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Home My WebLink About2021/10/12 Post-Meeting Agenda Package SPECIAL MEETING OF THE HOUSING AUTHORITY MEETING JOINTLY WITH THE CITY COUNCIL OF THE CITY OF CHULA VISTA **POST-MEETING AGENDA** Date:October 12, 2021, 5:00 p.m. Location:Council Chambers, 276 Fourth Avenue, Chula Vista, CA Notice is hereby given that the Mayor of the City of Chula Vista has called and will convene a Special Meeting of the Housing Authority meeting jointly with the City Council on Tuesday, August 24, 2021, at 5:00 p.m. in the Council Chambers, located at 276 Fourth Avenue, Building A, Chula Vista, California. The City Council has transitioned back to holding live, in-person meetings. View the Meeting Live in English & Spanish: chulavistaca.gov/councilmeetings AT&T U-verse ch. 99 (San Diego County) Cox ch. 24 (Chula Vista) in English only PUBLIC COMMENTS: Public comments may be submitted to the City Council in the following ways: In-Person comments during the meeting. Join us for the City Council meeting at the time and location specified on this agenda to make your comments. For up-to-date participation protocols visit www.chulavistaca.gov/councilmeetings • How To Submit eComments: Visit www.chulavistaca.gov/councilmeetings, locate this meeting and click on the comment bubble icon. Click on the item you wish to comment on, then click on "Leave Comment." eComments can be submitted when the agenda is published and until the conclusion of public comments for the agenda item. eComments may be viewed by the City Council and members of the public as they are submitted. If you have difficulty submitting eComments email your comments to: cityclerk@chulavistaca.gov • HOW TO WATCH: Live stream is available at www.chulavistaca.gov/councilmeetings. For Spanish, please click on "ES" in the bottom right-hand corner. Recorded meetings are also aired on Wednesdays at 7 p.m. (both channels in English only) and are available on the City's website in English and Spanish. ACCESSIBILITY: Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk’s Office at cityclerk@chulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at least forty-eight hours in advance of the meeting. SPEAKER TIME LIMITS: The time allotted for speakers may be adjusted by the Mayor. - Five minutes* for specific items listed on the agenda - Three minutes* for items NOT on the agenda (called to speak during Public Comments) - A group of individuals may select a spokesperson to speak on their behalf on an agenda item, waiving their option to speak individually on the same item. Generally, five minutes are allotted per person, up to a limit of 30 minutes, although the limits may be adjusted. Members of the group must be present. *Individuals who use a translator will be allotted twice the amount of time. GETTING TO KNOW YOUR AGENDA Agenda Sections: CONSENT CALENDAR items are routine items that are not expected to prompt discussion. All items are considered for approval at the same time with one vote. Councilmembers and staff may request items be removed and members of the public may submit a speaker slip if they wish to comment on an item. Items removed from the Consent Calendar are discussed after the vote on the remaining Consent Calendar items. PUBLIC COMMENT provides the public with an opportunity to address the Council on any matter not listed on the agenda that is within the jurisdiction of the Council. In compliance with the Brown Act, the Council cannot take action on matters not listed on the agenda. PUBLIC HEARINGS are held on matters specifically required by law. The Mayor opens the public hearing and asks for presentations from staff and from the proponent or applicant involved (if applicable) in the matter under discussion. Following questions from the Councilmembers, the Mayor opens the public hearing and asks for public comments. The hearing is closed, and the City Council may discuss and take action. ACTION ITEMS are items that are expected to cause discussion and/or action by the Council but do not legally require a Public Hearing. Staff may make a presentation and Councilmembers may ask questions of staff and the involved parties before the Mayor invites the public to provide input. CLOSED SESSION may only be attended by members of the Council, support staff, and/or legal counsel. The most common purpose of a Closed Session is to avoid revealing confidential information that may prejudice the legal or negotiating position of the City or compromise the privacy interests of employees. Closed sessions may be held only as specifically authorized by law. Council Actions: RESOLUTIONS are formal expressions of opinion or intention of the Council and are usually effective immediately. ORDINANCES are laws adopted by the Council. Ordinances usually amend, repeal or supplement the Municipal Code; provide zoning specifications; or appropriate money for specific purposes. Most ordinances require two hearings: an introductory hearing, generally followed by a second hearing at the next regular meeting. Most ordinances go into effect 30 days after the final approval. PROCLAMATIONS are issued by the City to honor significant achievements by community members, highlight an event, promote awareness of community issues, and recognize City employees. 2021/10/12 City Council Post Agenda Page 2 of 620 Pages 1.CALL TO ORDER 2.ROLL CALL 3.PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE 4.SPECIAL ORDERS OF THE DAY 4.1.Presentation of a Proclamation Commending SBCS on its 50th Anniversary and Proclaiming October 12, 2021 as SBCS Day in the City of Chula Vista 4.2.Presentation by San Diego Food Bank Vice President of Operations Vanessa Ruiz Regarding Food Insecurity in Chula Vista 7 4.3.Presentation of a Proclamation Proclaiming October 14, 2021 as Children's Environmental Health Day in the City of Chula Vista 4.4.Police Department Update on Crime and Safety Trends 22 5.CONSENT CALENDAR (Items 5.1 through 5.5) All items listed under the Consent Calendar are considered and acted upon by one motion. Anyone may request an item be removed for separate consideration. RECOMMENDED ACTION: Council approve the recommended action on the below consent calendar items. 5.1.Approval of Meeting Minutes 40 RECOMMENDED ACTION: Approve the revised minutes dated: April 20, 2021 5.2.Waive Reading of Text of Resolutions and Ordinances RECOMMENDED ACTION: Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. *5.3.Consideration of Requests for Excused Absences 52 RECOMMENDED ACTION: Consider requests for excused absences as appropriate. 5.4.Growth Management Oversight Commission: Status Update on the Comprehensive Review and Annual Report for Fiscal Year 2020/21 53 Report Number: 21-0164 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Receive the update. 2021/10/12 City Council Post Agenda Page 3 of 620 5.5.Chula Vista Bayfront Resort Hotel and Convention Center Project: Amending the Agreement with RSG, Inc. for Financial Feasibility Study Services 55 Report Number: 21-0168 Location: Chula Vista Bayfront Master Plan Area Department: Development Services Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution approving a first amendment to the agreement with RSG, Inc. to provide financial feasibility study services for the Chula Vista Bayfront resort hotel and convention center project. 6.PUBLIC COMMENTS The public may address the Council on any matter within the jurisdiction of the Council but not on the agenda. 6.1.Public Comments Received for 10/12/2021 7.ACTION ITEMS The following item(s) will be considered individually and are expected to elicit discussion and deliberation. *7.1.Affordable Housing Financial Approvals: Consideration of Final Approvals for Columba Apartments Including Authorizing the Execution and Delivery of its Tax- Exempt Multi-family Housing Revenue Notes and Bonds 80 Report Number: 21-0151 Location: Northwest Corner of Solstice Avenue and Optima Street Chula Vista, California 91915 (Assessor Parcel Number 643-060-61-00) Department: Development Services Environmental Notice: The project was adequately covered in the previously certified Final Second Tier Environmental Impact Report (EIR-07-01) - SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan and Tentative Map. Due to the use of City HOME Investment Partnership Act Entitlement funds from the U.S. Department of Housing and Urban Development (HUD), the City completed the necessary reviews under the National Environmental Protection Act (NEPA). The City’s loan will be conditioned upon receiving an Authorization to Use Grant Funds from HUD. 2021/10/12 City Council Post Agenda Page 4 of 620 RECOMMENDED ACTION: Housing Authority adopt a resolution authorizing: (A) the execution and delivery of its tax-exempt multi-family housing revenue notes and its subordinate Chula Vista Housing Authority Multi-family Housing Revenue Bonds (Columba Apartments), collectively in an aggregate principal amount not to exceed $52,100,000; and (B) the execution and delivery of its taxable multi-family housing revenue notes in an aggregate principal amount not to exceed $26,000,000 for the purpose of financing the acquisition and construction of the Columba Apartments multi-family rental housing project; approving and authorizing the execution and delivery of any and all documents necessary to execute and deliver the notes, complete the transaction and implement this resolution, and ratifying and approving any action therefore taken in connection with the notes. 7.2.Grant Award and Program Implementation: Accept Grants and Implement the Chula Vista Community Shuttle Pilot Project 443 Report Number: 21-0074 Location: No specific geographic location Department: Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt a resolution to: 1) accept grant funds in the amount of $997,833 and approve mobility project voucher agreement with the California Air Resources Board for the Community Shuttle Program; 2) accept grant funds in an amount not-to-exceed $1,000,000 and approve a grant agreement with Community Congregational Development Corporation for the Community Shuttle Program; 3) approve an agreement with Circuit Transit, Inc. to implement and provide services for the Community Shuttle Program; and 4) appropriate funds for these purposes (4/5 vote required). 8.CITY MANAGER’S REPORTS 615 8.1.Former Fire Stations 5 and 9 demolition update and input on next steps. 9.MAYOR’S REPORTS 10.COUNCILMEMBERS’ COMMENTS 11.CITY ATTORNEY'S REPORTS 12.CLOSED SESSION Announcements of actions taken in Closed Sessions shall be made available by noon on the next business day following the Council meeting at the City Attorney's office in accordance with the Ralph M. Brown Act (Government Code 54957.7) 2021/10/12 City Council Post Agenda Page 5 of 620 12.1.Conference with Labor Negotiators Pursuant to Government Code Section 54957.6 Agency designated representatives: Maria Kachadoorian, Glen Googins, Courtney Chase, Kelley Bacon, Simon Silva, Sarah Schoen, and Tanya Tomlinson Employee organizations: ACE, IAFF, MM/PR, NS-IAFF, POA, WCE and unrepresented employees 13.ADJOURNMENT to the regular City Council meeting on October 26, 2021 in the Council Chambers. 2021/10/12 City Council Post Agenda Page 6 of 620 Vanessa Ruiz, VP of Operations vruiz@sandiegofoodbank.org 1 Food Insecurity – Emphasis on the City of Chula Vista 2021/10/12 City Council Post Agenda Page 7 of 620 POPULATION PROFILE San Diego County •Population: 3.3M (more people than 22 states) •500+ nonprofit partners; including 200 direct distributions Statistics: •Median Household Income $78,000+ •Housing Median $563,000+ •Over 10% Living in Poverty *Research provided by 2019 Census 2 2021/10/12 City Council Post Agenda Page 8 of 620 FOOD INSECURE PROFILE What is Nutrition Insecure? Someone who is unable to provide three, nutritious meals per day for themselves and/or their families. 3 2021/10/12 City Council Post Agenda Page 9 of 620 FOOD INSECURE PROFILE •San Diego County November 2020 Nutrition Insecurity Rates •Total nutrition insecure population: 1,034,000 •31% of total population (3,380,000), or 1 in 3 people •Nutrition insecure adults: 603,000 •29% of total adult population or 1 in 3 adults •Nutrition insecure children: 284,000 •40% of total child population or more than 2 in 5 children •San Diego County Food Insecure Household Characteristics in 2019 (Pre-COVID-19 Pandemic) •25%of the total population in San Diego County falls under 200% FPL. •44%of the Black population falls under 200% FPL. •37%of the Native population falls under 200% FPL. •29%of the White population falls under 200% FPL. •29% of the Pacific Islander population falls under 200% FPL. •23% of the Asian population falls under 200% FPL. •43% of the Hispanic/Latinx population (across all nationalities) are under 200% FPL. *Research by San Diego Hunger Coalition, 2020 4 2021/10/12 City Council Post Agenda Page 10 of 620 People Served Profile Great Recession verses Pandemic era Year People Served –Average Monthly 2008 –Great Recession 200,000 2009-2016 400,000 2017 375,000 2018-2019 350,000 2020-2021 –COVID-19 Pandemic 550,000-600,000 5 2021/10/12 City Council Post Agenda Page 11 of 620 FOOD BANK PROFILE 6 2017 2018 2019 2020 2021 Total Pounds of Food Distributed 25,779,655 28,011,092 31,788,618 43,601,861 59,671,020 % Increase over last year 19%9%13%37%37% 2017 2018 2019 2020 2021 Total Pounds of Food Received 27,368,944 28,441,925 33,723,544 45,374,508 58,880,069 % Increase over last year 14%4%19%35%30% Fiscal Year Numbers: 2021/10/12 City Council Post Agenda Page 12 of 620 FOOD BANK PROFILE 7 •CalFresh Outreach •Diaper to Degree •Diaper Bank •Food 4 Kids Backpack •On the Go (middle & high school) •College Hunger-Relief Program •Food to Nonprofits •Super Pantry Program •Neighborhood Distribution & Mobile Pantry •Nutrition & Wellness Education •USDA Programs •Emergency Food Assistance Program (EFAP/TEFAP) •Commodity Supplemental Food Program (CSFP) 2021/10/12 City Council Post Agenda Page 13 of 620 Impact in Chula Vista 2021/10/12 City Council Post Agenda Page 14 of 620 Food Pantry Partners in Chula Vista •Berean Bible Baptist Church •Calvin J. Lauderbach Elementary •Chula Vista Silvercrest Apartments •Community Through Hope •Eastlake Community Church •Embrace FFAH Brisas Del Mar •Feaster Elementary School •Feeding the Flock •Fred H Rohr Elementary •Greater Woodlawn Park COGIC •Harborside Elementary School •Harvest Ridge Apartments •Iglesia Palabra Viva •John Montgomery Elementary •Life Christian Center •Lilian J Rice Elementary •Living Rock Christian Church •Lutheran Social Services of So Cal •MAAC Project •New Gateway Solutions Corporation •Operation Promise •Otay Elementary •Oxford Terrace Apartments •Palomar Elementary •Project 1:1 •Salvation Army Chula Vista •Seniors On Broadway •Sharp Chula Vista Medical Center •Silent Voices, Inc. •South Bay Pentecostal •Southwestern Community College District •St. Paul's PACE AKALOA •Sunrise Church of Christ •True Vine Restoration Ministry •US for Warriors Foundation •Victory Lutheran Church •Villa Serena Apartments •Vista Square Elementary 38 Food Bank partners in Chula Vista 2021/10/12 City Council Post Agenda Page 15 of 620 Food Insecure Profile Pounds of Food Distributed in Chula Vista: •2021: 4,071,702 lbs. (doubled in 5 years) •2020: 3,347,713 lbs. •2019: 2,604,876 lbs. •2018: 2,197,929 lbs. •2017: 2,027,192 lbs. 2021/10/12 City Council Post Agenda Page 16 of 620 How to Access Services? •https://sandiegofoodbank.org/get help/ •866-350-FOOD (3663) •or call 211 2021/10/12 City Council Post Agenda Page 17 of 620 How can you help? 2021/10/12 City Council Post Agenda Page 18 of 620 How Can You Help? •VOLUNTEER –www.sandiegofoodbank.org 2021/10/12 City Council Post Agenda Page 19 of 620 HOST A FOOD DRIVE: DONATE: How Can You Help? 2021/10/12 City Council Post Agenda Page 20 of 620 15 SanDiegoFoodBank.org NorthCountyFoodBank.org Vanessa Ruiz vruiz@sandiegofoodbank.org VP of Operations (858) 863-5114 2021/10/12 City Council Post Agenda Page 21 of 620 POLICE DEPARTMEN T UPDATE PRESENTED TO THE CHULA VISTA CITY COUNCIL 2021/10/12 City Council Post Agenda Page 22 of 620 CRIME COMPARED TO REGION 2016 2019 2020 Carlsbad 21.73 20.77 16.38 Chula Vista 18.49 16.53 15.30 Coronado 16.61 12.23 10.08 El Cajon 28.39 26.39 22.89 Escondido 25.50 19.13 20.22 La Mesa 34.25 19.40 19.34 National City 29.29 22.98 23.91 Oceanside 28.03 23.92 22.27 San Diego 25.23 22.67 20.41 Annualized FBI Index Crime rates per 1,000 population San Diego jurisdictions, mid-year 2016, 2019, 2020 Source: SANDAG Crime in the San Diego Region, Mid-Year 2020 Statistics 22021/10/12 City Council Post Agenda Page 23 of 620 Positions Total Full-Time Employees Sworn 40.0 Professional Staff 16.0 Total Positions Funded 56.0 APPROVED FUNDING FOR STAFFING Measure A Funding 32021/10/12 City Council Post Agenda Page 24 of 620 Goal Actual Priority 1 Emergency 6:00 5:27 Priority 2 Urgent Calls 12:00 11:49 RESPONS E TIMES The Police Department is meeting goals for Priority 1 and Priority 2 calls. This is the first time in over 21 years that both P1 and P2 Goals have been met during the same Fiscal Year. On Average, the department responds to over 97,000 calls per year. As of October 10, 2021 we responded to 65,000 incidents. 514 Priority One Calls 11,561 Priority Two Calls 4 PRIORITY 1 RESPONSE TIMES by Fiscal Year 2021/10/12 City Council Post Agenda Page 25 of 620 1.General Disturbance 2.Domestic Violence 3.Check a Person’s Well Being 4.Traffic Collision 5.Mental Health Evaluation 6.Petty Theft ($950 or less) 7.False Alarm 8.Noise Disturbance 9.Illegally Parked Vehicle 10.Assault 2021 CALLS FOR SERVICE (CITYWIDE) Citizen Initiated Calls Top 10 Call Types (By Volume): 52021/10/12 City Council Post Agenda Page 26 of 620 CALLS FOR SERVICE CLUSTER MAP From October 2020 through October 2021 62021/10/12 City Council Post Agenda Page 27 of 620 Violent Crime Categories 2020 2021 % Change Murder 8 7 -12.00% Rape 41 31 -24.39% Armed Robbery 106 90 -15.09% Strong Arm Robbery 124 104 -16.13% Aggravated Assault 360 391 8.61% Firearm Incidents 62 83 34% VIOLENT CRIME TRENDS FBI Reportable Offenses 7Data from January –September of each year 2021/10/12 City Council Post Agenda Page 28 of 620 8 8 Juvenile crimes are trending lower than 2020 by 31%. Juvenile related Calls make up 14% of all the Calls For Service (CFS) at the parks with the highest CFS volumes. The Top 3 Juvenile offenses are: Assault, Weapon Violations and Drug/Narcotic Offenses.8 Park 2020 2021 Totals Harborside 128 59 187 Heritage 53 32 85 Discovery 51 28 79 Rohr 43 26 69 SDG&E East 25 24 49 CRIME AT PARKS –Top 5 Locations 2021/10/12 City Council Post Agenda Page 29 of 620 Property Crime Categories 2020 2021 % Change Residential Burglary 160 137 -14.38% Non- Residential Burglary 204 144 -29.41% Theft less than $400 847 736 -13.11% Theft higher than $400 670 746 11.34% Vehicle Theft 567 645 13.76% PROPERTY CRIME TRENDS FBI Reportable Offenses 9 Data from January –September of each year 2021/10/12 City Council Post Agenda Page 30 of 620 VEHICLE THEFTS 10 From October 2020 through October 2021 2021/10/12 City Council Post Agenda Page 31 of 620 VEHICLE COLLISIONS –Top 10 Locations October 2020 –October 2021 11 Location CFS Reports 2015 Birch Rd 22 9 555 Broadway 15 7 750 E St 11 8 Broadway & H St 12 6 Broadway & Palomar St 11 7 E Orange Av & Melrose Av 11 4 Olympic Pw & Brandywine Av 13 6 Olympic Pw & Heritage Rd 13 7 Olympic Pw & La Media Rd 11 7 Third Av & Palomar St 11 5 Total 130 66 During the past 12 months, there were 1,548 collisions. 1,439 collisions involved vehicles only.109 collisions involved at least one pedestrian. 2021/10/12 City Council Post Agenda Page 32 of 620 COLLISION LOCATIONS 122021/10/12 City Council Post Agenda Page 33 of 620 Totals as of October 10, 2021 13 GHOST GUN TRENDS in Chula Vista 2021/10/12 City Council Post Agenda Page 34 of 620 HOT TEAM EFFORTS 14 262 229 242 212 339 0 50 100 150 200 250 300 350 400 2017 2018 2019 2020 2021 Regional and Local Count of Unsheltered Individuals by Year 2017 -2018 count was visual using assumptions 2019 -2021 count included interview confirmation for accuracy 2021/10/12 City Council Post Agenda Page 35 of 620 Transient-Related CFS 3,355 3,443 3,474 4,425 2,761 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2017 2018 2019 2020 2021 YTD IMPACTS OF HOMELESSNESS 2017 to 2021 Calls For Service Projected year-end totals to be approx. 3,313 152021/10/12 City Council Post Agenda Page 36 of 620 Drone as First Responder Program 162021/10/12 City Council Post Agenda Page 37 of 620 INCIDENT RELATED SATISFACTION SURVEY 17 Sample Survey Question: "OVERALL, YOUR EXPERIENCE INTERACTING WITH MEMBERS OF CHULA VISTA POLICE DEPARTMENT WAS 'POSITIVE'" 2021/10/12 City Council Post Agenda Page 38 of 620 THANK YOU 2021/10/12 City Council Post Agenda Page 39 of 620 City of Chula Vista Meeting Minutes - Draft 5:00 PM Via Teleconference/Council Chambers 276 4th Avenue, Building A Chula Vista, CA 91910 Tuesday, April 20, 2021 REGULAR MEETING OF THE CITY COUNCIL The City Council minutes are prepared and ordered to correspond to the City Council Agenda. Agenda items may be taken out of order during the meeting. The agenda items at this meeting were considered in the order presented, except Item 5 which was considered before Item 3. CALL TO ORDER A regular meeting of the City Council of the City of Chula Vista was called to order at 5:01 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: Present:Councilmember Cardenas, Councilmember Galvez, Deputy Mayor McCann, Councilmember Padilla and Mayor Casillas Salas Also Present: City Manager Kachadoorian, City Attorney Googins, City Clerk Bigelow, and Assistant City Clerk Turner PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE Councilmember Padilla led the Pledge of Allegiance. SPECIAL ORDERS OF THE DAY A.21-0097 COVID-19 UPDATE BY CITY OF CHULA VISTA EMERGENCY SERVICES COORDINATOR MARLON KING Fire Chief Muns and Emergency Services Coordinator King gave a presentation on the item. B.21-0013 PRESENTATION OF THE SUSTAINABILITY CHAMPION AWARDS BY THE CHULA VISTA SUSTAINABILITY COMMISSION Environmental Sustainability Manager Wisniewski and Environmental Services Manager Medrano gave a presentation on the item. C.21-0083 PRESENTATION OF A PROCLAMATION TO THE PUBLIC WORKS DEPARTMENT, PROCLAIMING FRIDAY, APRIL 30, 2021 AS ARBOR DAY IN THE CITY OF CHULA VISTA Mayor Casillas Salas read the proclamation and Councilmember Galvez presented it to City Manager Kachadoorian and Public Works Director Little. D.21-0092 PRESENTATION OF A PROCLAMATION PROCLAIMING APRIL 2021 AS FAIR HOUSING MONTH IN THE CITY OF CHULA VISTA Page 1City of Chula Vista Revised Draft Minutes 4/20/2021 Note: Minutes have been revised to include text on page 11, designated with " *** " 2021/10/12 City Council Post Agenda Page 40 of 620 April 20, 2021City Council Meeting Minutes - Draft Mayor Casillas Salas read the proclamation and Councilmember Cardenas presented it to Estela De Los Rios. CONSENT CALENDAR (Items 1 - 1.5) 1.21-0113 ORDINANCE NO. 3501 OF THE CITY OF CHULA VISTA ESTABLISHING THE SPEED LIMITS AT THE FOLLOWING SEGMENTS: (1) BONITA GLEN DRIVE BETWEEN BONITA ROAD AND THE CHULA VISTA CITY LIMIT AT 25 MPH, (2) INCREASING EASTLAKE PARKWAY BETWEEN OLYMPIC PARKWAY AND HUNTE PARKWAY FROM 45 MPH TO 50 MPH, AND (3) INCREASING BIRCH ROAD BETWEEN LA MEDIA ROAD AND EASTLAKE PARKWAY FROM 45 MPH TO 50 MPH; AND AMENDING SCHEDULE X OF THE REGISTER MAINTAINED IN THE OFFICE OF THE CITY ENGINEER TO REFLECT THE ESTABLISHED SPEED LIMITS (SECOND READING AND ADOPTION) Recommended Action: Council adopt the ordinance. 1.5 21-0076 RESOLUTION NO. 2021-058 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE RE-CERTIFICATION OF THE CITY OF CHULA VISTA SEWER SYSTEM MANAGEMENT PLAN Recommended Action: Council adopt the resolution. Approval of the Consent Calendar A motion was made by Councilmember Galvez, seconded by Mayor Casillas Salas, to approve staff's recommendations on the above Consent Calendar items, headings read, text waived. The motion carried by the following vote: ACTION: Yes:Cardenas, Galvez, McCann, Padilla and Casillas Salas5 - No:0 Abstain:0 ITEMS REMOVED FROM THE CONSENT CALENDAR There were none. PUBLIC COMMENTS 2.21-0098 PUBLIC COMMENTS RECEIVED for April 20, 2021 Sally Bartlett submitted comments in appreciation to the Public Works department for keeping the city maintained beautifully. Nadia KeanAyub, Chula Vista resident, submitted comments expressing concern regarding actions taken by Newport Pacific Management Company. ACTION ITEMS 3.20-0420 PRESENTATION OF AN UPDATE ON THE CITY OF CHULA VISTA TRAILS MASTER PLAN, AND RICE AND SNAKE CANYON LOOP TRAIL PILOT PROGRAM Page 2City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 41 of 620 April 20, 2021City Council Meeting Minutes - Draft Senior Planner Goddard and Landscape Architect Caro gave a presentation on the item. The following members of the public submitted comments in support of staff’s recommendation on the item: -Dan Fellenbaum, Chula Vista resident -Daniel Briceno -Sean Murphy, Chula Vista resident -Jason McDonald, Escondido resident -Matt Phillips, Chula Vista resident -Susie Murphy, Chula Vista resident -Javier Araiza, San Diego resident -Melissa Ridgeway, Chula Vista resident -Devin Ridgeway, Chula Vista resident -Matthew S -Eric Quillen, Chula Vista resident -Rocky Valenzuela -Maribel Morales, Chula Vista resident -Jake Carlsen, Chula Vista resident -Allyn Olsen -Matthew Lowery -Todd Galarneau, Santee resident -Matt Krause, Chula Vista resident -Ronnie Williams, Bonita resident -Emily Cebulski, San Diego resident -Thomas Fellenbaum, Chula Vista resident -Joseph Edwards, Spring Valley resident -Chris Obra, Chula Vista resident -Jeffrey Veal, Bonita resident -Robert Moffitt, Chula Vista resident -Arturo Magana, Chula Vista resident -Erick Luna, Chula Vista resident -John Mendez, Chula Vista resident -Nelson Mozzini, Chula Vista resident -Amor Fuentecilla, Bonita resident -Ayako Boll, Chula Vista resident -Robert Ruiz, Chula Vista resident -John Mendez, Chula Vista resident -Maria Andres, Chula Vista resident -Adolfo Gonzalez, Chula Vista resident -Dan Carr, Poway resident -H. Anthony Harris, San Diego resident -Ankit G, San Diego resident -Jeff Hammett, Lemon Grove resident -George Johnston, San Diego resident -Michael Ladinig, San Marcos resident -Anna Pikul, La Jolla resident -Gail Winiar, Jamul resident -Jason Askegreen, Escondido resident -Laurence Fromm, Poway resident -Robert Kay, Bonita resident -Amir Aftahi, Chula Vista resident -Justina Strausbaugh, San Marcos resident -Jorge Galaz, San Diego resident Page 3City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 42 of 620 April 20, 2021City Council Meeting Minutes - Draft -Chuck Westerheide, San Diego resident -George Keller, La Mesa resident -James Luzbetak, La Mesa resident -Torrin Bechtel, San Diego resident -Gareth Evans, San Diego resident -Barbara Westlake, Carlsbad resident -Erin Mann, San Diego resident -Aaron Amerine, El Cajon resident -Carlos Valdez, San Diego resident -Tony Chen, Del Mar resident -Kyle Kupper, San Diego resident -James Smith, San Diego resident -Tom Frank, Solana Beach resident -Guillermo Solorzano, San Diego resident -Kai Johnson, San Diego resident -Marco Araujo, Encinitas resident -Charles Richmond, San Diego resident -Steve Thomas, San Diego resident -Frank Falcone, Escondido resident -Timothy Cockerham, San Diego resident -David Smith, San Diego resident -Chuck Edenburn, Lakeside resident -Andrew Patron, San Marcos resident -Don Litzenberg, San Diego resident -William Farrell, San Diego resident -Evan Sutton, San Diego resident -Kevin Loomas, San Diego resident -Mike Moore, San Diego resident -Renee Cardinal, Spring Valley resident -Steve Granata, Oceanside resident -Ron Guitard, Chula Vista resident -Chris LeBaron, San Diego resident -Susanne Glasgow, Jamul resident -Jason Guhse, San Diego resident -Dave Callender, Encinitas resident -Ari Hague, San Diego resident -Mark Huckins, San Diego resident -Ian Brigden, Carlsbad resident -Mike Horan, San Diego resident -Tom Mauro, San Diego resident -Brian Nixon, San Diego resident -Stephen Pearlman, San Diego resident -Scott Braden, Santee resident -Noel Harris, Carlsbad resident -John Gray, San Diego resident -Timothy Schroeder, Chula Vista resident -Ryan Cross, San Diego resident -Helen Laverdiere-Bushey, El Cajon resident -Mark Gardner, Chula Vista resident -John Holloway, San Diego resident -Alek Pena, Chula Vista resident -Brendan Tovar, Chula Vista resident -Ryan Swadener, Chula Vista resident Page 4City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 43 of 620 April 20, 2021City Council Meeting Minutes - Draft -Richard Whipple, Chula Vista resident -Steve Kolokowsky, San Diego resident -John Toman, San Diego resident -Lynx Vanasse, San Diego resident -Jud Rhode, La Jolla resident -Freddy Flores, Escondido resident -James Murren, San Diego resident -James Hoyle, Carlsbad resident -Michael Hamman, San Diego resident -Anna Carrillo, Chula Vista resident -Paul Schroeder, San Diego resident -Matthew Phillips, Chula Vista resident -Anthony Alamilla, San Ysidro resident -Arthur Casillas, Chula Vista resident -Matt Schinderle, San Diego resident -Patrick Murray, Chula Vista resident -Jyale Michel, Chula Vista resident -Jose Centeno, Chula Vista resident -Eric Eleccion, Chula Vista resident -Jonas Renemark, San Diego resident -Marlon Estepa, Chula Vista resident -Raymond Pacheco, Chula Vista resident -Richard Nevarez, Oceanside resident -Aaron McElderry, Oceanside resident -Carlos Martinez, Chula Vista resident -Alex Arreola, Chula Vista resident -Jason Schmidt, Chula Vista resident -Kekoa Haslop, San Diego resident -Omar Marquz, Bonita resident -Devin Ridgeway, Chula Vista resident -Melissa Ridgeway, Chula Vista resident -Rick Ponce, San Diego resident -Nathaniel Weissman, San Diego resident -Enrique Alvarez Malo, Spring Valley resident -Todd Monzingo, Chula Vista resident -Charmaine Ernst, San Diego resident -Jon Major, Lemon Grove resident -Michael Clodfelter, San Diego resident -Carlos Valdez, San Diego resident -Georgina Garibay, San Diego resident -Robert Murillo, Chula Vista resident -Merwynn Ramos, San Diego resident -Jeff Ela, San Diego resident -Jose Ortega, Chula Vista resident -Andy Andrade, San Diego resident -Robert Kay, Bonita resident -Jun Perez, Chula Vista resident -Ryan Jay Ramos, Chula Vista resident -Xandro Dael, San Diego resident -Angel Hernandez, Chula Vista resident -Jeffrey Padgett, San Ysidro resident -Jorge Jimenez, Chula Vista resident -Garry Labitad, Chula Vista resident Page 5City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 44 of 620 April 20, 2021City Council Meeting Minutes - Draft -Mark Mina, National City resident -Cuahutemoc Orozco, Chula Vista resident -Jose Nolasco, San Ysidro resident -Albert Leon, Chula Vista resident -David Merlo, San Diego resident -Dario Garcia, Chula Vista resident -Andrew Palek, San Diego resident -Hector Ayala, San Diego resident -Curtis Wevodau, Chula Vista resident -Sean Murphy, Chula Vista resident -Carlos Calderon, Chula Vista resident -Neil Nucup, El Cajon resident -Adam Garling, Chula Vista resident -Frank Falcone, Escondido resident -Victor Avina, Chula Vista resident -Mark Sepulveda, Chula Vista resident -Marcos Caraveo, Chula Vista resident -Andrew DePratti, Chula Vista resident -Roger Phillips, Chula Vista resident -Darryl Suasi, Chula Vista resident -Steven Banh, San Diego resident -Daniel Melendrez, Chula Vista resident -Scott Cloyd, La Mesa resident -Gadiel, U.S. Navy -David Mitchell, Bonita resident -Irma DePratti, Chula Vista resident -Changwen Liu, San Diego resident -Joey Fasano, Chula Vista resident -Dom Dias, San Diego resident -Benjamin Ruiz, San Diego resident -Francis Lim, San Diego resident -Jaime Bernal, San Diego resident -Ethan Janke, Bonita resident -Chris Wessels, El Cajon resident -Holley Hawthirn, Lancaster resident -Theresa Janke, Bonita resident -Frank Padaon, San Diego resident -Ernest Hale, San Diego resident -Ian Kelly, San Diego resident -Morgan Sumner, Chula Vista resident -Robert Dela Cruz, San Marcos resident -Oscar Martinez, Chula Vista resident -Alex Hamana, San Diego resident -Theodore Myers, San Diego resident -Sigfrido Urtecho, Chula Vista resident -Greg Baker, Chula Vista resident -Ricardo Gomez, Bonita resident -Ian Goodfellow, Encinitas resident -David Villagomez, Chula Vista resident -Ron Marquez, San Diego resident -Gus Sanchez, El Cajon resident -Tyler Witzel, El Cajon resident -Jedidiah Cobarrubias, San Diego resident Page 6City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 45 of 620 April 20, 2021City Council Meeting Minutes - Draft -Jose De Anda, Chula Vista resident -Edward Garcia, Chula Vista resident -Miguel Zuniga, El Cajon resident -Alexzander Hurst, Chula Vista resident -Gabriela Salazar, Chula Vista resident -Ryan Rogers, San Diego resident -Andrew Nix, Chula Vista resident -John Barlolong, Chula Vista resident -Eric Abutin, Bonita resident -Andre Liu, La Jolla resident -Alfredo Tapia, Chula Vista resident -Matthew Stone, San Diego resident -Victor Solorio, Chula Vista resident -Angelica Solorio, Chula Vista resident -Anthony Svonovec, Chula Vista resident -Karlo Soria, San Diego resident -Kim Tran, San Diego resident -Cyril Florin, San Diego resident -Tom Sprink, Cardiff resident -Marilyn Phillips, Chula Vista resident -Violeta Santoyo, La Mesa resident -Jeremy Netzley, Carlsbad resident -Kurt Rein, Cardiff resident David Hogan, representing the Sierra Club, submitted comments in opposition to staff’s recommendation on the item. 4.21-0031 CONSIDERATION OF ACCEPTING THE CLIMATE CHANGE WORKING GROUP'S RECOMMENDATIONS FOR UPDATING THE CHULA VISTA 2017 CLIMATE ACTION PLAN RESOLUTION NO. 2021-059 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING THE CLIMATE CHANGE WORKING GROUP’S RECOMMENDATIONS FOR NEW GREENHOUSE GAS EMISSION REDUCTION STRATEGIES AND DIRECTING STAFF TO UPDATE THE 2017 CLIMATE ACTION PLAN ACCORDINGLY FOR FUTURE CONSIDERATION Conservation Specialist Downs, Climate Change Working Group Chair Legaspi and Fabiola Lao, representing Center for Sustainable Energy, gave a presentation on the item. The following members of the public submitted comments in support of staff’s recommendation on the item: -Vanessa Garcia, Bonita resident -Matthew Lowery -Fabiola Lao San Diego, resident -Carolyn Scofield -Shelah Ott San Diego, resident -Karinna Gonzalez Bonita, resident -Ronald Hidinger Chula Vista, resident -Rita Clement Chula Vista, resident -Susie Murphy Chula Vista, resident -Noah Harris San Diego, resident Page 7City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 46 of 620 April 20, 2021City Council Meeting Minutes - Draft -Tara Hammond La Jolla, resident Mike Hartley, representing Local #230, submitted comments requesting the City to consider more cost-effective choices. A motion was made by Councilmember Galvez, seconded by Mayor Casillas Salas, to Resolution No. 2021-059, heading read, text waived. The motion carried by the following vote: ACTION: Yes:Cardenas, Galvez, McCann, Padilla and Casillas Salas5 - No:0 Abstain:0 5.21-0099 CITY COUNCIL CONSIDERATION OF AND POSSIBLE ACTION WITH RESPECT TO THE CHULA VISTA POLICE DEPARTMENT OPERATION OF AUTOMATED LICENSE PLATE RECOGNITION (ALPR OR LPR) SYSTEMS AND DATA SHARING PROGRAM THROUGH AN AGREEMENT WITH VIGILANT/MOTOROLA Police Chief Kennedy and Police Captain Thunberg gave a presentation on the item. The following members of the public spoke in opposition to staff's recommendation: -Sophia Rodriguez, Chula Vista resident -Ricardo Medina, Chula Vista resident -Matthew Arnold, Chula Vista resident -Nancy Relaford, San Diego resident, who also spoke on behalf of Claire Pratt, Bonita resident; Nicholas Paul, Chula Vista resident; and Eduardo Saldivar, Chula Vista resident -Pedro Rios, Chula Vista resident, who also spoke on behalf of Kelly Zavala and Margaret Baker -Norell Martinez, Chula Vista resident, who also spoke on behalf of Becky Thimm, Chula Vista resident; Gerilyn Brown, Chula Vista resident; and Vivian Dunbar -Benjamin Prado, San Diego resident The following members of the public spoke in support of staff's recommendation: -Brett Davis, Chula Vista resident -Shannon Shay, Chula Vista resident Byron Richardson submitted a request to speak but was not present when called. The following members of the public submitted written documentation in opposition of staff's recommendation but did not wish to speak: -Benjamin Prado -Silvia Saldivar, Chula Vista resident -Kelly Zavala, San Diego resident The following members of the public submitted comments in support of the ALPR program: -Mike Garcia -Sarah Morga, Chula Vista resident -Christopher Ramirez, Chula Vista resident -Brett Davis, Chula Vista resident -Mike Diaz, Chula Vista resident -Norma Cazares -Shane Stiles, Chula Vista resident -Dell Miller, Bonita resident -David Sanchez Page 8City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 47 of 620 April 20, 2021City Council Meeting Minutes - Draft -Virginia Jensen -Cat Mills -J. Miller -Nico Sanchez -Susie Murphy, Chula Vista resident -N C -D Dull -Shannon Shay -Mr S -Daniel Martin -Filiberto Mendez -J H -Dustin Bruzee, Chula Vista resident -David Roberts -Anthony Molina -K Michelle -Mike Jones, Chula Vista resident -Adrian Garcia, Chula Vista resident -C Bearss, Chula Vista resident -William Lopez, La Mesa resident -S Foxx -J Diaz -Peter Jensen -Cheryl Smith -Colleen Black -Vern Sallee, Chula Vista resident -Solomon Kert -Gary Wedge, San Diego resident -Anna Wright, Chula Vista resident -Stephen Wright, Chula Vista resident -Doug Wood, Chula Vista resident -Edgar Garcia, Chula Vista resident -Manny Salazar -Daniel Gonzalez -Eric Wood, Chula Vista resident -Sandra Wagner, Chula Vista resident -John Haugland, Chula Vista resident -Mike German, Bonita resident -Becky Cortez, Chula Vista resident -J T, Atlanta, GA resident -Mike Tardy, San Diego resident -Patricia Bartels, Chula Vista resident -Juan & Cindy Hernandez, Chula Vista resident -Charles Hernandez -Jeff Mielke, Chula Vista resident -John Ortiz -Darshan Patel -Cy Stevens -Peter Watry, Chula Vista resident -Mudhafer Jarjees, Chula Vista resident -Sam Salem -Salem Zora -Fauzi Zora Page 9City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 48 of 620 April 20, 2021City Council Meeting Minutes - Draft Gerry Sablan submitted comments in support of the ALPR program, and suggested the City form an oversight committee. The following members of the public submitted comments in opposition to the ALPR program: -Eduardo Saldivar, Chula Vista resident -Dulce Garcia, San Diego resident -Elizabeth Nunez -Francis Riley, Chula Vista resident -Mejgan Afshan -Javier Padilla, National City resident -Lanelle Teran, San Diego resident -Kelly Zavala -Nan Kar -Kayleigh Hernandez, San Diego resident -Gloria Teran, Escondido resident -Kathy Tell, Carlsbad resident -Silvia Saldivar -Lorilee SanAgustin, Chula Vista resident -Jocelyn Yerena -Maria Reyes, Chula Vista resident -Eduardo S, Chula Vista resident -Monica Santos -Alicia Pentico, Bonita resident -Daria Lopez, Chula Vista resident -Ashley Roane, San Diego resident -Connie Mack -Marcia Garcia, Chula Vista resident -Lynn DeHahn -Marian Ruiz, Lemon Grove resident -Erin TsurumotoGrassi, San Diego resident -Kandi CustodioTan -Wedad Schlotte -M Ramirez, San Diego resident -Tama BeckerVarano, San Diego resident -David Harris, San Diego resident -Michael M, San Diego resident -Katie Zeitz, San Diego resident -Chelsey Birgisdottir, San Diego resident -Kathy Hardy, Chula Vista resident -Lois Klepin, Chula Vista resident -Rebecca Wallies, San Diego resident -Nicole Oga -Jessie Schmitte, Chula Vista resident -Stanley Baggett -Gloria Escalera -Carol Hayes Margaret Baker submitted comments in opposition to the ALPR program and in support of a moratorium on the program. . Page 10City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 49 of 620 April 20, 2021City Council Meeting Minutes - Draft A motion was made by Mayor Casillas Salas, seconded by Deputy Mayor McCann, to reauthorize the Automated License Plate Recognition (ALPR) program for one year and, in that time, conduct listening sessions throughout the City, ideally with Councilmembers who would organize the sessions, with a minimum of one listening session on each the east and west sides of the City, but ideally one in each City Council district; and to direct staff to determine the feasibility of establishing a group for oversight of the ALPR program, including the potential cost, for consideration of further action. The motion carried by the following vote: ACTION: Yes:Cardenas, Galvez, McCann, Padilla and Casillas Salas5 - No:0 Abstain:0 At the request of Councilmember Padilla, there was consensus of the Council to make a referral to staff to present for Council consideration a proposed framework to formalize the ad-hoc Police advisory committee, making it a formal, standing commission of the City with its members appointed by the City Council and certain seats filled by individuals with specified qualifications; and to provide the commission with support, a defined purpose, including advising the Council on community policing issues, and possession of a degree of independent oversight. CITY MANAGER’S REPORTS There were none. MAYOR’S REPORTS Mayor Casillas Salas spoke regarding the following events: meeting with the Mayor of Tijuana, swearing-in ceremony for seven police officers, and opening of Grasshopper Dispensary and Farmer's Table. Mayor Casillas Salas paid tribute to Dr. Emerald Randolph and stated the meeting would be adjourned in her honor. COUNCILMEMBERS’ COMMENTS Councilmember Galvez spoke regarding the following events: openings of Grasshopper Dispensary and Farmer's Table, Earth Day event, and Armenian genocide remembrance. Deputy Mayor McCann spoke of his attendance at the following: Search Bar & Restaurant and Hanu Korean BBQ, Farmers Table ribbon-cutting, and the promotion of seven police officers. Councilmember Cardenas spoke regarding repurposing Fire Station No. 5 for the opening of the Monoclonal Antibody Regional Center and expressed gratitude to the County and San Ysidro Health Center for partnering with the City in providing critical medical services for COVID-19 patients. Councilmember Padilla expressed his gratitude for being able to return to in-person Council meetings. CITY ATTORNEY'S REPORTS There were none. CLOSED SESSION Pursuant to Resolution No. 13706 and Council Policy No. 346-03, Official Minutes and records of action taken during Closed Sessions are maintained by the City Attorney. Page 11City of Chula Vista Revised Draft Minutes 4/20/2021 *** 2021/10/12 City Council Post Agenda Page 50 of 620 April 20, 2021City Council Meeting Minutes - Draft City Attorney Googins announced that the Council would convene in closed session to discuss the items listed below. He stated he would recuse himself from being involved on Item 6 due to a potential conflict of interest. Mayor Casillas Salas recessed the meeting at 9:45 p.m. The Council reconvened at 9:52 p.m., with all members present. 6.21-0109 CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9 (d)(1) Name of case: Maria Jarque v The Walters Management, et al., San Diego Superior Court, case number 37-2019-48667-CU-PO-CTL. No reportable action. Action pending finalization of settlement.ACTION: 7.21-0110 CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54957.6 Agency designated representatives: Maria Kachadoorian, Glen Googins, Courtney Chase, Kelley Bacon, Simon Silva, David Bilby and Tanya Tomlinson Employee organization: ACE, IAFF, MM/PR, POA, WCE and unrepresented employees No reportable action.ACTION: ADJOURNMENT The meeting was adjourned at 10:31 p.m., in memory of Dr. Emerald Randolph. Minutes prepared by: Sheree Kansas, Deputy City Clerk _______________________________ Kerry K. Bigelow, MMC, City Clerk Page 12City of Chula Vista Revised Draft Minutes 4/20/2021 2021/10/12 City Council Post Agenda Page 51 of 620 Mayor and Council City of Chula Vista 376 Fourth Avenue Chula vista. CA 91910 (619) 691-5044 (619) 476-5379 Memorandum To: Mayor and Councilmembers From: Andrea Cardenas CC: City Manager, City Clerk, City Attorney Date: 10/12/2021 Re: Request for an Excused Absence Comments: Dear Mayor and Councilmembers, Please excuse my absence from the Chula Vista City Council meeting on October 12, 2021 due to personal matters. Sincerely, Andrea Cardenas Councilmember District 4 2021/10/12 City Council Post Agenda Page 52 of 620 v . 0 03 P a g e | 1 October 12, 2021 ITEM TITLE Growth Management Oversight Commission: Status Update on the Comprehensive Review and Annual Report for Fiscal Year 2020/21 Report Number: 21-0164 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Receive the update. SUMMARY The Growth Management Oversight Commission (GMOC) Ordinance [Chula Vista Municipal Code (CVMC) Chapter 19.09] requires that the GMOC provide the City Council with an annual report which evaluates the impact of development on the quality of life in Chula Vista based on threshold criteria set forth in the Ordinance. Staff has been working with the GMOC on a comprehensive review of the Growth Management Program. To remain focused on completion of this review, staff will not be preparing an annual report for Fiscal Year (FY) 2020/21. The GMOC concurred with this recommendation at its meeting on September 2, 2021. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. 2021/10/12 City Council Post Agenda Page 53 of 620 P a g e | 2 BOARD/COMMISSION/COMMITTEE RECOMMENDATION On September 2, 2021, the GMOC concurred with staff’s recommendation to not prepare the FY 2020/21 Annual Report. DISCUSSION The purpose of the comprehensive review process is to evaluate the relevance of the Growth Management Program which was created over 30 years ago. As the City approaches build-out and the state continues to adopt new housing regulations, a thorough analysis of the program is warranted. Staff and the GMOC have made significant progress on this review and need to remain focused on the process until it is complete, which is anticipated by June 30, 2022. This item is provided for the information of the City Council and the public. No action is required. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a dis qualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current year fiscal impact to the General Fund or the Development Services Fund as a result of this status update. ONGOING FISCAL IMPACT There is no ongoing fiscal impact to the General Fund or the Development Services Fund as a result of this status update. ATTACHMENTS None. Staff Contact: Tiffany Allen, Director of Development Services Kimberly Vander Bie, Associate Planner 2021/10/12 City Council Post Agenda Page 54 of 620 v . 0 03 P a g e | 1 October 12, 2021 ITEM TITLE Chula Vista Bayfront Resort Hotel and Convention Center Project: Amending the Agreement with RSG, Inc. for Financial Feasibility Study Services Report Number: 21-0168 Location: Chula Vista Bayfront Master Plan Area Department: Development Services Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution approving a first amendment to the agreement with RSG, Inc. to provide financial feasibility study services for the Chula Vista Bayfront resort hotel and convention center project. SUMMARY The City previously entered into an agreement with RSG, Inc. (RSG) to provide financial feasibility study services to support a planned public bond offering, financing a portion of the costs of constructing a convention center on the Chula Vista Bayfront and related public infrastructure improvements (the “Public Financing”). Additional analysis and reporting not contemplated in the original agreement are now required to support the Public Financing. A first amendment to the agreement with RSG to provide these additional services has been negotiated and is recommended for approval (the “First Amendment”). ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. 2021/10/12 City Council Post Agenda Page 55 of 620 P a g e | 2 BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION The City of Chula Vista entered into an agreement with RSG for financial feasibility study services on April 8, 2020, in an amount not-to-exceed $50,000 (the “Original Agreement”). Pursuant to the terms of the Original Agreement, RSG prepared a comprehensive report that forecast local taxes to be generated by the proposed RIDA Chula Vista, LLC (RIDA) hotel and conference center project (the "RHCC Project") to be operated by Gaylord, the Chula Vista Resort RV Park to be operated by Sun Communities (the “RV Park”), and the Rambler Hotel, dated August 3, 2020. The Original Agreement expired on December 31, 2020 (Attachment 2). The City requires an update to the August 3, 2020 report in order to move forward with the Financing. The First Amendment includes the following services:  An updated Fiscal Impact Analysis evaluating the projected revenues to the City associated with operation of the RHCC Project, Rambler Hotel and the RV Park based on a report to be prepared by a feasibility study consultant (CBRE) hired by the San Diego Unified Port District. Updated items will include transient occupancy tax, taxable sales tax, property taxes, vehicle license fee revenue, special tax revenues and other revenues expected from the project. Costs would include expected expenditure impacts borne by the City to provide municipal services to the project once completed.  An updated financial pro forma will be prepared based on the information from the CBRE report. This update will ensure consistent time frames and terminology.  Upon request, Credit Rating Services that include assisting and participating in Credit Rating Agency presentations and reviews. The First Amendment provides a not-to-exceed amount of $50,000 for these updated services and expires on December 31, 2022 (Attachment 1). This amendment increases the maximum contract amount to $100,000. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. 2021/10/12 City Council Post Agenda Page 56 of 620 P a g e | 3 CURRENT-YEAR FISCAL IMPACT All General Fund discretionary dollars committed to the RHCC Project have been set aside in the current fiscal year budget. No additional General Fund impact is anticipated as a result of the approval of the First Amendment in the current fiscal year. All costs associated with the Original Agreement and the First Amendment are reimbursable closing costs of the Public Financing. ONGOING FISCAL IMPACT There is no ongoing fiscal impact as a result of approving this amendment. ATTACHMENTS 1. First Amendment 2. Agreement Staff Contact: Laura C. Black, AICP, Assistant Director of Development Services Tiffany Allen, Director of Development Services 2021/10/12 City Council Post Agenda Page 57 of 620 City of Chula Vista Amendment to Agreement No.: #2021-094 Consultant Name: RSG, Inc. Rev. 5/27/2021 FIRST AMENDMENT to Agreement between the City of Chula Vista and RSG, Inc. For Financial Feasibility Study Services This FIRST AMENDMENT (First Amendment) is entered into effective as of October 12, 2021 (the “Effective Date”) by and between the City of Chula Vista (City) and RSG, Inc. (“Consultant” or “RSG”) with reference to the following facts: RECITALS WHEREAS, City and RSG previously entered into a Financial Feasibility Study Agreement (the “Original Agreement”) on April 8, 2020 that reached its Term limit date of December 31, 2020; and WHEREAS, RSG completed the majority of the original work, but has not yet participated in the bond marketing/rating process as contemplated under the Original Agreement; and WHEREAS, the City and RSG desire to amend the Original Agreement to include an updated Fiscal Impact Analysis for the Chula Vista Bayfront resort hotel convention center project (the “RHCC Project”), Rambler Hotel and the RV Park; Develop a Financial Pro Forma and provide Credit Rating Services as more specifically set forth below; and WHEREAS, notwithstanding the Term limit date of December 31, 2020, the City and RSG have mutually agreed to an extension to the Term limit date of the Original Agreement and to amend the same, and also to increase the agreement amount by $50,000, for a new total not-to- exceed amount of $100,000 with the new Term limit date of December 31, 2022. NOW, THEREFORE, in consideration of the above recitals and the mutual obligations of the parties set forth herein, City and Consultant agree as follows: 1. Exhibit A, entitled Amended and Restated Scope of Work and Payment Terms is hereby attached hereto and incorporated herein by this reference. 2. Except as expressly provided herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. 3. Each party represents that it has full right, power and authority to execute this FIRST Amendment and to perform its obligations hereunder, without the need for any further action under its governing instruments, and the parties executing this Amendment on the behalf of such party are duly authorized agents with authority to do so. DocuSign Envelope ID: F510F964-3DAB-4873-8C46-9C30254FC6B9 2021/10/12 City Council Post Agenda Page 58 of 620 City of Chula Vista Amendment to Agreement No.: #2021-094 Consultant Name: RSG, Inc. Rev. 5/27/2021 SIGNATURE PAGE TO FIRST AMENDMENT TO A FINANCIAL FEASIBILITY STUDY AGREEMENT RSG, INC. CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ TARA MATTHEWS MARIA V. KACHADOORIAN PRINCIPAL CITY MANAGER APPROVED AS TO FORM BY: _________________________________ GLEN R. GOOGINS CITY ATTORNEY DocuSign Envelope ID: F510F964-3DAB-4873-8C46-9C30254FC6B9 2021/10/12 City Council Post Agenda Page 59 of 620 City of Chula Vista Amendment to Agreement No.: #2021-094 Consultant Name: RSG, Inc. Rev. 5/27/2021 EXHIBIT A AMENDED AND RESTATED SCOPE OF WORK AND PAYMENT TERMS 1. Contact People for Contract Administration and Legal Notice A. City Contract Administration: Tiffany Allen 276 4th Avenue Chula Vista, CA 91910 691.691.5179 tallen@chulavistaca.gov For Legal Notice Copy to: City of Chula Vista City Attorney 276 Fourth Avenue, Chula Vista, CA 91910 619-691-5037 CityAttorney@chulavistaca.us B. Contractor/Service Provider Contract Administration: RSG, INC. Tara Matthews 17872 Gillette Ave Suite 350 Irvine, CA 92614 714.316.2111 cmattingly@webrsg.com For Legal Notice Copy to: Tara Matthews 17872 Gillette Ave Suite 350 Irvine, CA 92614 714.316.2111 tmatthews@webrsg.com 2. Required Services A. General Description: Consultant shall provide an update to the comprehensive report that forecasted local taxes to be generated by the proposed RIDA Chula Vista, LLC ("RIDA") Hotel and Conference Center ("RHCC") to be operated by Gaylord Hotel and the Chula Vista Resort RV Park to be operated by Sun Communities, dated August 3, 2020, in the form of an updated Fiscal Impact Analysis; Develop a Financial Pro Forma and provide Credit Rating Services, as requested. DocuSign Envelope ID: F510F964-3DAB-4873-8C46-9C30254FC6B9 2021/10/12 City Council Post Agenda Page 60 of 620 City of Chula Vista Amendment to Agreement No.: #2021-094 Consultant Name: RSG, Inc. Rev. 5/27/2021 B. Detailed Description: Contractor shall provide an updated Fiscal Impact Analysis evaluating the projected revenues to the City associated with operation of the proposed Resort Hotel and Convention Center ("RHCC") Rambler Hotel and the RV Park based on the Report prepared by CBRE. Updated items will include transient occupancy tax, taxable sales tax, property taxes, vehicle license fee revenue, special tax revenues and other revenues expected from the project. Costs would include expected expenditure impacts borne by the City to provide municipal services to the project once completed. Contractor shall update the financial pro forma based on the information from the CBRE Report and ensure consistent time frames and terminology. The updated financial pro forma will identify the proposed new Resort and Hotel Convention Center projects estimated operating overage and shortfall for a stabilized 10 years of operation. Upon request, Contractor shall provide Credit Rating Services that include assisting and participating in Credit Rating Agency presentations and reviews. Under the assumptions that the local taxes forecast will be summarized in the Preliminary Official Statement (POS) and the final Official Statement (OS) and will incorporate as an appendix in disclosure documents. Contractor will be available to discuss their findings and provide certification (acceptable to the Port, JEPA, and the City) of their findings' accuracy. 3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin October 12, 2021 and end on December 31, 2022 for completion of all Required Services. 4. Compensation: A. Form of Compensation ☒ Time and Materials. For performance of the Defined Services by Contractor as herein required, City shall pay Contractor for the productive hours of time spent by Contractor in the performance of said Services, at the rates or amounts as indicated below and a total amount not to exceed of $50,000: Principal/Director $ 275.00 Senior Associate $ 200.00 Associate $ 185.00 Analyst $ 135.00 Research Assistant $ 125.00 B. Reimbursement of Costs ☒ Invoiced or agreed-upon amounts as follows: Reimbursable Expenses - Cost plus 10% DocuSign Envelope ID: F510F964-3DAB-4873-8C46-9C30254FC6B9 2021/10/12 City Council Post Agenda Page 61 of 620 City of Chula Vista Amendment to Agreement No.: #2021-094 Consultant Name: RSG, Inc. Rev. 5/27/2021 Notwithstanding the foregoing, the maximum amount to be paid to the Consultant for services performed through December 31, 2022 shall not exceed $50,000. If the City exercises its option to extend the Agreement, the amount to be paid to the Consultant for services provided during the term of that extension shall not exceed $50,000 If the City exercises all additional options to extend the Agreement, the total amount to be paid to the Consultant for services provided during the initial and optional extension periods shall not exceed $50,000. 5. Special Provisions: ☒ None DocuSign Envelope ID: F510F964-3DAB-4873-8C46-9C30254FC6B9 2021/10/12 City Council Post Agenda Page 62 of 620 8, 2020(“EffectiveDate”) Vista, acharteredmunicipalcorporation (“City”) nd, Consultant”) (collectively, the “Parties” and, individually, a “Party”) isse asthesecondphase (“PhaseII”) ofaFinancialFeasibilityStudy resorthotelconvention centerproject (the “RHCCProject”) andinformtheinitialphase (“PhaseI”) ofthe No.: 2020030 2021/10/12 City Council Post Agenda Page 63 of 620 1. 1.1 . Consultantagreestoperformtheservices, anddeliver toCitythe “Deliverables” (if describedinExhibitAshallbereferredtohereinasthe “RequiredServices.” 1.2 . 1.3 .ancewiththeCity’s servicesrelatedtotheRequiredServices (“AdditionalServices”). Ifso, CityandConsultantagreetomeet consistent withtheratesandtermsalreadyprovidedtherein. OnceaddedtoExhibitA, “AdditionalServices” shallalsobecome “RequiredServices” f 1.4 1.5 1.64 1.7. 1.8. 1.9 . Priortocommencement ofanywork, Consultant shallsubmitforCity’sinformati on No.: 2020030 2021/10/12 City Council Post Agenda Page 64 of 620 shallensurethateachandeverysubcontractor carriesouttheConsultant’sresponsibilitiesassetforthinthis 1.10 orConsultant’ 2. 2.1 4. 2.2. unless 2.3 AtCity’sdiscretion, invoices nottimelysubmitted maybe 2.4. oneachinvoice (the “holdbackamount”) 2.5. Citymayreimburse Consultant’sout 2.6. 2.7 No.: 2020030 2021/10/12 City Council Post Agenda Page 65 of 620 3. 3.1 the “RequiredInsurance”). TheRequiredInsurance shallalsocomplywithallotherterms 3.2 . 3.3 businessintheStateofCaliforniawithacurrentA.M. Best’sratingofAVorbetter, or, ifinsuranceisplaced Insurers (LESLI) withacurrentA.M. Best’sratingofnolessthanAX. ForWorkers’ 3.4 3.5 asrequiredinExhibitBorasmayotherwisebespecifiedbyCity’sRiskManager.. Thegeneralliability additionalinsuredcoveragemustbeprovidedintheformofanendorsementtotheConsultant’sinsurance 3.6 GeneralLiabilityCoveragetobe “Primary.”Consultant’sgeneralliabilitycoveragemustbeprimary 3.7. insuredperiodunderthisAgreement, exceptafterthirtydays’ priorwrittennoticetotheCitybycertifiedmail, 3.8. Consultant’sinsurer(s) willprovideaWaiverofSubrogation infavorofthe 3.9 No.: 2020030 2021/10/12 City Council Post Agenda Page 66 of 620 willendeavor” and “butfailuretomailsuchnoticeshallimposenoobligationorliabilityofanykindupon thecompany, itsagents, orrepresentatives” oranysimilarlanguagemustbedeletedfromallcertificates. The 3.10 The “RetroDate” mustbeshown, andmustbebeforethedateofthisAgreementorthebeginning b. witha “RetroDate” priortotheeffectivedateofthisAgreement, theConsultantmustpurchase “extended reporting” coverage foraminimumoffive (5) yearsaftercompletionoftheworkrequiredbythisAgreement. d. 3.11 tolimittheConsultant’sobligationsunderthisAgreement, includingIndemnity. 3.12 4. 4.1. Indemnified Parties”), fromandagainst anyandallclaims, demands, causesofaction, costs, expenses, feesandcourtcosts), liabil 4.2. 8 2782.8. No.: 2020030 2021/10/12 City Council Post Agenda Page 67 of 620 4.3 . IncludedinConsultant’sobligationsunderthisSection4isConsultant’s obligationtodefend, atConsultant’sowncost, expenseandrisk, anyandallsuits, actionsorotherlegal 4.4. Consultant’sObligationsNot . Consultant’sobligationsunderthisSection4shall declaration bytheConsultant. Furthermore, Consultant’sobligations 4 limit, modifyorexcuseanyofConsultant’sotherobligationsordutiesunderthisAgreement. 4.5. . ConsultantagreestopayanyandallcostsCityincursinenforcingConsultant’s 4.6 . Consultant’sobligations underthisSection4shallsurvivethetermination ofthisAgreement. 5. 5.1 5.2 otherwise, inthistransaction, theproceedshereof, orinthebusinessofConsultantorConsultant’s 6. 6.1 covenants, agreements orconditionsofthisAgreement (eacha “Default”), inadditiontoanyandallother No.: 2020030 2021/10/12 City Council Post Agenda Page 68 of 620 toCity’sspecified terminationdate, andCityagreesthatthespecifiedDefaultiscapableofbeingcured, City all ”WorkProduct” (definedinSection 7 SuchWorkProductshallbeCity’ssoleandexclusivepropertyasprovided inSection 7 t’sreceiptoftheDefault 6.2 WorkProduct” (definedinSection 7 7 y’svalueundertheAgreement. 6.3 6.4 6.5 6.6 classmaildirectedtotheindividualandaddress listedunder “ForLegalNotice,” insection1.B. ofExhibitA 7. No.: 2020030 2021/10/12 City Council Post Agenda Page 69 of 620 uiredServices (collectively “WorkProduct”) shallbethesoleandexclusiveproperty ofCity. No 8. 8.1. 8.2 . CitywouldnothaveenteredintothisAgreementbutforConsultant’sunique noranyparthereof, withoutCity’spriorwrit 8.3 8.4 8.5 8.6 8.7 8.8 conductofConsultantoranyofConsultant’sofficers, employees, oragents (“ConsultantRelated Individuals”), exceptassetforthinthisAgreement. NoConsultantRelatedIndividualsshallbedeemed No.: 2020030 2021/10/12 City Council Post Agenda Page 70 of 620 8.9 No.: 2020030 2021/10/12 City Council Post Agenda Page 71 of 620 BY:________________________________BY: ________________________________ BY: ________________________________ GlenR. Googins No.: 2020030 2021/10/12 City Council Post Agenda Page 72 of 620 SCOPEOFWORKANDPA 1. 2764 Vista, CA91910 6196915179 6196915037 7143162111 7143162111 2. RIDA”) , Rambler Motel (the “Project”). No.: 2020030 2021/10/12 City Council Post Agenda Page 73 of 620 currentlyoperating) andnewRVparkbasedontheCity’scurrent10% o o o should the “Authority”), 2020 EvaluateCBRE’sPhaseI , 2020 No.: 2020030 2021/10/12 City Council Post Agenda Page 74 of 620 2020 2020 TBD 2020 3., 202031, 2020. 4. No.: 2020030 2021/10/12 City Council Post Agenda Page 75 of 620 costs 50,000. 5. writtennoticetoConsultantoftheCity’selectiontoexercisetheextensionviatheNoticeofExerciseofOption No.: 2020030 2021/10/12 City Council Post Agenda Page 76 of 620 Mustbeprimaryandmustnot Operations Workers’ Employer’sLiability No.: 2020030 2021/10/12 City Council Post Agenda Page 77 of 620 12 Code”) requiredesignatedstateand 3 4 1. 2. 3. 4. 5. 6. 7. 1. of “Consultant,” pursuantto FPPCRegulation18700.3, mustfileaForm700. 2. b 866 3772 *2. determination oftheconsultant’srequirement tocomply withthe disclosurerequirements setforthintheCode. VictorDeLaCruz 1Gov. Code §§81000 22.02.040. 3 415261 18700.3 (Consultantdefinedasan “individual” whoparticipatesinmakingagovernmentaldecision; “individual” doesnotincl No.: 2020030 2021/10/12 City Council Post Agenda Page 78 of 620 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT OF THE AGREEMENT FOR FINANCIAL FEASIBILITY STUDY SERVICES BETWEEN THE CITY AND RSG, INC. WHEREAS, the City of Chula Vista entered into an agreement for Financial Feasibility Study Services on April 8, 2020 with RSG, Inc. (RSG) (the “Original Agreement”) that reached its Term limit date of December 31, 2020; and WHEREAS, RSG completed the majority of the original work, but has not yet participated in the bond marketing/rating process as contemplated under the Original Agreement; and WHEREAS, the City of Chula Vista still requires updated Financial Feasibility Study Services for bonding purposes for the Bayfront to move forward with issuing long-term debt to finance the construction of the proposed Resort Hotel and Convention Center (the "RHCC") project and related public infrastructure; and WHEREAS, notwithstanding the Term limit date of December 31, 2020, the City of Chula Vista and RSG have mutually agreed to an extension to the Term limit date of the Original Agreement and to amend the same, subject to City Council approval, and also to increase the agreement amount by $50,000, for a new total not-to-exceed amount of $100,000 with the new Term limit date of December 31, 2022. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it hereby approves the first amendment of the agreement for Financial Feasibility Study Services, between the City and RSG, Inc., in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the Mayor to execute same. Presented by: Tiffany Allen Director of Development Services Approved as to form by: Glen R. Googins City Attorney 2021/10/12 City Council Post Agenda Page 79 of 620 v . 0 03 P a g e | 1 October 12, 2021 ITEM TITLE Affordable Housing Financial Approvals: Consideration of Final Approvals for Columba Apartments Including Authorizing the Execution and Delivery of its Tax-Exempt Multi-family Housing Revenue Notes and Bonds Report Number: 21-0151 Location: Northwest Corner of Solstice Avenue and Optima Street Chula Vista, California 91915 (Assessor Parcel Number 643-060-61-00) Department: Development Services Environmental Notice: The project was adequately covered in the previously certified Final Second Tier Environmental Impact Report (EIR-07-01) - SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan and Tentative Map. Due to the use of City HOME Investment Partnership Act Entitlement funds from the U.S. Department of Housing and Urban Development (HUD), the City completed the necessary reviews under the National Environmental Protection Act (NEPA). The City’s loan will be conditioned upon receiving an Authorization to Use Grant Funds from HUD. Recommended Action Housing Authority adopt a resolution authorizing: (A) the execution and delivery of its tax-exempt multi- family housing revenue notes and its subordinate Chula Vista Housing Authority Multi-family Housing Revenue Bonds (Columba Apartments), collectively in an aggregate principal amount not to exceed $52,100,000; and (B) the execution and delivery of its taxable multi-family housing revenue notes in an aggregate principal amount not to exceed $26,000,000 for the purpose of financing the acquisition and construction of the Columba Apartments multi-family rental housing project; approving and authorizing the execution and delivery of any and all documents necessary to execute and deliver the notes, complete the transaction and implement this resolution, and ratifying and approving any action therefore taken in connection with the notes. SUMMARY The Chula Vista Housing Authority (“CVHA”) is being asked to authorize the execution and delivery of the multifamily housing notes for the proposed financing of Columba Apartments (“the Project”), as requested 2021/10/12 City Council Post Agenda Page 80 of 620 P a g e | 2 by Chelsea Investment Corporation (“Project Sponsor”) on behalf of Millenia II CIC, LP. The Project received a Private Activity Bond Allocation of $52,100,000 from the California Debt Limit Allocation Committee (“CDLAC”) on April 28, 2021, to finance the Project. Tonight’s action provides final approval of the financial package and constitutes final action by the Housing Authority in authorizing the Project. ENVIRONMENTAL REVIEW The Development Services Director has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the Project was adequately covered in previously certified Final Second Tier Environmental Impact Report (EIR 07-01) – SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan and Tentative Map. Therefore, no further CEQA review or documentation is necessary. The City’s federal HOME funds will also be a source of financial assistance. Therefore, as required by the federal entitlement funds, the project was reviewed under the National Environmental Protection Act (“NEPA”) resulting in a Finding of No Significant Impact. Funding of the loan will be conditioned upon receiving the Authorization to Use Grant Fund from HUD. BOARD/COMMISSION/COMMITTEE RECOMMENDATION On April 11, 2021, the Housing Advisory Commission voted (4-0) to recommend the approval of the project. DISCUSSION On January 9, 2021, at a public hearing held in compliance with Section 147(f) of the Internal Revenue Service Code of 1986, reflecting the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”), the Chula Vista City Council (via CC Resolution No. 2021-012 and CVHA Resolution No. 2021-001) approved the use of multifamily housing revenue notes, to be issued by the CVHA, to finance the new construction and operation of the Project located at northwest corner of Solstice Avenue and Optima Street (Attachment 1). An application was submitted to the CDLAC, the State bonding authority, and to the California Tax Credit Allocation Committee (“CTAC”) for the companion tax credits. Subsequently on April 28, 2021, the Project received a 2021 State Ceiling on Qualified Private Activity Bonds Allocation in the amount of $52,100,000 (the “Allocation”), pursuant to CDLAC Resolution No. 21-134. Additionally, the Project received a Preliminary Reservation Letter from the California Tax Credit Allocation Committee (“CTCAC”) for federal and state tax credits. The bond allocation and tax credit contributions will be used to substantially finance the Project. The City and Authority were advised on this matter by a financing team consisting of Stradling Yocca Carlson & Rauth, as special counsel and bond counsel (together, “Special Counsel”) and Ross Financial as Financial Advisor. Staff requests that the CVHA approve, in substantial final form, all documents related to the execution and delivery of the notes and bonds to finance the Project. The Project will assist the City in meeting its Regional Housing Need Allocation (RHNA) set asides in providing units for extremely low, very low, and low-income households in satisfaction of the City’s General Plan 2021-2029 Housing Element. The City Council has 2021/10/12 City Council Post Agenda Page 81 of 620 P a g e | 3 authorized the Project via CVHA Resolution 2021-004 and Council Resolution 2021-182, the execution of a companion loan documents that includes the City’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) that restrict occupancy of the Project. Resolutions, the note, and bond documents presented for the Council’s and CVHA’s consideration have been prepared by Stradling Yocca Carlson & Rauth, serving as Special Counsel for the City of Chula Vista and CVHA. The Development Team The Project is being developed by Chelsea Investment Corporation (“CIC”), a for-profit affordable housing developer (the “Project Sponsor”), who has developed several projects in Chula Vista, primarily in eastern Chula Vista to satisfy various developers’ Balanced Communities Affordable Housing obligations, including: Teresina Apartments, Rancho Buena Vista, Villa Serena Senior Apartments, the Landings I and II, Duetta Apartments and Volta Senior Apartments. CIC has over 11,000 units in its portfolio. The company has a strong experienced team of professionals. CIC has successfully managed low-income housing units for over 30 years. CIC is a qualified developer and has demonstrated on going desire and commitment to partner with the City in the development of another affordable housing project. At bond closing, a limited partnership, Millenia II, CIC, LP, will enter into agreements and project documents to construct, maintain, and operate the Project as the owner and borrower of the bond proceeds. Pacific Southwest Community Development Corporation (“PSCDC”) will serve as the Managing General Partner and CIC Millenia II, LLC will serve as the Administrative General Partner of Millenia II CIC, LP. A summary of the project team is listed in Table 1 below. Table 1 - Development Team Summary Role FIRM/CONTACT Ownership Millenia II, CIC, LP Managing Partner 0.005% PSCDC Administrative General Partner 1.005 % CIC Millenia II, LLC Tax Credit Investor/Limited Partner 98.99 % Raymond James HOF 71-Millenia II CIC, LLC (“RJ”) Property Management CIC Management, Inc. Lender/Note Purchaser Citibank Architect Joseph Wong AIA Design Associates (“JWDA”) The Project Sponsor will be responsible for managing the construction of the property through completion and cost certification, with a general contractor overseeing construction. CIC will also be responsible for preparation of annual property-specific budgets, marketing, leasing, overseeing property management and maintenance, income-qualification of residents, annual reporting to investor and lender, payments to lenders and provide resident services. ConAm Property Management will serve as the day-to-day property manager. The Project The Project will be built within the Millenia master planned community in eastern Chula Vista. The Project envisions a total of 200 units, with 198 affordable to extremely low, very low- and low-income households and 2 units for the onsite resident managers. The unit mix will consist of 56 one-bedroom units, 86 two- 2021/10/12 City Council Post Agenda Page 82 of 620 P a g e | 4 bedroom units and 58 three-bedroom units. One two-bedroom and one three-bedroom units will be reserved for onsite resident managers. Project amenities include a computer lab/lounge, laundry facilities, community room, onsite leasing/ property management office, landscaped courtyards, two tot lots, bocce ball area, four barbeque areas with shaded structures, and two community gardens. The Project will also provide units that are accessible to persons with disabilities. The Project is ideally located for the convenience of residents. Located in the urban heart of Otay Ranch, the Project will be near retail, employment, residential, civic, and cultural uses. The Project is within comfortable walking and biking distance to recreational opportunities and neighborhood services and has direct access to public transportation. Nearby amenities and services are located: Less than 0.5 miles from grocery store and other shopping; Less than 0.5 miles from a community park; and Adjacent to the Bus Rapid Transit  Total Project costs for both acquisition and construction are estimated at $102.8 million, as more fully described in Table 2. Table 2 - Estimated Costs and Key Performance Indicators Total Estimated Costs Estimated Costs per Unit Acquisition Costs $14,500,000 $72,500 Hard Costs and Soft Costs $ 88,336,787 $ 441,684 TOTAL COSTS $ 102,836,787 $ 514,184 TOTAL Dwelling Units (DUs) 200 Income & Rent Restrictions For bond financing, Section 142 (d) of the Internal Revenue Code requires either a minimum of 20 percent of the rental units in the Project be available for occupancy by very low-income persons or families whose income does not exceed 50 percent of the area median income (AMI) for the San Diego Primary Metropolitan Statistical Area, or alternatively, at least 40 percent of the rental units are required to be available for occupancy by low-income persons or families whose income does not exceed 60 percent of the AMI. The units are made available at affordable rents established by the applicable State law. The Project will exceed the affordability requirements of bond financing with 198 of the 200 units of the Project to be restricted as affordable for very low- and low-income households, with two units reserved for the resident managers, as reflected in Table 3. The Project proposes to maintain the income and rent restrictions for 55 years from the effective date of the bond financing agreements. These income and rent restrictions will be outlined within the bond regulatory agreement to be recorded against the property and shall be in compliance with the CDLAC Committee Regulations and the Low Income Housing Tax Credit program as set forth in Section 42 of the Internal Revenue Code in 1986, as amended (“LIHTC”). The 2021 San Diego County Area Medium Income (“AMI”) is $95,100. 2021/10/12 City Council Post Agenda Page 83 of 620 P a g e | 5 Unit and Affordability Mix The unit mix and affordability restrictions for the Project are anticipated as shown below: Columba Unit Mix 30% AMI 50% AMI* 60% AMI* 1 Bedroom/1 Bath 56 6 6 44 2 Bedroom/1 Bath 86* 9 9 67 3Bedroom/2Bath 58* 6 6 45 Total Units 200 21 21 158 *Includes 1 manager’s unit in each unit type that are unrestricted. Manager’s units are not subject to affordability restrictions Compliance with the income and rent restrictions will be subject annually to a regulatory audit and annual tax credit certification. Compliance with strict property management policies and procedures will ensure that income and rent restrictions will be maintained for the full 55-year compliance period. Financing The Tax-Exempt and Taxable Multi-Family Revenue Notes and Bonds and Low-Income Housing Tax Credit financing will support the majority of the estimated $102,836,786 total development cost of the Project. The Project Sponsor has requested the CVHA consider the issuance of one tax-exempt Note and one series of tax- exempt Bonds with a total aggregate principal not to exceed $52.1 million and a taxable note in the amount not to exceed $26 million. Citibank, N.A. (“Citi”) will be the lender/purchaser of the tax-exempt and taxable notes and provide a construction-converting-to-permanent loan (Tax-Exempt Series). Subordinate Bonds will also be issued to finance the costs of acquisition, constructing, and equipping the Project; the Subordinate Bonds will be purchased by a fund created by principals at Chelsea. The Project Sponsor is receiving $4,830,308 in annual Low-Income Housing Tax Credits for the next 10 years and $4,999,996 in state credits over a four-year period. Raymond James will be the Tax Credit Investor. The balance of the needed funds for construction and permanent financing of the Project is provided by a deferred developer fee and a seller carryback loan. Financial assistance from the City and CVHA was approved on August 24, 2021 and includes $2 million from the City’s HOME Investment Partnership Act Entitlement funds from HUD and $1 million from the Successor Housing Agency’s Low- and Moderate- Income Housing Fund. A summary of the estimated sources and uses submitted by the Project Sponsor is provided in Attachment 2. Financial Advisor’s Feasibility Analysis Ross Financial is the CVHA’s Financial Advisor for this transaction. After evaluating the terms of the proposed financing and the public benefits to be achieved, it is the Financial Advisor’s recommendation that the CVHA proceed with execution and delivery of the notes. The Financial Advisor’s analysis and recommendation is included as Attachment 3. 2021/10/12 City Council Post Agenda Page 84 of 620 P a g e | 6 Bond Structure The CVHA is being asked to authorize the execution and delivery of its tax-exempt multifamily housing revenue notes and issue its subordinate CVHA multi-family housing revenue bonds in an aggregate principal amount not to exceed $52.1 million and to authorize the execution and delivery of its taxable multifamily housing revenue notes in an aggregate principal not to exceed $26 million to finance acquisition and development costs. Citibank, N.A (Citi) has committed to provide tax-exempt and taxable construction and permanent financing for the Project and will be purchaser of the notes which will be held by Citi or another affiliate of Citi (the taxable and tax-exempt notes are collectively the “Notes”). The subordinate bond (“Subordinate Bond”) will be purchased by CIC Opportunities Fund III, LLC, a California limited liability company (Seller of the Property). Raymond James Tax Credit Housing Opportunity Fund, Inc. is also providing financing through the purchase of tax credits. The Subordinate Bond will be subordinate to the Notes. The Notes and the Subordinate Bond will meet all requirements of the CVHA’s Multifamily Housing Revenue Bond Program and will fully comply with the City bond disclosure policies. At this time, the Housing Authority is being asked to approve in substantial final form all documents related to the execution and delivery of the notes and bonds. Note and bond documents presented for the CVHA’s consideration have been prepared by Stradling Yocca Carlson & Rauth, serving as Special Counsel to the CVHA. These documents are listed below:  The Bond Regulatory Agreement and Declaration of Restrictive Covenants specifies the regulations for the use and operation of the Project (Attachment 4).  The Borrower Loan Agreement specifies the terms and conditions of the Loan financing for the Project (see Attachment 5).  The Funding Loan Agreement describes the terms and conditions between the Issuer and the Funding Lender for advancing funds and application of these for the purpose of funding a loan to the Borrower (Attachment 6).  The Subordinate Indenture describes the terms and conditions under which the Issuer will issue the series of bonds subordinate to the governmental lender notes described in the Funding Loan Agreement (Attachment 7).  The Subordinate Loan Agreement provides the terms and conditions under which the proceeds of the junior bonds will be advanced to the Borrower for the purpose of funding the subordinate loan to the Borrower (Attachment 8).  The Subordinate Bond Purchase Agreement provides the terms and conditions whereby the subordinate bonds will be privately purchased by CIC Opportunities Fund III LLC, a California limited liability company (Attachment 9). 2021/10/12 City Council Post Agenda Page 85 of 620 P a g e | 7 2021-2029 Housing Element With the execution and recordation of a Deed of Trust and a Declaration of Covenants, Conditions, and Restrictions (“CC&Rs”), the Project will provide 200 units (includes 2-exempt manager’s units) within the Project to be operated as affordable rental housing for extremely low, very-low and low-income households and will count towards the City’s Regional Housing Need obligations of the 2021-2029 Housing Element. Financial Disclosure Government Code Section 5852.1 requires that the governing body of a public body obtain and disclose certain information about a financing, including conduit revenue obligations, prior to authorizing th e issuance of bonds with a term of greater than 13 months. Such information is to be based on good faith estimates of the following information made available in a meeting open to the public. Attachment 10, Public Disclosures Relating to Conduit Revenue Obligations, satisfies this requirement. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council/Housing Authority members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware and has not been informed by any City Council/Housing Authority member of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT Multifamily Housing Revenue Bond Financing is a self-supporting program, with the borrower, the property owner, responsible for the payment of all costs of issuance and other costs of the notes. The CVHA will receive compensation for its services in execution and delivery of the notes by charging an origination fee equal to 20 basis points (0.20%) of the total original principal amount of the notes and bonds, with a minimum fee of $148,364, with the final amount determined at the transaction closing. The borrower is responsible for payment of all costs under the financing, including Bond Counsel, Outside Counsel, Financial Advisor Fees, and Trustee Fees. ONGOING FISCAL IMPACT Multifamily Housing Revenue Bond Financing is self-supporting program. Staff costs associated with monitoring compliance of the regulatory restrictions and administration of the outstanding notes will be reimbursed from an annual administrative fee of $21,000 paid to the CVHA by the borrower. The notes will not constitute a debt of the City or financially obligate the City of the CVHA because the security for the repayment of the notes will be limited to specific private sources of the development. Neither the faith and credit nor the taxing power of the City or the CVHA will be pledged to the payment of the notes. The borrower is responsible for payment of all costs under the financing, including CVHA’s annual administrative fee. 2021/10/12 City Council Post Agenda Page 86 of 620 P a g e | 8 ATTACHMENTS 1. Locator Map 2. Draft Project Proforma (10-6-21) 3. Financial Advisor’s Feasibility Analysis Bond Loan Documents (Transactional Documents) 4. Bond Regulatory Agreement 5. Funding Loan Agreement 6. Borrower Loan Agreement 7. Subordinate Indenture 8. Subordinate Loan Agreement 9. Subordinate Bond Purchase Agreement Other: 10. Public Disclosures Relating to Conduit Revenue Obligations Staff Contact: Tiffany Allen, Director of Development Services Jose Dorado, Senior Management Analyst 2021/10/12 City Council Post Agenda Page 87 of 620 4828-0762-0343v3/024036-0092 RESOLUTION NO. RESOLUTION OF THE CHULA VISTA HOUSING AUTHORITY AUTHORIZING (1) THE EXECUTION AND DELIVERY OF ITS TAX- EXEMPT MULTI-FAMILY HOUSING REVENUE NOTES AND ITS SUBORDINATE CHULA VISTA HOUSING AUTHORITY MULTI- FAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS), COLLECTIVELY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $52,100,000, AND (2) THE EXECUTION AND DELIVERY OF ITS TAXABLE MULTI-FAMILY HOUSING REVENUE NOTES IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $26,000,000 FOR THE PURPOSE OF FINANCING THE ACQUISITION AND CONSTRUCTION OF THE COLUMBA APARTMENTS MULTI-FAMILY RENTAL HOUSING PROJECT; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF ANY AND ALL DOCUMENTS NECESSARY TO EXECUTE AND DELIVER THE NOTES, COMPLETE THE TRANSACTION AND IMPLEMENT THIS RESOLUTION, AND RATIFYING AND APPROVING ANY ACTION HERETOFORE TAKEN IN CONNECTION WITH THE NOTES WHEREAS, pursuant to the Housing Authorities Law, Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (“Housing Authorities Law”), the Chula Vista Housing Authority, a public body corporate and politic organized, existing and operating pursuant to the Housing Authorities Law, the Chula Vista Housing Authority (the “Authority”) is empowered to execute and deliver obligations for the purpose of financing the acquisition, construction, rehabilitation, refinancing, development, and operation of multifamily rental housing; WHEREAS, Millenia II CIC, LP, a California limited partnership (the “Borrower”), intends to acquire and construct a 198-unit plus two manager’s units multifamily rental housing project located at the Northwest corner of Solstice Avenue and Optima Street in Chula Vista, California known as the “Columba Apartments” (the “Project”); WHEREAS, the Borrower has requested Authority to execute and deliver tax-exempt multifamily housing revenue notes in one or more series (the “Tax-Exempt Notes”), and one or more series of taxable multifamily housing revenue notes (the “Taxable Notes,” and, together with the Tax-Exempt Notes, the “Notes”) and a series of tax-exempt multifamily housing revenue bonds subordinate to the Notes (the “Subordinate Bonds,” and, together with the Tax-Exempt Notes, the “Tax-Exempt Obligations”), and to loan the proceeds of the Notes and Subordinate Bonds to the Borrower to finance the acquisition, construction and equipping of the Project; WHEREAS, the aggregate principal amount of the Tax-Exempt Notes and Subordinate Bonds, collectively, shall not exceed $52,100,000, and the aggregate principal amount of the Taxable Notes shall not exceed $26,000,000; WHEREAS, Authority, by action of its Board of Commissioners (the “Board”), desires to assist the Borrower and to increase the supply of affordable housing by making the units in the Project available for low and very low income persons or families, and in order to accomplish such purposes it is desirable for Authority to provide for the execution and Delivery of the Notes and financing of the Project; 2021/10/12 City Council Post Agenda Page 88 of 620 Resolution No. Page 2 2 4828-0762-0343v3/024036-0092 WHEREAS, the Notes will be executed and delivered pursuant to the Funding Loan Agreement (the “Funding Loan Agreement”), by and among the Authority, Citibank, N.A. (“Citibank”) and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”), and the proceeds of the Notes will be loaned to the Borrower pursuant to the Borrower Loan Agreement, between the Authority and the Borrower (the “Borrower Loan Agreement”); WHEREAS, Citibank will act as the Funding Lender under the Funding Loan Agreement; WHEREAS, the Authority will loan the proceeds of the Notes to the Borrower and the Borrower will use the proceeds of the Notes exclusively to finance the costs of acquisition, construction and equipping of the Project and the costs of executing and delivering the Notes; and WHEREAS, the Subordinate Bonds will be issued pursuant to a Subordinate Indenture of Trust (the “Subordinate Indenture”), between the Authority and U.S. Bank National Association, as subordinate trustee (the “Subordinate Trustee”), and the proceeds of the Subordinate Bonds will be loaned to the Borrower pursuant to the Subordinate Loan Agreement, by and among the Authority, the Borrower and Subordinate Trustee (the Subordinate Loan Agreement”); WHEREAS, the Subordinate Bonds shall be purchased by CIC Opportunities Fund II LLC, a California limited liability company (the “Subordinate Bonds Purchaser”) pursuant to the terms of the Subordinate Bond Purchase Agreement, by and among the Authority, the Borrower and the Subordinate Bonds Purchaser (the “Subordinate Bond Purchase Agreement”); WHEREAS, the Authority will loan the proceeds of the Subordinate Bonds to the Borrower and the Borrower will use the proceeds of the Subordinate Bonds exclusively to finance the costs of acquisition, construction and equipping of the Project and the costs of issuing the Subordinate Bonds; WHEREAS, Government Code Section 8869.85 requires a local agency to file an application with the California Debt Limit Allocation Committee (“Committee”) prior to the issuance of tax - exempt multifamily housing revenue bonds and the Authority has filed such an application; WHEREAS, the Committee has allocated to the Project $52,100,000 of the State of California 2021 State ceiling for private activity bonds under Section 146 of the Internal Revenue Code of 1986; WHEREAS, it is the intent of the Authority to enter into bond documentation to govern the Notes being executed and delivered (collectively, the “Transaction Documents”), including: (1) the Funding Loan Agreement; (2) the Borrower Loan Agreement; (3) a regulatory agreement and declaration of restrictive covenants, by and between the Authority and the Borrower (the “Regulatory Agreement”); (4) the Subordinate Indenture, (5) Subordinate Loan Agreement and (6) Subordinate Bond Purchase Agreement; and WHEREAS, it appears that each of the documents and instruments described herein now before this meeting is in a substantially appropriate form and is an appropriate instrument to be executed and delivered for the purposes intended. 2021/10/12 City Council Post Agenda Page 89 of 620 Resolution No. Page 3 3 4828-0762-0343v3/024036-0092 NOW, THEREFORE, THE BOARD OF COMMISSIONERS OF THE CHULA VISTA HOUSING AUTHORITY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS: 1. Authorization of Notes. In accordance with the Housing Authorities Law and pursuant to the Funding Loan Agreement, Authority authorizes the execution and delivery of notes in one or more series of tax-exempt notes and one or more series of taxable notes designated as “Chula Vista Housing Authority Multifamily Housing Revenue Notes (Columba Apartments) 2021 Series A- ___” (collectively, the “Notes”), with an interest rate or rates, a maturity date or dates and other terms as provided in the Funding Loan Agreement as finally executed for the Notes. The Notes shall be in substantially the form set forth in and otherwise in accordance with the Funding Loan Agreement, and shall be executed on behalf of Authority by the manual or facsimile signature of the Chair of the Board of Commissioners of the Authority (the “Chair”) or the Executive Director of the Authority (the “Executive Director”), and the Notes shall be attested by the manual or facsimile signature of the Secretary of the Board of Commissioners of the Authority (“Secretary”). 2. Authorization of Subordinate Bonds. In accordance with the Housing Authorities Law and pursuant to the Subordinate Indenture, Authority authorizes the issuance of a series of tax- exempt bonds subordinate to the Notes designated as “Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments) Subordinate 2021 Series A-__” (the “Subordinate Bonds”), with an interest rate or rates, a maturity date or dates and other terms as provided in the Subordinate Indenture as finally executed for the Subordinate Bonds. The Subordinate Bonds shall be in substantially the form set forth in and otherwise in accordance with the Subordinate Indenture, and shall be issued on behalf of Authority by the manual or facsimile signature of the Chair or the Executive Director, and the Subordinate Notes shall be attested by the manual or facsimile signature of the Secretary. 3. Approval of Transaction Documents. The form of each of the Transaction Documents, in substantially the form on file with the Secretary, is hereby approved. The Chair, the Executive Director, and their authorized designee(s) (each, an “Authorized Officer”) are authorized to execute, and the Secretary is authorized to attest, each of the Transaction Documents in substantially said form, with such additions thereto and changes therein as the Authorized Officer may approve or recommend in accordance with Section 5 hereof. The date, maturity date or dates, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption, and other terms of the Notes shall be as provided in the Funding Loan Agreement as finally executed, and the date, maturity date or dates, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption, and other terms of the Subordinate Bonds shall be as provided in the Subordinate Indenture as finally executed. 4. Approval of Transaction Documents. Any Authorized Officer is authorized to execute and deliver, and the Secretary is authorized to attest, any and all certificates, agreements and other documents ancillary to the Transaction Documents in the forms approved by the City Attorney, as general counsel to Authority (“General Counsel”), and by special counsel and bond counsel to the Authority and City on these matters, Stradling Yocca Carlson & Rauth (together, “Special Counsel”). 5. Approval of Changes to Documents. Any Authorized Officer executing a document approved herein, in consultation with General Counsel and Special Counsel, is authorized to approve 2021/10/12 City Council Post Agenda Page 90 of 620 Resolution No. Page 4 4 4828-0762-0343v3/024036-0092 and make such modifications, changes or additions to Transaction Documents or other documents as may be necessary or advisable, and the approval of any modification, change or addition to any of the aforementioned agreements shall be evidenced conclusively by the execution and delivery thereof by such Authorized Officer and approval as to form by General Counsel and Special Counsel. Further, any Authorized Officer, acting alone, is authorized to execute any assignment agreement related to any mortgage note, mortgage, deed of trust or other document related to the loans made to the Borrower from the proceeds of the Notes and the Subordinate Bonds. 6. Actions Ratified and Authorized. All actions heretofore taken by the officers, employees and agents of Authority with respect to the execution and delivery of the Notes and the issuance of the Subordinate Bonds are approved, confirmed and ratified, and the officers, employees and agents of Authority are authorized and directed, for and in the name and on behalf of Auth ority, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents, including, but not limited to, those documents described in the Transaction Documents and the other documents herein approved, which they, or any of them, may deem necessary or advisable in order to consummate the lawful execution and delivery of the Notes and to effectuate the purposes thereof and of the documents herein approved in accordance with this resolution and resolutions heretofore adopted by the Board. In the event that the Secretary is unavailable to sign any document related to the Notes or Subordinate Bonds, any Deputy Secretary of the Authority may sign on behalf of the Secretary. 7. Further Consents, Approvals and Other Actions. All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution or otherwise appropriate in the administration of the Notes and Subordinate Bonds and the lending program financed thereby, including without limitation any of the foregoing that may be necessary or desirable in connection with any amendment of such documents, any transfer of the Project, any substitution of security for the Notes or Subordinate Bonds, or any prepayment of the Notes or Subordinate Bonds may be taken or given by the Chair or the Executive Director, and the Chair or the Executive Director are hereby authorized and directed to give any such consent, approval, notice, order or request and to take any such action which such officer may deem necessary or desirable to further the purposes of this Resolution. 8. Conflicting Resolutions Repealed. As to the Notes, all prior resolutions or parts thereof, if any, in conflict herewith are, to the extent of such conflict, repealed. 9. Severability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any remaining sections, paragraphs or provisions of this Resolution. 10. Effectiveness of Resolution and Date Thereof. This Resolution shall take effect upon its adoption. 11. Certification. The Secretary shall certify to the passage and adoption o f this Resolution. 2021/10/12 City Council Post Agenda Page 91 of 620 Resolution No. Page 5 5 4828-0762-0343v3/024036-0092 The foregoing Resolution was passed and adopted by the Board of Commissioners of the Chula Vista Housing Authority, California, this 12th day of October 2021, by the following vote, to wit: AYES: NOES: ABSENT: Mayor ATTEST: _____________________________ Secretary 2021/10/12 City Council Post Agenda Page 92 of 620 Resolution No. Page 6 6 4828-0762-0343v3/024036-0092 STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN DIEGO ) I, _______________, Secretary of the Chula Vista Housing Authority, California, hereby certify that the above and foregoing Resolution was duly and regularly ado pted by the Board of Commissioners at a regular meeting thereof held on the 12th day of October, 2021. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 12th day of October 2021. Secretary of the Housing Authority of the City of Chula Vista, California 2021/10/12 City Council Post Agenda Page 93 of 620 Attachment 1 2021/10/12 City Council Post Agenda Page 94 of 620 Revision Date: Print Date: (Loan Paydown) Closing Completion Conversion 8,609 $17,500/unit 3,500,000$ Equity Pay In 15% 65% 19.0%1.00% Basis Eligible Acquisition Cost 8.65%$54,959/unit 10,991,775 0.8725$ 14,491,775 State Tax Credit Price CERTIFICATED 0.8500$ Contract for offsite public improvements 1,250,011 $6,200/unit 1,240,092 4.00% $9,465/unit 1,893,052 98.99% Parking - inc vertical Structured $0/acre 0 Vertical construction #DIV/0!#DIV/0!39,571,291 GC Contingecy 5.0%$10,676/unit 2,135,222 0 $31,388/unit 6,277,552 $261,836/unit 52,367,220 6.0%$13,092/unit 2,618,361 $343.83/gsf 54,985,581 TCAC AMI Studio 1BR 2BR 3BR Totals 5,707 Sq. Ft.0 585 786 1,027 159,922 1.83% of GC $5,024/unit 1,004,800 250 UA $35 $44 $55 $37,805/unit 7,560,933 5.00%120%0 0 0 0 0 $2,058/unit 411,500 1.15 100%0 0 0 $3,822/unit 764,381 35 70%0 0 0 0 0 $73,171/unit 14,634,126 4.25%60%0 44 67 45 156 $43,030/unit 8,606,026 3.53%50%0 6 9 6 21 $4,525/unit 905,013 4.00%30%0 3 5 3 11 $2,249/unit 449,764 22,880,231 30%30% RDA Rents 3 4 3 10 Tax- Exempt Bonds - Construction 49,700,000 34,336,542 Total Construction Loan 72,580,231 Mgr.0 0 1 1 2 Tax- Exempt Bonds - C Bond 2,400,000 Totals 0 56 86 58 200 103,813,898 Tax-exempt construction to perm 35,460,000 Tax-exempt construction only 14,240,000 Average affordability 55.76% Junior Subordinate Bond 2,400,000 Total Tax-exempt bonds 52,100,000 Cash Developer Fee 3,643,409 Tiebreaker 152,838 Bedrooms for tiebreaker 247.75 0 DDA/QCT BoostDDA (2021 confirmed) Tract #: 113.04 130% Federal LIHTC Equity 42%43,403,051 No State LIHTC Equity 4%4,207,072 50% Test 52,100,000 52.03% 0% 103,500 N/A 34%35,460,000 N/A 2%2,400,000 Large Family 5% 4,859,118 None 9% 9,491,775 Opportunity Map designation 2021 High Resource 2%2,000,000 Solar State Fed 1%1,000,000 0 0 0 Lease Up Complete Cross over calendar year 1% 889,383 0 0 7,461,843 Conversion/Stabilizatiion 100%103,813,898 0 0 7,461,843 Overhead, Profit, General Conditions Census Tract 133.14 Impact Fees per Unit: Financing Sources: 39,768 C bond PRELIM DEVELOPMENT PROGRAMMING SUMMARY Chula Vista San Diego $57,750 3.100 MSA: 4 Person 50% AMI: Site (acres): Construction Type: No. of Stories: Parking Type: No. of Stalls: Solar Credits 4% Credit Rate LP Interest 10 Yr Federal Tax Credits 4 Yr State Credits Donate for Leverage Solar Tax Credit Price $72,459/unit Type III modified 5 Structured Acquisition Land Cost Subtotal Acquisition Sources 2nd Yr Credit Delivery CA 9% Tiebreaker Rural Designation Prevailing Wage (State, Federal, Both): $519,069/unitTotal Development Costs Construction Begin - Initial Closing Deferred Developer Fee Bond Deposit Refund Permanent Loan (Tranche A) Interest Rate - Permanent Loan Taxable Construction loan CA 9% Site Amenity Score Housing Set Aside Perm Loan Amort Interest Rate - Construction Loan Taxable Tax Credit Allocation 3rd Yr Credit Delivery 10/2/248609 7/2/24 PROJECT SUMMARY Millenia II - 200 Unit family project Design Assist on/off site 4,999,996 Federal Tax Credit Price Hard Costs 10/6/21 12:00 AM High Resource 4% & Bonds state credits City: Development Costs FINANCING ASSUMPTIONSSOURCES AND USES SUMMARY 50,253,174 Equity PROJECT UNIT & INCOME MIX PROJECT TIMING Legal Fees Reserves Development Impact and Permit Fees Developer Fee 1st Yr Credit Delivery 2023 4/28/21 Interest Rate - Construction Loan Tax Exempt Tax Credit Considerations Construction Complete 10/25/21 11/1/23 2/1/24 Seller Note City of Chula Vista RDA Funds = 21 units at 30% AMI Accrued interest on residual receipts loans City of Chula Vista HOME Funds - 11 assisted units Total Development Sources GC Contract Amount Owner Hard Costs Contingency Subtotal Hard Costs Remaining Development Soft costs $274,928/unit $171,683/unit Debt Opr. Exp./Unit/Year A&E Financing Fees and Interest DCR Replacement Reserves/Unit/Year Vacancy Rate Owner Soft Costs Contingency Subtotal Soft Costs DRAFT 2021/10/12 City Council Post Agenda Page 95 of 620 3,643,409 44,839,657$ Construction Stabilization Conversion 8609 Total 42,347,552 Pre-Dev Close Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Subtotal 6mos 36,170,084 10%15%15%15%15%10%10%10% SOURCES OF FUNDS 36,169,984 1 6,510,458 - - - - - - - - 6,510,458 28,211,983 8,246,580 434,031 43,403,051 2 21,035 631,061 - - - - - - - - 631,061 2,734,597 799,344 42,071 4,207,072 3 - - - - - - - - - - - - - - 4 3,500 - 100,000 - - - - - - 103,500 - - - 103,500 5 455,950 12,080,279 6,070,013 9,254,174 7,601,619 12,047,961 2,190,004 49,700,000 (31,146,579) (18,553,421) - - 6 - 4,786,655 5,413,532 5,513,562 5,597,193 21,310,942 1,569,289 (22,880,231) - - 6 - - - - - - - - - - - 35,460,000 - 35,460,000 7 - - - - - - - - - - - - - - 8 - - - - - - - - - - - 4,859,118 - 4,859,118 9 $12,000/unit 2,400,000 - - - - - - - 2,400,000 - - 2,400,000 10 - - - - - - - - - - - - - 12 $47,459/unit 9,491,775 - - - - - - - - 9,491,775 - - - 9,491,775 13 - 81,188 86,188 86,188 86,188 88,188 92,188 92,188 92,188 704,507 184,877 - - 889,383 14 Chula Vista Housing Authority - HOME Funds 1,000,000 800,000 1,800,000 200,000 2,000,000 15 Chula Vista Housing Authority - RDA Fund restricting 21 units at 30% AMI 1,000,000 - - - - - - 1,000,000 - - 1,000,000 16 Total Sources of Funds 455,950 32,117,073 7,151,201 9,440,362 7,687,807 12,134,149 7,864,848 5,505,720 5,605,750 5,689,381 93,652,242 1,754,165 7,931,390 476,101 103,813,898 17 18 19 USES OF FUNDS 20 ACQUISITION 21 Land Cost $17,500/unit 3,500,000 - - - - - - - - 3,500,000 - - - 3,500,000 26 Basis Eligible Acquisition Cost $54,959/unit 10,991,775 - - - - - - - - 10,991,775 - - - 10,991,775 27 Other: Option Payment/Acq Fee 4,100 - - - - - - - - 4,100 - - - 4,100 28 Subtotal Site AcquisitionTotal Land / Acquitisiton 14,495,875 - - - - - - - - 14,495,875 - - - 14,495,875 29 47 NEW CONSTRUCTION - 48 Separate Contract for off-site public improvements:548,251 548,251 1,096,501 1,096,501 49 Overhead/Profit/GR 11%120,615 120,615 120,615 50 Contractor Precon 3%32,895 32,895 32,895 51 52 Design Assist -$ 1,240,092 - - - - - - - - 1,240,092 - - - 1,240,092 53 Off-site Improvements/Onsite Improvements 1,893,052.00$ - 946,526 946,526 - - - - - - 1,893,052 - - - 1,893,052 57 Vertical 39,571,291$ - 3,957,129 5,935,694 5,935,694 5,935,694 5,935,694 3,957,129 3,957,129 3,957,129 39,571,291 - - - 39,571,291 58 GC Contingency 5.00%62,005 245,183 344,111 296,785 296,785 296,785 197,856 197,856 197,856 2,135,222 - - - 2,135,222 59 Overhead/Profit/GR 11%143,231 566,372 794,896 685,573 685,573 685,573 457,048 457,048 457,048 4,932,362 - - - 4,932,362 60 Contractor Precon 3%1,345,190 1,345,190 - - - 1,345,190 63 Other:- - - - - - - - - - - - - - 64 Total New Construction/GC Contract Sum $261,836/unit - 2,944,027 6,263,461 8,569,478 6,918,051 6,918,051 6,918,051 4,612,034 4,612,034 4,612,034 52,367,220 - - - 52,367,220 65 66 ARCHITECTURAL 67 Building: Design/Build inc SOV 0 - - - - - - - - - - - 68 Landscape 0 48,200 48,200 48,200 69 Energy Consultant 0 89,000 89,000 89,000 72 Other: Interior Design, Misc.0 90,100 - - - - - - - - 90,100 - - - 90,100 73 Total Architectural - 227,300 - - - - - - - - 227,300 - - - 227,300 74 75 SURVEY & ENGINEERING 76 Civil, inc ALTA 0 192,500 125,000 12,500 330,000 - - - 330,000 78 Staking 0 90,000 90,000 - - - 90,000 79 Structural Testing 0 95,000 95,000 - - - 95,000 80 Soils 0 77,500 77,500 - - - 77,500 81 Other: 0 - - - - - 82 Other: - CASP, Fire…0 125,000 - - - - - - - - 125,000 - - - 125,000 83 Other: Additional Testing/Inspections 0 60,000 - - - - - - - - 60,000 - - - 60,000 84 Total Survey & Engineering 52,300 - 377,500 292,500 95,000 - - - - - 12,500 777,500 - - - 777,500 85 86 CONTINGENCY COSTS 87 Hard Cost Contingency 5%147,201 313,173 428,474 345,903 345,903 345,903 230,602 230,602 230,602 2,618,361 - - - 2,618,361 88 Soft Cost Contingency 2.00%270,492 11,266 8,675 8,311 95,082 11,782 13,002 14,963 16,191 449,764 - - - 449,764 89 Subtotal ImprovementsTotal Contingency - 417,693 324,439 437,149 354,213 440,985 357,685 243,603 245,565 246,793 3,068,125 - - - 3,068,125 90 91 CONSTRUCTION PERIOD EXPENSES 92 Construction Loan Interest - 128,488 191,423 268,230 348,394 439,799 496,770 544,838 593,741 3,011,682 1,003,143 - 4,014,825 93 Soft Loan Interest - 81,188 86,188 86,188 86,188 88,188 92,188 92,188 92,188 704,507 184,877 - - 889,383 94 C Bond Interest - 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 360,000 90,000 - - 450,000 95 Origination Fee 1.00%725,802 - - - - - - - - 725,802 - - - 725,802 96 C Bond Fee and DD/Legal 3.00%122,000 - - - - - - - - 122,000 - - - 122,000 97 Owner Paid Bonds/Escrow 40,000 - - - - - - - - 40,000 - - - 40,000 98 Lender Inspection Fees - 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 48,000 - - - 48,000 99 Taxes During Construction 42,800 - - - - - - - 42,800 - - - 42,800 100 Other: Application fee - - - - - - - - - - - - - - 101 Insurance During Construction 770,000 - - - - - - - - 770,000 - - - 770,000 102 Title and Recording Fees 91,500 - - - - - - - - 91,500 - - - 91,500 103 Construction Mgmt. and Monitoring 0 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 9,000 - - - 9,000 104 Predevelopment Loan Interest 75,000 - - - - - - - - 75,000 - - - 75,000 105 Other: Accounting & Admin - - - - - - - - - - - - 106 Other: Citibank Due Diligence 25,000 - - - - - - - - - 25,000 - - - 25,000 107 Subtotal Interest/FeesTotal Construction Period Expense 25,000 1,867,102 261,801 329,736 406,543 486,707 580,112 641,083 689,152 738,055 6,025,291 1,278,019 - - 7,303,310 108 109 PERMANENT FINANCING EXPENSES Residual Receipt Loans Accrued Interest Permanent Loan (Tranche A) Deferred Developer Fee C Bond Subordinate Fee (MGP Loan) Permanent Loan (Tranche B) Developer's Equity Contribution Bond Deposit Refund Construction Loan - Tax Exempt Seller Note Construction Loan - Taxable Construction Period PROJECTED SOURCES AND USES OF FUNDS Millenia II - 200 Unit family project Federal LIHTC Equity State LIHTC Equity DRAFT 2021/10/12 City Council Post Agenda Page 96 of 620 3,643,409 44,839,657$ Construction Stabilization Conversion 8609 Total 42,347,552 Pre-Dev Close Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Subtotal 6mos 36,170,084 10%15%15%15%15%10%10%10% Construction Period PROJECTED SOURCES AND USES OF FUNDS Millenia II - 200 Unit family project 110 Loan Origination Fees 0.00%- - - - - - - - - - - 30,000 - 30,000 111 Credit Enhancement & Application Fee - - - - - - - - - - - - - - 112 Title and Recording Fees - - - - - - - - - - - 7,162 - 7,162 113 Property Taxes - - - - - - - - - - - - - - 114 Insurance - - - - - - - - - - - - - - 115 Other: Issuer Fee 0.200%170,960 - - - 21,000 - - - 21,000 212,960 - - 212,960 116 Other: Misc. Perm Conversion Fees - - - - - - - - - - - 7,500 - 7,500 117 Total Permanent Financing 170,960 - - - 21,000 - - - 21,000 212,960 - 44,662 - 257,622 118 119 LEGAL FEES 120 Construction Lender Legal 75,000 - - - - - - - - 75,000 - - - 75,000 121 Permanent Lender Legal - - - - - - - - - - - 7,500 - 7,500 122 Sponsor Legal 79,000 105,000 - - - - - - - - 184,000 - - - 184,000 123 Organizational Legal 50,000 - - - - - - - - 50,000 - - - 50,000 124 Other Legal (Issuer Legal, Bond Counsel, Trustee Fees/Legal)70,000 - - - - - - - - 70,000 - - - 70,000 125 Other:- - - - - - - - - - - - - - 126 Other: GP Legal 0 25,000 - - - - - - - - 25,000 - - - 25,000 127 Total Legal Fees 79,000 325,000 - - - - - - - - 404,000 - 7,500 - 411,500 128 129 CAPITALIZED RESERVES 130 Operating Reserve 3 months - - - - - - - - - - - 764,381 764,381 131 Replacement Reserve - - - - - - - - - - - - - - 132 Rent-up Reserve - - - - - - - - - - - - - - 133 Transition Reserve (2 years)- - - - - - - - - - - - - - 134 Other: Prepaid HOA - - - - - - - - - - - - - - 135 Other: Capitalized LP Fee - - - - - - - - - - - - - - 136 Total Reserves - - - - - - - - - - - - 764,381 - 764,381 137 138 REPORTS & STUDIES 139 Market Study 15,300 - - - - - - - - 15,300 - - - 15,300 140 Relocation Plan & consulting 0 - - - - - - - - - - - - - - 141 Appraisal 0 - - - - - - - - - - - - - - 142 Environmental 19,500 - - - - - - - - - 19,500 - - - 19,500 143 Other: Lender Deposit 0 - - - - - - - - - - - - - 144 Other: Investor Deposit 0 - - - - - - - - - - - - - - 145 Other: Third Party Reports 53,700 - - - - - - - - - 53,700 - - - 53,700 146 Other: Consultant 22,850 60,000 - - - - - - - - 82,850 - - - 82,850 147 Total Reports & Studies 111,350 60,000 - - - - - - - - 171,350 - - - 171,350 148 149 OTHER 150 TCAC App./Alloc/Monitoring Fees 0 149,303 - - - - - - - - 149,303 - 149,303 151 CDLAC/CDIAC Fees 0.06%31,260 - - - - - - - 31,260 - - - 31,260 152 Local Permit Fees $2,200/unit 125,000 315,000 - - - - - - - - 440,000 - - - 440,000 153 Water & Sewer Fee $3,021/unit 647,313 647,313 647,313 154 School Fees $9,877/unit 1,590,000 1,590,000 1,590,000 153 Local Development Impact Fees $39,768/unit 0 4,338,407 - - - 4,258,407 - - - - 8,596,813 - - - 8,596,813 154 CFD Prepayment $16,800/unit 3,360,000 - - - - - - - - 3,360,000 - - - 3,360,000 155 Syndicator/Investor Fees & Expenses - - - - - - - - - - - - - - 156 Furnishings - - - - - - - - - - - 157 Final Cost Audit Expense - - - - - - - - - - 15,000 - - 15,000 158 Marketing $200k Paid to seller at close 200,000 - - - - 50,000 50,000 300,000 10,000 - - 310,000 159 MGP Services Fee 20,000 - - - 20,000 - - - 20,000 160 CVHA TEFRA 3,500 - - - - - - - - - 3,500 - - - 3,500 161 Accounting/Finance/Admin 8,600 16,400 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 97,000 - - - 97,000 162 Other: CPA Opinion 0 - - - - - - - - - - 163 Bond Performance Deposit 103,500 - - - - - - - - - 103,500 - - - 103,500 164 Total Other Costs 240,600 10,667,683 9,000 9,000 9,000 4,267,407 9,000 9,000 59,000 59,000 15,338,689 25,000 - - 15,363,689 165 166 DEVELOPER COSTS 167 Developer Fee 563,932 - - - - - - 563,932 451,146 7,114,847 476,101 8,606,026 168 Consultant/Processing Agent - - - - - - - - - - - - - - 169 Project Administration - - - - - - - - - - - - - - 170 Syndication Consultant - - - - - - - - - - - - - - 171 Guarantee Fees - - - - - - - - - - - - - - 172 Broker Fees Paid to Related Party - - - - - - - - - - - - - - 173 Construction Oversight & Mgmt - - - - - - - - - - - - - - 174 Total Developer Costs - 563,932 - - - - - - - - 563,932 451,146 7,114,847 476,101 8,606,026 175 176 177 Total Uses of Funds 455,950 32,117,073 7,151,201 9,440,362 7,687,807 12,134,149 7,864,848 5,505,720 5,605,750 5,689,381 93,652,242 1,754,165 7,931,390 476,101 103,813,898 178 Net Source & Use (0) (0) - - - - - - - - (0) 0 - (0) 179 Distributions - - 180 Balance of Funds (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) DRAFT 2021/10/12 City Council Post Agenda Page 97 of 620 Millenia II - 200 Unit family project 2021 rents Square Total Gross Utility Adjust Monthly Annual Rent:Restriction %AMI Units Feet/Unit Sq. Ft. Rents Allowance for mkt Net Rent Rent 1BR/1BA LIHTC 70%585 0 1,590$ 35$ -$ 1,555$ -$ 1BR/1BA LIHTC 60% 44 585 25,740 1,363$ 35$ -$ 1,328$ 701,184$ 1BR/1BA LIHTC 50% 6 585 3,510 1,136$ 35$ 1,101$ 79,272$ 1BR/1BA LIHTC 30% 3 585 1,755 682$ 35$ 647$ 23,278$ 1BR/1BA RDA 30%30% 3 585 1,755 571$ 35$ 536$ 19,296$ 2BR/1BA LIHTC 70%786 0 1,908$ 44$ -$ 1,864$ -$ 2BR/1BA LIHTC 60% 67 786 52,662 1,635$ 44$ 1,591$ 1,279,164$ 2BR/1BA LIHTC 50% 9 786 7,074 1,363$ 44$ 1,319$ 142,452$ 2BR/1BA LIHTC 30% 5 786 3,930 818$ 44$ 774$ 46,428$ 2BR/1BA RDA 30%30% 4 786 3,144 642$ 44$ 598$ 28,704$ 3BR/2BA LIHTC 120% 0 1,027 0 -$ 55$ -$ -$ 3BR/2BA LIHTC 100% 0 1,027 0 -$ 55$ -$ -$ 3BR/2BA LIHTC 60% 45 1,027 46,215 1,890$ 55$ -$ 1,835$ 990,900$ 3BR/2BA LIHTC 50% 6 1,027 6,162 1,575$ 55$ 1,520$ 109,440$ 3BR/2BA LIHTC 30% 3 1,027 3,081 945$ 55$ 890$ 32,040$ 3BR/2BA RDA 30%30% 3 1,027 3,081 713$ 55$ 658$ 23,688$ 2BR/1BA MGR 1 786 786 -$ -$ -$ -$ 3BR/2BA MGR 1 1,027 1,027 -$ Total Rents 200 159,922 3,475,846 Community Room/Office 0 % Loss to Efficiency 0%0 Construction Square Feet 159,922 Income from Operations PUPM Laundry 12.00$ 28,800 Other Income (App. Fees, Late, etc.)8.00$ 19,200 Garage -$ 0 Garages 0 Cable & Highspeed Data Income -$ 0 Telephone Income -$ 0 Sub-Total 20.00$ 3,523,846 Less: Vacancies @ 5%176,192 Commercial Income 0 Less: Vacancies @ 25%0 Total Income 3,347,653 Operating Expenses PUPA Comps Diff Admin 424$ -$ 424$ 84,867 Management Fee 660$ 660$ 132,000 Utilities 1,212$ -$ 1,212$ 242,388 Payroll 1,272$ -$ 1,272$ 254,394 Repair & Maintenance (inc security)1,346$ -$ 1,346$ 269,216 Insruance 300$ -$ 300$ 60,000 Taxes (HOA, CFD)407$ -$ 407$ 81,381 Other 86$ -$ 86$ 17,136 Total Expenses 5,707$ 1,141,382 Net Operating Income 2,206,271 Reserves $250.00/unit 50,000 Services 13,320 Annual Admin Fee 0.000%City CV 21,000 Mandatory Debt Service 0.420%0 Net Income Available for Debt Service 2,121,951 DSC TEST 1.15 Tranche B Tranche C 0 2,400,000 4.25%4.25% 35 35 1.15 153,762 0 1,845,141 0 Debt Service Coverage Monthly Payment Annual Payment Cash Flow After D/S Tranche A 35,460,000 17 40 1.15 276,811 Loan Sizing Loan Amount Interest Term Amortization Notes OPERATING BUDGET & INCOME ANALYSIS DRAFT 2021/10/12 City Council Post Agenda Page 98 of 620 TAX CREDITS & BASIS CALCULATION Millenia II - 200 Unit family project ACTUAL OR EST.70%30% DESCRIPTION OF COSTS OF COSTS ELIGIBLE BASIS ELIGIBLE BASIS ACQUISITION Land Cost 3,500,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX Existing Improvement Costs 10,991,775$ XXXXXXXXXXXXX 10,991,775$ Other: Option Payment/Acq Fee 4,100$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL LAND/AQUISITION COSTS 14,495,875$ -$ 10,991,775$ NEW CONSTRUCTION Design Assist 1,240,092$ 1,240,092$ Off-site Improvements/Onsite Improvements 1,893,052$ 1,893,052$ Solar -$ -$ Offsite Public Improvements 1,096,501$ 1,096,501$ Parking -$ -$ Vertical 39,571,291$ 39,571,291$ GC Contingency 2,135,222$ 2,135,222$ Overhead/Profit/GR 5,052,977$ 5,052,977$ Contractor Precon 1,378,085$ 1,378,085$ Other:-$ -$ TOTAL CONSTRUCTION 52,367,220$ -$ 52,367,220$ ARCHITECTURAL FEES Building: Design/Build inc SOV -$ -$ Landscape 48,200$ 48,200$ Energy Consultant 89,000$ 89,000$ Other: Acoustic Study -$ -$ Other: Traffic Study -$ -$ Other: Interior Design, Misc.90,100$ 90,100$ TOTAL ARCHITECTURAL COSTS 227,300$ -$ 227,300$ SURVEY & ENGINEERING Civil, inc ALTA 330,000$ 330,000$ Staking 90,000$ 90,000$ Structural Testing 95,000$ 95,000$ Soils 77,500$ 77,500$ Other: - CASP, Fire…125,000$ 125,000$ Other: Additional Testing/Inspections 60,000$ 60,000$ TOTAL SURVEY & ENGINEERING 777,500$ -$ 777,500$ CONTINGENCY COSTS Hard Cost Contingency 2,618,361$ 2,618,361$ Soft Cost Contingency 449,764$ 449,764$ TOTAL CONTINGENCY COSTS 3,068,125$ -$ 3,068,125$ CONSTRUCTION PERIOD EXPENSES Construction Loan Interest 4,014,825$ 2,710,514$ C Bond Loan Interest 889,383$ 704,507$ C Bond Interest 450,000$ 360,000$ Origination Fee 725,802$ 544,352$ Credit Enhancement & Application Fee 122,000$ 122,000$ Owner Paid Bonds 40,000$ 40,000$ Lender Inspection Fees 48,000$ 48,000$ Taxes During Construction 42,800$ 42,800$ Insurance During Construction 770,000$ 770,000$ Title and Recording Fees 91,500$ 68,625$ Construction Management & Testing 9,000$ 9,000$ Predevelopment Loan Interest 75,000$ 75,000$ Other: Accounting & Admin -$ -$ Other: Citibank Due Diligence 25,000$ 25,000$ TOTAL CONSTRUCTION PERIOD EXPENSE 7,303,310$ -$ 5,519,797$ PERMANENT FINANCING EXPENSES Loan Origination Fee 30,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX Credit Enhancement & Application Fee -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Title and Recording Fees 7,162$ XXXXXXXXXXXXX XXXXXXXXXXXXX Property Taxes -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Insurance -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Other: Issuer Fee 212,960$ XXXXXXXXXXXXX XXXXXXXXXXXXX Other: Misc. Perm Conversion Fees 7,500$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL PERMANENT FINANCING COSTS 257,622$ -$ -$ LEGAL FEES Construction Lender Legal 75,000$ 37,500$ Permanent Lender Legal 7,500$ XXXXXXXXXXXXX Sponsor Legal 184,000$ 92,000$ Organizational Legal 50,000$ XXXXXXXXXXXXX Bond Legal 70,000$ XXXXXXXXXXXXX DRAFT 2021/10/12 City Council Post Agenda Page 99 of 620 CPA, Opinion -$ -$ Other: GP Legal 25,000$ 12,500$ TOTAL LEGAL 411,500$ -$ 142,000$ CAPITALIZED RESERVES Operating Reserve 764,381$ XXXXXXXXXXXXX XXXXXXXXXXXXX Replacement Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Rent-up Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Transition Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL RESERVE COSTS 764,381$ -$ XXXXXXXXXXXXX REPORTS & STUDIES Appraisal 15,300$ 15,300$ Market Study -$ -$ Physical Needs Assessment -$ -$ Environmental Studies 19,500$ 19,500$ Other: Third Party Reports 53,700$ 53,700$ Other: Consultant 82,850$ 82,850$ TOTAL REPORTS & STUDIES 171,350$ -$ 171,350$ OTHER EXPENSES TCAC App./Alloc/Monitoring Fees 149,303$ XXXXXXXXXXXXX XXXXXXXXXXXXX CDLAC/CDIAC Fees 31,260$ XXXXXXXXXXXXX Local Permit Fees 440,000$ 440,000$ Local Development Impact Fees 10,834,126$ 10,834,126$ CFD Prepayment 3,360,000$ 3,360,000$ Syndicator/Investor Fees & Expenses -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Furnishings -$ -$ Final Cost Audit Expense 15,000$ 15,000$ Marketing 310,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX MGP Services Fee 20,000$ 20,000$ CVHA TEFRA 3,500$ 3,500$ Accounting/Finance/Admin 97,000$ 97,000$ Other: CPA Opinion -$ -$ Other:103,500$ 103,500$ TOTAL OTHER COSTS 15,363,689$ -$ 14,769,626$ DEVELOPER COSTS Developer Fee Limit - Per Application -$ -$ Developer Fee Calculation 8,606,026.37$ -$ 8,606,026$ Developer Fee 8,606,026$ -$ 8,606,026$ Consultants/Processing Agent -$ -$ Project Administration -$ -$ Syndication Consultant -$ -$ Guarantee Fees -$ -$ Broker Fees Paid to Related Party -$ -$ Construction Oversight & Mgmt -$ -$ TOTAL DEVELOPER FEE 8,606,026$ -$ 8,606,026$ TOTAL RESIDENTIAL COSTS 103,813,898$ -$ 96,640,719$ TOTAL COMMERCIAL COSTS -$ -$ TOTAL PROJECT AND BASIS COSTS 103,813,898$ -$ 96,640,719$ -$ Adjustment for Excess Basis -$ Additional Amount Voluntarily Excluded From Basis -$ Requested Undadjusted Eligible Basis -$ 96,640,719$ 130% DIFFICULT DEVELOPMENT FACTOR?Tract #: 113.04 y 125,632,934$ Credit Reduction 19.88%-$ Total Adjusted Qualified Basis 125,632,934$ TX CREDITS @ % LI Eligible@ Tx Credit Rt 100.00%4.00%4.00% TX CREDITS @ % LI Eligible -$ 5,025,317$ TX CREDITS OVER TEN YEARS -$ 50,253,174$ TX CREDIT EQ'Y@$/Credit@% Investment 0.8725$ 98.99%43,403,051$ 4.96% State Tax Credits - 13% of Eligible Basis & Over 4 Yrs 4,999,996$ State Tax Credits Equity 0.8500$ 98.99%4,207,072$ -$ Solar Credits - 30% of Eligible Basis 30.00% Solar Equity -$ 98.99%-$ Solar Rebates -$ DRAFT 2021/10/12 City Council Post Agenda Page 100 of 620 OPERATIONAL CASH FLOW Millenia II - 200 Unit family project 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Gross Revenue Inflation @ 2.00%3,523,846 3,594,323 3,666,209 3,739,533 3,814,324 3,890,610 3,968,422 4,047,791 4,128,747 4,211,322 4,295,548 4,381,459 4,469,088 4,558,470 4,649,639 4,742,632 4,837,485 4,934,235 5,032,919 5,133,578 Vacancy 5% (176,192)(179,716)(183,310)(186,977)(190,716)(194,531)(198,421)(202,390)(206,437)(210,566)(214,777)(219,073)(223,454)(227,924)(232,482)(237,132)(241,874)(246,712)(251,646)(256,679) Net Revenue 3,347,653 3,414,606 3,482,899 3,552,556 3,623,608 3,696,080 3,770,001 3,845,401 3,922,309 4,000,756 4,080,771 4,162,386 4,245,634 4,330,547 4,417,157 4,505,501 4,595,611 4,687,523 4,781,273 4,876,899 Operating Expenses Inflation @ 3.00%1,141,382 1,175,623 1,210,892 1,247,219 1,284,635 1,323,175 1,362,870 1,403,756 1,445,869 1,489,245 1,533,922 1,579,940 1,627,338 1,676,158 1,726,443 1,778,236 1,831,583 1,886,531 1,943,126 2,001,420 Net Operating Income 2,206,271 2,238,983 2,272,006 2,305,338 2,338,972 2,372,905 2,407,132 2,441,645 2,476,441 2,511,511 2,546,849 2,582,447 2,618,296 2,654,389 2,690,715 2,727,265 2,764,028 2,800,992 2,838,147 2,875,479 Replacement Reserves 3.00%50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 67,196 69,212 71,288 73,427 75,629 77,898 80,235 82,642 85,122 87,675 Services Inflation @ 3.00%13,320 13,720 14,131 14,555 14,992 15,442 15,905 16,382 16,873 17,380 17,901 18,438 18,991 19,561 20,148 20,752 21,375 22,016 22,676 23,357 Cash Available to Debt Service 2,142,951 2,173,763 2,204,830 2,236,146 2,267,705 2,299,500 2,331,524 2,363,770 2,396,229 2,428,893 2,461,752 2,494,797 2,528,017 2,561,401 2,594,938 2,628,614 2,662,418 2,696,334 2,730,349 2,764,446 Principal and Interest 0 4.25% 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 1,845,141 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 Annual Admin Fee 0.00%21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 Other 0.42%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Managing GP Fee 5,000 3.00%5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 6,921 7,129 7,343 7,563 7,790 8,024 8,264 8,512 8,768 Net Project Cash Flow 271,811 302,473 333,385 364,542 395,937 427,563 459,413 491,480 523,754 556,228 588,892 621,735 654,747 687,918 721,234 574,455 608,024 641,700 675,467 709,309 DSCR 1.16 1.17 1.19 1.21 1.23 1.24 1.26 1.28 1.30 1.31 1.33 1.35 1.37 1.39 1.41 1.30 1.31 1.33 1.35 1.37 TCAC Gross Revenue Test no more than 2% in year 15 if DSCR > 125% or 8% test 8% 7.86% 8.56% 9.24% 9.89% 10.53% 11.14% 11.73% 12.29% 12.84% 13.36% 13.87% 14.35% 14.81% 15.25% 15.67% 12.28% 12.73% 13.17% 13.59% 13.99% TCAC Debt Service Test 125% 14.73% 16.39% 18.07% UMR Operating Expense Test <= 1.20 DSCR or 12% cash flow to expense ratio 12% 23.81% 25.73% 27.53% 29.23% 30.82% 32.31% 33.71% 35.01% 36.22% 37.35% 38.39% 39.35% 40.23% 41.04% 41.78% 32.30% 33.20% 34.01% 34.76% 35.44% Distributuions: Refinance Proceeds 0 Incentive Leasing Fee 0 0 0 Resident Services 0 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LP Asset Management Fee 7,500 3.00%7,500 7,725 7,957 8,195 8,441 8,695 8,955 9,224 9,501 9,786 10,079 10,382 10,693 11,014 11,344 11,685 Deferred Developer Fee 50%of Avail Cashflow 0.00%132,155 147,374 162,714 178,173 193,748 209,434 225,229 241,128 257,127 273,221 289,406 305,677 322,027 338,452 354,945 281,385 304,012 320,850 322,061 0 Deferred fee 4,859,118 48.6% Cash Available After Deferred Fee Payment 132,155 147,374 162,714 178,173 193,748 209,434 225,229 241,128 257,127 273,221 289,406 305,677 322,027 338,452 354,945 281,385 304,012 320,850 353,406 709,309 C Bond 100%of Avail Cashflow w/deferred fee 7.50%132,155 147,374 162,714 178,173 193,748 209,434 225,229 241,128 257,127 273,221 289,406 305,677 322,027 338,452 354,945 281,385 304,012 320,850 353,406 327,418 75%of Avail Cashflow after deferred fee 2,400,000 48.6%48.7%48.8%48.9%49%49%49%49%49%49%49%49%49%49%49%49%50%50%52%46% Cash Available AfterC Bond Payment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 381,891 City of CV- combined loan _____of Avail Cashflow 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 95,473 3,000,000 Seller Loan 12.5%of Avail Cashflow 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 47,736 Cash Flow Available After Soft Loan Loans 100.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 238,682 Partnership Admin Fee (90% of Cash Flow)90.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 214,814 Cash Flow Available after Partnership Admin Fee 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 23,868 LP Distribution 98.99%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 23,627 GP Distribution 1.01%0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 241 Remaining Cash Flow After Partnership Distribution 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DRAFT 2021/10/12 City Council Post Agenda Page 101 of 620 OPERATIONAL CASH FLOW Millenia II - 200 Unit family project Gross Revenue Inflation @ 2.00% Vacancy 5% Net Revenue Operating Expenses Inflation @ 3.00% Net Operating Income Replacement Reserves 3.00% Services Inflation @ 3.00% Cash Available to Debt Service Principal and Interest 0 4.25% Annual Admin Fee 0.00% Other 0.42% Managing GP Fee 5,000 3.00% Net Project Cash Flow DSCR TCAC Gross Revenue Test no more than 2% in year 15 if DSCR > 125% or 8% test 8% TCAC Debt Service Test 125% UMR Operating Expense Test <= 1.20 DSCR or 12% cash flow to expense ratio 12% Distributuions: Refinance Proceeds Incentive Leasing Fee Resident Services 0 3.00% LP Asset Management Fee 7,500 3.00% Deferred Developer Fee 50%of Avail Cashflow 0.00% Deferred fee 4,859,118 Cash Available After Deferred Fee Payment C Bond 100%of Avail Cashflow w/deferred fee 7.50% 75%of Avail Cashflow after deferred fee 2,400,000 Cash Available AfterC Bond Payment City of CV- combined loan 25.0%of Avail Cashflow 3.00% 3,000,000 Seller Loan 12.5%of Avail Cashflow 3.00% Cash Flow Available After Soft Loan Loans 100.00% Partnership Admin Fee (90% of Cash Flow)90.00% Cash Flow Available after Partnership Admin Fee LP Distribution 98.99% GP Distribution 1.01% Remaining Cash Flow After Partnership Distribution 21 22 23 24 25 26 27 28 29 30 5,236,249 5,340,974 5,447,794 5,556,750 5,667,885 5,781,242 5,896,867 6,014,804 6,135,100 6,257,802 (261,812)(267,049)(272,390)(277,837)(283,394)(289,062)(294,843)(300,740)(306,755)(312,890) 4,974,437 5,073,925 5,175,404 5,278,912 5,384,490 5,492,180 5,602,024 5,714,064 5,828,345 5,944,912 2,061,463 2,123,307 2,187,006 2,252,616 2,320,195 2,389,800 2,461,494 2,535,339 2,611,399 2,689,741 2,912,974 2,950,619 2,988,398 3,026,296 3,064,296 3,102,380 3,140,529 3,178,725 3,216,946 3,255,171 90,306 93,015 95,805 98,679 101,640 104,689 107,830 111,064 114,396 117,828 24,057 24,779 25,523 26,288 27,077 27,889 28,726 29,588 30,475 31,389 2,798,611 2,832,825 2,867,070 2,901,328 2,935,579 2,969,802 3,003,974 3,038,073 3,072,074 3,105,953 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 2,025,370 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 0 0 0 0 0 0 0 0 0 0 9,031 9,301 9,581 9,868 10,164 10,469 10,783 11,106 11,440 11,783 743,211 777,154 811,120 845,091 879,046 912,963 946,821 980,597 1,014,265 1,047,801 1.38 1.40 1.42 1.44 1.45 1.47 1.49 1.50 1.52 1.54 14.37% 14.72% 15.06% 15.39% 15.69% 15.97% 16.24% 16.49% 16.72% 16.93% 36.05% 36.60% 37.09% 37.52% 37.89% 38.20% 38.47% 38.68% 38.84% 38.96% 0 0 0 0 0 0 0 0 0 0 743,211 777,154 811,120 845,091 879,046 912,963 946,821 980,597 1,014,265 1,047,801 0 0 0 0 0 0 0 0 0 0 0% 743,211 777,154 811,120 845,091 879,046 912,963 946,821 980,597 1,014,265 1,047,801 185,803 194,288 202,780 211,273 219,761 228,241 236,705 245,149 253,566 261,950 92,901 97,144 101,390 105,636 109,881 114,120 118,353 122,575 126,783 130,975 464,507 485,721 506,950 528,182 549,404 570,602 591,763 612,873 633,916 654,875 418,056 437,149 456,255 475,364 494,463 513,542 532,587 551,586 570,524 589,388 46,451 48,572 50,695 52,818 54,940 57,060 59,176 61,287 63,392 65,488 45,982 48,082 50,183 52,285 54,385 56,484 58,579 60,668 62,751 64,826 469 491 512 533 555 576 598 619 640 661 0 0 0 0 0 0 0 0 0 0 DRAFT 2021/10/12 City Council Post Agenda Page 102 of 620 Revision Date: Print Date: (Loan Paydown) Closing Completion Conversion 8,609 $17,500/unit 3,500,000$ Equity Pay In 15%65%19.0%1.00% Basis Eligible Acquisition Cost 8.78%$54,959/unit 10,991,775 0.8725$ 14,491,775 State Tax Credit Price CERTIFICATED 0.8500$ Contract for offsite public improvements 1,250,011 $6,200/unit 1,240,092 4.00% $9,465/unit 1,893,052 98.99% Parking - inc vertical Structured $0/acre 0 Vertical construction #DIV/0!#DIV/0!39,571,291 GC Contingecy 2.5%$5,338/unit 1,067,611 0 $30,640/unit 6,128,086 $255,751/unit 51,150,143 6.0%$12,788/unit 2,557,507 $335.84/gsf 53,707,651 TCAC AMI Studio 1BR 2BR 3BR Totals 5,707 Sq. Ft.0 585 786 1,027 159,922 1.87% of GC $5,024/unit 1,004,800 250 UA $35 $44 $55 $37,814/unit 7,562,799 5.00%120%0 0 0 0 0 $2,058/unit 411,500 1.15 100%0 0 0 $3,843/unit 768,590 40 70%0 0 0 0 0 $73,171/unit 14,634,126 4.10%60%0 44 67 45 156 $42,067/unit 8,413,401 3.53%50%0 6 9 6 21 $4,525/unit 905,013 4.00%30%0 6 9 6 21 $2,249/unit 449,883 24,295,706 30%30% RDA Rents 0 0 0 0 Tax- Exempt Bonds - Construction 49,500,000 34,150,112 Total Construction Loan 73,795,706 Mgr.0 0 1 1 2 Tax- Exempt Bonds - C Bond 2,600,000 Totals 0 56 86 58 200 102,349,538 Tax-exempt construction to perm 36,580,000 Tax-exempt construction only 12,920,000 Average affordability 55.76% Junior Subordinate Bond 2,600,000 Total Tax-exempt bonds 52,100,000 Cash Developer Fee 2,394,390 Tiebreaker 152,838 Bedrooms for tiebreaker 247.75 0 DDA/QCT Boos DDA (2021 confirmed)Tract #: 113.04 130% Federal LIHTC Equity 42%42,739,797 No State LIHTC Equity 4%4,207,072 50% Test 52,100,000 52.81% 0%103,500 N/A 36%36,580,000 N/A 3%2,600,000 Large Family 6%5,915,511 None 9%9,491,775 Opportunity Map designation 2021 High Resource 0%0 Solar State Fed 0%0 0 0 0 Lease Up Complete Cross over calendar year 1%711,883 0 0 7,347,816 Conversion/Stabilizatiion 100%102,349,538 0 0 7,347,816 GC Contract Amount Owner Hard Costs Contingency Subtotal Hard Costs Remaining Development Soft costs $268,538/unit $170,751/unit Debt Opr. Exp./Unit/Year A&E Financing Fees and Interest DCR Replacement Reserves/Unit/Year Vacancy Rate Owner Soft Costs Contingency Subtotal Soft Costs 10/25/21 11/1/23 2/1/24 Seller Note City of Chula Vista RDA Funds = 21 units at 30% AMI Accrued interest on residual receipts loans City of Chula Vista HOME Funds - 11 assisted units Total Development Sources PROJECT UNIT & INCOME MIX PROJECT TIMING Legal Fees Reserves Development Impact and Permit Fees Developer Fee 1st Yr Credit Delivery 2023 4/28/21 Interest Rate - Construction Loan Tax Exempt Tax Credit Considerations Construction Complete PROJECT SUMMARY Millenia II - 200 Unit family project Design Assist on/off site 4,999,996 Federal Tax Credit Price Hard Costs 10/8/21 12:00 AM High Resource 4% & Bonds state credits City: Development Costs FINANCING ASSUMPTIONSSOURCES AND USES SUMMARY 49,485,241 Equity Tax Credit Allocation 3rd Yr Credit Delivery 10/2/248609 7/2/24 Interest Rate - Permanent Loan Taxable Construction loan CA 9% Site Amenity Score Housing Set Aside Perm Loan Amort Interest Rate - Construction Loan Taxable Sources 2nd Yr Credit Delivery CA 9% Tiebreaker Rural Designation Prevailing Wage (State, Federal, Both): $511,748/unitTotal Development Costs Construction Begin - Initial Closing Deferred Developer Fee Bond Deposit Refund Permanent Loan (Tranche A) 4% Credit Rate LP Interest 10 Yr Federal Tax Credits 4 Yr State Credits Donate for Leverage Solar Tax Credit Price $72,459/unit Type III modified 5 Structured Acquisition Land Cost Subtotal Acquisition PRELIM DEVELOPMENT PROGRAMMING SUMMARY Chula Vista San Diego $57,750 3.100 MSA: 4 Person 50% AMI: Site (acres): Construction Type: No. of Stories: Parking Type: No. of Stalls: Solar Credits Overhead, Profit, General Conditions Census Tract 133.14 Impact Fees per Unit: Financing Sources: 39,768 Junior C Bond 2021/10/12 City Council Post Agenda Page 103 of 620 2,394,390 43,772,046$ Construction Stabilization Conversion 8609 Total 42,347,552 Pre-Dev Close Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Subtotal 6mos 36,170,084 10%15%15%15%15%10%10%10% SOURCES OF FUNDS 36,169,984 1 6,410,970 - - - - - - - - 6,410,970 27,780,868 8,120,561 427,398 42,739,797 2 21,035 631,061 - - - - - - - - 631,061 2,734,597 799,344 42,071 4,207,072 3 - - - - - - - - - - - - - - 4 3,500 - 100,000 - - - - - - 103,500 - - - 103,500 5 455,950 12,717,149 6,939,098 9,070,172 7,443,618 11,888,533 985,480 49,500,000 (30,515,464) (18,984,536) - - 6 - 6,632,681 5,316,161 5,415,311 5,498,056 22,862,208 1,433,498 (24,295,706) - - 6 - - - - - - - - - - - 36,580,000 - 36,580,000 7 - - - - - - - - - - - - - - 8 - - - - - - - - - - - 5,915,511 - 5,915,511 9 $13,000/unit 2,600,000 - - - - - - - 2,600,000 - - 2,600,000 10 - - - - - - - - - - - - - 12 $47,459/unit 9,491,775 - - - - - - - - 9,491,775 - - - 9,491,775 13 - 71,188 71,188 71,188 71,188 71,188 71,188 71,188 71,188 569,507 142,377 - - 711,883 14 Chula Vista Housing Authority - HOME Funds - 15 Chula Vista Housing Authority - RDA Fund restricting 21 units at 30% AMI - - 16 Total Sources of Funds 455,950 31,854,454 7,010,286 9,241,360 7,514,806 11,959,722 7,689,349 5,387,349 5,486,500 5,569,244 92,169,020 1,575,875 8,135,174 469,469 102,349,538 17 18 19 USES OF FUNDS 20 ACQUISITION 21 Land Cost $17,500/unit 3,500,000 - - - - - - - - 3,500,000 - - - 3,500,000 26 Basis Eligible Acquisition Cost $54,959/unit 10,991,775 - - - - - - - - 10,991,775 - - - 10,991,775 27 Other: Option Payment/Acq Fee 4,100 - - - - - - - - 4,100 - - - 4,100 28 Total Land / Acquitisiton 14,495,875 - - - - - - - - 14,495,875 - - - 14,495,875 29 47 NEW CONSTRUCTION - 48 Separate Contract for off-site public improvements:548,251 548,251 1,096,501 1,096,501 49 Overhead/Profit/GR 11%120,615 120,615 120,615 50 Contractor Precon 3%32,895 32,895 32,895 51 52 Design Assist -$ 1,240,092 - - - - - - - - 1,240,092 - - - 1,240,092 53 Off-site Improvements/Onsite Improvements 1,893,052.00$ - 946,526 946,526 - - - - - - 1,893,052 - - - 1,893,052 57 Vertical 39,571,291$ - 3,957,129 5,935,694 5,935,694 5,935,694 5,935,694 3,957,129 3,957,129 3,957,129 39,571,291 - - - 39,571,291 58 GC Contingency 2.50%31,002 122,591 172,055 148,392 148,392 148,392 98,928 98,928 98,928 1,067,611 - - - 1,067,611 59 Overhead/Profit/GR 11%139,820 552,887 775,970 669,249 669,249 669,249 446,166 446,166 446,166 4,814,925 - - - 4,814,925 60 Contractor Precon 3%1,313,161 1,313,161 - - - 1,313,161 63 Other:- - - - - - - - - - - - - - 64 Total New Construction/GC Contract Sum $255,751/unit - 2,877,586 6,127,384 8,378,496 6,753,335 6,753,335 6,753,335 4,502,224 4,502,224 4,502,224 51,150,143 - - - 51,150,143 65 66 ARCHITECTURAL 67 Building: Design/Build inc SOV 0 - - - - - - - - - - - 68 Landscape 0 48,200 48,200 48,200 69 Energy Consultant 0 89,000 89,000 89,000 72 Other: Interior Design, Misc.0 90,100 - - - - - - - - 90,100 - - - 90,100 73 Total Architectural - 227,300 - - - - - - - - 227,300 - - - 227,300 74 75 SURVEY & ENGINEERING 76 Civil, inc ALTA 0 192,500 125,000 12,500 330,000 - - - 330,000 78 Staking 0 90,000 90,000 - - - 90,000 79 Structural Testing 0 95,000 95,000 - - - 95,000 80 Soils 0 77,500 77,500 - - - 77,500 81 Other: 0 - - - - - 82 Other: - CASP, Fire…0 125,000 - - - - - - - - 125,000 - - - 125,000 83 Other: Additional Testing/Inspections 0 60,000 - - - - - - - - 60,000 - - - 60,000 84 Total Survey & Engineering 52,300 - 377,500 292,500 95,000 - - - - - 12,500 777,500 - - - 777,500 85 86 CONTINGENCY COSTS 87 Hard Cost Contingency 5%143,879 306,369 418,925 337,667 337,667 337,667 225,111 225,111 225,111 2,557,507 - - - 2,557,507 88 Soft Cost Contingency 2.00%270,855 11,305 8,705 8,310 95,053 11,732 12,941 14,886 16,096 449,883 - - - 449,883 89 Total Contingency - 414,734 317,674 427,629 345,977 432,720 349,399 238,053 239,997 241,207 3,007,390 - - - 3,007,390 90 91 CONSTRUCTION PERIOD EXPENSES 92 Construction Loan Interest - 136,665 204,172 279,431 358,196 450,551 511,009 558,216 606,250 3,104,490 1,031,216 - 4,135,706 93 Soft Loan Interest - 71,188 71,188 71,188 71,188 71,188 71,188 71,188 71,188 569,507 142,377 - - 711,883 94 C Bond Interest - 48,750 48,750 48,750 48,750 48,750 48,750 48,750 48,750 390,000 97,500 - - 487,500 95 Origination Fee 1.00%737,957 - - - - - - - - 737,957 - - - 737,957 96 C Bond Fee and DD/Legal 3.00%128,000 - - - - - - - - 128,000 - - - 128,000 97 Owner Paid Bonds/Escrow 40,000 - - - - - - - - 40,000 - - - 40,000 98 Lender Inspection Fees - 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 48,000 - - - 48,000 99 Taxes During Construction 42,800 - - - - - - - 42,800 - - - 42,800 100 Other: Application fee - - - - - - - - - - - - - - 101 Insurance During Construction 770,000 - - - - - - - - 770,000 - - - 770,000 102 Title and Recording Fees 91,500 - - - - - - - - 91,500 - - - 91,500 103 Construction Mgmt. and Monitoring 0 1,125 1,125 1,125 1,125 1,125 1,125 1,125 1,125 9,000 - - - 9,000 104 Predevelopment Loan Interest 75,000 - - - - - - - - 75,000 - - - 75,000 105 Other: Accounting & Admin - - - - - - - - - - - - 106 Other: Citibank Due Diligence 25,000 - - - - - - - - - 25,000 - - - 25,000 107 Total Construction Period Expense 25,000 1,885,257 263,728 331,235 406,494 485,260 577,614 638,073 685,279 733,313 6,031,253 1,271,092 - - 7,302,346 108 109 PERMANENT FINANCING EXPENSES 110 Loan Origination Fees 0.00%- - - - - - - - - - - 30,000 - 30,000 Construction Period PROJECTED SOURCES AND USES OF FUNDS Millenia II - 200 Unit family project Federal LIHTC Equity State LIHTC Equity Developer's Equity Contribution Bond Deposit Refund Construction Loan - Tax Exempt Seller Note Construction Loan - Taxable Residual Receipt Loans Accrued Interest Permanent Loan (Tranche A) Deferred Developer Fee C Bond Subordinate Fee (MGP Loan) Permanent Loan (Tranche B) 2021/10/12 City Council Post Agenda Page 104 of 620 2,394,390 43,772,046$ Construction Stabilization Conversion 8609 Total 42,347,552 Pre-Dev Close Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Subtotal 6mos 36,170,084 10%15%15%15%15%10%10%10% Construction Period PROJECTED SOURCES AND USES OF FUNDS Millenia II - 200 Unit family project 111 Credit Enhancement & Application Fee - - - - - - - - - - - - - - 112 Title and Recording Fees - - - - - - - - - - - 7,162 - 7,162 113 Property Taxes - - - - - - - - - - - - - - 114 Insurance - - - - - - - - - - - - - - 115 Other: Issuer Fee 0.200%173,791 - - - 21,000 - - - 21,000 215,791 - - 215,791 116 Other: Misc. Perm Conversion Fees - - - - - - - - - - - 7,500 - 7,500 117 Total Permanent Financing 173,791 - - - 21,000 - - - 21,000 215,791 - 44,662 - 260,453 118 119 LEGAL FEES 120 Construction Lender Legal 75,000 - - - - - - - - 75,000 - - - 75,000 121 Permanent Lender Legal - - - - - - - - - - - 7,500 - 7,500 122 Sponsor Legal 79,000 105,000 - - - - - - - - 184,000 - - - 184,000 123 Organizational Legal 50,000 - - - - - - - - 50,000 - - - 50,000 124 Other Legal (Issuer Legal, Bond Counsel, Trustee Fees/Legal)70,000 - - - - - - - - 70,000 - - - 70,000 125 Other:- - - - - - - - - - - - - - 126 Other: GP Legal 0 25,000 - - - - - - - - 25,000 - - - 25,000 127 Total Legal Fees 79,000 325,000 - - - - - - - - 404,000 - 7,500 - 411,500 128 129 CAPITALIZED RESERVES 130 Operating Reserve 3 months - - - - - - - - - - - 768,590 768,590 131 Replacement Reserve - - - - - - - - - - - - - - 132 Rent-up Reserve - - - - - - - - - - - - - - 133 Transition Reserve (2 years)- - - - - - - - - - - - - - 134 Other: Prepaid HOA - - - - - - - - - - - - - - 135 Other: Capitalized LP Fee - - - - - - - - - - - - - - 136 Total Reserves - - - - - - - - - - - - 768,590 - 768,590 137 138 REPORTS & STUDIES 139 Market Study 15,300 - - - - - - - - 15,300 - - - 15,300 140 Relocation Plan & consulting 0 - - - - - - - - - - - - - - 141 Appraisal 0 - - - - - - - - - - - - - - 142 Environmental 19,500 - - - - - - - - - 19,500 - - - 19,500 143 Other: Lender Deposit 0 - - - - - - - - - - - - - 144 Other: Investor Deposit 0 - - - - - - - - - - - - - - 145 Other: Third Party Reports 53,700 - - - - - - - - - 53,700 - - - 53,700 146 Other: Consultant 22,850 60,000 - - - - - - - - 82,850 - - - 82,850 147 Total Reports & Studies 111,350 60,000 - - - - - - - - 171,350 - - - 171,350 148 149 OTHER 150 TCAC App./Alloc/Monitoring Fees 0 149,303 - - - - - - - - 149,303 - 149,303 151 CDLAC/CDIAC Fees 0.06%31,260 - - - - - - - 31,260 - - - 31,260 152 Local Permit Fees $2,200/unit 125,000 315,000 - - - - - - - - 440,000 - - - 440,000 153 Water & Sewer Fee $3,021/unit 647,313 647,313 647,313 154 School Fees $9,877/unit 1,590,000 1,590,000 1,590,000 153 Local Development Impact Fees $39,768/unit 0 4,338,407 - - - 4,258,407 - - - - 8,596,813 - - - 8,596,813 154 CFD Prepayment $16,800/unit 3,360,000 - - - - - - - - 3,360,000 - - - 3,360,000 155 Syndicator/Investor Fees & Expenses - - - - - - - - - - - - - - 156 Furnishings - - - - - - - - - - - 157 Final Cost Audit Expense - - - - - - - - - - 15,000 - - 15,000 158 Marketing $200k Paid to seller at close 200,000 - - - - 50,000 50,000 300,000 10,000 - - 310,000 159 MGP Services Fee 20,000 - - - 20,000 - - - 20,000 160 CVHA TEFRA 3,500 - - - - - - - - - 3,500 - - - 3,500 161 Accounting/Finance/Admin 8,600 16,400 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 97,000 - - - 97,000 162 Other: CPA Opinion 0 - - - - - - - - - - 163 Bond Performance Deposit 103,500 - - - - - - - - - 103,500 - - - 103,500 164 Total Other Costs 240,600 10,667,683 9,000 9,000 9,000 4,267,407 9,000 9,000 59,000 59,000 15,338,689 25,000 - - 15,363,689 165 166 DEVELOPER COSTS 167 Developer Fee 349,728 - - - - - - 349,728 279,782 7,314,422 469,469 8,413,401 168 Consultant/Processing Agent - - - - - - - - - - - - - - 169 Project Administration - - - - - - - - - - - - - - 170 Syndication Consultant - - - - - - - - - - - - - - 171 Guarantee Fees - - - - - - - - - - - - - - 172 Broker Fees Paid to Related Party - - - - - - - - - - - - - - 173 Construction Oversight & Mgmt - - - - - - - - - - - - - - 174 Total Developer Costs - 349,728 - - - - - - - - 349,728 279,782 7,314,422 469,469 8,413,401 175 176 177 Total Uses of Funds 455,950 31,854,454 7,010,286 9,241,360 7,514,806 11,959,722 7,689,349 5,387,349 5,486,500 5,569,244 92,169,020 1,575,875 8,135,174 469,469 102,349,538 178 Net Source & Use (0) (0) - - - - - - - - (0) 0 - (0) 179 Distributions - - 180 Balance of Funds (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) 2021/10/12 City Council Post Agenda Page 105 of 620 Millenia II - 200 Unit family project 2021 rents Square Total Gross Utility Adjust Monthly Annual Rent:Restriction %AMI Units Feet/Unit Sq. Ft.Rents Allowance for mkt Net Rent Rent 1BR/1BA LIHTC 70%585 0 1,590$ 35$ -$ 1,555$ -$ 1BR/1BA LIHTC 60%44 585 25,740 1,363$ 35$ -$ 1,328$ 701,184$ 1BR/1BA LIHTC 50%6 585 3,510 1,136$ 35$ 1,101$ 79,272$ 1BR/1BA LIHTC 30%6 585 3,510 682$ 35$ 647$ 46,555$ 1BR/1BA RDA 30%30%0 585 0 571$ 35$ 536$ -$ 2BR/1BA LIHTC 70%786 0 1,908$ 44$ -$ 1,864$ -$ 2BR/1BA LIHTC 60%67 786 52,662 1,635$ 44$ 1,591$ 1,279,164$ 2BR/1BA LIHTC 50%9 786 7,074 1,363$ 44$ 1,319$ 142,452$ 2BR/1BA LIHTC 30%9 786 7,074 818$ 44$ 774$ 83,570$ 2BR/1BA RDA 30%30%0 786 0 642$ 44$ 598$ -$ 3BR/2BA LIHTC 120%0 1,027 0 -$ 55$ -$ -$ 3BR/2BA LIHTC 100%0 1,027 0 -$ 55$ -$ -$ 3BR/2BA LIHTC 60%45 1,027 46,215 1,890$ 55$ -$ 1,835$ 990,900$ 3BR/2BA LIHTC 50%6 1,027 6,162 1,575$ 55$ 1,520$ 109,440$ 3BR/2BA LIHTC 30%6 1,027 6,162 945$ 55$ 890$ 64,080$ 3BR/2BA RDA 30%30%0 1,027 0 713$ 55$ 658$ -$ 2BR/1BA MGR 1 786 786 -$ -$ -$ -$ 3BR/2BA MGR 1 1,027 1,027 -$ Total Rents 200 159,922 3,496,618 Community Room/Office 0 % Loss to Efficiency 0%0 Construction Square Feet 159,922 Income from Operations PUPM Laundry 12.00$ 28,800 Other Income (App. Fees, Late, etc.)8.00$ 19,200 Garage -$ 0 Garages 0 Cable & Highspeed Data Income -$ 0 Telephone Income -$ 0 Sub-Total 20.00$ 3,544,618 Less: Vacancies @ 5%177,231 Commercial Income 0 Less: Vacancies @ 25%0 Total Income 3,367,387 Operating Expenses PUPA Comps Diff Admin 424$ -$ 424$ 84,879 Management Fee 660$ 660$ 132,000 Utilities 1,212$ -$ 1,212$ 242,388 Payroll 1,272$ -$ 1,272$ 254,394 Repair & Maintenance (inc security)1,432$ -$ 1,432$ 286,340 Insurance 300$ -$ 300$ 60,000 Taxes (HOA, CFD)407$ -$ 407$ 81,381 Other -$ -$ Total Expenses 5,707$ 1,141,382 Net Operating Income 2,226,005 Reserves $250.00/unit 50,000 Services 13,320 Annual Admin Fee 0.000%City CV 21,000 Mandatory Debt Service 0.420%0 Net Income Available for Debt Service 2,141,685 DSC TEST 1.15 Tranche B Tranche C 0 2,600,000 4.10%4.10% 35 35 1.15 155,165 0 1,861,978 0 OPERATING BUDGET & INCOME ANALYSIS Notes Debt Service Coverage Monthly Payment Annual Payment Cash Flow After D/S Tranche A 36,580,000 17 40 1.15 279,707 Loan Sizing Loan Amount Interest Term Amortization 2021/10/12 City Council Post Agenda Page 106 of 620 TAX CREDITS & BASIS CALCULATION Millenia II - 200 Unit family project ACTUAL OR EST.70%30% DESCRIPTION OF COSTS OF COSTS ELIGIBLE BASIS ELIGIBLE BASIS ACQUISITION Land Cost 3,500,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX Existing Improvement Costs 10,991,775$ XXXXXXXXXXXXX 10,991,775$ Other: Option Payment/Acq Fee 4,100$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL LAND/AQUISITION COSTS 14,495,875$ -$ 10,991,775$ NEW CONSTRUCTION Design Assist 1,240,092$ 1,240,092$ Off-site Improvements/Onsite Improvements 1,893,052$ 1,893,052$ Solar -$ -$ Offsite Public Improvements 1,096,501$ 1,096,501$ Parking -$ -$ Vertical 39,571,291$ 39,571,291$ GC Contingency 1,067,611$ 1,067,611$ Overhead/Profit/GR 4,935,540$ 4,935,540$ Contractor Precon 1,346,056$ 1,346,056$ Other:-$ -$ TOTAL CONSTRUCTION 51,150,143$ -$ 51,150,143$ ARCHITECTURAL FEES Building: Design/Build inc SOV -$ -$ Landscape 48,200$ 48,200$ Energy Consultant 89,000$ 89,000$ Other: Acoustic Study -$ -$ Other: Traffic Study -$ -$ Other: Interior Design, Misc.90,100$ 90,100$ TOTAL ARCHITECTURAL COSTS 227,300$ -$ 227,300$ SURVEY & ENGINEERING Civil, inc ALTA 330,000$ 330,000$ Staking 90,000$ 90,000$ Structural Testing 95,000$ 95,000$ Soils 77,500$ 77,500$ Other: - CASP, Fire…125,000$ 125,000$ Other: Additional Testing/Inspections 60,000$ 60,000$ TOTAL SURVEY & ENGINEERING 777,500$ -$ 777,500$ CONTINGENCY COSTS Hard Cost Contingency 2,557,507$ 2,557,507$ Soft Cost Contingency 449,883$ 449,883$ TOTAL CONTINGENCY COSTS 3,007,390$ -$ 3,007,390$ CONSTRUCTION PERIOD EXPENSES Construction Loan Interest 4,135,706$ 2,794,041$ C Bond Loan Interest 711,883$ 569,507$ C Bond Interest 487,500$ 390,000$ Origination Fee 737,957$ 553,468$ Credit Enhancement & Application Fee 128,000$ 128,000$ Owner Paid Bonds 40,000$ 40,000$ Lender Inspection Fees 48,000$ 48,000$ Taxes During Construction 42,800$ 42,800$ Insurance During Construction 770,000$ 770,000$ Title and Recording Fees 91,500$ 68,625$ Construction Management & Testing 9,000$ 9,000$ Predevelopment Loan Interest 75,000$ 75,000$ Other: Accounting & Admin -$ -$ Other: Citibank Due Diligence 25,000$ 25,000$ TOTAL CONSTRUCTION PERIOD EXPENSE 7,302,346$ -$ 5,513,440$ PERMANENT FINANCING EXPENSES Loan Origination Fee 30,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX Credit Enhancement & Application Fee -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Title and Recording Fees 7,162$ XXXXXXXXXXXXX XXXXXXXXXXXXX Property Taxes -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Insurance -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Other: Issuer Fee 215,791$ XXXXXXXXXXXXX XXXXXXXXXXXXX Other: Misc. Perm Conversion Fees 7,500$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL PERMANENT FINANCING COSTS 260,453$ -$ -$ LEGAL FEES Construction Lender Legal 75,000$ 37,500$ Permanent Lender Legal 7,500$ XXXXXXXXXXXXX Sponsor Legal 184,000$ 92,000$ Organizational Legal 50,000$ XXXXXXXXXXXXX Bond Legal 70,000$ XXXXXXXXXXXXX2021/10/12 City Council Post Agenda Page 107 of 620 CPA, Opinion -$ -$ Other: GP Legal 25,000$ 12,500$ TOTAL LEGAL 411,500$ -$ 142,000$ CAPITALIZED RESERVES Operating Reserve 768,590$ XXXXXXXXXXXXX XXXXXXXXXXXXX Replacement Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Rent-up Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Transition Reserve -$ XXXXXXXXXXXXX XXXXXXXXXXXXX TOTAL RESERVE COSTS 768,590$ -$ XXXXXXXXXXXXX REPORTS & STUDIES Appraisal 15,300$ 15,300$ Market Study -$ -$ Physical Needs Assessment -$ -$ Environmental Studies 19,500$ 19,500$ Other: Third Party Reports 53,700$ 53,700$ Other: Consultant 82,850$ 82,850$ TOTAL REPORTS & STUDIES 171,350$ -$ 171,350$ OTHER EXPENSES TCAC App./Alloc/Monitoring Fees 149,303$ XXXXXXXXXXXXX XXXXXXXXXXXXX CDLAC/CDIAC Fees 31,260$ XXXXXXXXXXXXX Local Permit Fees 440,000$ 440,000$ Local Development Impact Fees 10,834,126$ 10,834,126$ CFD Prepayment 3,360,000$ 3,360,000$ Syndicator/Investor Fees & Expenses -$ XXXXXXXXXXXXX XXXXXXXXXXXXX Furnishings -$ -$ Final Cost Audit Expense 15,000$ 15,000$ Marketing 310,000$ XXXXXXXXXXXXX XXXXXXXXXXXXX MGP Services Fee 20,000$ 20,000$ CVHA TEFRA 3,500$ 3,500$ Accounting/Finance/Admin 97,000$ 97,000$ Other: CPA Opinion -$ -$ Other:103,500$ 103,500$ TOTAL OTHER COSTS 15,363,689$ -$ 14,769,626$ DEVELOPER COSTS Developer Fee Limit - Per Application -$ -$ Developer Fee Calculation 8,413,401.19$ -$ 8,413,401$ Developer Fee 8,413,401$ -$ 8,413,401$ Consultants/Processing Agent -$ -$ Project Administration -$ -$ Syndication Consultant -$ -$ Guarantee Fees -$ -$ Broker Fees Paid to Related Party -$ -$ Construction Oversight & Mgmt -$ -$ TOTAL DEVELOPER FEE 8,413,401$ -$ 8,413,401$ TOTAL RESIDENTIAL COSTS 102,349,538$ -$ 95,163,926$ TOTAL COMMERCIAL COSTS -$ -$ TOTAL PROJECT AND BASIS COSTS 102,349,538$ -$ 95,163,926$ -$ Adjustment for Excess Basis -$ Additional Amount Voluntarily Excluded From Basis -$ Requested Undadjusted Eligible Basis -$ 95,163,926$ 130% DIFFICULT DEVELOPMENT FACTOR?Tract #: 113.04 y 123,713,104$ Credit Reduction 19.88%-$ Total Adjusted Qualified Basis 123,713,104$ TX CREDITS @ % LI Eligible@ Tx Credit Rt 100.00%4.00%4.00% TX CREDITS @ % LI Eligible -$ 4,948,524$ TX CREDITS OVER TEN YEARS -$ 49,485,241$ TX CREDIT EQ'Y@$/Credit@% Investment 0.8725$ 98.99%42,739,797$ 4.99% State Tax Credits - 13% of Eligible Basis & Over 4 Yrs 4,999,996$ State Tax Credits Equity 0.8500$ 98.99%4,207,072$ -$ Solar Credits - 30% of Eligible Basis 30.00% Solar Equity -$ 98.99%-$ Solar Rebates -$ 2021/10/12 City Council Post Agenda Page 108 of 620 OPERATIONAL CASH FLOW Millenia II - 200 Unit family project 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Gross Revenue Inflation @ 2.00%3,544,618 3,615,510 3,687,820 3,761,577 3,836,808 3,913,544 3,991,815 4,071,651 4,153,084 4,236,146 4,320,869 4,407,286 4,495,432 4,585,341 Vacancy 5%(177,231)(180,775)(184,391)(188,079)(191,840)(195,677)(199,591)(203,583)(207,654)(211,807)(216,043)(220,364)(224,772)(229,267) Net Revenue 3,367,387 3,434,734 3,503,429 3,573,498 3,644,968 3,717,867 3,792,224 3,868,069 3,945,430 4,024,339 4,104,826 4,186,922 4,270,661 4,356,074 Operating Expenses Inflation @ 3.00%1,141,382 1,175,623 1,210,892 1,247,219 1,284,635 1,323,175 1,362,870 1,403,756 1,445,869 1,489,245 1,533,922 1,579,940 1,627,338 1,676,158 Net Operating Income 2,226,005 2,259,111 2,292,537 2,326,279 2,360,332 2,394,692 2,429,355 2,464,313 2,499,562 2,535,094 2,570,904 2,606,983 2,643,323 2,679,916 Replacement Reserves 3.00%50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 67,196 69,212 71,288 73,427 Services Inflation @ 3.00%13,320 13,720 14,131 14,555 14,992 15,442 15,905 16,382 16,873 17,380 17,901 18,438 18,991 19,561 Cash Available to Debt Service 2,162,685 2,193,891 2,225,361 2,257,087 2,289,065 2,321,287 2,353,747 2,386,437 2,419,350 2,452,476 2,485,807 2,519,333 2,553,044 2,586,928 Principal and Interest 0 4.10%1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 1,861,978 Annual Admin Fee 0.00%21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 Other 0.42%0 0 0 0 0 0 0 0 0 0 0 0 0 0 Managing GP Fee 5,000 3.00%5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 6,921 7,129 7,343 Net Project Cash Flow 274,707 305,764 337,079 368,646 400,460 432,513 464,799 497,310 530,038 562,975 596,110 629,434 662,937 696,608 DSCR 1.16 1.17 1.19 1.21 1.23 1.24 1.26 1.28 1.30 1.32 1.33 1.35 1.37 1.39 TCAC Gross Revenue Test no more than 2% in year 15 if DSCR > 125% or 8% test 8%7.89%8.60%9.28%9.95%10.58%11.20%11.79%12.37%12.92%13.44%13.95%14.44%14.91%15.35% TCAC Debt Service Test 125%14.75%16.42%18.10% UMR Operating Expense Test <= 1.20 DSCR or 12% cash flow to expense ratio 12%24.07%26.01%27.84%29.56%31.17%32.69%34.10%35.43%36.66%37.80%38.86%39.84%40.74%41.56% Distributuions: Refinance Proceeds Incentive Leasing Fee 0 0 0 Resident Services 0 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 LP Asset Management Fee 7,500 3.00%7,500 7,725 7,957 8,195 8,441 8,695 8,955 9,224 9,501 9,786 10,079 10,382 10,693 11,014 Deferred Developer Fee 50%of Avail Cashflow 0.00%133,604 149,019 164,561 180,225 196,009 211,909 227,922 244,043 260,269 276,594 293,015 309,526 326,122 342,797 Deferred fee 5,915,511 48.6% Cash Available After Deferred Fee Payment 133,604 149,019 164,561 180,225 196,009 211,909 227,922 244,043 260,269 276,594 293,015 309,526 326,122 342,797 C Bond 100%of Avail Cashflow w/deferred fee 7.50%133,604 149,019 164,561 180,225 196,009 211,909 227,922 244,043 260,269 276,594 293,015 309,526 326,122 342,797 75%of Avail Cashflow after deferred fee 2,600,000 48.6%48.7%48.8%48.9%49%49%49%49%49%49%49%49%49%49% Cash Available AfterC Bond Payment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 City of CV- combined loan 25.0%of Avail Cashflow 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 - Seller Loan 12.5%of Avail Cashflow 3.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash Flow Available After Soft Loan Loans 100.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 Partnership Admin Fee (90% of Cash Flow)90.00%0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash Flow Available after Partnership Admin Fee 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LP Distribution 98.99%0 0 0 0 0 0 0 0 0 0 0 0 0 0 GP Distribution 1.01%0 0 0 0 0 0 0 0 0 0 0 0 0 0 Remaining Cash Flow After Partnership Distribution 0 0 0 0 0 0 0 0 0 0 0 0 0 02021/10/12 City Council Post Agenda Page 109 of 620 OPERATIONAL CASH FLOW Millenia II - 200 Unit family project Gross Revenue Inflation @ 2.00% Vacancy 5% Net Revenue Operating Expenses Inflation @ 3.00% Net Operating Income Replacement Reserves 3.00% Services Inflation @ 3.00% Cash Available to Debt Service Principal and Interest 0 4.10% Annual Admin Fee 0.00% Other 0.42% Managing GP Fee 5,000 3.00% Net Project Cash Flow DSCR TCAC Gross Revenue Test no more than 2% in year 15 if DSCR > 125% or 8% test 8% TCAC Debt Service Test 125% UMR Operating Expense Test <= 1.20 DSCR or 12% cash flow to expense ratio 12% Distributuions: Refinance Proceeds Incentive Leasing Fee Resident Services 0 3.00% LP Asset Management Fee 7,500 3.00% Deferred Developer Fee 50%of Avail Cashflow 0.00% Deferred fee 5,915,511 Cash Available After Deferred Fee Payment C Bond 100%of Avail Cashflow w/deferred fee 7.50% 75%of Avail Cashflow after deferred fee 2,600,000 Cash Available AfterC Bond Payment City of CV- combined loan 25.0%of Avail Cashflow 3.00% - Seller Loan 12.5%of Avail Cashflow 3.00% Cash Flow Available After Soft Loan Loans 100.00% Partnership Admin Fee (90% of Cash Flow)90.00% Cash Flow Available after Partnership Admin Fee LP Distribution 98.99% GP Distribution 1.01% Remaining Cash Flow After Partnership Distribution 2037 2038 15 16 17 18 19 20 21 22 23 24 25 26 4,677,048 4,770,589 4,866,000 4,963,320 5,062,587 5,163,839 5,267,115 5,372,458 5,479,907 5,589,505 5,701,295 5,815,321 (233,852)(238,529)(243,300)(248,166)(253,129)(258,192)(263,356)(268,623)(273,995)(279,475)(285,065)(290,766) 4,443,195 4,532,059 4,622,700 4,715,154 4,809,457 4,905,647 5,003,760 5,103,835 5,205,911 5,310,030 5,416,230 5,524,555 1,726,443 1,778,236 1,831,583 1,886,531 1,943,126 2,001,420 2,061,463 2,123,307 2,187,006 2,252,616 2,320,195 2,389,800 2,716,753 2,753,823 2,791,117 2,828,624 2,866,331 2,904,226 2,942,297 2,980,528 3,018,905 3,057,414 3,096,036 3,134,754 75,629 77,898 80,235 82,642 85,122 87,675 90,306 93,015 95,805 98,679 101,640 104,689 20,148 20,752 21,375 22,016 22,676 23,357 24,057 24,779 25,523 26,288 27,077 27,889 2,620,975 2,655,173 2,689,507 2,723,965 2,758,533 2,793,194 2,827,934 2,862,734 2,897,578 2,932,446 2,967,319 3,002,176 1,861,978 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 2,081,758 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 0 0 0 0 0 0 0 0 0 0 0 0 7,563 7,790 8,024 8,264 8,512 8,768 9,031 9,301 9,581 9,868 10,164 10,469 730,435 544,624 578,725 612,943 647,262 681,668 716,145 750,674 785,239 819,820 854,397 888,949 1.41 1.28 1.29 1.31 1.33 1.34 1.36 1.38 1.39 1.41 1.43 1.45 15.78%11.58%12.06%12.52%12.95%13.37%13.77%14.15%14.50%14.84%15.16%15.47% 42.31%30.63%31.60%32.49%33.31%34.06%34.74%35.35%35.90%36.39%36.82%37.20% 0 0 0 11,344 11,685 359,545 266,470 289,363 306,471 323,631 340,834 358,072 355,508 0 0 0 0 359,545 266,470 289,363 306,471 323,631 340,834 358,072 395,166 785,239 819,820 854,397 888,949 359,545 266,470 289,363 306,471 323,631 340,834 358,072 395,166 588,929 614,865 640,797 666,712 49%49%50%50%50%50%50% 0 0 0 0 0 0 0 0 196,310 204,955 213,599 222,237 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24,539 25,619 26,700 27,780 0 0 0 0 0 0 0 0 171,771 179,336 186,899 194,458 0 0 0 0 0 0 0 0 154,594 161,402 168,209 175,012 0 0 0 0 0 0 0 0 17,177 17,934 18,690 19,446 0 0 0 0 0 0 0 0 17,004 17,752 18,501 19,249 0 0 0 0 0 0 0 0 173 181 189 196 0 0 0 0 0 0 0 0 0 0 0 02021/10/12 City Council Post Agenda Page 110 of 620 OPERATIONAL CASH FLOW Millenia II - 200 Unit family project Gross Revenue Inflation @ 2.00% Vacancy 5% Net Revenue Operating Expenses Inflation @ 3.00% Net Operating Income Replacement Reserves 3.00% Services Inflation @ 3.00% Cash Available to Debt Service Principal and Interest 0 4.10% Annual Admin Fee 0.00% Other 0.42% Managing GP Fee 5,000 3.00% Net Project Cash Flow DSCR TCAC Gross Revenue Test no more than 2% in year 15 if DSCR > 125% or 8% test 8% TCAC Debt Service Test 125% UMR Operating Expense Test <= 1.20 DSCR or 12% cash flow to expense ratio 12% Distributuions: Refinance Proceeds Incentive Leasing Fee Resident Services 0 3.00% LP Asset Management Fee 7,500 3.00% Deferred Developer Fee 50%of Avail Cashflow 0.00% Deferred fee 5,915,511 Cash Available After Deferred Fee Payment C Bond 100%of Avail Cashflow w/deferred fee 7.50% 75%of Avail Cashflow after deferred fee 2,600,000 Cash Available AfterC Bond Payment City of CV- combined loan 25.0%of Avail Cashflow 3.00% - Seller Loan 12.5%of Avail Cashflow 3.00% Cash Flow Available After Soft Loan Loans 100.00% Partnership Admin Fee (90% of Cash Flow)90.00% Cash Flow Available after Partnership Admin Fee LP Distribution 98.99% GP Distribution 1.01% Remaining Cash Flow After Partnership Distribution 27 28 29 30 5,931,627 6,050,260 6,171,265 6,294,690 (296,581)(302,513)(308,563)(314,735) 5,635,046 5,747,747 5,862,702 5,979,956 2,461,494 2,535,339 2,611,399 2,689,741 3,173,551 3,212,408 3,251,302 3,290,214 107,830 111,064 114,396 117,828 28,726 29,588 30,475 31,389 3,036,996 3,071,756 3,106,431 3,140,997 2,081,758 2,081,758 2,081,758 2,081,758 21,000 21,000 21,000 21,000 0 0 0 0 10,783 11,106 11,440 11,783 923,455 957,891 992,233 1,026,455 1.46 1.48 1.50 1.51 15.75%16.02%16.26%16.49% 37.52%37.78%38.00%38.16% 0 0 0 0 923,455 957,891 992,233 1,026,455 692,591 718,418 744,174 769,841 230,864 239,473 248,058 256,614 0 0 0 0 28,858 29,934 31,007 32,077 202,006 209,539 217,051 224,537 181,805 188,585 195,346 202,083 20,201 20,954 21,705 22,454 19,997 20,742 21,486 22,227 204 212 219 227 0 0 0 02021/10/12 City Council Post Agenda Page 111 of 620 LEASE UP SCHEDULE Millenia II - 200 Unit family project 10/25/2021 2 11/1/2021 200 11/1/2023 3 11/1/2023 66.7 11/1/2023 2/1/2024 Would need to fully lease-up one building in 2023 and start credits in other building 1/1/24 to avoid 2/3 credits New Units Unit Cumm Units Unit Mths %LIHTCs New Units Unit Cumm Units Unit Mths %LIHTCs Month #Month Leased/mo Months Leased % Leased by Qtr Leased by Qtr Month #Month Leased/mo Months Leased % Leased by Qtr Leased by Qtr 0 Jan-21 0 0 0 0%3 Jan-22 0 0 0 0% 0 Feb-21 0 0 0 0%4 Feb-22 0 0 0 0% 0 Mar-21 0 0 0 0%0 0.00%0 5 Mar-22 0 0 0 0%0 0.00%0 0 Apr-21 0 0 0 0%6 Apr-22 0 0 0 0% 0 May-21 0 0 0 0%7 May-22 0 0 0 0% 0 Jun-21 0 0 0 0%0 0.00%0 8 Jun-22 0 0 0 0%0 0.00%0 0 Jul-21 0 0 0 0%9 Jul-22 0 0 0 0% 0 Aug-21 0 0 0 0%10 Aug-22 0 0 0 0% 0 Sep-21 0 0 0 0%0 0.00%0 11 Sep-22 0 0 0 0%0 0.00%0 0 Oct-21 0 0 0 0%12 Oct-22 0 0 0 0% 1 Nov-21 0 0 0 0%13 Nov-22 0 0 0 0% 2 Dec-21 0 0 0 0%0 0.00%0 14 Dec-22 0 0 0 0%0 0.00%0 ------------ nits Placed In Service 0 0 0.00%0 0 0 0.00%0 Unit Months in Year 2,400 Ck----->0 2400 Ck----->0 it Months - Projected 0 0 aced In Service 0.00%0.00% 2022 Closing Date Construction Start Est'd placed-in-service - first bldg: Est'd placed-in-service - last bldg: Est'd full completion Est'd 100% lease-up date: Number of buildings: # of units to be leased: Lease-up Period (mths): Avg units leased per mth: 2021 2021/10/12 City Council Post Agenda Page 112 of 620 ROSS FINANCIAL 1736 Stockton Street, Suite One • San Francisco, CA 94133 • (415) 912-5612 • FAX (415) 912-5611 September 22, 2021 Mr. Jose Dorado Senior Management Analyst City of Chula Vista Housing Division 276 Fourth Street Chula Vista, CA 1910 Re: Columba Apartments Dear Mr. Dorado: The Chula Vista Housing Authority (the “Authority”) has retained Ross Financial as its independent municipal advisor, in part, to analyze the feasibility of issuing tax-exempt and taxable obligations, as the case may be (the “Notes” and “Bonds”), for the Columba Apartments development (the “Development”). This feasibility analysis reviews the following items: •Overview of the Development •Proposed financing approach •Benefits and risks to Authority •Public purpose •Recommendations Ross Financial has based its analysis of the Development’s financial feasibility on materials provided by Chelsea Investment Corporation (“Chelsea”), which has created the developer and the borrower entity (the “Borrower”) for the Development. The materials include: (1) the joint application to the California Debt Limit Allocation Committee (“CDLAC”) and California Tax Credit Allocation Committee (“CTCAC”), (2) the financing commitments from (a) Citibank, N.A. as construction and permanent lender (the “Lender”) for the Notes and (b) CIC Opportunities Fund II LLC for the Bonds, (3) the market study performed by Kinetic Valuation Group in support of the application to CDLAC and CTCAC, and (4) Chelsea’s pro forma financial schedules for the Development. Ross Financial has not visited the site of the proposed Development and had no role in the selection of the Lender or in developing the overall financing structure. Attachment 3 2021/10/12 City Council Post Agenda Page 113 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 2 of 10 OVERVIEW OF THE DEVELOPMENT Development Summary. The Development is a new construction multifamily rental housing development that will contain 200 1-bedroom, 2-bedroom and 3-bedroom units in two four and five story residential buildings, serviced by elevators. The Development will consist of 178 affordable units plus 2 restricted manager’s units. The Development will contain 34 units with accessible bathrooms and wheelchair barrier-free shower stalls and 21 units with features to assist residents with communication impairments. The Development will be Type III modified construction with a concrete foundation, stucco exterior and a flat roof. The Development will have 325 parking spaces in a 3- level Type I concrete parking structure – 260 spaces, including 8 accessible, will be covered. The Development will provide: 3,376 square feet of community space, including a computer lab/lounge, four rental offices and a community room; two landscaped courtyards totaling approximately 17,600 square feet, which will include a tot lot, bocce ball, four barbeque areas; and two laundry rooms. Unit amenities include: central heat and air conditioning, window coverings, vinyl flooring in the kitchen and bathrooms, stove/oven, refrigerator, dishwasher and garbage disposal. Service amenities include: adult education and skill building classes, ESL, art, job counseling, financial literacy, health and wellness. Unit and Affordability Mix. The unit mix and affordability restrictions for Development is expected to be as follows: Columba Unit Mix 30% AMI** 50% AMI** 60% AMI** 1 Bedroom/1 Bath 56 6 6 44 2 Bedroom/1 Bath 86* 9 9 67 3Bedroom/2Bath 58* 6 6 45 Total Units 200 21 21 158 *Includes 1 manager’s unit in each unit type that are unrestricted ** AMI = Area median income; Manager’s units are not subject to affordability restrictions Specifically: • 21 units will be restricted by the Authority acting as Successor Housing Agency due the use of low and moderate income housing funds as a funding source, with rents and income limits meeting the requirements of the California Health & Safety Code; • 11 units will be restricted by the City due to the use of HOME Investment Partnership Act funding; • 108 units will be restricted pursuant to the City’s bond policy due to its issuance of the Notes and Bonds; and • The remaining units will be restricted to CTCAC rents See “Proposed Financing – City of Chula Vista/Housing Authority Financial Involvement). 2021/10/12 City Council Post Agenda Page 114 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 3 of 10 Description of Project Site. The Development is to be constructed on a 3.07 acre site located in the Otay Ranch General Development Plan in the Eastern Urban Center, also known as the Millenia Development. Columba Apartments is surrounded by recent multi- use developments, including office, commercial and high density residential within 0.5 to 1.0 mile from the site. The site is located south of Chelsea’s prior projects, known as Duetta and Volta Apartments, completed in 2016. Ownership of the Development/Borrower. The ownership entity for the Development will be a Millenia CIC, L.P., a single asset California limited partnership consisting of: (a) CIC Millenia, LLC, created by Chelsea, which will serve as Administrative General Partner, (b) Pacific Southwest Community Development Corporation, a California not- for-profit public benefit corporation which will serve as Managing General Partner and (c) a tax credit limited partnership entity created by Raymond James Tax Credit Funds, Inc. Chelsea Experience. According to Chelsea, the firm has 35 years of experience in financing, developing and/or rehabilitating multifamily rental housing. This experience encompasses 11,000 units in the Western United States, including more than 6,000 affordable housing units in Chula Vista, San Diego and Carlsbad. Chelsea’s most recent activity with the Housing Authority includes: • St. Regis Park Apartments, a 119-unit family project that Chelsea acquired and rehabilitated in 2000 and again rehabilitated in 2019; • Duetta Apartments, a 87-unit new construction family project located at 1715 Orion Avenue, which opened in the 4th quarter of 2017; • Volta Apartments, a 123-unit new construction senior project located at 1734 Solstice Avenue, which opened in the 4th quarter of 2017. CDLAC/CTCAC. On February 4, 2021, the Housing Authority filed a joint application to CDLAC and CTCAC requesting a private activity bond allocation of $52,100,000 for the Development, along with a reservation of 4% Federal and State tax credits. The CTCAC application proposed income set-asides based on income-averaging. On April 28, 2021, CDLAC awarded a private activity bond allocation in the requested amount and CTCAC reserved the requested 4% Federal and State tax credits. The CDLAC allocation will expire on October 25, 2021. In connection with the CDLAC/CTCAC application process, on January 19, 2021, the Housing Authority adopted a resolution of intent to issue tax-exempt obligations for the Development and authorized the submission of an application to CDLAC. Three weeks prior, on December 29, 2020, a TEFRA hearing, duly noticed, was held before the City Council at which time the Development was approved for purposes of Section 147 of the Internal Revenue Code. The TEFRA approval was signed January 19, 2021. 2021/10/12 City Council Post Agenda Page 115 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 4 of 10 PROPOSED FINANCING Project Costs and Funding. According to most recent projections provided by Chelsea, the total costs of the Development, including construction and all soft costs, are estimated at $102,836,786. The estimated sources of funds will differ during the construction period and following construction and lease-up (“at permanent”), as shown in the following table based on the most recent projections: Sources of Funds Construction Permanent Tax-Exempt Note Proceeds $49,700,000 $34,990,000 Taxable Note Proceeds 22,081,957 -- Tax-Exempt Junior Bond Proceeds 2,400,000 2,400,000 Accrued Interest – Junior Bonds -- 780,000 City of Chula Vista HOME Funds 2,000,000 2,000,000 City of Chula Vista RDA Funds 1,000,000 1,000,000 Federal Low Income Housing Tax Credits 6,454,564 43,030,424 State Tax Credits 631,061 4,207,072 Seller Note 9,500,000 9,500,000 Deferred Costs 4,139,914 -- Deferred Developer Fee 4,929,290 4,929,290 Total $102,836,786 $102,836,786 Uses of Funds Land Cost $14,500,000 $14,500,000 Offsite Public Improvements 1,250,011 1,250,011 Site Work 1,893,052 1,893,052 Construction 39,571,291 39,571,291 Overhead, Profit, General Conditions 6,277,552 6,277,552 Architectural & Engineering/Design Assist 2,194,692 2,194,692 Contingency Costs (Owner, Hard and Soft) 5,685,898 5,685,898 Impact Fees and Permits 14,020,267 14,020,267 Financing Fees and Interest 7,299,245 7,299,245 Reserves 765,461 765,461 Misc. Soft Costs and Legal 882,237 882,237 Developer Fee* 8,497,092 8,497,092 Total $102,836,786 $102,836,786 *Cash developer fee is $3,567,802 with $4,929,290 deferred Description of Financing. The expectation (based on the most recent pro forma) is that the Housing Authority will issue: • The Notes in two series: (a) a tax-exempt series in the estimated amount of $49,700,000 and (b) a taxable series in the estimated amount of $22,081,957. • The Bonds in one series in the estimated amount of $2,400,000. (Note: The aggregate par of the tax-exempt Note and the Bonds may not exceed $52,100,000) The Notes will have the following features: 2021/10/12 City Council Post Agenda Page 116 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 5 of 10 • Each Note will be funded by Citibank, N.A. (the “Lender”); • The Notes will be issued on a draw down basis, with interest payable only on the amounts drawn; • Following lease-up (expected in 6 months after construction completion) (at “Conversion”), the taxable Note will be repaid in full and the tax-exempt Note will be paid down to a permanent estimated par of $34,990,000. The sources of repayment will be Federal and State low income housing tax credits. • Prior to Conversion, the tax-exempt Note will bear a variable interest rate equal to 30 Day SOFR + 1.86% and the taxable Note will bear a variable interest rate equal to 30 Day SOFR + 2.36%. SOFR, which stands for “Secured Overnight Financing Rate”, is the successor index to LIBOR which is scheduled to be phased out by June 30, 2023. At Conversion, the tax-exempt Note will convert to a fixed rate that will be set at Closing. The rate will be established by reference to a formula (19-year LIBOR +2.20%) and is estimated at 3.85% in the current market. The pro forma assumes a construction loan rate of 4.25% and a permanent loan rate of 4.25%. • The tax-exempt Note will have a stated maturity of 34 years from Closing (i.e., in 2055) but will be subject to mandatory prepayment in 19 years after Closing (i.e., in 2040). Following Conversion, the tax-exempt Note will amortize on a 40-year basis. The taxable Note is expected to have a stated maturity of approximately 4 years from Closing and will be repaid in full at Conversion as noted above. • The Notes are expected to close by October 25, 2021. The Bonds will have the following features: • The Bonds will be purchased by CIC Opportunities Fund III, LLC (the “Fund”), which was formed by Chelsea. Due to Federal Tax limitations, no more than 49% of the Fund will consist of principals of Chelsea, the Borrower or related entities; • The Bonds will be issued on a cash basis with proceeds delivered at Closing and held by U.S. Bank National Association as trustee; • The interest on the Bonds will be at a tax-exempt rate of 7.50%; • The Bonds will be issued as subordinate obligations payable from residual revenues of the Development after payment of the Notes; • The expected maturity of the Bonds is 45 years; • The Bonds will close at the same time as the Notes, by October 25, 2021. The Lender will execute a document representing that it has sufficient knowledge and experience to evaluate the risks and merits associated with making the loans evidenced by the Notes and its intention to hold the Notes for its account. The Lender may transfer all or a portion of the Notes only to transferees that execute a document with similar representations. The Fund will execute a similar document with respect to the Bonds and is expected to hold the Bonds through maturity or prior repayment. 2021/10/12 City Council Post Agenda Page 117 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 6 of 10 City of Chula Vista/Housing Authority Financial Involvement. The City of Chula Vista will make a residual receipts loan in the aggregate amount of up to $3,000,000 (the “Loan”) of which $2,000,000 will be funded from HOME funds and $1,000,000 will be funded by the Successor Redevelopment Agency from low-mod income funds. The Loan will be evidenced by two sets of documents (the “HOME Documents and the “Low-Mod Documents”), including two notes (the “CV Notes”) with the following features: • The CV Notes will bear simple interest at the rate of 3%; • The CV Notes will be payable from 65% of residual receipts (“Residual Receipts”) of the Development after payment of operating expenses, senior debt service, deferred developer fee and certain other costs. • The CV Notes will mature on December 31, 2078 • The Low-Mod Documents will restrict 21 units in accordance with the requirements of the Health & Safety Code and the HOME Documents will restrict 11 of the units to 50% of AMI. Affordability Restrictions. The Development will be subject to the following regulatory restrictions and terms: • Tax-Exempt Note and Bond Regulatory Agreement requirements (including voluntary elections made to CDLAC) for a 55-year term; • Tax Credit Regulatory Agreement requirements under which all tax credit units must be affordable at or below 60% AMI for a 55-year term to remain eligible for tax credits; and • Two Declarations of Covenants, Conditions and Restrictions and Affordable Housing Agreement (the “Declarations”): the one reflecting HOME funds restricting 11 units for a 55-year term and the one reflecting Low-Mod funds restricting 21 units, with the remaining restrictions mirroring the Tax Credit Regulatory Agreement. Cash Flow for the Developments. The Borrower provided pro forma cash flows for the Development. The following table summarizes key elements of the most recent proforma: 2021/10/12 City Council Post Agenda Page 118 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 7 of 10 Columba Assumptions Vacancy 5% Revenue Escalation 2% Operating Expense Escalation 3% Cash Flow and Coverage Stabilized Net Income – First Full Year $3,348,255 Expenses (1,141,382) Resident Services (13,320) Replacement Reserve (50,000) Authority Bond Monitoring and Admin Fee2 (49,738) Net Operating Income $1,963,751 Tax-Exempt Note Debt Service3 (1,829,684) Debt Service Coverage4 1.15x Managing General Partner Fee (10,000) Net Project Cash Flow $273,131 MGP and LP Fees (10,000) Deferred Developer Fee (50% of excess flow) (131,566) Available Cash Flow after Deferred Developer Fee 131,566 Junior Bond (131,566) Net Cash Flow for CV Note 0 Net Cash Flow for Seller Loan 0 Net Cash Flow for Partnership Admin Fees and Distributions 0 2 Fee in pro forma appears higher than the applicable fee for this transaction. Authority’s fee at permanent will be $21,000 and plus a monitoring fee of approximately $65 per City-restricted unit 3 Assumes an initial permanent loan par of $34,990,000 at 4.25% 4 Net operating income divided by sum of Note Debt Service The Borrower’s pro forma projects that the cash flow to repay the CV Notes will materialize approximately 20 years after stabilized occupancy. The following table shows the Borrower’s most recent projected cash flow for the Development during first full five years following stabilized occupancy: 2021/10/12 City Council Post Agenda Page 119 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 8 of 10 PUBLIC PURPOSE The Notes and Bonds are expected to result in the long-term affordability of 198 one, two and three-bedroom units in the City of Chula Vista: 21 units will be restricted and affordable to households earning 30% of AMI; 21 units will be restricted and affordable to households earning 50% of AMI; and 156 units will be restricted and affordable to households earning 60% of AMI. Two units will be occupied by resident managers and will be unrestricted. The Bond Regulatory Agreement, the Tax Credit Regulatory Agreement and Declarations restrictions will require that these affordability levels be maintained for a period of 55 years. BENEFITS AND RISKS TO THE AUTHORITY The Notes and Bonds provide a vehicle for financing a portion of the construction costs of the Development. As proposed, the Notes and Bonds will result in the long-term affordability of 198 one, two and three-bedroom units in the City of Chula Vista with units restricted to income levels described in “Public Purpose” above. The Notes and Bonds do not pose undue financial risk to the Housing Authority. The Notes and Bonds are not direct obligations of the Housing Authority or the City of Chula Vista. The Notes will evidence loans to be funded by the Lender, which has indicated its intention to hold the Notes for its own account. The Notes are expected to be paid down to $34,990,000 following conversion. The Bonds will be purchased by the Fund, which also has indicated its intention to hold the Bonds for its own account; the Fund consists of Escalation Revenues 1 2 3 4 5 2.00%Gross Scheduled Rent 3,524,479 3,594,969 3,666,868 3,740,205 3,815,009 less 5% vacancy (176,224)(179,748)(183,343)(187,010)(190,750) Total Net Income 3,348,255 3,415,220 3,483,525 3,553,195 3,624,259 Expenses 3.00%Operating Expenses (1,141,382)(1,175,623)(1,210,892)(1,247,219)(1,284,635) 3.00%Services (13,320)(13,720)(14,131)(14,555)(14,992) 3.00%Replacement Reserves (50,000)(51,500)(53,045)(54,636)(56,275) Issuer Bond Monitoring and Admin Fee (49,738)(49,738)(49,738)(49,738)(49,738) Total Expenses + Reserves (1,254,440)(1,290,581)(1,327,806)(1,366,148)(1,405,641) Net Operating Income 2,093,815 2,124,639 2,155,718 2,187,047 2,218,618 Permanent Note Service (1,820,684)(1,820,684)(1,820,684)(1,820,684)(1,820,684) Debt Service Coverage 1.15x 1.17x 1.18x 1.20x 1.22x Available Cash Flow after Permanent Loan Debt Service 273,131 303,955 335,034 366,363 397,934 3.00%Managing GP Fee (5,000)(5,150)(5,305)(5,464)(5,628) LP Fee (5,000)(5,000)(5,000)(5,000)(5,000) Project Cash Flow after MGP and LP Fees 263,131 293,805 324,730 355,899 387,307 Deferred Developer Fee (50% of excess cash flow)(131,566)(146,903)(162,365)(177,950)(193,653) Project Cash Flow after Deferred Developer Fee 131,566 146,903 162,365 177,950 193,653 Junior Bond (75% of Available Cash Flow after Deferred Dev. Fee)(131,566)(146,903)(162,365)(177,950)(193,653) Project Cash Flow after Junior Bond 0 0 0 0 0 3.00%CV Note (25% of Available Cash Flow)0 0 0 0 0 Seller Loan (12.5% of Available Cash Flow)0 0 0 0 0 Partnership Admin Fee (90% of Available Cash Flow)0 0 0 0 0 LP and GP Distributions Year 2021/10/12 City Council Post Agenda Page 120 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 9 of 10 individuals that are principals of Chelsea and understand the risks associated with the Development. The primary risk is construction and lease-up risk – that the Development is not completed and/or leased up in a timely fashion. Given the development and project management experience of Chelsea, the target tenant population and the demand for affordable units, this risk seems remote. This risk is borne entirely by the Lender and the Fund, which includes Chelsea principals. If the Housing Authority issues the Notes and Bonds in the amounts shown in the report, the Authority would receive an issuer fee at Note/Bond closing of $148,364: equal to 0.20% times the initial aggregate par amount of the Notes and Bonds. The Authority also would receive estimate annual fees of $21,000 to monitor the Notes and Bonds and a Loan monitoring fee of $4,252 (increasing 3% annually) with respect to City-restricted units. Costs of issuance will be funded by the Borrower from low income housing tax credit contributions and/or other funds. The Borrower has agreed to indemnify the Housing Authority and Authority as to matters relating to the Notes and Bonds. However, the Borrower is a single purpose entity with no significant assets or source of income other than the Development and is generally not required to make up any cash flow shortfalls. Accordingly, Chelsea will be providing its indemnification. RECOMMENDATIONS Ross Financial recommends that the Housing Authority proceed with the issuance of the Notes and Bonds based on the following findings: • The Notes and Bonds will achieve a public purpose by providing an aggregate of 198 affordable units, with all units restricted to income levels at 30%, 50% and 60% of AMI. • The Notes will evidence tax-exempt and taxable loans funded by a well-established, highly capitalized bank that is active in affordable housing lending. The Notes will be subject to restrictive transfer limitations at all times. • The Bonds will be purchased by a Fund comprised of principals of Chelsea and other individuals who understand real estate risk and the risk of the Development. The Bonds are payable only from residual receipts from the Development after payment of the Notes and cannot default due to insufficient cash flow. The Fund and its participants expect to hold the Bonds through maturity and the Bonds will be subject to restrictive transfer limitations at all times. • The Borrower has agreed to indemnify the Housing Authority and the Authority regarding matters relating to the financing. The Borrower will pay issuance costs from sources other than Note or Bond proceeds. 2021/10/12 City Council Post Agenda Page 121 of 620 Mr. Jose Dorado Re: Columba Apartments September 22, 2021 Page 10 of 10 • Based on estimates provided by Chelsea on behalf of the Borrower, there should be sufficient funds to complete the Development and the Development provides adequate cash flow to cover permanent loan debt service on the Note. The Bonds are payable from residual receipts from the Development and are not subject to default and acceleration in the event that cash flow is insufficient. If there is any additional information you require concerning the Development, Ross Financial will be pleased to provide a supplemental analysis. Very truly yours, Peter J. Ross Principal 2021/10/12 City Council Post Agenda Page 122 of 620 ROSS FINANCIAL 1736 Stockton Street, Suite One  San Francisco, CA 94133  (415) 912-5612  FAX (415) 912-5611 October 11, 2021 Mr. Jose Dorado Senior Management Analyst City of Chula Vista Housing Division 276 Fourth Street Chula Vista, CA 1910 Re: Columba Apartments (Updated Report) Dear Mr. Dorado: The Chula Vista Housing Authority (the “Authority”) has retained Ross Financial as its independent municipal advisor, in part, to analyze the feasibility of issuing tax-exempt and taxable obligations, as the case may be (the “Notes” and “Bonds”), for the Columba Apartments development (the “Development”). This report updates Ross Financial’s report, dated September 22, 2021, to reflect the Chelsea’s revised pro forma that no longer includes City of Chula Vista HOME and RDA moneys as funding sources for the Development. This feasibility analysis reviews the following items:  Overview of the Development  Proposed financing approach  Benefits and risks to Authority  Public purpose  Recommendations Ross Financial has based its analysis of the Development’s financial feasibility on materials provided by Chelsea Investment Corporation (“Chelsea”), which has created the developer and the borrower entity (the “Borrower”) for the Development. The materials include: (1) the joint application to the California Debt Limit Allocation Committee (“CDLAC”) and California Tax Credit Allocation Committee (“CTCAC”), (2) the financing commitments from (a) Citibank, N.A. as construction and permanent lender (the “Lender”) for the Notes and (b) CIC Opportunities Fund II LLC for the Bonds, (3) the market study performed by Kinetic Valuation Group in support of the application to CDLAC and CTCAC, and (4) Chelsea’s pro forma financial schedules for the Development. Ross Financial has not visited the site of the proposed Development and had no role in the selection of the Lender or in developing the overall financing structure. 2021/10/12 City Council Post Agenda Page 123 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 2 of 9 OVERVIEW OF THE DEVELOPMENT Development Summary. The Development is a new construction multifamily rental housing development that will contain 200 1-bedroom, 2-bedroom and 3-bedroom units in two four and five story residential buildings, serviced by elevators. The Development will consist of 178 affordable units plus 2 restricted manager’s units. The Development will contain 34 units with accessible bathrooms and wheelchair barrier-free shower stalls and 21 units with features to assist residents with communication impairments. The Development will be Type III modified construction with a concrete foundation, stucco exterior and a flat roof. The Development will have 325 parking spaces in a 3- level Type I concrete parking structure – 260 spaces, including 8 accessible, will be covered. The Development will provide: 3,376 square feet of community space, including a computer lab/lounge, four rental offices and a community room; two landscaped courtyards totaling approximately 17,600 square feet, which will include a tot lot, bocce ball, four barbeque areas; and two laundry rooms. Unit amenities include: central heat and air conditioning, window coverings, vinyl flooring in the kitchen and bathrooms, stove/oven, refrigerator, dishwasher and garbage disposal. Service amenities include: adult education and skill building classes, ESL, art, job counseling, financial literacy, health and wellness. Unit and Affordability Mix. The unit mix and affordability restrictions for Development is expected to be as follows: Columba Unit Mix 30% AMI** 50% AMI** 60% AMI** 1 Bedroom/1 Bath 56 6 6 44 2 Bedroom/1 Bath 86* 9 9 67 3Bedroom/2Bath 58* 6 6 45 Total Units 200 21 21 158 *Includes 1 manager’s unit in each unit type that are unrestricted ** AMI = Area median income; Manager’s units are not subject to affordability restrictions Specifically:  108 units will be restricted pursuant to the City’s bond policy due to its issuance of the Notes and Bonds; and  The remaining units will be restricted to CTCAC rents Description of Project Site. The Development is to be constructed on a 3.07 acre site located in the Otay Ranch General Development Plan in the Eastern Urban Center, also known as the Millenia Development. Columba Apartments is surrounded by recent multi- use developments, including office, commercial and high density residential within 0.5 to 1.0 mile from the site. The site is located south of Chelsea’s prior projects, known as Duetta and Volta Apartments, completed in 2016. 2021/10/12 City Council Post Agenda Page 124 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 3 of 9 Ownership of the Development/Borrower. The ownership entity for the Development will be a Millenia CIC, L.P., a single asset California limited partnership consisting of: (a) CIC Millenia, LLC, created by Chelsea, which will serve as Administrative General Partner, (b) Pacific Southwest Community Development Corporation, a California not- for-profit public benefit corporation which will serve as Managing General Partner and (c) a tax credit limited partnership entity created by Raymond James Tax Credit Funds, Inc. Chelsea Experience. According to Chelsea, the firm has 35 years of experience in financing, developing and/or rehabilitating multifamily rental housing. This experience encompasses 11,000 units in the Western United States, including more than 6,000 affordable housing units in Chula Vista, San Diego and Carlsbad. Chelsea’s most recent activity with the Housing Authority includes:  St. Regis Park Apartments, a 119-unit family project that Chelsea acquired and rehabilitated in 2000 and again rehabilitated in 2019;  Duetta Apartments, a 87-unit new construction family project located at 1715 Orion Avenue, which opened in the 4th quarter of 2017;  Volta Apartments, a 123-unit new construction senior project located at 1734 Solstice Avenue, which opened in the 4th quarter of 2017. CDLAC/CTCAC. On February 4, 2021, the Housing Authority filed a joint application to CDLAC and CTCAC requesting a private activity bond allocation of $52,100,000 for the Development, along with a reservation of 4% Federal and State tax credits. The CTCAC application proposed income set-asides based on income-averaging. On April 28, 2021, CDLAC awarded a private activity bond allocation in the requested amount and CTCAC reserved the requested 4% Federal and State tax credits. The CDLAC allocation will expire on October 25, 2021. In connection with the CDLAC/CTCAC application process, on January 19, 2021, the Housing Authority adopted a resolution of intent to issue tax-exempt obligations for the Development and authorized the submission of an application to CDLAC. Three weeks prior, on December 29, 2020, a TEFRA hearing, duly noticed, was held before the City Council at which time the Development was approved for purposes of Section 147 of the Internal Revenue Code. The TEFRA approval was signed January 19, 2021. 2021/10/12 City Council Post Agenda Page 125 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 4 of 9 PROPOSED FINANCING Project Costs and Funding. According to most recent projections provided by Chelsea, the total costs of the Development, including construction and all soft costs, are estimated at $102,349,538. The estimated sources of funds will differ during the construction period and following construction and lease-up (“at permanent”), as shown in the following table based on the most recent projections: Sources of Funds Construction Permanent Tax-Exempt Note Proceeds $49,500,000 $36,580,000 Taxable Note Proceeds 24,295,706 -- Tax-Exempt Junior Bond Proceeds 2,600,000 2,600,000 Accrued Interest – Junior Bonds 569,507 711,883 Federal Low Income Housing Tax Credits 6,410,970 42,739,797 State Tax Credits 631,061 4,207,072 Seller Note 9,491,775 9,491,775 Bond Deposit Refund 103,500 103,500 Deferred Costs 2,831,508 -- Deferred Developer Fee 5,915,511 5,915,511 Total $102,349,538 $102,349,538 Uses of Funds Land Cost $14,491,775 $14,491,775 Offsite Public Improvements 1,250,011 1,250,011 Site Work 1,893,052 1,893,052 Construction 39,571,291 39,571,291 Overhead, Profit, General Conditions 6,128,086 6,128,086 Architectural & Engineering/Design Assist 2,244,892 2,244,892 Contingency Costs (Owner, Hard and Soft) 4,075,001 4,075,001 Impact Fees and Permits 14,634,126 14,634,126 Financing Fees and Interest 7,562,799 7,562,799 Reserves 768,590 768,590 Misc. Soft Costs and Legal 1,316,514 1,316,514 Developer Fee* 8,413,401 8,413,401 Total $102,439,538 $102,439,538 *Cash developer fee is $2,304,390 with $5,915,511 deferred Description of Financing. The expectation (based on the most recent pro forma) is that the Housing Authority will issue:  The Notes in two series: (a) a tax-exempt series in the estimated amount of $49,500,000 and (b) a taxable series in the estimated amount of $24,295,706.  The Bonds in one series in the estimated amount of $2,600,000. (Note: The aggregate par of the tax-exempt Note and the Bonds may not exceed $52,100,000) The Notes will have the following features: 2021/10/12 City Council Post Agenda Page 126 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 5 of 9  Each Note will be funded by Citibank, N.A. (the “Lender”);  The Notes will be issued on a draw down basis, with interest payable only on the amounts drawn;  Following lease-up (expected in 6 months after construction completion) (at “Conversion”), the taxable Note will be repaid in full and the tax-exempt Note will be paid down to a permanent estimated par of $36,580,000. The sources of repayment will be Federal and State low income housing tax credits.  Prior to Conversion, the tax-exempt Note will bear a variable interest rate equal to 30 Day SOFR + 1.86% and the taxable Note will bear a variable interest rate equal to 30 Day SOFR + 2.36%. SOFR, which stands for “Secured Overnight Financing Rate”, is the successor index to LIBOR which is scheduled to be phased out by June 30, 2023. At Conversion, the tax-exempt Note will convert to a fixed rate that will be set at Closing. The rate will be established by reference to a formula (19-year LIBOR +2.20%) and is estimated at 4.10% in the current market. The pro forma assumes a construction loan rate of 3.53% and a permanent loan rate of 4.10%.  The tax-exempt Note will have a stated maturity of 34 years from Closing (i.e., in 2055) but will be subject to mandatory prepayment in 19 years after Closing (i.e., in 2040). Following Conversion, the tax-exempt Note will amortize on a 40-year basis. The taxable Note is expected to have a stated maturity of approximately 4 years from Closing and will be repaid in full at Conversion as noted above.  The Notes are expected to close by October 25, 2021. The Bonds will have the following features:  The Bonds will be purchased by CIC Opportunities Fund III, LLC (the “Fund”), which was formed by Chelsea. Due to Federal Tax limitations, no more than 49% of the Fund will consist of principals of Chelsea, the Borrower or related entities;  The Bonds will be issued on a cash basis with proceeds delivered at Closing and held by U.S. Bank National Association as trustee;  The interest on the Bonds will be at a tax-exempt rate of 7.50%;  The Bonds will be issued as subordinate obligations payable from residual revenues of the Development after payment of the Notes;  The expected stated maturity of the Bonds is 45 years;  The Bonds will close at the same time as the Notes, by October 25, 2021. The Lender will execute a document representing that it has sufficient knowledge and experience to evaluate the risks and merits associated with making the loans evidenced by the Notes and its intention to hold the Notes for its account. The Lender may transfer all or a portion of the Notes only to transferees that execute a document with similar representations. The Fund will execute a similar document with respect to the Bonds and is expected to hold the Bonds through maturity or prior repayment. 2021/10/12 City Council Post Agenda Page 127 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 6 of 9 Affordability Restrictions. The Development will be subject to the following regulatory restrictions and terms:  Tax-Exempt Note and Bond Regulatory Agreement requirements (including voluntary elections made to CDLAC) for a 55-year term; and  Tax Credit Regulatory Agreement requirements under which all tax credit units must be affordable at or below 60% AMI for a 55-year term to remain eligible for tax credits. Cash Flow for the Developments. The Borrower provided pro forma cash flows for the Development. The following table summarizes key elements of the most recent proforma: Columba Assumptions Vacancy 5% Revenue Escalation 2% Operating Expense Escalation 3% Cash Flow and Coverage Stabilized Net Income – First Full Year $3,367,387 Expenses (1,141,382) Resident Services (13,320) Replacement Reserve (50,000) Authority Bond Monitoring and Admin Fee (21,000) Net Operating Income $2,141,685 Tax-Exempt Note Debt Service1 (1,861,978) Debt Service Coverage2 1.15x Net Project Cash Flow $279,707 MGP and LP Fees (12,500) Deferred Developer Fee (50% of excess flow) (133,604) Available Cash Flow after Deferred Developer Fee 133,604 Junior Bond (133,604) Net Cash Flow for Seller Loan 0 Net Cash Flow for Partnership Admin Fees and Distributions 0 1 Assumes an initial permanent loan par of $36,580,000 at 4.10% 2 Net operating income divided by sum of Note Debt Service The following table shows the Borrower’s most recent projected cash flow for the Development during first full five years following stabilized occupancy: 2021/10/12 City Council Post Agenda Page 128 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 7 of 9 Escalation Revenues 1 2 3 4 5 2.00%Gross Scheduled Rent 3,544,618 3,615,510 3,687,821 3,761,577 3,836,809 less 5% vacancy (177,231)(180,776)(184,391)(188,079)(191,840) Total Net Income 3,367,387 3,434,735 3,503,430 3,573,498 3,644,968 Expenses 3.00%Operating Expenses (1,141,382)(1,175,623)(1,210,892)(1,247,219)(1,284,635) 3.00%Services (13,320)(13,720)(14,131)(14,555)(14,992) 3.00%Replacement Reserves (50,000)(51,500)(53,045)(54,636)(56,275) Issuer Bond Monitoring and Admin Fee (21,000)(21,000)(21,000)(21,000)(21,000) Total Expenses + Reserves (1,225,702)(1,261,843)(1,299,068)(1,337,410)(1,376,903) Net Operating Income 2,141,685 2,172,892 2,204,361 2,236,088 2,268,065 Permanent Note Service (1,861,978)(1,861,978)(1,861,978)(1,861,978)(1,861,978) Debt Service Coverage 1.15x 1.17x 1.18x 1.20x 1.22x Available Cash Flow after Permanent Loan Debt Service 279,707 310,914 342,383 374,110 406,087 3.00%Managing GP Fee (5,000)(5,150)(5,305)(5,464)(5,628) LP Fee (7,500)(7,500)(7,500)(7,500)(7,500) Project Cash Flow after MGP and LP Fees 267,207 298,264 329,579 361,146 392,960 Deferred Developer Fee (50% of excess cash flow)(133,604)(149,132)(164,789)(180,573)(196,480) Project Cash Flow after Deferred Developer Fee 133,604 149,132 164,789 180,573 196,480 Junior Bond (75% of Available Cash Flow after Deferred Dev. Fee)(133,604)(149,132)(164,789)(180,573)(196,480) Project Cash Flow after Junior Bond 0 0 0 0 0 Seller Loan (12.5% of Available Cash Flow)0 0 0 0 0 Partnership Admin Fee (90% of Available Cash Flow)0 0 0 0 0 LP and GP Distributions Year PUBLIC PURPOSE The Notes and Bonds are expected to result in the long-term affordability of 198 one, two and three-bedroom units in the City of Chula Vista: 21 units will be restricted and affordable to households earning 30% of AMI; 21 units will be restricted and affordable to households earning 50% of AMI; and 156 units will be restricted and affordable to households earning 60% of AMI. Two units will be occupied by resident managers and will be unrestricted. The Bond Regulatory Agreement and the Tax Credit Regulatory Agreement will require that these affordability levels be maintained for a period of 55 years. BENEFITS AND RISKS TO THE AUTHORITY The Notes and Bonds provide a vehicle for financing a portion of the construction costs of the Development. As proposed, the Notes and Bonds will result in the long-term affordability of 198 one, two and three-bedroom units in the City of Chula Vista with units restricted to income levels described in “Public Purpose” above. The Notes and Bonds do not pose undue financial risk to the Housing Authority. The Notes and Bonds are not direct obligations of the Housing Authority or the City of Chula Vista. The Notes will evidence loans to be funded by the Lender, which has indicated its intention to hold the Notes for its own account. The Notes are expected to be paid down to $36,580,000 following conversion. The Bonds will be purchased by the Fund, which also has indicated its intention to hold the Bonds for its own account; the Fund consists of 2021/10/12 City Council Post Agenda Page 129 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 8 of 9 individuals that are principals of Chelsea and understand the risks associated with the Development. The primary risk is construction and lease-up risk – that the Development is not completed and/or leased up in a timely fashion. Given the development and project management experience of Chelsea, the target tenant population and the demand for affordable units, this risk seems remote. This risk is borne entirely by the Lender and the Fund, which includes Chelsea principals. If the Housing Authority issues the Notes and Bonds in the amounts shown in the report, the Authority would receive an issuer fee at Note/Bond closing of $152,791: equal to 0.20% times the initial aggregate par amount of the Notes and Bonds. The Authority also would receive estimated annual fees of $21,000 to monitor the Notes. Costs of issuance will be funded by the Borrower from low income housing tax credit contributions and/or other funds. The Borrower has agreed to indemnify the Housing Authority and Authority as to matters relating to the Notes and Bonds. However, the Borrower is a single purpose entity with no significant assets or source of income other than the Development and is generally not required to make up any cash flow shortfalls. Accordingly, Chelsea will be providing its indemnification. RECOMMENDATIONS Ross Financial recommends that the Housing Authority proceed with the issuance of the Notes and Bonds based on the following findings:  The Notes and Bonds will achieve a public purpose by providing an aggregate of 198 affordable units, with all units restricted to income levels at 30%, 50% and 60% of AMI.  The Notes will evidence tax-exempt and taxable loans funded by a well-established, highly capitalized bank that is active in affordable housing lending. The Notes will be subject to restrictive transfer limitations at all times.  The Bonds will be purchased by a Fund comprised of principals of Chelsea and other individuals who understand real estate risk and the risk of the Development. The Bonds are payable only from residual receipts from the Development after payment of the Notes and cannot default due to insufficient cash flow. The Fund and its participants expect to hold the Bonds through maturity and the Bonds will be subject to restrictive transfer limitations at all times.  The Borrower has agreed to indemnify the Housing Authority and the Authority regarding matters relating to the financing. The Borrower will pay issuance costs from sources other than Note or Bond proceeds. 2021/10/12 City Council Post Agenda Page 130 of 620 Mr. Jose Dorado Re: Columba Apartments October 11, 2021 Page 9 of 9  Based on estimates provided by Chelsea on behalf of the Borrower, there should be sufficient funds to complete the Development and the Development provides adequate cash flow to cover permanent loan debt service on the Note. The Bonds are payable from residual receipts from the Development and are not subject to default and acceleration in the event that cash flow is insufficient. If there is any additional information you require concerning the Development, Ross Financial will be pleased to provide a supplemental analysis. Very truly yours, Peter J. Ross Principal 2021/10/12 City Council Post Agenda Page 131 of 620 Stradling Yocca Carlson & Rauth Draft dated October 6, 2021 4850-1650-8151/024036-0092 Recording Requested By and When Recorded Mail To: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attention: Bradley R. Neal, Esq. REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS By and Between CHULA VISTA HOUSING AUTHORITY and MILLENIA II CIC, LP a California limited partnership _________________________ Dated as of October 1, 2021 _________________________ Relating to: $____________ CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE NOTE (COLUMBA APARTMENTS) 2021 SERIES A-1 and $_____________ CHULA VISTA HOUSING AUTHORITY JUNIOR MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE SERIES 2021A-3 2021/10/12 City Council Post Agenda Page 132 of 620 i 4850-1650-8151/024036-0092 TABLE OF CONTENTS Section 1. Definitions and Interpretation ....................................................................................... 2 Section 2. Representations, Covenants and Warranties of the Owner ........................................... 6 Section 3. Qualified Residential Rental Project ............................................................................. 6 Section 4. Low Income Tenants and Very Low Income Tenants; Reporting Requirements ......... 7 Section 5. Tax-Exempt Status of Obligations .............................................................................. 11 Section 6. Requirements of the Housing Law.............................................................................. 11 Section 7. Requirements of the Governmental Lender ................................................................ 12 Section 8. Modification of Covenants.......................................................................................... 13 Section 9. Indemnification; Other Payments ............................................................................... 14 Section 10. Consideration .............................................................................................................. 15 Section 11. Reliance ....................................................................................................................... 15 Section 12. Transfer of the Project ................................................................................................ 15 Section 13. Term ............................................................................................................................ 17 Section 14. Covenants to Run With the Land ................................................................................ 18 Section 15. Burden and Benefit ..................................................................................................... 18 Section 16. Uniformity; Common Plan ......................................................................................... 18 Section 17. Default; Enforcement .................................................................................................. 18 Section 18. Recording and Filing ................................................................................................... 19 Section 19. Payment of Fees .......................................................................................................... 19 Section 20. Governing Law; Venue ............................................................................................... 20 Section 21. Amendments; Waivers ................................................................................................ 20 Section 22. Notices ........................................................................................................................ 21 Section 23. Severability ................................................................................................................. 22 Section 24. Multiple Counterparts ................................................................................................. 22 Section 25. Limitation on Liability ................................................................................................ 22 Section 26. Third-Party Beneficiary .............................................................................................. 23 Section 27. Property Management ................................................................................................. 23 Section 28. Requirements of CDLAC ........................................................................................... 24 EXHIBIT A DESCRIPTION OF REAL PROPERTY EXHIBIT B FORM OF INCOME CERTIFICATION EXHIBIT C FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE EXHIBIT D CDLAC RESOLUTION 2021/10/12 City Council Post Agenda Page 133 of 620 4850-1650-8151/024036-0092 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (as supplemented and amended from time to time, this “Regulatory Agreement”) is made and entered into as of October 1, 2021, by and between the CHULA VISTA HOUSING AUTHORITY, a public body, corporate and politic, duly organized and existing under the laws of the State of California (together with any successor to its rights, duties and obligations, the “Governmental Lender”), and MILLENIA II CIC, LP, a California limited partnership, duly organized, validly existing and in good standing under the laws of the State of California (together with any successor to its rights, duties and obligations hereunder and as owner of the Project identified herein, the “Owner”). W I T N E S S E T H: WHEREAS, pursuant to Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (as amended, the “Housing Law”), and the hereinafter defined Funding Loan Agreement, the Governmental Lender has agreed to execute and deliver its Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1 (the “Tax- Exempt Note”) in the aggregate principal amount of $____________; WHEREAS, the Tax-Exempt Note will be executed and delivered pursuant to a Funding Loan Agreement, dated as of October 1, 2021 (the “Funding Loan Agreement”), among the Governmental Lender, Citibank, N.A., the Funding Lender (the “Funding Lender”) and U.S. Bank National Association, as fiscal agent; WHEREAS, the proceeds of the Tax-Exempt Note will be used to fund a portion of a loan (the “Borrower Loan” as defined in the Funding Loan Agreement) to the Owner to finance the acquisition, construction and equipping of the multifamily rental housing project known as Columba Apartments, located on the real property site described in Exhibit A hereto (as further described herein, the “Project”); WHEREAS, in addition to the Tax-Exempt Note, pursuant to and in accordance with the Housing Law, the Governmental Lender has authorized and undertaken to issue revenue bonds to be designated the Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3, in the original aggregate principal amount of $___________ (the “Subordinate Bonds,” and, together with the Tax-Exempt Note, the “Tax-Exempt Obligations”) pursuant to a Subordinate Indenture of Trust, by and between the Governmental Lender and U.S. Bank National Association, as trustee (the “Subordinate Trustee”), dated as of October 1, 2021 (the “Subordinate Indenture”) in order to provide additional funds necessary to finance the Project; WHEREAS, in connection with the issuance of the Subordinate Bonds, the Governmental Lender has entered into a Subordinate Loan Agreement dated as of October 1, 2021 (the “Subordinate Loan Agreement”) with the Owner and the Trustee specifying the terms and conditions under which the Governmental Lender will issue the Subordinate Bonds and use the proceeds of the sale thereof to make a subordinate loan in the original aggregate principal amount of $__________ (the “Subordinate Loan”), to the Owner for additional financing of the Project; and 2021/10/12 City Council Post Agenda Page 134 of 620 2 4850-1650-8151/024036-0092 WHEREAS, in order to assure the Governmental Lender and the owners of the Tax-Exempt Obligations that interest on the Tax-Exempt Obligations will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”), and to satisfy the public purposes for which the Tax-Exempt Obligations are authorized to be executed and delivered or issued, as the case may be, under the Housing Law, and to satisfy the purposes of the Governmental Lender in determining to execute and deliver or issue, as the case may be, the Tax-Exempt Obligations, certain limits on the occupancy of units in the Project need to be established and certain other requirements need to be met. NOW, THEREFORE, in consideration of the execution and delivery or issuance, as the case may be, of the Tax-Exempt Obligations by the Governmental Lender and the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Governmental Lender and the Owner hereby agree as follows: Section 1. Definitions and Interpretation. Unless the context otherwise requires, the capitalized terms used herein shall have the respective meanings assigned to them in the recitals hereto, in this Section 1, or in the Funding Loan Agreement. “Administrator” means the Governmental Lender or any administrator or program monitor appointed by the Governmental Lender to administer this Regulatory Agreement, and any successor administrator appointed by the Governmental Lender. “Area” means the Metropolitan Statistical Area or County, as applicable, in which the Project is located, as defined by the United States Department of Housing and Urban Development. “Available Units” means residential units in the Project that are actually occupied and residential units in the Project that are vacant and have been occupied at least once after becoming available for occupancy, provided that (a) a residential unit that is vacant on the later of (i ) the date the Project is acquired or (ii) the Closing Date is not an Available Unit and does not become an Available Unit until it has been occupied for the first time after such date, and (b ) a residential unit that is not available for occupancy due to renovations is not an Available Unit and does not become an Available Unit until it has been occupied for the first time after the renovations are completed. “CDLAC” means the California Debt Limit Allocation Committee or its successors. “CDLAC Conditions” has the meaning given such term in Section 28(a). “CDLAC Resolution” means CDLAC Resolution No. 21-134 attached hereto as Exhibit D, adopted on April 28, 2021, and relating to the Project, as such resolution may be modified or amended from time to time. “Certificate of Continuing Program Compliance” means the Certificate to be filed by the Owner with the Administrator, on behalf of the Governmental Lender, pursuant to Section 4(f) hereof, which shall be substantially in the form attached as Exhibit C hereto or in such other comparable form as may be provided by the Governmental Lender to the Owner, or as otherwise approved by the Governmental Lender. “City” means the City of Chula Vista, California. 2021/10/12 City Council Post Agenda Page 135 of 620 3 4850-1650-8151/024036-0092 “Closing Date” means the date the Tax-Exempt Obligations are originally executed and delivered or issued, as the case may be. “Compliance Period” means the period beginning on the first day of the Qualified Project Period and ending on the later of the end of the Qualified Project Period or such later date as set forth in Section 28(c) of this Regulatory Agreement. “County” means the County of San Diego, California. “Deed of Trust” means the “Security Instrument” as defined in the Funding Loan Agreement, as the same may be modified, amended or supplemented from time to time. “Gross Income” means the gross income of a person (together with the gross income of all persons who intend to reside with such person in one residential unit) as calculated in the manner prescribed in under Section 8 of the Housing Act. “Housing Act” means the United States Housing Act of 1937, as amended, or its successor. “Housing Law” means Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code, as amended. “Income Certification” means a Tenant Income Certification and a Tenant Income Certification Questionnaire in the form attached as Exhibit B hereto or in such other comparable form as may be provided by the Governmental Lender to the Owner, or as otherwise approved by the Governmental Lender. “Investor Limited Partner” means ____________, a ____________, or any other successor entity or assignee in such entity’s capacity as an equity investor in the Owner. “Loan Agreement” means the “Borrower Loan Agreement” as defined in the Funding Loan Agreement, as the same may be modified, amended or supplemented from time to time. “Low Income Tenant” means a tenant occupying a Low Income Unit. “Low Income Unit” means any Available Unit if the aggregate Gross Income of all tenants therein does not exceed limits determined in a manner consistent with determinations o f “low-income families” under Section 8 of the Housing Act, provided that the percentage of median Gross Income that qualifies as low income hereunder shall be sixty percent (60%) of median Gross Income for the Area, with adjustments for family size. A unit occupied by one or more students shall only constitute a Low Income Unit if such students meet the requirements of Section 142(d)(2)(C) of the Code. The determination of an Available Unit’s status as a Low Income Unit shall be made by the Owner upon commencement of each lease term with respect to such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant. “Manager” means a property manager meeting the requirements of Section 27 hereof. CIC Management, Inc., a California corporation, is hereby approved as the initial Manager. “Noteowner Representative” or “Noteowner” means during any period in which the Tax- Exempt Note is outstanding, the “Noteowner” under and as such term is defined in the Funding Loan Agreement. If at any time the Tax-Exempt Note is not outstanding then there is no Noteowner 2021/10/12 City Council Post Agenda Page 136 of 620 4 4850-1650-8151/024036-0092 Representative and references herein to the Noteowner Representative are void and inapplicable and shall be disregarded. “Project” means the 198-unit plus 2 manager’s units multifamily rental housing development located in the City of Chula Vista, San Diego County on the real property site described in Exhibit A hereto, consisting of those facilities, including r eal property, structures, buildings, fixtures or equipment situated thereon, as it may at an y time exist, the acquisition, construction and equipping of which facilities are to be financed, in whole or in part, from the proceeds of the sale of the Tax- Exempt Obligations or the proceeds of any payment by the Owner pursuant to the Loan Agreement, and any real property, structures, buildings, fixtures or equipment acquired in substitution for, as a renewal or replacement of, or a modification or improvement to , all or any part of the facilities described in the Loan Agreement and the Subordinate Loan Agreement. “Qualified Project Period” means the period beginning on 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 in the Project are occupied, (b) the first day on which no Tax-Exempt obligations 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 Housing Act terminates. “Regulations” means the Income Tax Regulations of the Department of the Treasury applicable under the Code from time to time. “Regulatory Agreement” means this Regulatory Agreement and Declaration of Restrictive Covenants, as it may be supplemented and amended from time to time. “Rent-Restricted” means, with respect to any Unit, that the Rental Payments with respect to such unit is not more than 30% of the imputed income limitation applicable to such Unit pursuant to Section §42(g)(2)(C) of the Code, as modified by Appendix D hereto, if applicable. “Rental Payments” means the rental payments paid by the occupant of a unit, excluding any supplemental rental assistance to the occupant from the State, the federal gove rnment, or any other public agency, but including any mandatory fees or charges imposed on the occupant by the Owner as a condition of occupancy of the unit. “Subordinate Bond Documents” has the meaning set forth in the Subordinate Indenture. “Subordinate Bondholder Representative” or “Subordinate Bondholder” means during any period in which the Subordinate Bonds are outstanding, the “Subordinate Bondholder Representative” under and as such term is defined in the Subordinate Indenture. If at any time the Subordinate Bonds are not outstanding then there is no Subordinate Bondholder Representative and references herein to the Subordinate Bondholder Representative are void and inapplicable and shall be disregarded. “Subordinate Bonds” means the Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3, in the original aggregate principal amount of $____________. 2021/10/12 City Council Post Agenda Page 137 of 620 5 4850-1650-8151/024036-0092 “Subordinate Indenture” means the Subordinate Indenture of Trust, by and between the Governmental Lender and the Subordinate Trustee, dated as of October 1, 2021, as the same may be modified, amended or supplemented from time to time. “Subordinate Loan” has the meaning set forth in the Subordinate Loan Agreement. “Subordinate Loan Agreement” means the Subordinate Loan Agreement, by and among the Governmental Lender, Subordinate Trustee, and Owner, dated as of June 1, 2021, as the same may be modified, amended or supplemented from time to time. “Subordinate Trustee” means U.S. Bank National Association, its successors and assigns, as trustee under the Subordinate Indenture. “Tax Certificate” means the “Tax Certificate” as defined in the Funding Loan Agreement. “Tax-Exempt” means with respect to interest on any obligations of a state or local government, including the Tax-Exempt Obligations, that such interest is excluded from gross income for federal income tax purposes; provided, however, that such interest may be includable as an item of tax preference or otherwise includable directly or indirec tly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax, under the Code. “Tax-Exempt Obligations” means, collectively, the Tax-Exempt Note and the Subordinate Bonds. “TCAC” means the California Tax Credit Allocation Committee. “Transfer” means the conveyance, assignment, sale or other disposition of all or any portion of the Project; and shall also include, without limitation to the foregoing, the following: (1) an installment sales agreement wherein Owner agrees to sell the Project or any part thereof for a price to be paid in installments; and (2) an agreement by the Owner leasing all or a substantial part of the Project to one or more persons or entities pursuant to a single or related transactions. “Very Low Income Tenant” means a tenant occupying a Very Low Income Unit. “Very Low Income Unit” means any Available Unit if the aggregate Gross Income of all tenants therein does not exceed limits determined in a manner consistent with determinations of “very low-income families” under Section 8 of the Housing Act, provided that the percentage of median Gross Income that qualifies as very low income hereunder shall be fifty percent (50%) of median Gross Income for the Area, with adjustments for family size. A unit occupied by one or more students shall only constitute a Very Low Income Unit if such students meet the requirements of Section 142(d)(2)(C) of the Code. The determination of an Available Unit's status as a Very Low Income Unit shall be made by the Owner upon commencement of each lease term with respect to such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant. Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of any gender shall be construed to include each other gender when approp riate 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. 2021/10/12 City Council Post Agenda Page 138 of 620 6 4850-1650-8151/024036-0092 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. The parties to this Regulatory Agreement acknowledge that each party and their respective counsel have participated in the drafting and revision of this Regulatory Agreement. Accordingly, the parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Regulatory Agreement or any supplement or exhibit hereto. Section 2. Representations, Covenants and Warranties of the Owner. (a) The Owner hereby incorporates herein, as if set forth in full herein, each of the representations, covenants and warranties of the Owner contained in the Tax Certificate and the Loan Agreement relating to the Project. (b) The Owner hereby represents and warrants that the Project is located entirely within the City. (c) The Owner acknowledges, represents and warrants that it understands the nature and structure of the transactions contemplated by this Regulatory Agreement; that it is familiar with the provisions of all of the documents and instruments relating to the Tax-Exempt Obligations to which it is a party or of which it is a beneficiary; that it understands the financial and legal risks inherent in such transactions; and that it has not relied on the Governmental Lender for any guidance or expertise in analyzing the financial or other consequences of such financing transactions or otherwise relied on the Governmental Lender in any manner except to execute and deliver or issue, as the case may be, the Tax-Exempt Obligations in order to provide funds to assist the Owner in constructing and developing the Project. Section 3. Qualified Residential Rental Project. The Owner hereby acknowledges and agrees that the Project is to be owned, managed and operated as a “residential rental project” (within the meaning of Section 142(d) of the Code) for a term equal to the Compliance Period. To that end, and for the term of this Regulatory Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: (a) The Project will be constructed, developed and operated for the purpose of providing multifamily residential rental property. The Owner will 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 su bordinate facilities, and no other facilities, in accordance with Section 142(d) of the Code, Section 1.103-8(b) of the Regulations and the provisions of the Housing Law, 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 (except for not more than two units set aside for a resident manager or other administrative use) will be similarly constructed units, and each dwelling unit in the Project will contain complete separate and distinct facilities for living, sleeping, 2021/10/12 City Council Post Agenda Page 139 of 620 7 4850-1650-8151/024036-0092 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. (c) None of the dwelling units in the Project will at any time be utilized on a transient basis or rented for a period of less than 30 consecutive days, or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home or trailer court or park; provided that the use of certain units for tenant guests on an intermittent basis shall not be considered transient use for purposes of this Regulatory Agreement. (d) No part of the Project will at any time during the Compliance Period be owned by a cooperative housing corporation, nor shall the Owner take any steps in connection with a conversion to such ownership or use, and the Owner will not take any steps in connection with a conversion of the Project to condominium ownership during the Compliance Period (except that the Owner may obtain final map approval and the Final Subdivision Public Report from the California Department of Real Estate and may file a condominium plan with the City). (e) All of the Available Units in the Project will be available for rental during the period beginning on the date hereof and ending on the termination of the Compliance Period on a continuous, “first-come, first-served” basis to members of the general public; which for purposes of this Regulatory Agreement means the general population, and the Owner 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 to be leased or rented in such a manner that they constitute Low Income Units or Very Low Income Units. (f) The Project consists of a parcel or parcels that are contiguous except for the interposition of a road, street or stream, and all of the facilities of the Project 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 the Project shall be occupied by the Owner; provided, however, that if the Project contains five or more dwelling units, this provision shall not be construed to prohibit occupancy of not more than one dwelling unit by a resident manager or maintenance personnel, any of whom may be the Owner. Section 4. Low Income Tenants and Very Low Income Tenants; Reporting Requirements. Pursuant to the requirements of Section 142(d) of the Code and applicable provisions of the Housing Act, the Owner hereby represents, as of the date hereof, and warrants, covenants and agrees as follows: (a) (i) During the Qualified Project Period, not less than forty-two (42) of the units in the Project shall be designated as Very Low Income Units, as set forth in Exhibit A to the CDLAC Resolution, 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 Gross 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: 2021/10/12 City Council Post Agenda Page 140 of 620 8 4850-1650-8151/024036-0092 Unit Size Household Size One Bedroom One and a Half 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 n ew 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 anot her seventy-six (76) of the units in the Project shall be designated as Low Income Units, as set forth in Exhibit A to the CDLAC Resolution, 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 Gross Income for the Area, as adjusted for household size utilizing the percentages set forth above under the definition of Low Income Tenant less a reasonable dedu ction 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 Bedroom One and a Half 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 thereafte r 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 2021/10/12 City Council Post Agenda Page 141 of 620 9 4850-1650-8151/024036-0092 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 Owner 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 Owner will provide such further information as may be required in the future by the State of California, the Governmental Lender, the Housing Law, 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, po licies, 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 Owner 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 Governmental Lender or (4) such other information as may be reasonably requested by the Governmental Lender. Copies of the most recent Income Certifications for Low Income Tenants and Very Low Income Tenants shall be attached to the annual report to be filed with the Governmental Lender 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 Owner shall recertify the income of the occupants of each Very 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 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 Owner 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 Owner shall recertify the income of the occupants of each Low Income Uni t 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 Owner 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 year thereafter during the term of this Regulatory Agreement, the Owner shall advise the 2021/10/12 City Council Post Agenda Page 142 of 620 10 4850-1650-8151/024036-0092 Governmental Lender of the status of the occupancy of the Project by delivering to the Governmental Lender a Certificate of Continuing Program Compliance (with a copy to the Funding Lender). (e) The Owner 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 Governmental Lender, the Funding Lender, the Department of the Treasury or the Internal Revenue Service to inspect the books and records of the Owner pertaining to the Project, including those records pertaining to the occupancy of the Low Income Units and Very Low Income Units. (f) The Owner 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 Governmental Lender and the Funding Lender. (g) The Owner 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 Housing Act, or its successor. The Owner 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 Owner 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 Owner 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 Owner 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 Owner 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 percent age 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). (h) Each lease pertaining to a Low Income Unit or Very Low Income Unit shall contain a provision to the effect that the Owner 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 Owner pursuant to Section 4(c) above may, at the option of the Owner, 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 Owner agrees to provide to the Governmental Lender 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 the lease shall be not less than thirty (30) days. (j) To the extent required by law, notwithstanding the terminati on 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 Owner 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. 2021/10/12 City Council Post Agenda Page 143 of 620 11 4850-1650-8151/024036-0092 Section 5. Tax-Exempt Status of Tax-Exempt Obligations. The Owner and the Governmental Lender, as applicable, each hereby represents, warrants and agrees as follows: (a) The Owner and the Governmental Lender 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 Tax-Exempt nature of the interest on the Tax-Exempt Obligations and, if either of them 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) The Owner and the Governmental Lender will file of record such documents and take such other steps as are necessary, in the written opinion of Tax Counsel filed with the Governmental Lender (with a copy to the Owner), 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. Section 6. Requirements of the Housing Law. In addition to the other requirements set forth herein, the Owner hereby agrees that it shall comply with each of the requirements of Section 34312 of the Housing Law, including the following: (a) Not less than 30% of the total number of units in the Project shall be Low Income Units and not less than 10% of the total number of units in the Project shall be Very Low Income Units. The units made available to meet these requirements shall be of comparable quality and offer a range of sizes and numbers of bedrooms comparable to the units that are available to other tenants in the Project. (b) The Rental Payments for the Low Income Units paid by the tenants ther eof (excluding any supplemental rental assistance from the State, the federal government or any other public agency to those tenants or on behalf of those units) shall not exceed the Rent-Restricted amount for such Low Income Units. The Rental Payments for the Very Low Income Units paid by the tenants thereof (excluding any supplemental rental assistance from the State, the federal government or any other public agency to those tenants or on behalf of those units) shall not exceed the Rent-Restricted amount for such Very Low Income Units, provided that the assumed household size for the Very Low Income Units shall be one person/studio, two persons/one bedroom, and three persons/two bedroom. (c) The Owner shall accept as tenants, on the same basis as all other p rospective tenants, low-income persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the Housing Act. The Owner shall not permit any selection criteria to be applied to Sectio n 8 certificate or voucher holders that is more burdensome than the criteria applied to all other prospective tenants. (d) The units reserved for occupancy as required by Section 4(a) shall remain available on a priority basis for occupancy at all times on and after the Closing Date and continuing through the Compliance Period. (e) During the three (3) years prior to the expiration of the Compliance Period, the Owner shall continue to make available, to eligible households, Low Income Units and Very Low 2021/10/12 City Council Post Agenda Page 144 of 620 12 4850-1650-8151/024036-0092 Income Units that have been vacated to the same extent that nonreserved units are made available to noneligible households. (f) Following the expiration or termination of the Compliance Period, except in the event of foreclosure and payoff of the Tax-Exempt Obligations, deed in lieu of foreclosure, eminent domain, or action of a federal agency preventing enforcement, units reserved for occupancy as required by subsection (a) of this Section shall remain available to any eligible tenant occupying a reserved unit at the date of such expiration or termination, at the rent determined by subsection (b) of this Section, until the earliest of (1) the household’s income exceeds 140% of the maximum eligible income specified above, (2) the household voluntarily moves or is evicted for good cause (as defined in the Housing Law), (3) 60 years after the date of the commencement of the Compliance Period, or (4) the Owner pays the relocation assistance and benefits to households as provided in Section 7264(b) of the California Government Code. (g) Except as set forth in Section 13 hereof, the covenants and conditions of this Regulatory Agreement shall be binding upon successors in interest of the Owner. (h) This Regulatory Agreement shall be recorded in the office of the County recorder, and shall be recorded in the grantor-grantee index under the name of the Owner as grantor and under the name of the Governmental Lender as grantee. Section 7. Requirements of the Governmental Lender. In addition to other requirements set forth herein and to the extent not prohibited by the requirements set forth in Sections 4 through 6 hereof, the Owner hereby agrees to comply with each of the requirements of the Governmental Lender set forth in this Section 7, as follows: (a) For the duration of the Compliance Period, notwithstanding any retirement of the Tax-Exempt Obligations or termination of the Loan Agreement or Subordinate Loan Agreement, the Owner will pay to the Governmental Lender all of the amounts required to be paid by the Owner under the Loan Agreement and Section 19 hereof and will indemnify the Governmental Lender as provided in Section 9 of this Regulatory Agreement. (b) All tenant lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained as required by the Governmental Lender, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the Governmental Lender upon reasonable advance notice to the Owner. (c) The Owner acknowledges that the Governmental Lender has appointed the Administrator to administer this Regulatory Agreement and to monitor performance by the Owner of the terms, provisions and requirements hereof. The Owner shall comply with any reaso nable request made by the Administrator or the Governmental Lender to deliver to any such Administrator, in addition to or instead of the Governmental Lender, any reports, notices or other documents required to be delivered pursuant hereto, and to make the Project and the books and records with respect thereto available for inspection by the Administrator as an agent of the Governmental Lender. The fees and expenses of the Administrator shall be paid by the Governmental Lender. 2021/10/12 City Council Post Agenda Page 145 of 620 13 4850-1650-8151/024036-0092 (d) For purposes of Section 6(b), the base rents shall be adjusted for household size, based upon the following unit sizes and household sizes, as permitted by TCAC. (e) Notwithstanding any other provisions of this Regulatory Agreement, in no event shall all of the rent, including the portion paid by the Low Income Tenant and any other person or entity, collected by Owner (the “Total Rent”) for any Low Income Unit exceed the amount of rent set forth in this Regulatory Agreement. Total Rent includes all payments made by the Low Income Tenant and all subsidies received by Owner. In the case of Low Income Tenants receiving Section 8 benefits, Owner acknowledges that it shall not accept any subsidy or payment that would cause the Total Rent received for any Low Income Unit to exceed the maximum rents allowed by this Regulatory Agreement for such Low Income Unit. Should Owner receive Total Rent in excess of the allowable maximum rent set forth in this Regulatory Agreement for a Low Income Unit, Owner agrees to immediately notify the Governmental Lender and reimburse the Governmental Lender for any such overpayment. Any of the foregoing requirements of the Governmental Lender contained in this Section 7 may be expressly waived by the Governmental Lender, in its sole discretion, in writing, but (i) no waiver by the Governmental Lender of any requirement of this Section 7 shall, or shall be deemed to, extend to or affect any other provision of this Regulatory Agreement except to the extent the Governmental Lender has received an opinion of Tax Counsel that any such provision is not required by the Housing Law and may be waived without adversely affecting the exclusion from gross income of interest on the Tax-Exempt Obligations for federal income tax purposes; and (ii) any requirement of this Section 7 shall be void and of no force and effect if the Governmental Lender and the Owner receive a written opinion of Tax Counsel to the effect that compliance with any such requirement would cause interest on the Tax-Exempt Obligations to cease to be Tax-Exempt or to the effect that compliance with such requirement would be in conflict with the Housing Law or any other state or federal law. In the event of any conflict between this Regulatory Agreement and any other regulatory agreement regarding the Project, the more restrictive terms shall prevail. Section 8. Modification of Covenants. The Owner and the Governmental Lender hereby agree as follows: (a) To the extent any amendments to the Housing Law, the Regulations or the Code shall, in the written opinion of Tax Counsel filed with the Governmental Lender and the Owner, retroactively impose requirements upon the ownership or operation of the Project more restrictive than those imposed by this Regulatory Agreement, and if such requirements are applicable to the Project and compliance therewith is necessary to maintain the validity of, or the Tax -Exempt status of interest on the Tax-Exempt Obligations, this Regulatory Agreement shall be deemed to be automatically amended to impose such additional or more restrictive requirements. (b) To the extent that the Housing Law, the Regulations or the Code, or any amendments thereto, shall, in the written opinion of Tax Counsel filed with the Governmental Lender and the Owner, impose requirements upon the ownership or operation of the Project less restrictive than imposed by this Regulatory Agreement, this Regulatory Agreement may be amended or modified to provide such less restrictive requirements but only by written amendment signed by the Governmental Lender, at its sole discretion, and the Owner, with the consent of the Noteowner Representative and Subordinate Bondholder Representative, and only upon receipt by the 2021/10/12 City Council Post Agenda Page 146 of 620 14 4850-1650-8151/024036-0092 Governmental Lender of the written opinion of Tax Counsel to the effect that such amendment will not affect the Tax-Exempt status of interest on the Tax-Exempt Obligations or violate the requirements of the Housing Law, and otherwise in accordance with Section 21 hereof. (c) The Owner and the Governmental Lender shall execute, deliver and, if applicable, file of record any and all documents and instruments necessary to effectuate the intent of this Section 8. Section 9. Indemnification; Other Payments. To the fullest extent permitted by law, the Owner agrees to indemnify, hold harmless and defend the Governmental Lender and each of its officers, governing members, directors, officials, employees, attorneys, agents, and program participants (collectively, the “Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees and expenses, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject under or any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: (i) the Tax-Exempt Obligations, the Funding Loan Agreement, the Loan Agreement, the Subordinate Indenture, the Subordinate Loan Agreement, this Regulatory Agreement, or the Tax Certificate and all documents related thereto, or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including, as applicable, the execution and delivery or transfer of interests in the Tax-Exempt Obligations; (ii) any act or omission of the Owner or any of its agents, contractors, servants, employees or licensees in connection with the Loan or the Projec t, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation, construction or rehabilitation of, the Project or any part thereof; (iii) any lien or charge upon payments by the Owner to the Governmental Lender or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Governmental Lender in respect of any portion of the Project; (iv) any violation of any environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Project or any part thereof; (v) the defeasance and/or redemption, in whole or in part, of the Tax-Exempt Obligations; (vi) any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in any offering statement or disclosure document for the Tax-Exempt Obligations or any of the documents relating to the Tax-Exempt Obligations, or any omission or alleged omission from any offering statement or disclosure document for the Tax-Exempt Obligations of any material fact necessary to be stated therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; or 2021/10/12 City Council Post Agenda Page 147 of 620 15 4850-1650-8151/024036-0092 (vii) any declaration of taxability of interest on the Tax-Exempt Obligations, or allegations (or regulatory inquiry) that interest on the Tax-Exempt Obligations is taxable for federal tax purposes; except to the extent such damages are caused by the willful misconduct or gross negligence of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Owner, 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 shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement. Each Indemnified Party s hall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Owner shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Owner if in the judgment of such Indemnified Party a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel. In addition to the foregoing, the Owner shall pay upon demand all of the fees and expenses paid or incurred by the Governmental Lender in enforcing the provisions hereof. In addition thereto, the Owner will pay upon demand all of the fees and expenses paid or incurred by the Governmental Lender in enforcing the provisions hereof, as more fully set forth in the Loan Agreement. The provisions of this Section 9 shall survive the final payment or defeasance of the Tax- Exempt Obligations and the term of this Regulatory Agreement. Section 10. Consideration. The Governmental Lender has agreed to execute and deliver the Tax-Exempt Obligations to provide funds to lend to the Owner to finance the Project, all for the purpose, among others, of inducing the Owner to acquire, construct, develop and operate the Project. In consideration of the execution and delivery of the Tax-Exempt Obligations by the Governmental Lender, the Owner has entered into this Regulatory Agreement and has agreed to restrict the us es to which this Project can be put on the terms and conditions set forth herein. Section 11. Reliance. The Governmental Lender and the Owner hereby recognize and agree that the representations and covenants set forth herein may be relied upon by all persons, including but not limited to the Administrator, interested in the legality and validity of the Tax- Exempt Obligations, in the exemption from California personal income taxation of interest on the Tax-Exempt Obligations and in the Tax-Exempt status of the interest on the Tax-Exempt Obligations. In performing their duties and obligations hereunder, the Governmental Lender, the Administrator may rely upon statements and certificates of the Low Income Tenants, and upon audits of the books and records of the Owner pertaining to the Project. In addition, the Governmental Lender 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 Governmental Lender hereunder in good faith and in conformity with such opinion. Section 12. Transfer of the Project. For the Compliance Period, the Owner shall not Transfer the Project, in whole or in part, without the prior written consent of the Governmental Lender, which consent shall not be unreasonably withheld or delayed if the following conditions are 2021/10/12 City Council Post Agenda Page 148 of 620 16 4850-1650-8151/024036-0092 satisfied: (A) the receipt by the Governmental Lender of evidence acceptable to the Governmental Lender that (1) the Owner shall not be in default hereunder or under the Loan Agreement, if in effect (which may be evidenced by a Certificate of Continuing Program Compliance), or the transferee undertakes to cure any defaults of the Owner to the reasonable satisfaction of the Governmental Lender; (2) the continued operation of the Project shall comply with the provisions of this Regulatory Agreement; (3) either (a) the transferee or its Manager has at least three years’ experience in the ownership, operation and management of similar size rental housing projects, and at least one year’s experience in the ownership, operation and management of rental housing projects containing below - market-rate units, without any record of material violations of discrimination restrictions or other state or federal laws or regulations or local governmental requirements applicable to such projects, or (b) the transferee agrees to retain a Manager with the experience and record described in subclause (a) above, or (c) the transferring Owner or its management company will continue to manage the Project, or another management company reasonably acceptable to the Governmental Lender will manage, for at least one year following such Transfer and, if applicable, during such period the transferring Owner or its management company will provide training to the transf eree and its manager in the responsibilities relating to the Low Income Units; and (4 ) the person or entity that is to acquire the Project does not have pending against it, and does not have a history of significant and material building code violations or complaints concerning the maintenance, upkeep, operation, and regulatory agreement compliance of any of its projects as identified by any local, state or federal regulatory agencies; (B) the execution by the transferee of any document reasonably requested by the Governmental Lender with respect to the assumption of the Owner’s obligations under this Regulatory Agreement and the Loan Agreement (if then in effect), including without limitation an instrument of assumption hereof and thereof, and delivery to t he Governmental Lender of an opinion of such transferee’s counsel to the effect that each such document and this Regulatory Agreement are valid, binding and enforceable obligations of such transferee, subject to bankruptcy and other standard limitations affecting creditor’s rights; (C) receipt by the Governmental Lender of an opinion of Tax Counsel to the effect that any such Transfer will not adversely affect the Tax -Exempt status of interest on the Tax-Exempt Obligations; (D) receipt by the Governmental Lender of all fees and/or expenses then currently due and payable to the Governmental Lender by the Owner; and (E) receipt by the Governmental Lender of evidence of satisfaction of compliance with the provisions of Section 28(d)(i) related to notice to CDLAC of transfer of the Project. It is hereby expressly stipulated and agreed that any Transfer of the Project in violation of this Section 12 shall be null, void and without effect, shall cause a reversion of title to the Owner, and shall be ineffective to relieve the Owner of its obligations under this Regulatory Agreement. The written consent of the Governmental Lender to any Transfer of the Project shall constitute conclusive evidence that the Transfer is not in violation of this Section 12. Nothing in this Section shall affect any provision of any other document or instrument between the Owner and any other party which requires the Owner to satisfy certain conditions or obtain the prior written consent of such other party in order to Transfer the Project. Upon any Transfer that complies with this Regulatory Agreement, the Owner shall be fully released from its obligations hereunder to the extent such obligations have been fully assumed in writing by the transferee of the Project. The foregoing notwithstanding, the Project may be transferred pursuant to a foreclosure, exercise of power of sale or deed in lieu of foreclosure or comparable conversion under the Deed of Trust without the consent of the Governmental Lender or compliance with the provisions of this Section 12. The Governmental Lender hereby approves the transfer of limited partnership interests in the Owner, including, without limitation, the transfer of limited partnership interests in the Owner and the transfer of interests in the limited partners of Owner. The Governmental Lender hereby 2021/10/12 City Council Post Agenda Page 149 of 620 17 4850-1650-8151/024036-0092 agrees that the removal and replacement of one or more of the general partners pursuant to the Owner’s partnership agreement shall not require the consent of Governmental Lender. For the Compliance Period, the Owner shall not: (1) encumber any of the Project or grant commercial leases of any part thereof, or permit the conveyance, transfer or encumbrance of any part of the Project, except for (A) encumbrances permitted under the Deed of Trust, or (B) a Transfer in accordance with the terms of this Regulatory Agreement, in each case upon receipt by the Governmental Lender of an opinion of Tax Counsel to the effect that such action will not adversely affect the Tax-Exempt status of interest on the Tax-Exempt Obligations (provided that such opinion will not be required with respect to any encumbrance, lease or transfer relating to a commercial operation or ancillary facility that will be available for tenant use and is customary to the operation of multifamily housing developments similar to the Project); (2) demolish any part of the Project or substantially subtract from any real or personal property of the Project, except to the extent that what is demolished or removed is replaced with comparable property or such demolition or removal is otherwise permitted by the Loan Agreement or the Deed of Trust; or (3 ) permit the use of the dwelling accommodations of the Project for any purpose except rental residences. Section 13. 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 for the period provided herein and shall terminate as to any provision not otherwise provided with a specific termination date and shall termi nate in its entirety at the end of the Compliance Period, it being expressly agreed and understood that the provisions hereof are intended to survive the retirement of the Tax-Exempt Obligations and discharge of the Funding Loan Agreement, the Loan Agreement, the Subordinate Indenture and the Subordinate Loan Agreement. The terms of this Regulatory Agreement to the contrary notwithstanding, the requirements of this Regulatory Agreement shall terminate and be of no further force and effect in the event of involuntary noncompliance with the provisions of this Regulatory Agreement caused by fire or other casualty, seizure, requisition, foreclosure or 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 Governmental Lender from enforcing such provisions, or condemnation or a similar event, but only if, within a reasonable period, either the Tax-Exempt Obligations are retired or amounts received as a consequence of such event are used to provide a project that meets the requirements hereof; 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 ter mination of such provisions as the result of the foreclosure or the delivery of a deed in lieu of foreclosure or a similar event, the Owner or any related person (within the meaning of Section 1.103-10(e) of the Regulations) obtains an ownership interest in the Project for federal income tax purposes. The Owner hereby agrees that, following any foreclosure, transfer of title by deed in lieu of foreclosure or similar event, neither the Owner nor any such related person as described above will obtain an ownership interest in the Project for federal tax purposes. Notwithstanding any other provision of this Regulatory Agreement, this Regulatory Agreement may be terminated upon agreement by the Governmental Lender and the Owner, with the consent of CDLAC, upon receipt by the Governmental Lender of an opinion of Tax Counsel to the effect that such termination will not adversely affect the exclusion from gross income of interest on the Tax-Exempt Obligations 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 2021/10/12 City Council Post Agenda Page 150 of 620 18 4850-1650-8151/024036-0092 delivery of such instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms. Section 14. Covenants to Run With the Land. Notwithstanding Section 1461 of the California Civil Code, the Owner hereby subjects the Project to the covenants, reservations and restrictions set forth in this Regulatory Agreement. The Governmental Lender and the Owner 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 Owner’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 15. Burden and Benefit. The Governmental Lender and the Owner hereby declare their understanding and intent that the burdens of the covenants set forth herein touch and concern the land in that the Owner’s legal interest in the Project is rendered less valuable thereby. The Governmental Lender and the Owner hereby further declare their understanding and intent that the benefits 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, the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the public purposes for which the Tax-Exempt Obligations were executed and delivered or issued, as the case may be. Section 16. 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 of the site on which the Project is located. Section 17. Default; Enforcement. If the Owner defaults in the performance or observance of any covenant, agreement or obligation of the Owner 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 Governmental Lender or the Noteowner Representative or the Subordinate Bondholder Representative to the Owner, or for a period of 60 days from the date the Owner should, with reasonable diligence, have discovered such default, then the Governmental Lender shall declare an “Event of Default” to have occurred hereunder; provided, however, that if the default is of such a nature that it cannot be corrected within 60 days, such default shall not constitute an Event of Default hereunder so long as (i) the Owner institutes corrective action within said 60 days and diligently pursues such action until the default is corrected, and (ii) in the opinion of Tax Counsel, the failure to cure said default within 60 days will not adversely affect the Tax -Exempt status of interest on the Tax-Exempt Obligations. The Governmental Lender shall have the right to enforce the obligations of the Owner under this Regulatory Agreement within shorter periods of time than are otherwise provided herein if necessary to insure compliance with the Housing Law or the Code. Any cure of any default made or tendered by the Investor Limited Partner shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner. Following the declaration of an Event of Default hereunder, the Governmental Lender, subject to the terms of the Funding Loan Agreement, may take any one or more of the following steps, in addition to all other remedies provided by law or equity: 2021/10/12 City Council Post Agenda Page 151 of 620 19 4850-1650-8151/024036-0092 (i) by mandamus or other suit, action or proceeding at law or in equity, including injunctive relief, require the Owner to perform its obligations and covenants hereunder or enjoin any acts or things that may be unlawful or in violation of the rights of the Governmental Lender hereunder; (ii) have access to and inspect, examine and make copies of all of the books and records of the Owner 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 Owner hereunder; and (iv) with the consent of the Noteowner Representative, which consent shall not be unreasonably withheld, declare a default under the Funding Loan Agreement or Loan Agreement, as applicable, and proceed with any remedies provided therein. The Owner hereby agrees that specific enforcement of the Owner’s agreements contained herein is the only means by which the Governmental Lender may fully obtain the benefits of this Regulatory Agreement made by the Owner herein, and the Owner therefore agrees to the imposition of the remedy of specific performance against it in the case of any Event of Default by the Owner hereunder. The Governmental Lender hereby agrees that cure of any Event of Default made or tendered by any partner of the Owner shall be deemed to be a cure by the Owne r and shall be accepted or rejected on the same basis as if made or tendered by the Owner. All reasonable fees, costs and expenses (including reasonable attorney’s fees and expenses) the Governmental Lender incurred in taking any action pursuant to this Section shall be the sole responsibility of the Owner. Section 18. Recording and Filing. (a) The Owner 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, and in such other places as the Governmental Lender may reasonably request. The Owner shall pay all fees and charges incurred in connection with any such recording. (b) The Owner and the Governmental Lender will file of record such other documents and take such other steps as are reasonably necessary, in the opinion of Tax Counsel, in order to insure that the requirements and restrictions of this Regulatory Agreement will be binding upon all owners of the Project. (c) The Owner hereby covenants to include or reference 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, and is bound by, such restrictions, and, except in the case of a foreclosure or comparable involuntary conversion of the Deed of Trust, whereby the Funding Lender becomes the owner of the Project, to obtain the agreement from any transferee to abide by all requirements and restrictions of this Regulatory Agreement. Section 19. Payment of Fees. Notwithstanding any prepayment of the Loan and discharge of the Funding Loan Agreement, the Owner shall continue to pay the fees of the 2021/10/12 City Council Post Agenda Page 152 of 620 20 4850-1650-8151/024036-0092 Governmental Lender as provided in this Section 19, unless such prepayment is made in connection with a refunding of the Tax-Exempt Obligations. The Owner agrees to pay to the Governmental Lender (i) an initial issuance fee of $______________, equal to 0.20% of the aggregate amount of Tax-Exempt Obligations and its Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-2 (Taxable), which issuance fee shall be paid on or before the Closing Date, (ii) the Governmental Lender’s annual administration fee (the “Annual Administration Fee”), which shall be an amount equal to $21,000, payable semi-annually in equal installments on each [December 15 and June 15] (provided the first two semi-annual installments due [June 15, 2022 and December 15, 2022] shall be due and payable on the Closing Date), and continuing throughout the Compliance Period, and (iii) within 30 days after receipt of request for payment thereof, all reasonable out-of- pocket expenses of the Governmental Lender (not including salaries and wages of Governmental Lender employees) related to the Tax-Exempt Obligations, the Project and the financing thereof, including, without limitation, legal fees and expenses incurred in connection with the interpretation, performance, enforcement or amendment of any documents relating to the Project or the Tax-Exempt Obligations, including without limitation any legal fees and expenses incurred in connection with any audit of the Tax-Exempt Note is by the Internal Revenue Service. In addition, commencing _________, 202__, the Owner shall pay the Governmental Lender a loan monitoring fee of [$4,252], which fee shall increase by three percent (3%) annually. If the Owner fails to make payment of the Annual Administration Fee for a period of two consecutive years or more, the Governmental Lender may, in its sole discretion, declare the total amount of the Annual Administration Fee through the end of the Compliance Period immediately due and payable, such amount to be discounted at a rate equal to the then current market rate for U.S. Treasury obligations of a maturity equal to the remaining term of the Compliance Period. Section 20. Governing Law; Venue. This Regulatory Agreement shall be construed in accordance with and governed by the laws of the State of California applicable to contracts made and performed in the State of California. This Regulatory Agreement shall be enforceable i n the State of California, and any action arising hereunder shall (unless waived by the Governmental Lender in writing) be filed and maintained in the Superior Court of California, County of San Diego. Section 21. Amendments; Waivers. (a) Except as provided in Sections 8(a) and 28(e) hereof, this Regulatory Agreement may be amended only 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, California, and only upon (i) receipt by the Governmental Lender of an opinion from Tax Counsel that such amendment will not adversely affect the Tax-Exempt status of interest on the Tax-Exempt Obligations and is not contrary to the provisions of the Housing Law and (ii) the written consent of the Noteowner Representative and Subordinate Bondholder Representative , who shall receive a copy of any such amendment. (b) Anything to the contrary contained herein notwithstanding, the Governmental Lender and the Owner hereby agree to amend this Regulatory Agreement to the extent required, in the opinion of Tax Counsel, in order that interest on the Tax-Exempt Obligations remains Tax-Exempt. The parties requesting such amendment shall notify the other parties to this Regulatory Agreem ent of the proposed amendment, with a copy of such proposed amendment to Tax Counsel and a request that Tax Counsel render to the Governmental Lender an opinion as to the effect of such proposed 2021/10/12 City Council Post Agenda Page 153 of 620 21 4850-1650-8151/024036-0092 amendment upon the Tax-Exempt status of interest on the Tax-Exempt Obligations. This provision shall not be subject to any provision of any other agreement requiring any party hereto to obtain the consent of any other person in order to amend this Regulatory Agreement. (c) Any waiver of, or consent to, any condition under this Regulatory Agreement must be expressly made in writing. Section 22. Notices. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, overnight delivery, certified or registered mail, postage prepaid, return receipt requested, or by telecopy, in each case at the respective addresses specified in the Funding Loan Agreement, or at such other addresses as may be specified in writing by the parties hereto. Unless otherwise specified by the Administrator, the address of the Administrator is: Chula Vista Housing Authority 276 Fourth Avenue Chula Vista, California 91910 Attention: Director 2021/10/12 City Council Post Agenda Page 154 of 620 22 4850-1650-8151/024036-0092 Unless otherwise specified by CDLAC, the address of CDLAC is: California Debt Limit Allocation Committee 915 Capitol Mall, Room 311 Sacramento, CA 95814 Attention: Executive Director The Governmental Lender, the Administrator, CDLAC and the Owner may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Notice shall be deemed given on the date evidenced by the postal or courier receipt or other written evidence of delivery or electronic transmission; provided that any telecopy or other electronic transmission received by any party after 4:00 p.m., local time of the receiving party, as evidenced by the time shown on such transmission, shall be deemed to have been received the following Business Day. A copy of each notice of default provided to the Owner hereunder shall also be provided to the Investor and the Noteowner Representative at the addresses set forth in the Funding Loan Agreement. A copy of each notice of default provided to the Owner hereunder shall also be provided to the Subordinate Bondholder Representative at the addresses set forth in the Subordinate Indenture. A copy of each notice sent by or to the Owner shall also be sent to the Manager at the address of the Manager provided by the Owner to the Administrator; but such copies shall not constitute notice to the Owner, nor shall any failure to send such copies constitute a breach of this Regulatory Agreement or a failure of or defect in notice to the Owner. The Owner shall notify the Governmental Lender and the Administrator in writing of any change to the name of the Project or any change of name or address for the Owner or the Manager. The Owner shall further notify CDLAC in writing of any event provided in Section 28(d) hereof. Section 23. Severability. If any provision of this Regulatory Agreement shall be invali d, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. Section 24. Multiple Counterparts. This Regulatory Agreement may be simultaneously 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 25. Limitation on Liability. Notwithstanding the foregoing or any other provision or obligation to the contrary contained in this Regulato ry Agreement, (i) the liability of the Owner under this Regulatory Agreement to any person or entity, including, but not limited to, the Noteowner Representative, the Subordinate Bondholder Representative or the Governmental Lender and their successors and assigns, is limited to the Owner’s interest in the Project, the Pledged Revenues and the amounts held in the funds and accounts created under the Funding Loan Agreement, or any rights of the Owner under any guarantees relating to the Project, and such persons and entities shall look exclusively thereto, or to such other security as may from time to time be given for the payment of obligations arising out of this Regulatory Agreement or any other agreement securing the obligations of the Owner under this Regulatory Agreement; and (ii) from and after the date of this Regulatory Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Regulatory Agreement, any agreement pertaining to any Project or any other agreement securing the Owner’s obligations under 2021/10/12 City Council Post Agenda Page 155 of 620 23 4850-1650-8151/024036-0092 this Regulatory Agreement), shall be rendered against the Owner, the assets of the Owner (other than the Owner’s interest in the Project, this Regulatory Agreement, amounts held in the funds and accounts created under the Funding Loan Agreement or Subordinate Bond Documents, any rights of the Owner under the Funding Loan Agreement, Subordinate Bond Documents or any other documents relating to the Tax-Exempt Obligations or any rights of the Owner under any guarantees relating to the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Regulatory Agreement and the Funding Loan Agreement or any agreement securing the obligations of the Owner under this Regulatory Agreement, or any judgment, order or decree rendered pursuant to any su ch action or proceeding, except to the extent provided in the Loan Agreement. Section 26. Third-Party Beneficiary. The City and CDLAC are intended to be and shall each be a third-party beneficiary of this Regulatory Agreement. The City shall have the right (but not the obligation) to enforce, separately or jointly with the Governmental Lender or to cause the Governmental Lender to enforce, the terms of this Regulatory Agreement and to pursue an action for specific performance or other available remedy at law or in eq uity in accordance with Section 17 hereof. CDLAC shall have the right (but not the obligation) to enforce the CDLAC Conditions and to pursue an action for specific performance or other available remedy at law or in equity in accordance with Section 17 hereof, provided that any such action or remedy shall not materially adversely affect the interests and rights of the Noteowners and Subordinate Bondholders. Section 27. Property Management. The Owner agrees that at all times the Project shall be managed by a property manager (i) approved by the Governmental Lender in its reasonable discretion and (ii) who has at least three years’ experience in the ownership, operation and management of similar size rental housing projects, and at least one year’s experience in the ownership, operation and management of rental housing projects containing below -market-rate units, without any record of material violations of discrimination restrictions or other state or federal laws or regulations or local governmental requirements applica ble to such projects (the “Manager”). The Owner shall submit to the Governmental Lender from time to time such information about the background, experience and financial condition of any existing or proposed Manager as the Governmental Lender may reasonably require to determine whether such Manager meets the requirements for a Manager set forth herein. The Governmental Lender reserves the right to conduct periodic reviews of the management practices and of the Manager to determine if the Project is being operated and managed in accordance with the requirements and standards of this Agreement. The Owner agrees to cooperate with the Governmental Lender in such reviews. Replacement of Manager. If the Governmental Lender determines in its reasonable judgment that the Project is not being operated and managed in accordance with one or more of the material requirements or standards of this Agreement, the Governmental Lender may deliver notice to the Owner and the Noteowner Representative requesting replacement of the Manager, which notice shall state clearly the reasons for such request. The Owner agrees that, upon receipt of such notice, it shall within 60 days submit to the Governmental Lender, with copies to the Noteowner Representative, a proposal to engage a new Manager meeting the requirements of this Section 27. Each of the Governmental Lender and the Noteowner Representative shall each respond within 30 days to such proposal or such approval shall be deemed given. Upon receipt o f such consent or deemed consent, the Owner shall within 60 days terminate the existing Manager’s engagement and engage the new Manager. If such proposal is denied by either the Governmental Lender or the Noteowner Representative, the Owner agrees that upon receipt of notice of such denial, it shall within 60 days 2021/10/12 City Council Post Agenda Page 156 of 620 24 4850-1650-8151/024036-0092 submit to the Governmental Lender, with copies to the Noteowner Representative, a proposal to engage another new Manager meeting the requirements of this Section 27, subject to the Governmental Lender’s and Noteowner Representative’s consent or deemed consent pursuant to the terms hereof. Notwithstanding any other provision of this Section 27 to the contrary, the Noteowner Representative may at any time by written instruction to the Governmental Lender and the Owner deny the Governmental Lender’s request for a replacement Manager and direct that the existing Manager be retained. Section 28. Requirements of CDLAC. In addition to other requirements set forth herein and to the extent not prohibited by the requirements set forth in Sections 4 through 6 hereof, the Owner hereby agrees to comply with each of the requirements of CDLAC set forth in this Section 28, as follows: (a) The Owner shall comply with the CDLAC Resolution attached hereto as Exhibit E and the CDLAC Conditions set forth in Exhibit A thereto (collectively, the “CDLAC Conditions”), which conditions are incorporated herein by reference and made a part hereof. The Owner will prepare and submit to the Governmental Lender, not later than February 1 of each year, until the Project is completed, and on February 1 every three years thereafter until the end of the Compliance Period, a Certificate of Compliance II for Qualified Residential Rental Projects, in substantially the form required or otherwise provided by CDLAC from time to time, executed by an authorized representative of the Owner. Such Certificate of Compliance II for Qualified Residential Rental Projects shall be shall be prepared pursuant to the terms of the CDLAC Conditions. Additionally, the Owner will prepare and submit to the Governmental Lender, a Certificate of Completion, in substantially the form required or otherwise provided by CDLAC from time to time, executed by an authorized representative of the Owner certifying among other things t o the substantial completion of the Project. Compliance with the terms of the CDLAC Conditions not contained within this Regulatory Agreement, but referred to in the CDLAC Conditions are the responsibility of the Owner to report to the Governmental Lender. (b) The Owner acknowledges that the Governmental Lender and the Administrator shall monitor the Owner’s compliance with the terms of the CDLAC Conditions. The Owner acknowledges that the Governmental Lender will prepare and submit to CDLAC, not later than March 1 of each year, until the Project is completed, and on March 1 every three years thereafter until the end of the Compliance Period, a Self-Certification Certificate in the form provided by CDLAC. The Owner will cooperate fully with the Governmental Lender in connection with such monitoring and reporting requirements. (c) Except as otherwise provided in Section 13 of this Regulatory Agreement, this Regulatory Agreement shall terminate on the date 55 years after the date on which at least fifty percent (50%) of the units in the Project are first occupied or otherwise after the commencement of the Qualified Project Period. (d) The Owner shall notify CDLAC in writing of: (i) any change in ownership of the Project, (ii) any change in the Governmental Lender, (iii) any change in the name of the Project or the Manager; (iv) any material default under the Funding Loan Agreement, the Loan Agreement or this Regulatory Agreement, including, but not limited to, such defaults associated with the Tax - Exempt status of the Tax-Exempt Obligations, and the income and rental requirements as provided in 2021/10/12 City Council Post Agenda Page 157 of 620 25 4850-1650-8151/024036-0092 Sections 4 and 6 hereof and the CDLAC Conditions; or (v) termination of this Regulatory Agreement. (e) CDLAC shall have the right, but not the obligation, to deliver revised CDLAC Conditions to the Owner after the Closing Date, at any time; that are not more restrictive than the original CDLAC Conditions; provided however, that, with the prior written consent of the Noteowner Representative, which will not be unreasonably withheld: (i ) any changes in the terms and conditions of the CDLAC Conditions prior to the recordation against the Project in the real property records of the County of a regulatory agreement between Owner and TCAC (“TCAC Regulatory Agreement”) shall be limited to such changes as are necessary to correct any factual errors or to otherwise conform the CDLAC Conditions to any change in facts or circumstances applicable to the Owner or the Project; and (ii) after recordation of the TCAC Regulatory Agreement, any changes in the terms and conditions of the CDLAC Conditions shall be limited to such changes as are necessary to conform Items 1, 6, 7, 10, 11, 12, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25 and/or 26 of Exhibit A to the CDLAC Conditions to any change in terms and conditions requested by Owner and approved by CDLAC. The Owner shall record or cause to be recorded in the real property records of the County an amendment to this Regulatory Agreement containing such revised CDLAC Conditions, executed by the parties here to or their successor in title and pay any expenses in connection therewith. The Owner shall provide CDLAC with a copy of that recorded amendment reflecting the revised CDLAC Conditions. Any of the foregoing requirements of the CDLAC contained in this Section 28 may be expressly waived by CDLAC, in its sole discretion, in writing, but (i ) no waiver by CDLAC of any requirement of this Section 28 shall, or shall be deemed to, extend to or affect any other provision of this Regulatory Agreement except to the extent the Governmental Lender has received an opinion of Tax Counsel that any such provision is not required by the Housing Law and may be wa ived without adversely affecting the exclusion from gross income of interest on the Tax-Exempt Obligations for federal income tax purposes; and (ii) any requirement of this Section 28 shall be void and of no force and effect if the Governmental Lender and the Owner receive a written opinion of Tax Counsel to the effect that compliance with any such requirement would cause interest on the Tax-Exempt Obligations to cease to be Tax-Exempt or to the effect that compliance with such requirement would be in conflict with the Housing Law or any other state or federal law. 2021/10/12 City Council Post Agenda Page 158 of 620 [Execution Page to Regulatory Agreement and Declaration of Restrictive Covenants Dated as of October 1, 2021] 4850-1650-8151/024036-0092 IN WITNESS WHEREOF, the Governmental Lender and the Owner have executed this Regulatory Agreement by duly authorized representatives, all as of the date first above written. CHULA VISTA HOUSING AUTHORITY By: Director 2021/10/12 City Council Post Agenda Page 159 of 620 [Execution Page to Regulatory Agreement and Declaration of Restrictive Covenants Dated as of October 1, 2021] 4850-1650-8151/024036-0092 MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Juan P. Arroyo, Executive Vice President By: CIC Millenia II, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 160 of 620 A-1 4850-1650-8151/024036-0092 EXHIBIT A DESCRIPTION OF REAL PROPERTY Real property in the City of Chula Vista, County of San Diego, State of California, described as follows: 2021/10/12 City Council Post Agenda Page 161 of 620 B-1 4850-1650-8151/024036-0092 EXHIBIT B FORM OF INCOME CERTIFICATION 2021/10/12 City Council Post Agenda Page 162 of 620 C-1 4850-1650-8151/024036-0092 EXHIBIT C FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE The undersigned, ____________________, being duly authorized to execute this certificate on behalf of MILLENIA II CIC, LP (the “Owner”), hereby represents and warrants that: 1. The undersigned has read and is thoroughly familiar with the provisions of the following documents associated with the Owner’s participation in the Chula Vista Housing Authority’s (the “Governmental Lender”) Multifamily Housing Revenue Note (Columba Apartments), 2021 Series A-1, and the Governmental Lender’s Multifamily Housing Revenue Bonds Subordinate Series A-3, such documents including: (a) the Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) dated as of October 1, 2021 between the Owner and the Governmental Lender; (b) the Tax-Exempt Note executed and delivered from the Owner to the Governmental Lender representing the Owner’s obligation to repay the Loan, and the Subordinate Note executed and delivered from the Owner to the Governmental Lender representing the Owner’s obligation to repay the Subordinate Loan. 2. As of the date of this certificate, the following percentages of residential units in the Project (i) are occupied by Very Low Income Tenants and Low Income Tenants (as such te rms 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 Very Low Income Tenant and Low Income Tenant vacated such unit; as indicated: 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.: _____ ____ ____ ____ ____ 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.: _____ ____ ____ ____ ____ 2021/10/12 City Council Post Agenda Page 163 of 620 C-2 4850-1650-8151/024036-0092 3. The Owner hereby certifies that the Owner 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]. MILLENIA II CIC, LP, a California limited partnership By: Its: 2021/10/12 City Council Post Agenda Page 164 of 620 D-1 4850-1650-8151/024036-0092 EXHIBIT D CDLAC RESOLUTION THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE RESOLUTION NO. 21-134 2021/10/12 City Council Post Agenda Page 165 of 620 Stradling Yocca Carlson & Rauth Draft dated October 1, 2021 4848-7324-3383/024036-0092 BORROWER LOAN AGREEMENT between the CHULA VISTA HOUSING AUTHORITY, as Governmental Lender and MILLENIA II CIC, LP, a California limited partnership as Borrower dated as of October 1, 2021 relating to: $_______________ Funding Loan originated by CITIBANK, N.A., as Funding Lender from the proceeds of the $______________ Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1 $______________ Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-2 (Taxable) The interest of the Governmental Lender in this Borrower Loan Agreement (except for certain rights described herein) has been pledged and assigned to Citibank, N.A., as funding lender (the “Funding Lender”), under that certain Funding Loan Agreement, of even date herewith, by and among Chula Vista Housing Authority (the “Governmental Lender”), U.S. Bank National Association, as fiscal agent, and the Funding Lender, under which the Funding Lender is originating a loan to the Governmental Lender the proceeds of which are to be used to fund the Borrower Loan made under this Borrower Loan Agreement. 2021/10/12 City Council Post Agenda Page 166 of 620 TABLE OF CONTENTS Page i 4848-7324-3383/024036-0092 ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION Section 1.1 Specific Definitions ................................................................................................... 2 Section 1.2 Definitions ................................................................................................................. 2 ARTICLE II GENERAL Section 2.1 Origination of Borrower Loan ................................................................................. 17 Section 2.2 Security for the Funding Loan ................................................................................. 18 Section 2.3 Loan; Borrower Notes; Conditions to Closing ........................................................ 19 Section 2.4 Borrower Loan Payments ........................................................................................ 20 Section 2.5 Additional Borrower Payments ............................................................................... 21 Section 2.6 Overdue Payments; Payments in Default ................................................................ 22 Section 2.7 Calculation of Interest Payments and Deposits to Real Estate Related Reserve Funds .......................................................................................................... 22 Section 2.8 Grant of Security Interest; Application of Funds ..................................................... 22 Section 2.9 Marshalling; Payments Set Aside ............................................................................ 23 Section 2.10 Borrower Loan Disbursements ................................................................................ 23 ARTICLE III CONVERSION Section 3.1 Conversion Date and Extension of Outside Conversion Date ................................. 23 Section 3.2 Notice From Funding Lender; Funding Lender’s Calculation Final ....................... 23 Section 3.3 Mandatory Prepayment of the Borrower Loan ........................................................ 24 Section 3.4 Release of Remaining Loan Proceeds...................................................................... 24 Section 3.5 No Amendment ........................................................................................................ 24 Section 3.6 Determinations by Funding Lender ......................................................................... 24 ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1 Borrower Representations ........................................................................................ 25 ARTICLE V AFFIRMATIVE COVENANTS Section 5.1 Existence .................................................................................................................. 36 Section 5.2 Taxes and Other Charges ......................................................................................... 36 Section 5.3 Repairs; Maintenance and Compliance; Physical Condition ................................... 36 Section 5.4 Litigation .................................................................................................................. 36 Section 5.5 Performance of Other Agreements .......................................................................... 37 Section 5.6 Notices ..................................................................................................................... 37 Section 5.7 Cooperate in Legal Proceedings .............................................................................. 37 Section 5.8 Further Assurances .................................................................................................. 37 Section 5.9 Delivery of Financial Information ........................................................................... 38 Section 5.10 Environmental Matters ............................................................................................ 38 Section 5.11 Governmental Lender’s and Funding Lender’s Fees ............................................... 38 Section 5.12 Estoppel Statement .................................................................................................. 38 2021/10/12 City Council Post Agenda Page 167 of 620 TABLE OF CONTENTS (continued) Page ii 4848-7324-3383/024036-0092 Section 5.13 Defense of Actions ................................................................................................... 38 Section 5.14 Expenses .................................................................................................................. 39 Section 5.15 Indemnity ................................................................................................................. 40 Section 5.16 No Warranty of Condition or Suitability by the Governmental Lender or Funding Lender ........................................................................................................ 42 Section 5.17 Right of Access to the Project .................................................................................. 42 Section 5.18 Reserved................................................................................................................... 42 Section 5.19 Covenant with Governmental Lender and Funding Lender .................................... 42 Section 5.20 Obligation of the Borrower to Construct or Rehabilitate the Project ...................... 43 Section 5.21 Maintenance of Insurance ........................................................................................ 43 Section 5.22 Information; Statements and Reports....................................................................... 43 Section 5.23 Additional Notices ................................................................................................... 44 Section 5.24 Compliance with Other Agreements; Legal Requirements ..................................... 45 Section 5.25 Completion and Maintenance of Project.................................................................. 46 Section 5.26 Fixtures .................................................................................................................... 46 Section 5.27 Income from Project ................................................................................................ 46 Section 5.28 Leases and Occupancy Agreements......................................................................... 46 Section 5.29 Project Agreements and Licenses ............................................................................ 47 Section 5.30 Payment of Debt Payments ...................................................................................... 47 Section 5.31 ERISA ...................................................................................................................... 47 Section 5.32 Patriot Act Compliance ............................................................................................ 47 Section 5.33 Funds from Equity Investor ..................................................................................... 48 Section 5.34 Tax Covenants ......................................................................................................... 48 Section 5.35 Payment of Rebate ................................................................................................... 53 Section 5.36 Covenants under Funding Loan Agreement ............................................................ 54 Section 5.37 Continuing Disclosure Agreement ........................................................................... 54 ARTICLE VI NEGATIVE COVENANTS Section 6.1 Management Agreement .......................................................................................... 55 Section 6.2 Dissolution ............................................................................................................... 55 Section 6.3 Change in Business or Operation of Property.......................................................... 55 Section 6.4 Debt Cancellation .................................................................................................... 55 Section 6.5 Assets ....................................................................................................................... 55 Section 6.6 Transfers .................................................................................................................. 55 Section 6.7 Debt .......................................................................................................................... 55 Section 6.8 Assignment of Rights ............................................................................................... 56 Section 6.9 Principal Place of Business ...................................................................................... 56 Section 6.10 Partnership Agreement ............................................................................................ 56 Section 6.11 ERISA ...................................................................................................................... 56 Section 6.12 No Hedging Arrangements ...................................................................................... 56 Section 6.13 Loans and Investments; Distributions; Related Party Payments ............................. 56 Section 6.14 Amendment of Related Documents or CC&R’s ...................................................... 57 Section 6.15 Personal Property ..................................................................................................... 57 Section 6.16 Fiscal Year ............................................................................................................... 57 Section 6.17 Publicity ................................................................................................................... 57 Section 6.18 Subordinate Loan Documents .................................................................................. 57 2021/10/12 City Council Post Agenda Page 168 of 620 TABLE OF CONTENTS (continued) Page iii 4848-7324-3383/024036-0092 ARTICLE VII RESERVED ARTICLE VIII DEFAULTS Section 8.1 Events of Default ..................................................................................................... 58 Section 8.2 Remedies .................................................................................................................. 63 ARTICLE IX SPECIAL PROVISIONS Section 9.1 Sale of Notes and Secondary Market Transaction ................................................... 67 ARTICLE X MISCELLANEOUS Section 10.1 Notices ..................................................................................................................... 69 Section 10.2 Brokers and Financial Advisors ............................................................................... 71 Section 10.3 Survival .................................................................................................................... 72 Section 10.4 Preferences ............................................................................................................... 72 Section 10.5 Waiver of Notice ...................................................................................................... 72 Section 10.6 Offsets, Counterclaims and Defenses ...................................................................... 72 Section 10.7 Publicity ................................................................................................................... 73 Section 10.8 Construction of Documents ..................................................................................... 73 Section 10.9 No Third Party Beneficiaries ................................................................................... 73 Section 10.10 Assignment .............................................................................................................. 73 Section 10.11 [Reserved] ................................................................................................................ 73 Section 10.12 Governmental Lender, Funding Lender and Servicer Not in Control; No Partnership ............................................................................................................... 74 Section 10.13 Release ..................................................................................................................... 74 Section 10.14 Term of Borrower Loan Agreement ........................................................................ 74 Section 10.15 Reimbursement of Expenses .................................................................................... 74 Section 10.16 Permitted Contests ................................................................................................... 75 Section 10.17 Funding Lender Approval of Instruments and Parties ............................................. 75 Section 10.18 Funding Lender Determination of Facts .................................................................. 75 Section 10.19 Calendar Months ...................................................................................................... 75 Section 10.20 Determinations by Lender ....................................................................................... 76 Section 10.21 Governing Law ........................................................................................................ 76 Section 10.22 Consent to Jurisdiction and Venue .......................................................................... 76 Section 10.23 Successors and Assigns ........................................................................................... 76 Section 10.24 Severability .............................................................................................................. 76 Section 10.25 Entire Agreement; Amendment and Waiver............................................................ 76 Section 10.26 Counterparts ............................................................................................................. 77 Section 10.27 Captions ................................................................................................................... 77 Section 10.28 Servicer .................................................................................................................... 77 Section 10.29 Beneficiary Parties as Third Party Beneficiary ........................................................ 77 Section 10.30 Waiver of Trial by Jury ............................................................................................ 77 Section 10.31 Time of the Essence ................................................................................................. 77 2021/10/12 City Council Post Agenda Page 169 of 620 TABLE OF CONTENTS (continued) Page iv 4848-7324-3383/024036-0092 Section 10.32 [Reserved] ................................................................................................................ 77 Section 10.33 Reference Date ......................................................................................................... 77 ARTICLE XI LIMITATIONS ON LIABILITY Section 11.1 Limitation on Liability ............................................................................................. 78 Section 11.2 Limitation on Liability of Governmental Lender .................................................... 78 Section 11.3 Waiver of Personal Liability .................................................................................... 78 Section 11.4 Limitation on Liability of Governmental Lender’s or Funding Lender’s Commissioners, Officers, Employees, Etc .............................................................. 78 Section 11.5 Delivery of Reports, Etc .......................................................................................... 79 2021/10/12 City Council Post Agenda Page 170 of 620 4848-7324-3383/024036-0092 BORROWER LOAN AGREEMENT This Borrower Loan Agreement, dated as of October 1, 2021 (this “Borrower Loan Agreement”) is entered into by the CHULA VISTA HOUSING AUTHORITY, a public body corporate and politic, organized and existing under the laws of the State of California (together with its successors and assigns, the “Governmental Lender”), and MILLENIA II CIC, LP, a California limited partnership (together with its successors and assigns, the “Borrower”). R E C I T A L S : WHEREAS, the Governmental Lender is a public body, corporate and politic, duly organized and validly existing under the laws of the State of California; and WHEREAS, the Governmental Lender is empowered pursuant to Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (the “Act”) to: (a) make loans to any person to provide financing for residential rental developments located within the City of Chula Vista, California, and intended to be occupied in part or in whole by persons of low and moderate income; (b) borrow funds for the purpose of obtaining moneys to make such loans and provide such financing, to establish necessary reserve funds and to pay administrative costs and other costs incurred in connection with any such borrowing by the Governmental Lender; and (c) pledge all or any part of the revenues, receipts or resources of the Governmental Lender, including the revenues and receipts to be received by the Governmental Lender from or in connection with such loans, and to mortgage, pledge or grant security interests in such loans or other property of the Governmental Lender in order to secure the repayment of any such borrowing by the Governmental Lender; and WHEREAS, the Borrower has applied to the Governmental Lender for a loan (the “Borrower Loan”), for the acquisition, construction, development and equipping of a 198 unit plus 2 manager’s units multifamily rental housing project located at Northwest Corner of Solstice Avenue and Optima Street in the City of Chula Vista, County of San Diego, California, known as “Columba Apartments”; and WHEREAS, the Borrower’s repayment obligations under this Borrower Loan Agreement are evidenced by the Borrower Notes, as defined herein; and WHEREAS, the Borrower has requested that the Governmental Lender enter into that certain Funding Loan Agreement, of even date herewith (the “Funding Loan Agreement”), among the Governmental Lender, U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”), and Citibank, N.A. (the “Funding Lender”), under which the Funding Lender will make a loan (t he “Funding Loan”) to the Governmental Lender (and the Governmental Lender will issue its Governmental Lender Notes (as defined herein) in connection therewith), the proceeds of which will be loaned under this Borrower Loan Agreement to the Borrower to finance the acquisition and construction of the Project (as defined herein); and WHEREAS, the Borrower Loan is secured by, among other things, that certain Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (California) (as amended, restated and/or supplemented from time to time, the “Security Instrument”), of even date herewith and assigned to the Funding Lender to secure the Funding Loan, encumbering the Project, 2021/10/12 City Council Post Agenda Page 171 of 620 2 4848-7324-3383/024036-0092 and will be advanced to the Borrower pursuant to this Borrowe r Loan Agreement, the Funding Loan Agreement and the Construction Funding Agreement (as defined herein); and A G R E E M E N T : NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements herein contained, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION Section 1.1 Specific Definitions. For all purposes of this Borrower Loan Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) Unless specifically defined herein, all capitalized terms shall have the meanings ascribed thereto in the Security Instrument or, if not defined in the Security Instrument, in the Funding Loan Agreement. (b) All accounting terms not otherwise defined herein shall have the mea nings assigned to them, and all computations herein provided for shall be made, in accordance with GAAP. (c) All references in this instrument to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed. (d) All references in this instrument to a separate instrument are to such separate instrument as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof. (e) Unless otherwise specified, (i) all references to sections and schedules are to those in this Borrower Loan Agreement, (ii) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Borrower Loan Agreement as a whole and not to any particul ar provision, (iii) all definitions are equally applicable to the singular and plural forms of the terms defined and (iv) the word “including” means “including but not limited to.” Section 1.2 Definitions. The following terms, when used in this Borrower Loan Agreement (including when used in the above recitals), shall have the following meanings: “Act” shall have the meaning given to it in the recitals to this Borrower Loan Agreement. “Act of Bankruptcy” shall mean the filing of a petition in bankruptcy (or any other commencement of a bankruptcy or similar proceeding) under any applicable bankruptcy, insolvency, reorganization, or similar law, now or hereafter in effect; provided that, in the case of an involuntary proceeding, such proceeding is not dismissed within ninety (90) days after the commencement thereof. “ADA” shall have the meaning set forth in Section 4.1.38 hereof. 2021/10/12 City Council Post Agenda Page 172 of 620 3 4848-7324-3383/024036-0092 “Additional Borrower Payments” shall mean the payments payable pursuant to Section 2.5 (Additional Borrower Payments), Section 2.6 (Overdue Payments; Payments in Default), Section 3.3.3 of the Construction Funding Agreement (Borrower Loan in Balance), Section 5.14 (Expenses), and Section 10 of the Borrower Notes (Voluntary and Involuntary Prepayments). “Administrative General Partner” shall mean CIC Millenia II LLC, a California limited liability company. “Agreement of Environmental Indemnification” shall mean the Agreement of Environmental Indemnification, of even date herewith, executed by the Borrower and Guarantor for the benefit of the Beneficiary Parties (as defined therein) and any lawful holder, owner or pledgee of the Borrower Notes from time to time. “Appraisal” shall mean an appraisal of the Project and Improvements, which appraisal shall be (i) performed by a qualified appraiser licensed in the State selected by Funding Lender, and (ii) satisfactory to Funding Lender (including, without limitation, as adjusted pursuant to any internal review thereof by Funding Lender) in all respects. “Approved Developer Fee Schedule” shall have the meaning set forth in the Construction Funding Agreement. “Architect” shall mean any licensed architect, space planner or design professional that Borrower may engage from time to time, with the approval of Funding Lender, to design any portion of the Improvements, including the preparation of the Plans and Specifications. “Architect’s Agreement” means any agreement that Borrower and any Architect from time to time may execute pursuant to which Borrower engages such Architect to design any portion of the Improvements, including the preparation of the Plans and Specifications, as approved by Funding Lender. “Authorized Borrower Representative” shall mean a person at the time designated and authorized to act on behalf of the Borrower by a written certificate furnish ed to the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer and containing the specimen signature of such person and signed on behalf of the Borrower by its Borrower Controlling Entity which certificate may designate one or more alternates. “Bankruptcy Code” shall mean the United States Bankruptcy Reform Act of 1978, as amended from time to time, or any substitute or replacement legislation. “Bankruptcy Event” shall have the meaning given to that term in the Security Instrument. “Bankruptcy Proceeding” shall have the meaning set forth in Section 4.1.8 hereof. “Beneficiary Parties” shall mean, collectively, the Funding Lender and the Governmental Lender. “Borrower” shall have the meaning set forth in the recitals to this Borrower Lo an Agreement. 2021/10/12 City Council Post Agenda Page 173 of 620 4 4848-7324-3383/024036-0092 “Borrower Affiliate” means, as to the Borrower, its general partner or the Guarantor, (i) any entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of Borrower, its general partner or the Guarantor, (ii) any corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by the Borrower, its general partner or the Guarantor, (iii) any partner of Borrower, its general partner or the Guarantor, or (iv) any other person that is related (to the third degree of consanguinity) by blood or marriage to the Borrower, its general partner or the Guarantor (to the extent any of the Borrower, its gen eral partner or the Guarantor is a natural person), provided that the Equity Investor shall not be a Borrower Affiliate . “Borrower Controlling Entity” shall mean the general partner of the Borrower. “Borrower Deferred Equity” shall have the meaning set forth in the Construction Funding Agreement. “Borrower Initial Equity” shall have the meaning set forth in the Construction Funding Agreement. “Borrower Loan” shall mean the mortgage loan made by the Governmental Lender to the Borrower pursuant to this Borrower Loan Agreement, in the maximum principal amount of the Borrower Loan Amount, as evidenced by the Borrower Notes. “Borrower Loan Agreement” shall mean this Borrower Loan Agreement. “Borrower Loan Amount” shall mean $_______________, the original maximum principal amount of the Borrower Notes. “Borrower Loan Documents” shall mean this Borrower Loan Agreement, the Construction Funding Agreement, the Borrower Notes, the Security Instrument, the Agreement of Environmental Indemnification, the Replacement Reserve Agreement, the Guaranty, the Contingency Draw Down Agreement, and all other documents or agreements evidencing or relating to the Borrower Loan. “Borrower Loan Payment Date” shall mean (i) the date upon which regularly scheduled Borrower Loan Payments are due pursuant to the Borrower Notes, or (ii) any other date on which the Borrower Notes are prepaid or paid, whether at the scheduled maturity or upon the acceleration of the maturity thereof. “Borrower Loan Payments” shall mean the monthly loan payments payable pursuant to the Borrower Notes. “Borrower Loan Proceeds” shall mean proceeds of the Borrower Loan, to be disbursed in accordance with Section 2.10 of this Borrower Loan Agreement, Section 7.7 of the Funding Loan Agreement and the Construction Funding Agreement. “Borrower Notes” shall mean, collectively, the Series B-1 Borrower Note and the Series B-2 Borrower Note; and a “Borrower Note” shall mean one of such Borrower Notes. “Borrower Payment Obligations” shall mean all payment obligations of the Borrower under the Borrower Loan Documents, including, but not limited to, the Borrower Loan Payments and the Additional Borrower Payments. 2021/10/12 City Council Post Agenda Page 174 of 620 5 4848-7324-3383/024036-0092 “Business Day” shall mean any day other than (i) a Saturday or Sunday, or (ii) a day on which the Fiscal Agent or federally insured depository institutions in New York, New York or California are authorized or obligated by law, regulation, governmental decree or executive order to be closed. “Calculation Period” shall mean three (3) consecutive full Calendar Months occurring prior to the Conversion Date, as the same may be extended in accordance with Section 3.1 hereof. “Calendar Month” shall mean each of the twelve (12) calendar months of the year. “CC&R’s” shall mean any covenants, conditions, restrictions, maintenance agreements or reciprocal easement agreements affecting the Project or the Mortgaged Property. “Closing Date” means October _________, 2021, the date that the initial Borrower Loan Proceeds are disbursed hereunder. “Code” shall mean the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. “Collateral” shall mean all collateral described in (i) this Borrower Loan Agreement (including, without limitation, all property in which the Funding Lender is granted a security interest pursuant to any provision of this Borrower Loan Agreement), (ii) the Security Instrument, or (iii) any other Security Document, which Collateral shall include the Project, all of which collateral is pledged and assigned to Funding Lender under the Funding Loan Agreement to secure the Funding Loan. “Completion” shall have the meaning set forth in Section 5.25. “Completion Date” shall have the meaning set forth in the Construction Funding Agreement. “Computation Date” shall have the meaning ascribed thereto in Section 1.148 3(e) of the Regulations. “Condemnation” shall mean any action or proceeding or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Project, whether direct or indirect. “Conditions to Conversion” shall have the meaning set forth in the Construction Funding Agreement. “Construction Consultant” shall mean a third-party architect or engineer selected and retained by Funding Lender, at the cost and expense of Borrower, to monitor th e progress of construction and/or rehabilitation of the Project and to inspect the Improvements to confirm compliance with this Borrower Loan Agreement. “Construction Contract” shall mean any agreement that Borrower and any Contractor from time to time may execute pursuant to which Borrower engages the Contractor to construct any portion of the Improvements, as approved by Funding Lender. 2021/10/12 City Council Post Agenda Page 175 of 620 6 4848-7324-3383/024036-0092 “Construction Funding Agreement” means that certain Construction Funding Agreement of even date herewith, between the Funding Lender, as agent for the Governmental Lender, and Borrower, pursuant to which the Borrower Loan will be advanced by the Funding Lender (or the Servicer on its behalf), as agent of the Governmental Lender, to the Fiscal Agent for disbursement to the Borrower and setting forth certain provisions relating to disbursement of the Borrower Loan during construction of the Project, insurance and other matters, as such agreement may be amended, modified, supplemented and replaced from time to time. “Construction Schedule” shall mean a schedule of construction or rehabilitation progress with the anticipated commencement and completion dates of each phase of construction or rehabilitation, as the case may be, and the anticipated date and amounts of each Disbursem ent for the same, as approved by Funding Lender, as assignee of the Governmental Lender. “Contingency Draw-Down Agreement” means the Contingency Draw-Down Agreement of even date herewith, among the Fiscal Agent, the Funding Lender and the Borrower relating to possible conversion of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note from a draw down loan to a fully funded loan. “Continuing Disclosure Agreement” shall mean that certain Continuing Disclosure Agreement of even date herewith, between the Borrower and the Funding Lender, pursuant to which the Borrower agrees to provide certain information with respect to the Project, the Borrower and the Funding Loan subsequent to the Closing Date, as amended, supplemented or rest ated from time to time. “Contractor” shall mean any licensed general contractor or subcontractor that Borrower may directly engage from time to time, with the approval of Funding Lender, to construct and/or rehabilitate any portion of the Improvements. “Contractual Obligation” shall mean, for any Person, any debt or equity security issued by that Person, and any indenture, mortgage, deed of trust, contract, undertaking, instrument or agreement (written or oral) to which such Person is a party or by which it is bound, or to which it or any of its assets is subject. “Conversion” shall mean Funding Lender’s determination that the Conditions to Conversion have been satisfied in accordance with the provisions of this Borrower Loan Agreement and the Construction Funding Agreement. “Conversion Date” shall mean the date to be designated by Funding Lender once the Conditions to Conversion have been satisfied, the determination of the Permanent Period Amount has been made and any loan balancing payments in accordance with Section 3.3 hereof and the Construction Funding Agreement have been made. The Conversion Date must occur no later than the Outside Conversion Date (or Extended Outside Conversation Date, as applicable). “Cost Breakdown” shall mean the schedule of costs for the Improvements, as set forth in the Construction Funding Agreement, as the same may be amended from time to time with Funding Lender’s consent. “Costs of Funding” shall mean the Governmental Lender’s Closing Fee and the fees, costs, expenses and other charges incurred in connection with the funding of the Borrower Loan and the 2021/10/12 City Council Post Agenda Page 176 of 620 7 4848-7324-3383/024036-0092 Funding Loan, the negotiation and preparation of this Borrower Loan Agreement and each of the other Borrower Loan Documents and Funding Loan Documents and shall include, but shall not be limited to, the following: (i) counsel fees (including but not limited to Tax Counsel, counsel to the Governmental Lender, Borrower’s counsel, and Funding Lender’s counsel); (ii) financial advisor fees incurred in connection with the closing of the Borrower Loan and the Funding Loan; (iii) certifying and authenticating agent fees and expenses related to funding of the Funding Loan; (iv) recording fees; (v) any additional fees charged by the Governmental Lender or the Fiscal Agent; and (vi) costs incurred in connection with the required public notices generally and costs of the public hearing. “Costs of Funding Deposit” shall mean the amount required to be deposited by the Borrower with the Title Company to pay Costs of Funding in connection with the closing of the Borrower Loan and the Funding Loan on the Closing Date. “Cost of Improvements” shall mean the costs for the Improvements, as set forth on the Cost Breakdown. “Date of Disbursement” shall mean the date of a Disbursement. “Day” or “Days” shall mean calendar days unless expressly stated to be Business Days. “Debt” shall mean, as to any Person, any of such Person’s liabilities, including all indebtedness (whether recourse or nonrecourse, short term or long term, direct or contingent), all committed and unfunded liabilities, and all unfunded liabilities, that would appear upon a balance sheet of such Person prepared in accordance with GAAP. “Default Rate” shall have the meaning given to that term in the Borrower Notes. “Determination of Taxability” shall mean (i) a determination by the Commissioner or any District Director of the Internal Revenue Service, (ii) a private ruling or Technical Advice Memorandum concerning the Tax-Exempt Governmental Lender Note issued by the National Office of the Internal Revenue Service in which Governmental Lender and Borrower were afforded the opportunity to participate, (iii) a determination by any court of competent jurisdiction, (iv) the enactment of legislation or (v) receipt by the Funding Lender, at the request of the Governmental Lender, the Borrower or the Funding Lender, of an opinion of Tax Counsel, in each case to the effect that the interest on the Tax-Exempt Governmental Lender Note is includable in gross income for federal income tax purposes of any holder or any former holder of all or a portion of the Tax-Exempt Governmental Lender Note, other than a holder who is a “substantial user” of the Project or a “related person” (as such terms are defined in Section 147(a) of the Code); provided, however, that no such Determination of Taxability under clause (i) or (iii) shall be deemed to have occurred if the Governmental Lender (at the sole expense of the Borrower), the Funding Lender (at the sole expense of the Borrower) or the Borrower is contesting such determination, has elected to contest such determination in good faith and is proceeding with all applicable dispatch to prosecute such contest until the earliest of (a) a final determination from which no appeal may be taken with respect to such determination, (b) abandonment of such appeal by the Governmental Lender or the Borrower, as the case may be, or (c) one year from the date of initial determination. “Developer Fee” shall have the meaning set forth in the Construction Funding Agreement. 2021/10/12 City Council Post Agenda Page 177 of 620 8 4848-7324-3383/024036-0092 “Disbursement” means a disbursement of Borrower Loan Proceeds and Other Borrower Moneys pursuant to this Borrower Loan Agreement. “Engineer” shall mean any licensed civil, structural, mechanical, electrical, soils, environmental or other engineer that Borrower may engage from time to time, with the approval of Funding Lender, to perform any engineering services with respect to any portion of the Improvements. “Engineer’s Contract” shall mean any agreement that Borrower and any Engineer from time to time may execute pursuant to which Borrower engages such Engineer to perform any engineering services with respect to any portion of the Improvements, as approved by Funding Lender. “Equipment” shall have the meaning given to the term “Personalty” in the Security Instrument. “Equity Contributions” shall mean the equity to be contributed by the Equity Investor to Borrower, in accordance with and subject to the terms, conditions and adjustments of the Partnership Agreement. “Equity Investor” shall mean __________, a __________, and its permitted successors and assigns. “ERISA” shall mean the Employment Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder. “ERISA Affiliate” shall mean all members of a controlled group of corporations and all trades and business (whether or not incorporated) under common control and all other entities which, together with the Borrower, are treated as a single employer under any or all of Section 414(b), (c), (m) or (o) of the Code. “Event of Default” shall mean any Event of Default set forth in Section 8.1 of this Borrower Loan Agreement. An Event of Default shall “exist” if a Potential Default shall have occurred and be continuing beyond any applicable cure period. “Excess Revenues” shall have the meaning ascribed thereto in Section 2.2(e) hereof. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. “Expenses of the Project” shall mean, for any period, the current expenses, paid or accrued, for the operation, maintenance and current repair of the Project, as calculated in accordance with GAAP, and shall include, without limiting the generality of the foregoing, salaries, wages, employee benefits, cost of materials and supplies, costs of routine repairs, r enewals, replacements and alterations occurring in the usual course of business, costs and expenses properly designated as capital expenditures (e.g. repairs which would not be payable from amounts on deposit in a repair and replacement fund held pursuant to the Borrower Loan Documents), a management fee (however characterized) not to exceed the Underwritten Management Fee, costs of billings and collections, costs of insurance, and costs of audits. Expenses of the Project shall not include any payments, however characterized, on account of any subordinate financing in respect of the Project or other indebtedness, allowance for depreciation, amortization or other non-cash items, gains and losses or prepaid expenses not customarily prepaid. 2021/10/12 City Council Post Agenda Page 178 of 620 9 4848-7324-3383/024036-0092 “Extended Outside Conversion Date” shall have the meaning set forth in the Construction Funding Agreement. “Fair Market Value” shall mean the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is an interest in any commingled investment fund in which the Governmental Lender and related parties do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of investment. “Fiscal Agent” shall mean the Fiscal Agent from time to time under and pursuant to the Funding Loan Agreement. Initially, the Fiscal Agent is U.S. Bank National Association. “Funding Lender” shall mean Citibank, N.A., a national banking association, in its capacity as lender under the Funding Loan. “Funding Loan” means the Funding Loan in the original maximum principal amount of $_______________ made by Funding Lender to Governmental Lender under the Funding Loan Agreement, the proceeds of which are used by the Governmental Lender to make the Borrower Loan. “Funding Loan Agreement” means the Funding Loan Agreement, of even date herewith, among the Governmental Lender, the Fiscal Agent and the Funding Lender, as it may from time to time be supplemented, modified or amended by one or more amendments or other instruments supplemental thereto entered into pursuant to the applicable provisions thereof. “Funding Loan Documents” shall have the meaning given to that term in the Funding Loan Agreement. “GAAP” shall mean generally accepted accounting principles as in effect on the date of the application thereof and consistently applied throughout the period s covered by the applicable financial statements. “General Partner” shall mean, collectively, (i) the Administrative General Partner, (ii) the Managing General Partner, and/or (iii) any other Person that the partners of the Borrower, with the prior written approval of the Funding Lender (or as otherwise permitted with the Funding Lender’s approval pursuant to the Borrower Loan Documents), selected to be a general partner of the Borrower. “Governmental Authority” shall mean (i) any governmental municipality or political subdivision thereof, (ii) any governmental or quasi-governmental agency, authority, board, bureau, 2021/10/12 City Council Post Agenda Page 179 of 620 10 4848-7324-3383/024036-0092 commission, department, instrumentality or public body, or (iii) any court, administrative tribunal or public utility, agency, commission, office or authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise), now or hereafter in existence. “Governmental Lender” shall have the meaning set forth in the recitals to this Borrower Loan Agreement. “Governmental Lender Notes” shall mean, collectively, the Series B-1 Governmental Lender Note and the Series B-2 Governmental Lender Note. “Governmental Lender’s Closing Fee” shall mean the administrative fees of the Governmental Lender payable on the Closing Date, as specified in the definition of “Governmental Lender Fee” in the Regulatory Agreement. The Governmental Lender’s Closing Fee is payable to the Governmental Lender on the Closing Date pursuant to Section 2.3(c)(iii) hereof. “Gross Income” shall mean all receipts, revenues, income and other moneys received or collected by or on behalf of Borrower and derived from the ownership or operation of the Project, if any, and all rights to receive the same, whether in the form of accounts, acco unts receivable, contract rights or other rights, and the proceeds of such rights, and whether now owned or held or hereafter coming into existence and proceeds received upon the foreclosure sale of the Project. Gross Income shall not include loan proceeds, equity or capital contributions, or tenant security deposits being held by Borrower in accordance with applicable law. “Gross Proceeds” shall mean, without duplication, the aggregate of: (a) the net amount (after payment of all expenses of originating t he Funding Loan) of Funding Loan proceeds received by the Governmental Lender as a result of the origination of the Funding Loan; (b) all amounts received by the Governmental Lender as a result of the investment of the Funding Loan proceeds; (c) any amounts held in any fund or account to the extent that the Governmental Lender reasonably expects to use the amounts in such fund to pay any portion of the Funding Loan; and (d) any securities or obligations pledged by the Governmental Lender or by the Borrower as security for the payment of any portion of the Funding Loan. “Guarantor” shall mean, as applicable (i) Chelsea Investment Corporation, a California corporation, (ii) Emmerson Construction, Inc., a California corporation (with respect to its Completion Guaranty only), and (iii) any other person or entity which may hereafter become a guarantor of any of the Borrower’s obligations under the Borrower Loan. “Guaranty” shall mean, collectively, (i) the Completion and Repayment Guaranty, by Guarantor for the benefit of the Beneficiary Parties (as defined therein), and (ii) the Exceptions to Non-Recourse Guaranty, by Guarantor for the benefit of the Beneficiary Parties (as defined therein). 2021/10/12 City Council Post Agenda Page 180 of 620 11 4848-7324-3383/024036-0092 “Improvements” shall mean the 198-unit plus 2 manager’s units multifamily rental housing project to be constructed upon the Land and known or to be known as “Columba Apartments”, and all other buildings, structures, fixtures, wiring, systems, equipment and other improvements and personal property to be constructed, rehabilitated and/or installed at or on the Land in accordance with the Cost Breakdown and the Plans and Specifications. “Indemnified Party” shall have the meaning set forth in Section 5.15 hereof. “Installment Computation Date” shall mean any Computation Date other than the first Computation Date or the final Computation Date. “Interest Rate” shall mean the rate of interest accruing on the Borrower Loan pursuant to the Borrower Notes. “Interim Phase Amount” shall mean $_______________. “Land” means the real property described on Exhibit A to the Security Instrument. “Late Charge” shall mean the amount due and payable as a late charge on overdue payments under the Borrower Notes, as provided in Section 7 of the Borrower Notes and Section 2.5 hereof. “Legal Action” shall mean an action, suit, investigation, inquiry, proceeding or arbitration at law or in equity or before or by any foreign or domestic court, arbitrator or other Governmental Authority. “Legal Requirements” shall mean statutes, laws, rules, orde rs, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting all or part of the Project or any of Borrower’s property (including the Project) or the construction, rehabilitation, use, alteration or operation thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instrument, either of record or known to the Borro wer, at any time in force affecting all or part of the Project, including any that may (i) require repairs, modifications or alterations in or to all or part of the Project, or (ii) in any way limit the use and enjoyment thereof. “Liabilities” shall have the meaning set forth in Section 5.15 hereof. “Licenses” shall have the meaning set forth in Section 4.1.22 hereof. “Lien” shall mean any interest, or claim thereof, in the Project securing an obligation owed to, or a claim by, any Person other than the owner of the Project, whether such interest is based on common law, statute or contract, including the lien or security interest arising from a deed of trust, mortgage, deed to secure debt, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting the Project. “Management Agreement” shall mean the Management Agreement between the Borrower and the Manager, pursuant to which the Manager is to manage the Project, as same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 2021/10/12 City Council Post Agenda Page 181 of 620 12 4848-7324-3383/024036-0092 “Manager” shall mean the management company to be employed by the Borrower and approved by the Funding Lender in accordance with the terms of the Security Instrument, this Borrower Loan Agreement or any of the other Borrower Loan Documents. “Managing General Partner” shall mean Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, as managing general partner of the Borrower. “Material Adverse Change” means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Borrower Loan Agreement or any other Borrower Loan Document; (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, results of operations of the Borrower, General Partner, Guarantor or the Mortgaged Property; (c) could reasonably be expected to impair materially the ability of the Borrower, Genera l Partner or Guarantor to duly and punctually pay or perform any of their respective obligations under any of the Borrower Loan Documents to which they are a party; or (d) impairs materially or could reasonably be expected to impair materially any rights of or benefits available to the Governmental Lender under this Borrower Loan Agreement or any other Borrower Loan Document, including, without limitation, the ability of Governmental Lender or, upon the assignment of the Borrower Loan to it, of the Funding Lender, to the extent permitted, to enforce its legal remedies pursuant to this Borrower Loan Agreement or any other Borrower Loan Document. “Moody’s” shall mean Moody’s Investors Service, Inc., or its successor. “Mortgaged Property” shall have the meaning given to that term in the Security Instrument. “Net Operating Income” shall mean: (i) the Gross Income, less (ii) the Expenses of the Project. “Nonpurpose Investment” shall mean any investment property (as defined in Section 148(b) of the Code) that is acquired with the Gross Proceeds of the Funding Loan and which is not acquired to carry out the governmental purpose of the Funding Loan. “Ongoing Governmental Lender Fee” shall mean the ongoing portion of the Annual Administration Fee (as that term is defined in the Regulatory Agreement) that is payable after the Closing Date. “Other Borrower Moneys” shall mean monies of Borrower other than Borrower Loan Proceeds and includes, but is not limited to, the Subordinate Debt, the Net Operating Income, the Borrower’s Equity Contributions and any other funds contributed by or loaned to the Borrower for application to the Costs of the Improvements or other costs associated with the Project. “Other Charges” shall mean all maintenance charges, impositions other than T axes, and any other charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Project, now or hereafter levied or assessed or imposed against the Project or any part thereof. “Outside Conversion Date” shall have the meaning set forth in the Construction Funding Agreement. 2021/10/12 City Council Post Agenda Page 182 of 620 13 4848-7324-3383/024036-0092 “Partnership Agreement” shall mean that certain Amended and Restated Agreement of Limited Partnership of the Borrower dated as of October 1, 2021, as the same may be amended, restated or modified from time to time in accordance with its terms. “Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001, as the same may be amended from time to time, and corresponding provisions of future laws. “Patriot Act Offense” shall have the meaning set forth in Section 4.1.48 hereof. “Permanent Period” shall mean the period of time from the Conversion Date to the Maturity Date (as defined in the Funding Loan Agreement). “Permanent Period Amount” shall mean the principal amount of the Borrower Loan as of the first day of the Permanent Period following the applicable calculation provided for in the Construction Funding Agreement. “Permitted Encumbrances” shall have the meaning given to that term in the Security Instrument. “Permitted Lease” shall mean a lease and occupancy agreement pursuant to the form approved by Funding Lender, to a residential tenant in compliance with the Legal Requirements, providing for an initial term of not less than six (6) months nor more than two (2) years. “Person” shall mean a natural person, a partnership, a joint venture, an unincorporated association, a limited liability company, a corporation, a trust, any other legal entity, or any Governmental Authority. “Plan” shall mean (i) an employee benefit or other plan established or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions and (ii) which is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code. “Plans and Specifications” shall mean the plans and specifications, and all approved changes thereto pursuant to the approval process set forth in the Cons truction Funding Agreement, for the construction and/or rehabilitation, as the case may be, of the Project approved by Funding Lender. “Potential Default” shall mean the occurrence of an event which, under this Borrower Loan Agreement or any other Borrower Loan Document, would, but for the giving of notice or passage of time, or both, be an Event of Default. “Prepayment Premium” shall mean any premium payable by the Borrower pursuant to the Borrower Loan Documents in connection with a prepayment of the Borrower Notes (including any prepayment premium as set forth in the Borrower Notes). “Project” shall mean the Mortgaged Property (as defined in the Security Instrument) and Improvements thereon owned by the Borrower and encumbered by the Security Instrument, together with all rights pertaining to such real property and Improvements, as more particularly described in the Granting Clauses of the Security Instrument and referred to therein as the “Mortgaged Property.” 2021/10/12 City Council Post Agenda Page 183 of 620 14 4848-7324-3383/024036-0092 “Project Agreements and Licenses” shall mean any and all Construction Contracts, Engineer’s Contracts and Management Agreements, and all other rights, licenses, permits, franchises, authorizations, approvals and agreements relating to use, occupancy, operation or leasing of the Project or the Mortgaged Property. “Provided Information” shall have the meaning set forth in Section 9.1.1 (a) hereof. “Qualified Project Costs” shall have the meaning given to it in the Regulatory Agreement. “Rebate Amount” shall mean, for any given period, the amount determined by the Rebate Analyst as required to be rebated or paid as a yield reduction payment to the United States of America with respect to the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Notes. “Rebate Analyst” shall mean the rebate analyst selected by the Borrower and acceptable to the Governmental Lender and the Funding Lender. “Rebate Analyst’s Fee” shall mean the annual fee of the Rebate Analyst payable by the Borrower to the Rebate Analyst. “Rebate Fund” shall mean the Rebate Fund created pursuant to Section 5.35 hereof. “Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants, dated as of October 1, 2021, between the Governmental Lender and the Borrower. “Related Documents” shall mean, collectively, any agreement or other document (other than the Borrower Loan Documents) granting a security interest in all or a portion of the Project (including each agreement that is the subject of any Borrower Loan Document), and any other agreement, instrument or other document (not constituting a Borrower Loan Document) relating to or executed in connection with the transactions contemplated by this Borrower Loan Agreement, but excluding the Partnership Agreement. “Replacement Reserve Agreement” shall mean the Replacement Reserve Agreement, of even date herewith, between the Borrower and the Funding Lender, as the same may be amended, restated or supplemented from time to time. “Replacement Reserve Fund Requirement” means Borrower’s funding obligations from time to time under the Replacement Reserve Agreement. “Retainage” shall have the meaning set forth in the Construction Funding Agreement. “Review Fee” shall mean the three thousand dollar ($3,000) fee payable to Funding Lender in connection with the review of requests from the Borrower in connection with events requiring the consent and/or approval of the Funding Lender, including, but not limited to, subordinate financings and easements. “Secondary Market Disclosure Document” shall have the meaning set forth in Section 9.1.2 hereof. “Secondary Market Transaction” shall have the meaning set forth in Section 9.1.1 hereof. 2021/10/12 City Council Post Agenda Page 184 of 620 15 4848-7324-3383/024036-0092 “Securities” shall have the meaning set forth in Section 9.1.1 hereof. “Securities Act” shall mean the Securities Act of 1933, as amended. “Security Documents” shall mean the Security Instrument, the Replacement Reserve Agreement, the Collateral Agreements, the Collateral Assignments, this Borrower Loan Agreement, the Agreement of Environmental Indemnification, and such other security instruments that Funding Lender may reasonably request. “Security Instrument” shall have the meaning set forth in the recitals to this Borrower Loan Agreement. “Series A-1 Borrower Note” shall mean that certain Multifamily Note, dated the Closing Date, in the original maximum principal amount of $____________, made by the Borrower and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series A-1 Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or supplemented from time to time. “Series A-1 Governmental Lender Note” or “Tax-Exempt Governmental Lender Note” shall mean that certain Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1, dated the Closing Date, in the original maximum principal amount of $____________, made by the Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender and as it may thereafter be amended or supplemented from time to time. “Series A-2 Borrower Note” shall mean that certain Multifamily Note (Taxable), dated the Closing Date, in the original maximum principal amount of $____________, made by the Borrower and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series A-2 Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or supplemented from time to time. “Series A-2 Governmental Lender Note” or “Taxable Governmental Lender Note” shall mean that certain Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-2 (Taxable), dated the Closing Date, in the original maximum principal amount of $____________, made by the Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender and as it may thereafter be amended or supplemented from time to time. “Servicer” shall mean the Servicer contracting with or appointed by the Funding Lender to service the Borrower Loan. The initial Servicer shall be Citibank, N.A. “Servicing Agreement” shall mean any servicing agreement or master servicing agreement, between the Servicer and the Funding Lender relating to the servicing of the Borrower Loan and any amendments thereto or any replacement thereof. “Standard & Poor’s” or “S&P” shall mean S&P Global Ratings, a business unit of Standard & Poor’s Rating Services, or its successors. 2021/10/12 City Council Post Agenda Page 185 of 620 16 4848-7324-3383/024036-0092 “State” shall mean the State in which the Project is located. “Subordinate Bonds” shall mean the subordinate bonds issued by the Governmental Lender under the Subordinate Indenture in the aggregate principal amount of not to exceed $_______________. “Subordinate Debt” shall mean the subordinate construction and perman ent loan to Borrower in the amount of $_______________ being made by the Governmental Lender as of the Closing Date and the subordinate loan from which the Subordinate Bonds are payable , and the seller take-back loan in the amount of $_________ being made by SLF IV – Millenia, LLC, a Delaware limited liability company. “Subordinate Indenture” shall mean the Subordinate Indenture of Trust, by and between the Governmental Lender and the Subordinate Trustee, dated as of October 1, 2021, pursuant to which the Subordinate Bonds shall be issued. “Subordinate Lender” shall mean the City of Chula Vista and the Government Lender, as applicable. “Subordinate Loan” shall mean the loan of the proceeds of the Subordinate Bonds by the Governmental Lender to the Borrower pursuant to the Subordinate Loan Agreement. “Subordinate Loan Agreement” shall mean the Subordinate Loan Agreement, by and among the Governmental Lender, the Subordinate Trustee and the Borrower, dated as of October 1, 2021 pursuant to which the Subordinate Loan is made to the Borrower. “Subordinate Loan Documents” shall mean, collectively, the Subordinate Loan Agreement, the Subordinate Indenture and all instruments, agreements and other documents evidencing, securing or otherwise relating to the Subordinate Debt or executed and delivered by Borrower and/or Subordinate Lender in connection with the Subordinate Debt. “Subordinate Trustee” shall mean U.S. Bank National Association, as trustee under the Subordinate Indenture, and any successor in interest thereto. “Substantial Completion Date” shall have the meaning set forth in the Construction Funding Agreement. “Substantially Complete” or “Substantially Completed” shall have the meaning set forth in the Construction Funding Agreement. “Tax Counsel” shall have the meaning set forth in the Funding Loan Agreement. “Taxes” shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against all or part of the Project. “Term” shall mean the term of this Borrower Loan Agreement pursuant to Section 10.14. “Title Company” means First American Title Insurance Company. 2021/10/12 City Council Post Agenda Page 186 of 620 17 4848-7324-3383/024036-0092 “Title Insurance Policy” shall mean the mortgagee title insurance policy, in form acceptable to the Funding Lender, issued with respect to the Mortgaged Property and insuring the lien of the Security Instrument. “Transfer” shall have the meaning given to that term in the Security Instrument. “UCC” shall mean the Uniform Commercial Code as in effect in the State. “Unassigned Rights” shall have the meaning set forth in the Funding Loan Agreement. “Underwritten Management Fee” shall have the meaning set forth in the Construction Funding Agreement. “Unit” shall mean a residential apartment unit within the Improvements. “Written Consent” and “Written Notice” shall mean a written consent or notice signed by an Authorized Borrower Representative or an authorized representative of the Governmental Lender or the Funding Lender, as appropriate. ARTICLE II GENERAL Section 2.1 Origination of Borrower Loan. In order to provide funds for the purposes provided herein, the Governmental Lender agrees that it will, in accordance with the Act, enter into the Funding Loan Agreement and accept the Funding Loan from the Funding Lender. The Governmental Lender hereby agrees to make a loan to Borrower in the amount of the Borrower Loan Amount using the proceeds of the Funding Loan. The proceeds of the Funding Loan shall be advanced by the Funding Lender and disbursed by the Fiscal Agent to the Borrower in accordance with the terms of the Construction Funding Agreement and this Borrower Loan Agreement; provided that the first such disbursement on the Closing Date shall be made by the Funding Lender to the Fiscal Agent, which shall transfer such funds to the Title Company as specified in Section 7.7(a) of the Funding Loan Agreement. The Governmental Lender hereby appoints the Funding Lender as its agent with full authority and power to act on its behalf to disburse the Borrower Loan for the account of the Governmental Lender, to take certain actions and exercise certain remedies with respect to the Borrower Loan, and for the other purposes set forth in this Borrower Loan Agreement and to do all other acts necessary or incidental to the performance and execution thereof. Thi s appointment is coupled with an interest and is irrevocable except as expressly set forth herein. Accordingly, references to the rights of the Funding Lender to take actions under this Borrower Loan Agreement shall refer to Funding Lender in its role as agent of the Governmental Lender. The Funding Lender may designate Servicer to fulfill the rights and responsibilities granted by Governmental Lender to Funding Lender pursuant to this Section 2.1. Notwithstanding the foregoing, disbursements of the Borrower Loan shall be made from the Project Fund held by the Fiscal Agent pursuant to the Funding Loan Agreement. 2021/10/12 City Council Post Agenda Page 187 of 620 18 4848-7324-3383/024036-0092 Section 2.2 Security for the Funding Loan. (a) As security for the Funding Loan, the Governmental Lender has pledged and assigned to the Funding Lender under and pursuant to the Funding Loan Agreement (a) the Borrower Notes and all of its right, title and interest in and to this Borrower Loan Agreement and the Borrower Loan Documents (except for the Unassigned Rights) and all revenues and receipts therefrom and the security therefor (including the Security Instrument) and (b) the amounts on deposit from time to time in any and all funds established unde r the Funding Loan Agreement. All revenues and assets pledged and assigned thereby shall immediately be subject to the lien of such pledge without any physical delivery thereof or any further act, except in the case of the Borrower Notes, which shall be delivered to the Funding Lender. The Borrower hereby acknowledges and consents to such assignment to the Funding Lender. (b) With respect to the Unassigned Rights, subject to the limitations set forth in this Section 2.2, the Governmental Lender may: (i) Tax Covenants. Seek specific performance of, and enforce, the tax covenants in Section 8.7 of the Funding Loan Agreement, the provisions of the Regulatory Agreement, the Tax Certificate and the covenants of the Borrower in Section 5.34 of this Borrower Loan Agreement, and seek injunctive relief against acts which may be in violation of any of the foregoing covenants, and enforce the Borrower’s obligation under Section 5.35 to pay amounts for credit to the Rebate Fund; (ii) Regulatory Agreement. Seek specific performance of the obligations of the Borrower or any other owner of the Project under the Regulatory Agreement and injunctive relief against acts which may be in violation of the Regulatory Agreement or otherwise in accordance with the provisions of the Regulatory Agreement; provided, however, that the Governmental Lender may enforce any right it may have under the Regulatory Agreement for monetary damages only against Excess Revenues (defined below), if any, of the Borrower, unless Funding Lender otherwise specifically consents in writing to the use of other funds; and (iii) Reserved Rights. Take whatever action at law or in equity which appears necessary or desirable to enforce the other Unassigned Rights, provided, however, that the Governmental Lender or any person under its control may only enforce any right it may have for monetary damages against Excess Revenues, if any, of the Borrower, unless Funding Lender otherwise specifically consents in writing to the enforcement against other funds of the Borrower. (c) In no event shall the Governmental Lender, except at the express written direction of the Funding Lender: (i) prosecute its action to a lien on the Project; or (ii) except in connection with actions under Section 2.2(b) above, take any action which may have the effect, directly or indirectly, of impairing the ability of the Borrower to timely pay the principal of, interest on, or other amounts due under, the Borrower Loan or of causing the Borrower to file a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Borrower under any applicable liquidation, insolvency, bankruptcy, rehabilitation, composition, reorganization, conservation or other similar law in effect now or in the future; or 2021/10/12 City Council Post Agenda Page 188 of 620 19 4848-7324-3383/024036-0092 (iii) interfere with the exercise by Funding Lender or Servicer of any of their rights under the Borrower Loan Documents upon the occurrence of an event of default by the Borrower under the Borrower Loan Documents or the Funding Loan Documents; or (iv) take any action to accelerate or otherwise enforce payment or seek other remedies with respect to the Borrower Loan or the Funding Loan. (d) The Governmental Lender shall provide Written Notice to the Funding Lender and the Servicer immediately upon taking any action at law or in equity to exercise any remedy or direct any proceeding under the Borrower Loan Documents or the Funding Loan Documents. (e) As used in this Section 2.2, the term “Excess Revenues” means, for any period, the net cash flow of the Borrower available for distribution to shareholders, members or partners (as the case may be) for such period, after the payment of all interest expense, the amortization of all principal of all indebtedness coming due during such period (whether by maturity, mandatory sinking fund payment, acceleration or otherwise), the payment of all fees, costs and expenses on an occasional or recurring basis in connection with the Borrower Loan or the Funding Loan, the payment of all operating, overhead, ownership and other expenditures of the Borrower directly or indirectly in connection with the Project (whether any such expenditures are current, capital or extraordinary expenditures), and the setting aside of all reserves for taxes, insurance, water and sewer charges or other similar impositions, capital expenditures, repairs and replacements and all other amounts which the Borrower is required to set aside pursuant to agreement, but excluding depreciation and amortization of intangibles. Section 2.3 Loan; Borrower Notes; Conditions to Closing. (a) The Funding Loan shall be funded directly to the Fiscal Agent by the Funding Lender for disbursement to the Borrower pursuant to the Construction Funding Agreement in one or more installments not to exceed the Borrower Loan Amount in accordance with the disbursement procedures set forth in the Construction Funding Agreement and the Funding Loan Agreement, except for the initial disbursement of the Funding Loan as provided in Section 7.7(a) of the Funding Loan Agreement. Upon funding of each installment of the Funding Loan, the Governmental Lender shall be deemed to have made the Borrower Loan to the Borrower in a like principal amount. The Borrower Loan advances and Funding Loan advances shall be allocated first to the Series B-1 Borrower Note and the related Series B-1 Governmental Lender Note and, once the foregoing have been fully funded, then to the Series B-2 Borrower Note and the related Series B-2 Governmental Lender Note. The Borrower Loan shall mature and be payable at the times and in the amounts required under the terms hereof and of the Borrower Notes. The proceeds of the Borrower Loan shall be used by the Borrower to pay costs of the acquisition, construction, rehabilitation, development, equipping and/or operation of the Project. The Borrower hereby accep ts the Borrower Loan and acknowledges that the Governmental Lender shall cause the Funding Lender to fund the Borrower Loan in the manner set forth herein and in the Funding Loan Agreement. The Governmental Lender acknowledges that the Borrower Loan shall be funded by the Funding Lender to the Fiscal Agent for the account of the Governmental Lender, except as otherwise provided in Section 7.7 of the Funding Loan Agreement with respect to the funding thereof on the Closing Date. (b) The Borrower hereby accepts the Borrower Loan. As evidence of its obligation to repay the Borrower Loan, simultaneously with its execution and delivery of this 2021/10/12 City Council Post Agenda Page 189 of 620 20 4848-7324-3383/024036-0092 Borrower Loan Agreement, the Borrower hereby agrees to execute and deliver the Borrower Notes. The Borrower Loan shall mature and be payable at the times and in the amounts required under the terms hereof and of the Borrower Notes. (c) Closing of the Borrower Loan on the Closing Date shall be conditioned upon satisfaction or waiver by the Governmental Lender and the Funding Lende r, in their sole discretion, of each of the conditions precedent to closing set forth in the Funding Loan Agreement and this Borrower Loan Agreement, including but not limited to the following: (i) evidence of proper recordation of the Security Instrument, an assignment of the Security Instrument from the Governmental Lender to the Funding Lender, the Regulatory Agreement, and each of the other documents specified for recording in instructions delivered to the Title Company by counsel to the Funding Lender (or that such documents have been delivered to an authorized agent of the Title Company for recordation under binding recording instructions from Funding Lender’s counsel or such other counsel as may be acceptable to the Funding Lender); (ii) delivery to the Fiscal Agent or into escrow with the Title Company (or separate escrow company, if applicable) of all amounts required to be paid in connection with the origination of the Borrower Loan and the Funding Loan and any underlying real estate transfers or transactions, including the Costs of Funding Deposit and the Borrower Initial Equity, all as specified in written instructions delivered to the Title Company by counsel to the Funding Lender (or such other counsel as may be acceptable to the Funding Lender) and/or as specified in a closing memorandum of the Funding Lender; and (iii) payment of all fees payable in connection with the closing of the Borrower Loan including the Governmental Lender’s Closing Fee and the initial fees and expenses of the Fiscal Agent and the Funding Lender. In addition, closing of the Borrower Loan shall be subject to the delivery of an opinion of counsel to the Borrower addressed to the Governmental Lender and the Funding Lender, dated the Closing Date, in form and substance acceptable to Tax Counsel, regarding the due execution by the Borrower of, and the enforceability against the Borrower of, the Borrower Loan Documents. Section 2.4 Borrower Loan Payments. (a) The Borrower shall make Borrower Loan Payments in accordance with the Borrower Notes. Each Borrower Loan Payment made by the Borrower shall be made in funds immediately available through and including the Conversion Date on the Borrower Loan Payment Date, to the Fiscal Agent by 2:00 p.m., New York City time, or, if to the Servicer by 11:00 a.m., New York City time, and after the Conversion Date on the date that is two (2) Business Days prior to the Borrower Loan Payment Date to the Servicer, by 11:00 a.m., New York City time. Each such payment shall be made to the Fiscal Agent or the Servicer, as applica ble, by deposit to such account as the Fiscal Agent or Servicer, as applicable, may designate by Written Notice to the Borrower. Whenever any Borrower Loan Payment shall be stated to be due on a day that is not a Business Day, such payment shall be due on the first Business Day immediately thereafter. In addition, the Borrower shall make Borrower Loan Payments in accordance with the Borrower Notes in the amounts and at the times necessary to make all payments due and payable on the Funding Loan. All payments made by the Borrower hereunder or by the Borrower under the other Borrower Loan 2021/10/12 City Council Post Agenda Page 190 of 620 21 4848-7324-3383/024036-0092 Documents, shall be made irrespective of, and without any deduction for, any set -offs or counterclaims, but such payment shall not constitute a waiver of any such set offs or counterclaims. (b) Unless there is no Servicer, payments of principal and interest on the Borrower Notes shall be paid to the Servicer and the Servicer shall then remit such funds to the Fiscal Agent. If there is no Servicer, payments of principal and interest on the Borrower Notes shall be paid directly to the Fiscal Agent. Section 2.5 Additional Borrower Payments. (a) The Borrower shall pay the following amounts: (i) to the Fiscal Agent, the Rebate Amount then due, if any, to be deposited in the Rebate Fund as specified in Section 5.35 hereof and the Rebate Analyst’s Fee and any other costs incurred to calculate such Rebate Amount (to the extent such costs are not included in the Borrower Loan Payment); (ii) to the Governmental Lender, any and, on demand, all fees, charges, costs, advances, indemnities and expenses, including agent and counsel fees, of the Governmental Lender incurred by the Governmental Lender at any time in connection with the Borrower Loan Documents, the Funding Loan Documents or the Project, including, without limitation, the Ongoing Governmental Lender Fee, counsel fees and expenses incurred in connection with the interpretation, performance, or amendment and all counsel fees and expenses relating to the enforcement of the Borrower Loan Documents or the Funding Loan Documents or any other documents relating to the Project or the Borrower Loan or in connection with questions or other matters arising under such documents or in connection with any federal or state tax audit related to the Governmental Lender Notes, the Project or the Borrower; (iii) [Reserved]; (iv) all Costs of Funding and fees, charges and expenses, including agent and counsel fees incurred in connection with the origination of the Borrower Loan and the Funding Loan, as and when the same become due; (v) to the Funding Lender, on demand, all charges, costs, advances, indemnities and expenses, including agent and counsel fees, of the Funding Lender incurred by the Funding Lender at any time in connection with the Borrower Loan, the Funding Loan or the Project, including, without limitation, any Review Fee, reasonable counsel fees and expenses incurred in connection with the interpretation, performance, or amendment and all counsel fees and expenses relating to the enforcement of the Borrower Loan Documents or the Funding Loan Documents or any other documents relating to the Project or the Borrower Loan or in connection with questions or other matters arising under such documents or in connection with any federal or state tax audit; (vi) all Late Charges due and payable under the terms of the Borrower Notes and Section 2.6 hereof; provided, however, that all payments made pursuant to this subsection (vi) shall be made to the Servicer, and if there is no Servicer, such payments shall be made to the Funding Lender; and 2021/10/12 City Council Post Agenda Page 191 of 620 22 4848-7324-3383/024036-0092 (vii) to the Fiscal Agent, all fees, charges, costs, advances, indemnities and expenses, including agent and counsel fees, of Fiscal Agent incurred under the Borrower Loan Documents or the Funding Loan Documents as and when the same become due. (b) The Borrower shall pay to the party entitled thereto as expressly set forth in this Borrower Loan Agreement or the other Borrower Loan Documents or Funding Loan Documents: (i) all expenses incurred in connection with the enforcement of any rights under this Borrower Loan Agreement or any other Borrower Loan Document, the Regulatory Agreement, or any Funding Loan Document by the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer; (ii) all other payments of whatever nature that the Borrower has agreed to pay or assume under the provisions of this Borrower Loan Agreement or any other Borrower Loan Document or Funding Loan Document; and (iii) all expenses, costs and fees relating to inspections of the Project required by the Governmental Lender, the Funding Lender, the Fiscal Agent, the Servicer or the Construction Consultant, in accordance with the Borrower Loan Documents or the Funding Loan Documents or to reimburse such parties for such expenses, costs and fees. Section 2.6 Overdue Payments; Payments in Default. If any Borrower Payment Obligation is not paid by or on behalf of the Borrower when due, the Borrower shall pay to the Servicer a Late Charge in the amount and to the extent set forth in the Borrower Notes, if any. Section 2.7 Calculation of Interest Payments and Deposits to Real Estate Related Reserve Funds. The Borrower acknowledges as follows: (a) calculation of all interest payments shall be made by the Funding Lender; (b) deposits with respect to the Taxes and Other Charges shall be calculated by the Servicer or if there is no Servicer, the Funding Lender in accordance with the Security Instrument; and (c) deposits with respect to any replacement reserve funds required by the Funding Lender shall be calculated by the Servicer in accordance with the Replacement Reserve Agreement. In the event and to the extent that the Servicer or the Funding Lender, pursuant to the terms hereof, shall determine at any time that there exists a deficiency in amounts previously owed but not paid with respect to deposits to such replacement reserve fund , such deficiency shall be immediately due and payable hereunder following Written Notice to the Borrower. Section 2.8 Grant of Security Interest; Application of Funds. To the extent not inconsistent with the Security Instrument and as security for payment of the Bor rower Payment Obligations and the performance by the Borrower of all other terms, conditions and provisions of the Borrower Loan Documents, the Borrower hereby pledges and assigns to the Fiscal Agent and the Funding Lender, and grants to the Fiscal Agent a nd the Funding Lender, a security interest in, all the Borrower’s right, title and interest in and to all payments to or moneys held in the funds and accounts created and held by the Fiscal Agent, the Funding Lender or the Servicer for the Project. This Borrower Loan Agreement is, among other things, intended by the parties to be a security agreement for purposes of the UCC. Upon the occurrence and during the continuance of an Event of Default hereunder, the Fiscal Agent, the Funding Lender and the Servicer shall apply or cause to be applied any sums held by the Fiscal Agent, the Funding Lender and the Servicer with respect to the Project in accordance with the provisions of Article IX of the Funding Loan Agreement to the extent applicable 2021/10/12 City Council Post Agenda Page 192 of 620 23 4848-7324-3383/024036-0092 and otherwise in any manner and in any order determined by Funding Lender, in Funding Lender’s sole and absolute discretion. Section 2.9 Marshalling; Payments Set Aside. The Governmental Lender, the Fiscal Agent and the Funding Lender shall be under no obligation to marshal any asse ts in favor of the Borrower or any other Person or against or in payment of any or all of the proceeds. To the extent that the Borrower makes a payment or payments or transfers any assets to the Governmental Lender, the Fiscal Agent or the Funding Lender, or the Governmental Lender, the Fiscal Agent or the Funding Lender enforces its liens, and such payment or payments or transfers, or the proceeds of such enforcement or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party in connection with any insolvency proceeding, or otherwise, then: (i) any and all obligations owed to the Governmental Lender, the Fiscal Agent or the Funding Lender and any and all remedies available to the Governmental Lender, the Fiscal Agent or the Funding Lender under the terms of the Borrower Loan Documents and the Funding Loan Documents or in law or equity against the Borrower, Guarantor or General Partner and/or any of their properties shall be automatically revived and reinstated to the extent (and only to the extent) of any recovery permitted under clause (ii) below; and (ii) the Governmental Lender, the Fiscal Agent and the Funding Lender shall be entitled to recover (and shall be entitled to file a proof of claim to obtain such recovery in any applicable bankruptcy, insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding) either: (x) the amount of payments or the value of the transfer or (y) if the transfer has been undone and the assets returned in whole or in part, the value of the consideration paid to or received by the Borrower for the initial asset transfer, plus in each case any deferred interest from the date of the disgorgement to the date of distribution to the Governmental Lender, the Fiscal Agent or the Funding Lender in any bankruptcy, insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding, and any costs and expenses due and owing, including, without limitation, any reasonable attorneys’ fees incurred by the Governmental Lender, the Fiscal Agent or the Funding Lender in connection with the exercise by the Governmental Lender, the Fiscal Agent or the Funding Lender of its rights under this Section 2.9. Section 2.10 Borrower Loan Disbursements. Proceeds of the Borrower Loan shall be disbursed by the Fiscal Agent upon approval by the Funding Lender, as agent for the Governmental Lender, pursuant to the Construction Funding Agreement, to or for the benefit of the Bor rower as provided in Section 7.7 of the Funding Loan Agreement. ARTICLE III CONVERSION Section 3.1 Conversion Date and Extension of Outside Conversion Date. Borrower shall satisfy each of the Conditions to Conversion and cause the Conversion Date to occur on or before the Outside Conversion Date (including the Extended Outside Conversion Date, if any), as further provided in the Construction Funding Agreement. The failure to satisfy each of the Conditions to Conversion on or before the Outside Conversion Date (including the Extended Outside Conversion Date, if any) shall constitute an Event of Default under the Borrower Loan Documents. Section 3.2 Notice From Funding Lender; Funding Lender’s Calculation Final. Following satisfaction of all of the Conditions to Conversion, Funding Lender s hall deliver Written Notice to Borrower (with a copy to the Governmental Lender and the Fiscal Agent) of: (i) the 2021/10/12 City Council Post Agenda Page 193 of 620 24 4848-7324-3383/024036-0092 Conversion Date, (ii) the amount of the Permanent Period Amount, (iii) any required prepayment of the Borrower Notes (as described below in Section 3.3) and (iv) any amendments to the amortization schedule, as applicable. Funding Lender’s calculation of the Permanent Period Amount and any amendments to the amortization of the Borrower Loan shall be, in the absence of manifest error, conclusive and binding on all parties. Section 3.3 Mandatory Prepayment of the Borrower Loan. As further provided in the Construction Funding Agreement, if and to the extent the Permanent Period Amount is less than the Interim Phase Amount, Funding Lender may in its sole discretion require Borrower to make a partial prepayment of the Borrower Loan in an amount equal to the difference between the Interim Phase Amount and the Permanent Period Amount, provided, however, that if the Permanent Period Amount is less than the Minimum Permanent Period Amount (as defined in the Construction Funding Agreement), then Funding Lender may in its sole discretion require Borrower to prepay the Borrower Loan in full. Any prepayment in full or in part of the Borrower Loan required pursuant to the preceding paragraph shall be subject to a prepayment premium under certain circumstances as more particularly set forth in the Borrower Notes. Section 3.4 Release of Remaining Loan Proceeds. If and to the extent that the Permanent Period Amount is greater than the principal amount of the Borrower Loan which has previously been disbursed to Borrower, Funding Lender shall deliver Written Notice thereof to Borrower (with a copy to the Governmental Lender) on or before the Conversion Date. Within ten (10) business days after delivery of such notice, but in no event later than the Outside Conversion Date, Funding Lender shall advance to the Fiscal Agent, for deposit by the Fiscal Agent to the Note Proceeds Account of the Project Fund under the Funding Loan Agreement, Funding Loan proceeds so that the aggregate principal amount of the Funding Loan and of the Borrower Loan disbursed equals the Permanent Period Amount. Any Borrower Loan proceeds previously disbursed to the Borrower in excess of the Permanent Period Amount shall be paid by Borrower to Fiscal Agent. Section 3.5 No Amendment. Nothing contained in this Article III shall be construed to amend, modify, alter, change or supersede the terms and provisions of the Borrower Notes, Security Instrument, the Construction Funding Agreement or any other Borrower Loan Document and, if there shall exist a conflict between the terms and provisions of this Article III and those of the Borrower Notes, Security Instrument, the Construction Funding Agreement or other Borrower Loan Documents, then the terms and provisions of the Borrower Notes, Security Instrument, the Construction Funding Agreement and other Borrower Loan Documents shall control; provided, however, that in the event of a conflict between the terms and provisions of this Article III and those of the Borrower’s loan application with the Funding Lender, the terms and provisions of this Article III shall control. Section 3.6 Determinations by Funding Lender. In any instance where the consent or approval of Funding Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Funding Lender under this Article III, including in connection with the Construction Funding Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision shall be made or exercised by the 2021/10/12 City Council Post Agenda Page 194 of 620 25 4848-7324-3383/024036-0092 Funding Lender (or its designated representative), at its sole and exclusive option and in its sole and absolute discretion. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1 Borrower Representations. To induce the Governmental Lender to execute this Borrower Loan Agreement and to induce the Funding Lender to make Disbursements, the Borrower represents and warrants for the benefit of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer, that the representations and warranties set forth in this Section 4.1 are complete and accurate in all material respects as of the Closing Date and, subject to Section 4.2, shall survive the making of the Borrower Loan and will be complete and accurate in all material respects, and deemed remade, except as otherwise noted through notice to Funding Lender and approved by Funding Lender, as of the date of each Disbursement, as of the original Outside Conversion Date, as of the date of any extension thereof and as of the Conversion Date in accordance with the terms and conditions of the Borrower Notes: Section 4.1.1 Organization; Special Purpose. The Borrower is a limited partnership in good standing under the laws of the State (and under the law s of the state in which the Borrower was formed if the Borrower was not formed under the laws of the State), has full legal right, power and authority to enter into the Borrower Loan Documents to which it is a party, and to carry out and consummate all transactions contemplated by the Borrower Loan Documents to which it is a party, and by proper limited partnership action has duly authorized the execution, delivery and performance of the Borrower Loan Documents to which it is a party. The Person(s) of the Borrower executing the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party are fully authorized to execute the same. The Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party have been duly authorized, executed and delivered by the Borrower. The sole business of the Borrower is the ownership, management and operation of the Project. Section 4.1.2 Proceedings; Enforceability. Assuming due execution and delivery by the other parties thereto, the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party will constitute the legal, valid and binding agreements of the Borrower enforceable against the Borrower in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. Section 4.1.3 No Conflicts. The execution and delivery of the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the te rms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Partnership Agreement of the Borrower or to the best knowledge of the Borrower and wi th respect to the Borrower, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever (other than 2021/10/12 City Council Post Agenda Page 195 of 620 26 4848-7324-3383/024036-0092 the lien of the Security Instrument) upon any of the property or assets of the Borrower, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Borrower Loan Documents and the Funding Loan Documents, or the financial condition, assets, properties or operations of the Borrower. Section 4.1.4 Litigation; Adverse Facts. There is no Legal Action, nor is there a basis known to Borrower for any Legal Action, before or by any court or federal, stat e, municipal or other governmental authority, pending, or to the knowledge of the Borrower, after reasonable investigation, threatened, against or affecting the Borrower, the General Partner or the Guarantor, or their respective assets, properties or operations which, if determined adversely to the Borrower or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by, or the validity of, the Borrower Loan Documents or the Funding Loan Documents, upon the ability of each of Borrower, General Partner and Guarantor to perform their respective obligations under the Borrower Loan Documents, the Funding Loan Documents and the Related Documents to which it is a party, or upon the financial condition, assets (inclu ding the Project), properties or operations of the Borrower, the General Partner or the Guarantor. None of the Borrower, General Partner or Guarantor is in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially a nd adversely affect the consummation of the transactions contemplated by the Borrower Loan Documents and the Funding Loan Documents, the ability of each of Borrower, General Partner and Guarantor to perform their respective obligations under the Borrower Loan Documents, the Funding Loan Documents and the Related Documents to which it is a party, or the financial condition, assets, properties or operations of the Borrower, General Partner or Guarantor. None of Borrower, General Partner or Guarantor are (a) in violation of any applicable law, which violation materially and adversely affects or may materially and adversely affect the business, operations, assets (including the Project), financial condition of Borrower, General Partner or Guarantor, as applicab le; (b) subject to, or in default with respect to, any other Legal Requirement that would have a material adverse effect on the business, operations, assets (including the Project), financial condition of Borrower, General Partner or Guarantor, as applicable; or (c) in default with respect to any agreement to which Borrower, General Partner or Guarantor, as applicable, are a party or by which they are bound, which default would have a material adverse effect on the business, operations, assets (including th e Project), financial condition of Borrower, General Partner or Guarantor, as applicable; and (d) there is no Legal Action pending or, to the knowledge of Borrower, threatened against or affecting Borrower, General Partner or Guarantor questioning the validity or the enforceability of this Borrower Loan Agreement or any of the other Borrower Loan Documents or the Funding Loan Documents or of any of the Related Documents. All tax returns (federal, state and local) required to be filed by or on behalf of the Borrower have been filed, and all taxes shown thereon to be due, including interest and penalties, except such, if any, as are being actively contested by the Borrower in good faith, have been paid or adequate reserves have been made for the payment there of which reserves, if any, are reflected in the audited financial statements described therein. The Borrower enjoys the peaceful and undisturbed possession of all of the premises upon which it is operating its facilities. Section 4.1.5 Agreements; Consents; Approvals. Except as contemplated by the Borrower Loan Documents and the Funding Loan Documents, the Borrower is not a party to any agreement or instrument or subject to any restriction that would materially adversely affect the 2021/10/12 City Council Post Agenda Page 196 of 620 27 4848-7324-3383/024036-0092 Borrower, the Project, or the Borrower’s business, properties, operations or financial condition, except the Permitted Encumbrances. The Borrower is not in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contain ed in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or the Project is bound. No consent or approval of any trustee or holder of any indebtedness of the Borrower, and to the best knowledge of the Borrower and only with respect to the Borrower, no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except no representation is made with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of the Borrower Loan Documents or the Funding Loan Documents, or the consummation of any transaction herein or therein contemplated, or the fulfillment of or compliance with the terms and conditions he reof or thereof, except as have been obtained or made and as are in full force and effect. Section 4.1.6 Title. The Borrower shall have marketable title to the Project free and clear of all Liens except the Permitted Encumbrances. The Security Instrument, when properl y recorded in the appropriate records, together with any UCC financing statements required to be filed in connection therewith, will create (i) a valid, perfected first priority lien on the fee interest in the Project and (ii) perfected security interests in and to, and perfected collateral assignments of, all personalty included in the Project (including the Permitted Leases) to the extent such personalty is the type in which a security interest may be perfected under the UCC by the filing of a financing statement with the Secretary of State of the State, all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances. To the Borrower’s knowledge, there are no delinquent real property taxes or assessments, inclu ding water and sewer charges, with respect to the Project, nor are there any claims for payment for work, labor or materials affecting the Project which are or may become a Lien prior to, or of equal priority with, the Liens created by the Borrower Loan Documents and the Funding Loan Documents. Section 4.1.7 Survey. To the best knowledge of the Borrower, the survey for the Project delivered to the Governmental Lender and the Funding Lender does not fail to reflect any material matter affecting the Project or the title thereto. Section 4.1.8 No Bankruptcy Filing. The Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency law or the liquidation of all or a major portion of its property (a “Bankruptcy Proceeding”), and the Borrower has no knowledge of any Person contemplating the filing of any such petition against it. As of the Closing Date, the Borrower has the ability to pay its debts as they become due. Section 4.1.9 Full and Accurate Disclosure. No statement of fact made by the Borrower in any Borrower Loan Document or any Funding Loan Document contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein in light of the circumstances in which they were made, not misleading. There is no material fact or circumstance presently known to the Borrower that has not been disclosed to the Governmental Lender and the Funding Lender which materially and adversely affects the Project or the business, operations or financial condition of the Borrower or the Borrower’s ability to meet its obligations under this Borrower Loan Agreement and the other Borrower Loan Documents and Funding Loan Documents to which it is a party in a timely manner. 2021/10/12 City Council Post Agenda Page 197 of 620 28 4848-7324-3383/024036-0092 Section 4.1.10 No Plan Assets. The Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of the Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3 101. Section 4.1.11 Compliance. The Borrower, the Project and the use thereof will comply, to the extent required, in all material respects with all applicable Legal Requirements. The Borrower is not in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which would materially adversely affect the financial condition of the Borrower. There has not been committed by the Borrower or any Borrower Affiliate involved with the operation or use of the Project any act or omission affording any Governmental Authority the right of forfeiture as against the Project or any part thereof or any moneys paid in performance of the Borrower’s obligations under any Borrower Loan Document or any Funding Loan Documents. Section 4.1.12 Contracts. All service, maintenance or repair contracts affecting the Project have been entered into at arm’s length (except for such contracts between the Borrower , a Borrower Affiliate or the Affiliates of the Borrower Controlling Entity of the Borrower) in the ordinary course of the Borrower’s business and provide for the payment of fees in amounts and upon terms comparable to existing market rates. Section 4.1.13 Financial Information. All financial data, including any statements of cash flow and income and operating expense, that have been delivered to the Governmental Lender or the Funding Lender in respect of the Project by or on behalf of the Borrower, to the best knowledge of the Borrower, (i) are accurate and complete in all material respects, as of their respective dates, (ii) accurately represent the financial condition of the Project as of the date of such reports in all material respects, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP consistently applied throughout the periods covered, except as disclosed therein. Other than pursuant to or permitted by the Borrower Loan Documents or the Funding Loan Documents or the Borrower organizational documents, the Borrower has no contingent liabilities, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments. Since the date of such financial statements, there has been no materially adverse change in the financial condition, operations or business of the Borrower from that set forth in said financial statements. Section 4.1.14 Condemnation. No Condemnation or other proceeding has been commenced or, to the Borrower’s knowledge, is contemplated, threatened or pending with respect to all or part of the Project or for the relocation of roadways providing access to the Project. Section 4.1.15 Federal Reserve Regulations. No part of the proceeds of the Borrower Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Legal Requirements or any Borrower Loan Document or Funding Loan Document. Section 4.1.16 Utilities and Public Access. To the best of the Borrower’s knowledge, the Project is or will be served by water, sewer, sanitary sewer and storm drain facilities adequate to service it for its intended uses. All public utilities necessary or convenient to the full use 2021/10/12 City Council Post Agenda Page 198 of 620 29 4848-7324-3383/024036-0092 and enjoyment of the Project are or will be located in the public right -of-way abutting the Project, and all such utilities are or will be connected so as to serve the Project without passing over other property absent a valid easement. All roads necessary for the use of the Project for its current purpose have been or will be completed and dedicated to public use and accepted by all Governmental Authorities. Except for Permitted Encumbrances, the Project does not share ingress and egress through an easement or private road or share on -site or off-site recreational facilities and amenities that are not located on the Project and under the exclusive control of the Borrower, or where there is shared ingress and e gress or amenities, there exists an easement or joint use and maintenance agreement under which (i) access to and use and enjoyment of the easement or private road and/or recreational facilities and amenities is perpetual, (ii) the number of parties sharing such easement and/or recreational facilities and amenities must be specified, (iii) the Borrower’s responsibilities and share of expenses are specified, and (iv) the failure to pay any maintenance fee with respect to an easement will not result in a loss of usage of the easement. Section 4.1.17 Not a Foreign Person. The Borrower is not a “foreign person” within the meaning of §1445(f)(3) of the Code. Section 4.1.18 Separate Lots. Each parcel comprising the Land is a separate tax lot and is not a portion of any other tax lot that is not a part of the Land. Section 4.1.19 Assessments. Except as disclosed in the Title Insurance Policy, there are no pending or, to the Borrower’s best knowledge, proposed special or other assessments for public improvements or otherwise affecting the Project, or any contemplated improvements to the Project that may result in such special or other assessments. Section 4.1.20 Enforceability. The Borrower Loan Documents and the Funding Loan Documents are not subject to, and the Borrower has not asserted, any right of rescission, set - off, counterclaim or defense, including the defense of usury. Section 4.1.21 Insurance. The Borrower has obtained the insurance required by this Borrower Loan Agreement, if applicable, and the Security Instrument and has delivered to the Servicer copies of insurance policies or certificates of insurance reflecting the insurance coverages, amounts and other requirements set forth in this Borrower Loan Agreement, if applicable, and the Security Instrument. Section 4.1.22 Use of Property; Licenses. The Project will be used exclusively as a multifamily rental housing project and other appurtenant and related uses, which use is consistent with the zoning classification for the Project. All certifications, permits, licenses and approvals, including certificates of completion and occupancy permits required for the legal use or legal, nonconforming use, as applicable, occupancy and operation of the Project (collectively, the “Licenses”) required at this time for the construction or rehabilitation, as appropriate, and equipping of the Project have been obtained. To the Borrower’s knowledge, all Licenses obtained by the Borrower have been validly issued and are in full force and effect. The Borrower has no reason to believe that any of the Licenses required for the future use and occupancy of the P roject and not heretofore obtained by the Borrower will not be obtained by the Borrower in the ordinary course following the Completion Date. No Licenses will terminate, or become void or voidable or terminable, upon any sale, transfer or other dispositio n of the Project, including any transfer pursuant to foreclosure sale under the Security Instrument or deed in lieu of foreclosure thereunder. The Project does not violate any density or building setback requirements of the applicable zoning law 2021/10/12 City Council Post Agenda Page 199 of 620 30 4848-7324-3383/024036-0092 except to the extent, if any, shown on the survey. No proceedings are, to the best of the Borrower’s knowledge, pending or threatened that would result in a change of the zoning of the Project. Section 4.1.23 Flood Zone. As of the Closing Date, no structure within the Mortgaged Property lies or is located in an identifiable or designated Special Flood Hazard Area. Subsequent to the Closing Date, if the Mortgaged Property is determined to be in a Special Flood Hazard Area, Borrower will obtain appropriate flood insurance as requi red under the National Flood Insurance Act of 1968, Flood Disaster Protection Act of 1973, or the National Flood Insurance Reform Act of 1994 as amended or as required by the Servicer pursuant to its underwriting guidelines. Section 4.1.24 Physical Condition. The Project, including all Improvements, parking facilities, systems, fixtures, Equipment and landscaping, are or, after completion of the construction, rehabilitation and/or repairs, as appropriate, will be in good and habitable condition in all material respects and in good order and repair in all material respects (reasonable wear and tear excepted). The Borrower has not received notice from any insurance company or bonding company of any defect or inadequacy in the Project, or any part thereof, whic h would adversely affect its insurability or cause the imposition of extraordinary premiums or charges thereon or any termination of any policy of insurance or bond. After completion of construction, the physical configuration of the Project will not be in material violation of the ADA, if required under applicable law. Section 4.1.25 Encroachments. All of the Improvements included in determining the appraised value of the Project will lie wholly within the boundaries and building restriction lines of the Project, and no improvement on an adjoining property encroaches upon the Project, and no easement or other encumbrance upon the Project encroaches upon any of the Improvements, so as to affect the value or marketability of the Project, except those insured against by th e Title Insurance Policy or disclosed in the survey of the Project as approved by the Servicer. Section 4.1.26 State Law Requirements. The Borrower hereby represents, covenants and agrees to comply with the provisions of all applicable state laws relating to the Borrower Loan, the Funding Loan and the Project. Section 4.1.27 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements in connection wi th the transfer of the Project to the Borrower have been paid or will be paid at Closing. All mortgage, mortgage recording, stamp, intangible or other similar taxes required to be paid by any Person under applicable Legal Requirements in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Borrower Loan Documents and the Funding Loan Documents have been or will be paid. Section 4.1.28 Investment Company Act. The Borrower is not (i) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (ii) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “sub sidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended. Section 4.1.29 Fraudulent Transfer. The Borrower has not accepted the Borrower Loan or entered into any Borrower Loan Document or Funding Loan Document with the actual intent to hinder, delay or defraud any creditor, and the Borrower has received reasonably 2021/10/12 City Council Post Agenda Page 200 of 620 31 4848-7324-3383/024036-0092 equivalent value in exchange for its obligations under the Borrower Loan Documents and the Funding Loan Documents. Giving effect to the transactions contemplated by the Borrower Loan Documents and the Funding Loan Documents, the fair saleable value of the Borrower’s assets exceeds and will, immediately following the execution and delivery of the Borrower Loan Documents and the Funding Loan Documents, exceed the Borrower’s total liabilities, including subordinated, unliquidated, disputed or contingent liabilities. The fair saleable value of the Borrower’s assets is and will, immediately following the execution and delivery of the Borrower Loan Documents and the Funding Loan Documents, be greater than the Borrower’s probable liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and matured. The Borrower’s assets do not and, immediately following the execution and delivery of the Borrower Loan Documents and the Funding Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. The Borrower does not intend to, and does not believe that it wi ll, incur debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of the Borrower). Section 4.1.30 Ownership of the Borrower. Except as set forth in the Partnership Agreement of the Borrower and the exhibits thereto, the Borrower has no obligation to any Person to purchase, repurchase or issue any ownership interest in the Borrower. Section 4.1.31 Environmental Matters. To the best of Borrower’s knowledge, the Project is not in violation of any Legal Requirement pertaining to or imposing liability or standards of conduct concerning environmental regulation, contamination or cleanup, and will comply with covenants and requirements relating to environmental hazards as set forth in the Security Instrument. The Borrower will execute and deliver the Agreement of Environmental Indemnification on the Closing Date. Section 4.1.32 Name; Principal Place of Business. Unless prior Written Notice is given to the Funding Lender, the Borrower does not use and will not use any trade name, and has not done and will not do business under any name other than its actual name set forth herein. The principal place of business of the Borrower is its primary ad dress for notices as set forth in Section 10.1 hereof, and the Borrower has no other place of business, other than the Project and such principal place of business. Section 4.1.33 Subordinated Debt. There is no secured or unsecured indebtedness with respect to the Project or any residual interest therein, other than Permitted Encumbrances and the permitted secured indebtedness described in Section 6.7 hereof, except an unsecured deferred developer fee not to exceed the amount permitted by Funding Lender as determined on the Closing Date, and unsecured, subordinate partner loans to Borrower permitted or required under the terms of the Partnership Agreement. Section 4.1.34 Reserved. Section 4.1.35 General Tax. All representations, warranties and certifications of the Borrower set forth in the Regulatory Agreement and the Tax Certificate are incorporated by reference herein and the Borrower will comply with such as if set forth herein. 2021/10/12 City Council Post Agenda Page 201 of 620 32 4848-7324-3383/024036-0092 Section 4.1.36 Approval of the Borrower Loan Documents and Funding Loan Documents. By its execution and delivery of this Borrower Loan Agreement, the Borrower approves the form and substance of the Borrower Loan Documents and the Funding Loan Documents, and agrees to carry out the responsibilities and duties specified in the Borrower Loan Documents and the Funding Loan Documents to be carried out by the Borrower. The Borrower acknowledges that (a) it understands the nature and structure of the transactions relating to the financing of the Project, (b) it is familiar with the provisions of all of the Borrower Loan Documents and the Funding Loan Documents and other documents and instruments relating to the financing, (c) it understands the risks inherent in such transactions, including without limitation the risk of loss of the Project, and (d) it has not relied on the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer for any guidance or expertise in analyzing the financial or other consequences of the transactions contemplated by the Borrower Loan Documents and the Funding Loan Documents or otherwise relied on the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer in any manner. Section 4.1.37 Funding Loan Agreement. The Borrower has read and accepts and agrees that it is bound by the Funding Loan Agreement and the Funding Loan Documents. Section 4.1.38 Americans with Disabilities Act. The Project, as designed, will conform in all material respects with all applicable zoning, planning, building and environmental laws, ordinances and regulations of governmental authorities having jurisdiction over the Project, including, but not limited to, the Americans with Disabilities Act of 1990 (“ADA”), to the extent required (as evidenced by an architect’s certificate to such effect). Section 4.1.39 Requirements of Act, Code and Regulations. The Project satisfies all requirements of the Act, the Code and the Regulations applicable to the Project. Section 4.1.40 Regulatory Agreement. The Project is, as of the date of origination of the Funding Loan, in compliance with all requirements of the Regulatory Agreement to the extent such requirements are applicable; and the Borrower intends to cause the residential units in the Project to be rented or available for rental on a basis which satisfies the requirements of the Regulatory Agreement, including all applicable requirements of the Act and the Code and the Regulations, and pursuant to leases which comply with all applicable laws. Section 4.1.41 Intention to Hold Project. The Borrower intends to hold the Project for its own account and has no current plans, and except as set forth in the Partnership Agreement has not entered into any agreement, to sell the Project or any part of it; and the Borrower intends to occupy the Project or cause the Project to be occupied and to operate it or cause it to be operated at all times during the term of this Borrower Loan Agreement in complianc e with the terms of this Borrower Loan Agreement and the Regulatory Agreement and does not know of any reason why the Project will not be so used by it in the absence of circumstances not now anticipated by it or totally beyond its control. Section 4.1.42 Concerning General Partner. Each General Partner represents and covenants as to itself only and not on behalf of the other General Partner as follows: (a) The managing general partner of Borrower is the Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, and the administrative general partner of Borrower is CIC Millenia II LLC a California limited liability 2021/10/12 City Council Post Agenda Page 202 of 620 33 4848-7324-3383/024036-0092 company, and each of the Managing General Partner and Administrative General Partner is duly organized and validly existing under the laws of the State of California. The General Partner has all requisite power and authority, rights and franchises to enter into and perform its obligations under the Borrower Loan Documents and the Funding Loan Documents to be executed by it for its own account and on behalf of Borrower, as general partner of Borrower, under this Borrower Loan Agreement and the other Borrower Loan Documents and the Funding Loan Documents. (b) The General Partner has made all filings (including, without limitati on, all required filings related to the use of fictitious business names) and is in good standing in the State and in each other jurisdiction in which the character of the property it owns or the nature of the business it transacts makes such filings necessary or where the failure to make such filings could have a material adverse effect on the business, operations, assets, or financial condition of General Partner. (c) The General Partner is duly authorized to do business in the State. (d) The execution, delivery and performance by Borrower of the Borrower Loan Documents and the Funding Loan Documents to which Borrower is a party have been duly authorized by all necessary action of General Partner on behalf of Borrower, and by all necessary action on behalf of General Partner. (e) The execution, delivery and performance by General Partner, on behalf of Borrower, of the Borrower Loan Documents and the Funding Loan Documents to which Borrower is a party will not violate (i) General Partner’s organizational documents; (ii) any other Legal Requirement affecting General Partner or any of its properties; or (iii) any agreement to which General Partner is bound or to which it is a party; and will not result in or require the creation (except as provided in or contemplated by this Borrower Loan Agreement) of any Lien upon any of such properties, any of the Collateral or any of the property or funds pledged or delivered to Funding Lender pursuant to the Security Documents. Section 4.1.43 Government and Private Approvals. All governmental or regulatory orders, consents, permits, authorizations and approvals required for the construction, rehabilitation, use, occupancy and operation of the Improvements, that may be granted or denied in the discretion of any Governmental Authority, have been obtained and are in full force and effect (or, in the case of any of the foregoing that Borrower is not required to have as of the Closing Date, will be obtained), and will be maintained in full force and effect at all times during the construction or rehabilitation of the Improvements. All such orders, consents, permits, authorizations and approvals that may not be denied in the discretion of any Governmental Authority shall be obtained prior to the commencement of any work for which such orders, consents, permits, authorizations or approvals are required, and, once obtained, such orders, consents, permits, authorizations and approvals will be maintained in full force and effect at all times during the construction or rehabilitation of the Improvements. Except as set forth in the preceding two sentences, no additional governmental or regulatory actions, filings or registrations with respect to the Improvements, and no approvals, authorizations or consents of any trustee or holder of any indebtedness or obligatio n of Borrower, are required for the due execution, delivery and performance by Borrower or General Partner of any of the Borrower Loan Documents or the Funding Loan Documents or the Related Documents executed by Borrower or General Partner, as applicable. All required zoning approvals have been obtained, and the zoning of the Land for the Project is not conditional upon the happening of any further event. 2021/10/12 City Council Post Agenda Page 203 of 620 34 4848-7324-3383/024036-0092 Section 4.1.44 Concerning Guarantor. The Borrower Loan Documents and the Funding Loan Documents to which the Guarantor is a party or a signatory executed simultaneously with this Borrower Loan Agreement have been duly executed and delivered by Guarantor and are legally valid and binding obligations of Guarantor, enforceable against Guarantor in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity. Section 4.1.45 No Material Defaults. Except as previously disclosed to Funding Lender and the Governmental Lender in writing, there exists no material violation of or material default by Borrower under, and, to the best knowledge of Borrower, no event has occurred which, upon the giving of notice or the passage of time, or both, would constitute a material default with respect to: (i) the terms of any instrument evidencing, securing or guaranteeing any indebtedness secured by the Project or any portion or interest thereof or therein; (ii) any lease or other agreement affecting the Project or to which Borrower is a party; (iii) any license, permit, statute, ordinance, law, judgment, order, writ, injunction, decree, rule or regulation of any Governmental Authority, or any determination or award of any arbitrator to which Borrower or the Project may be bound; or (iv) any mortgage, instrument, agreement or document by which Borrower or any of its respective properties is bound; in the case of any of the foregoing: (1) which involves any Borrower Loan Document or Funding Loan Document; (2) which involves the Project and is not adequately covered by insurance; (3) that would materially and adversely affect the ability of Borrower, General Partner or Guarantor or to perform any of its respective obligations under any of the Borrower Loan Docume nts or the Funding Loan Documents or any other material instrument, agreement or document to which it is a party relating to the Project; or (4) which would adversely affect the priority of the Liens created by this Borrower Loan Agreement or any of the Borrower Loan Documents or the Funding Loan Documents. Section 4.1.46 Payment of Taxes. Except as previously disclosed to Funding Lender in writing: (i) all tax returns and reports of Borrower, General Partner and Guarantor required to be filed have been timely filed, and all taxes, assessments, fees and other governmental charges upon Borrower, General Partner and Guarantor, and upon their respective properties, assets, income and franchises, which are due and payable have been paid when due and payable; and (ii) Borrower knows of no proposed tax assessment against it or against General Partner or Guarantor that would be material to the condition (financial or otherwise) of Borrower, General Partner or Guarantor, and neither Borrower nor General Partner have contracted with any Governmental Authority in connection with such taxes. Section 4.1.47 Rights to Project Agreements and Licenses. Borrower is the legal and beneficial owner of all rights in and to the Plans and Specifications and all existing Project Agreements and Licenses, and will be the legal and beneficial owner of all rights in and to all future Project Agreements and Licenses. Borrower’s interest in the Plans and Specifications and all Project Agreements and Licenses is not subject to any present claim (other than under t he Borrower Loan Documents and the Funding Loan Documents and the Subordinate Loan Documents or as otherwise approved by Funding Lender in its sole discretion), set-off or deduction other than in the ordinary course of business. Section 4.1.48 Patriot Act Compliance. Borrower is not now, nor has ever been (i) listed on any Government Lists (as defined below), (ii) a person who has been determined by a Governmental Authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (September 23, 2001) or any other similar prohibitions contained in the rules and 2021/10/12 City Council Post Agenda Page 204 of 620 35 4848-7324-3383/024036-0092 regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in respect thereof, (iii) indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense, or (iv) under investigation by any Governmental Authority for alleged criminal activity. For purposes hereof, the term “Patriot Act Offense” shall mean any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) Bank Representative Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or (E) the Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government Lists” shall mean (1) the Specially Designated Nationals and Blocked Persons Lists maintained by the Office of Foreign Assets Control (“OFAC”), (2) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Funding Lender notified Borrower in writing is now in cluded in “Government Lists”, or (3) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other Governmental Authority or pursuant to any Executive Order of the President of the United State s of America that Funding Lender notified Borrower in writing is now included in “Government Lists”. Section 4.1.49 Rent Schedule. Borrower has prepared a prospective Unit absorption and rent collection schedule with respect to the Project substantially in the form atta ched as an exhibit to the Construction Funding Agreement, which schedule takes into account, among other relevant factors (i) a schedule of minimum monthly rentals for the Units, and (ii) any and all concessions including free rent periods, and on the basi s of such schedule, Borrower believes it will collect rents with respect to the Project in amounts greater than or equal to debt service on the Borrower Loan. Section 4.1.50 Other Documents. Each of the representations and warranties of Borrower or General Partner contained in any of the other Borrower Loan Documents or the Funding Loan Documents or Related Documents is true and correct in all material respects (or, in the case of representations or warranties contained in any of the other Borrower Loan Documents or Fund ing Loan Documents or Related Documents that speak as of a particular date, were true and correct in all material respects as of such date). All of such representations and warranties are incorporated herein for the benefit of Funding Lender. Section 4.1.51 Subordinate Loan Documents. The Subordinate Loan Documents are in full force and effect and the Borrower has paid all commitment fees and other amounts due and payable to the Subordinate Lender(s) thereunder. There exists no material violation of or material default by the Borrower under, and no event has occurred which, upon the giving of notice or the passage of time, or both, would constitute a material default under the Subordinate Loan Documents. Section 4.1.52 [Reserved]. Section 4.1.53 Survival of Representations and Covenants. All of the representations and warranties in Section 4.1 hereof and elsewhere in the Borrower Loan Documents (i) shall survive for so long as any portion of the Borrower Payment Obligations remains due and owing and (ii) shall be deemed to have been relied upon by the Governmental Lender and the Servicer notwithstanding any investigation heretofore or hereafter made by the Governmental Lender 2021/10/12 City Council Post Agenda Page 205 of 620 36 4848-7324-3383/024036-0092 or the Servicer or on its or their behalf, provided, however, that the representations, warranties and covenants set forth in Section 4.1.31 hereof shall survive in perpetuity and shall not be subject to the exculpation provisions of Section 11.1 hereof. ARTICLE V AFFIRMATIVE COVENANTS During the term of this Borrower Loan Agreement, the Borrower hereby covenants and agrees with the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer that: Section 5.1 Existence. The Borrower shall (i) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence and its material rights, and franchises, (ii) continue to engage in the business presently conducted by it, (iii) obtain and maintain all material Licenses, and (iv) qualify to do business and remain in good standing under the laws of the State. Section 5.2 Taxes and Other Charges. The Borrower shall pay all Taxes and Other Charges as the same become due and payable and prior to their becoming delinquent in accordance with the Security Instrument, except to the extent that the amount, validity or application thereof is being contested in good faith as permitted by the Security Instrument. The Borrower covenants to pay all taxes and Other Charges of any type or character charged to the Funding Lender affecting the amount available to the Funding Lender from payments to be received hereunder or in any way arising due to the transactions contemplated hereby (including taxes and Other Charges assessed or levied by any public agency or governmental authority of whatsoever character having power to levy taxes or assessments) but excluding franchise taxes bas ed upon the capital and/or income of the Funding Lender and taxes based upon or measured by the net income of the Funding Lender; provided, however, that the Borrower shall have the right to protest any such taxes or Other Charges and to require the Fundin g Lender, at the Borrower’s expense, to protest and contest any such taxes or Other Charges levied upon them and that the Borrower shall have the right to withhold payment of any such taxes or Other Charges pending disposition of any such protest or contest unless such withholding, protest or contest would adversely affect the rights or interests of the Funding Lender. This obligation shall remain valid and in effect notwithstanding repayment of the Borrower Loan hereunder or termination of this Borrower Loan Agreement. Section 5.3 Repairs; Maintenance and Compliance; Physical Condition. The Borrower shall cause the Project to be maintained in a good, habitable and safe (so as to not threaten the health or safety of the Project’s tenants or their invited guests) condi tion and repair (reasonable wear and tear excepted) as set forth in the Security Instrument and shall not remove, demolish or materially alter the Improvements or Equipment (except for removal of aging or obsolete equipment or furnishings in the normal course of business), except as provided in the Security Instrument. Section 5.4 Litigation. The Borrower shall give prompt Written Notice to the Governmental Lender, the Funding Lender and the Servicer of any litigation, governmental proceedings or claims or investigations regarding an alleged actual violation of a Legal Requirement pending or, to the Borrower’s knowledge, threatened against the Borrower which might materially adversely affect the Borrower’s condition (financial or otherwise) or business or the Project. 2021/10/12 City Council Post Agenda Page 206 of 620 37 4848-7324-3383/024036-0092 Section 5.5 Performance of Other Agreements. The Borrower shall observe and perform in all material respects each and every term to be observed or performed by it pursuant to the terms of any agreement or instrument affecting or pertaining to the Project. Section 5.6 Notices. The Borrower shall promptly advise the Governmental Lender, the Funding Lender and the Servicer of (i) any Material Adverse Change in the Borrower’s financial condition, assets, properties or operations other than general changes in the real estate market, (ii) any fact or circumstance affecting the Borrower or the Project that materially and adversely affects the Borrower’s ability to meet its obligations hereunder or under any of the other Borrower Loan Document to which it is a party in a timely manner, o r (iii) the occurrence of any Potential Default or Event of Default of which the Borrower has knowledge. If the Borrower becomes subject to federal or state securities law filing requirements, the Borrower shall cause to be delivered to the Governmental Lender, the Funding Lender and the Servicer any Securities and Exchange Commission or other public filings, if any, of the Borrower within two (2) Business Days of such filing. Section 5.7 Cooperate in Legal Proceedings. The Borrower shall cooperate fully with the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer with respect to, and permit the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer at their option, to participate in, any proceedings before any Governmental Authority that may in any way affect the rights of the Governmental Lender, the Funding Lender, the Fiscal Agent and/or the Servicer under any Borrower Loan Document or Funding Loan Document. Section 5.8 Further Assurances. The Borrower shall, at the Borrower’s sole cost and expense (except as provided in Section 9.1 hereof), (i) furnish to the Servicer and the Funding Lender all instruments, documents, boundary surveys, footing or foundation surveys (to the extent that Borrower’s construction or renovation of the Project alters any existing building foundations or footprints), certificates, plans and specifications, appraisals, title and other insurance reports and agreements relating to the Project, reasonably requested by the Servicer or the Funding Lender for the better and more efficient carrying out of the intents and purposes of the Borrower Loan Documents and the Funding Loan Documents; (ii) execute and deliver to the Servicer and the Funding Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the Borrower Loan, as the Servicer, the Fiscal Agent (at the direction of the Funding Lender) and the Funding Lender may reasonably require from time to time; (iii) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of the Borrower Loan Documen ts and the Funding Loan Documents, as the Servicer, the Fiscal Agent (at the direction of the Funding Lender) or the Funding Lender shall reasonably require from time to time; provided, however, with respect to clauses (i)-(iii) above, the Borrower shall not be required to do anything that has the effect of (A) changing the essential economic terms of the Borrower Loan or (B) imposing upon the Borrower greater personal liability under the Borrower Loan Documents and the Funding Loan Documents; and (iv) upon the Servicer’s, the Fiscal Agent’s (at the direction of the Funding Lender) or the Funding Lender’s request therefor given from time to time after the occurrence of any Potential Default or Event of Default for so long as such Potential Default or Event of Default, as applicable, is continuing pay for (a) reports of UCC, federal tax lien, state tax lien, judgment and pending litigation searches with respect to the Borrower and (b) searches of title to the Project, each such search to be conducted by search firms reasonably designated by the Servicer, the Fiscal Agent 2021/10/12 City Council Post Agenda Page 207 of 620 38 4848-7324-3383/024036-0092 (at the direction of the Funding Lender) or the Funding Lender in each of the locations reasonably designated by the Servicer, the Fiscal Agent or the Funding Lender. Section 5.9 Delivery of Financial Inf ormation. After notice to the Borrower of a Secondary Market Disclosure Document, the Borrower shall, concurrently with any delivery to the Funding Lender or the Servicer, deliver copies of all financial information required under Article IX. Section 5.10 Environmental Matters. So long as the Borrower owns or is in possession of the Project, the Borrower shall (a) keep the Project in compliance with all Hazardous Materials Laws (as defined in the Security Instrument), (b) promptly notify the Funding Lender and the Servicer if the Borrower shall become aware that any Hazardous Materials (as defined in the Security Instrument) are on or near the Project in violation of Hazardous Materials Laws, and (c) commence and thereafter diligently prosecute to completion all remedi al work necessary with respect to the Project required under any Hazardous Material Laws, in each case as set forth in the Security Instrument or the Agreement of Environmental Indemnification. Section 5.11 Governmental Lender’s and Funding Lender’s Fees. The Borrower covenants to pay the reasonable fees and expenses of the Governmental Lender (including the Ongoing Governmental Lender Fee), the Fiscal Agent and the Funding Lender or any agents, attorneys, accountants, consultants selected by the Governmental Lender, t he Fiscal Agent or the Funding Lender to act on its behalf in connection with this Borrower Loan Agreement and the other Borrower Loan Documents, the Regulatory Agreement and the Funding Loan Documents, including, without limitation, any and all reasonable expenses incurred in connection with the making of the Borrower Loan or in connection with any litigation which may at any time be instituted involving the Borrower Loan, this Borrower Loan Agreement, the other Borrower Loan Documents, the Regulatory Agreement and the Funding Loan Documents or any of the other documents contemplated thereby, or in connection with the reasonable supervision or inspection of the Borrower, its properties, assets or operations or otherwise in connection with the administration of the foregoing. This obligation shall remain valid and in effect notwithstanding repayment of the Borrower Loan hereunder or termination of this Borrower Loan Agreement. Section 5.12 Estoppel Statement. The Borrower shall furnish to the Funding Lender, the Fiscal Agent or the Servicer for the benefit of the Funding Lender or the Servicer within ten (10) days after request by the Funding Lender and the Servicer, with a statement, duly acknowledged and certified, setting forth (i) the unpaid principal of the Borrower Notes, (ii) the applicable Interest Rate, (iii) the date installments of interest and/or principal were last paid, (iv) any offsets or defenses to the payment of the Borrower Payment Obligations, and (v) that the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party are valid, legal and binding obligations of the Borrower and have not been modified or, if modified, giving particulars of such modification, and no Event of Default exists thereunder or specify any Event of De fault that does exist thereunder. The Borrower shall use commercially reasonable efforts to furnish to the Funding Lender or the Servicer, within 30 days of a request by the Funding Lender or Servicer, tenant estoppel certificates from each commercial tenant at the Project in form and substance reasonably satisfactory to the Funding Lender and the Servicer; provided that the Funding Lender and the Servicer shall not make such requests more frequently than twice in any year. Section 5.13 Defense of Actions. The Borrower shall appear in and defend any action or proceeding purporting to affect the security for this Borrower Loan Agreement hereunder or under the Borrower Loan Documents and the Funding Loan Documents, and shall pay, in the manner 2021/10/12 City Council Post Agenda Page 208 of 620 39 4848-7324-3383/024036-0092 required by Section 2.4 hereof, all costs and expenses, including the cost of evidence of title and attorneys’ fees, in any such action or proceeding in which Funding Lender may appear. If the Borrower fails to perform any of the covenants or agreements contained in this Borrower Loan Agreement or any other Borrower Loan Document, or if any action or proceeding is commenced that is not diligently defended by the Borrower which affects the Funding Lender’s interest in the Project or any part thereof, including eminent domain, code enforcement or proceedings of any nature whatsoever under any Federal or state law, whether now existing or hereafter enacted or amended, then the Funding Lender may make such appearances, disburse such sums and take such action as the Funding Lender deems necessary or appropriate to protect its interests. Such actions include disbursement of attorneys’ fees, entry upon the Project to make repairs or take other action to protect the security of the Project, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of Funding Lender appears to be prior or superior to the Borrower Loan Documents or the Funding Loan Documents other than the Permitted Exceptions. The Funding Lender shall have no obligation to do any of the above. The Funding Lender may take any such action without notice to or demand upon the Borrower. No such action shall release the Borrower from any obligation under this Borrower Loan Agreement or any of the other Borrower Loan Documents or Funding Loan Documents. In the event (i) that the Security Instrument is foreclosed in whole or in part or that any Borrower Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, or (ii) of the foreclosure of any mortgage, deed of trust or deed to secure debt prior to or subsequent to the Security Instrument or any Borrower Loan Document in which proceeding the Funding Lender is made a party or (iii) of the bankruptcy of the Borrower or an assignment by the Borrower for the benefit of its creditors, the Borrower shall be chargeable with and agrees to pay all costs of collection and defense, including actual attorneys’ fees in connection therewith and in connection with any appellate proceeding or post -judgment action involved therein, which shall be due and payable together with all required service or use taxes. Section 5.14 Expenses. The Borrower shall pay all reasonable expenses incurred by the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer (except as pro vided in Section 9.1 hereof) in connection with the Borrower Loan and the Funding Loan, including reasonable fees and expenses of the Governmental Lender’s, the Fiscal Agent’s, the Funding Lender’s and the Servicer’s attorneys, environmental, engineering a nd other consultants, and fees, charges or taxes for the recording or filing of the Borrower Loan Documents and the Funding Loan Documents. The Borrower shall pay or cause to be paid all reasonable expenses of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer (except as provided in Section 9.1 hereof) in connection with the issuance or administration of the Borrower Loan and the Funding Loan, including audit costs, inspection fees, settlement of condemnation and casualty awards , and premiums for title insurance and endorsements thereto. The Borrower shall, upon request, promptly reimburse the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer for all reasonable amounts expended, advanced or incurred by t he Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer to collect the Borrower Notes, or to enforce the rights of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer under this Borrower Loan Agreement or any other Borrower Loan Document, or to defend or assert the rights and claims of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer under the Borrower Loan Documents and the Funding Loan Documents arising out of an Event of Defau lt or with respect to the Project (by litigation or other proceedings) arising out of an Event of Default, which amounts will include all court costs, attorneys’ fees and expenses, fees of auditors and accountants, and investigation expenses as may be reas onably incurred by the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer in connection with any such matters (whether or not litigation is instituted), together with interest at the Default Rate on each such amount from the 2021/10/12 City Council Post Agenda Page 209 of 620 40 4848-7324-3383/024036-0092 Date of Disbursement until the date of reimbursement to the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer, all of which shall constitute part of the Borrower Loan and the Funding Loan and shall be secured by the Borrower Loan Document s and the Funding Loan Documents. The obligations and liabilities of the Borrower under this Section 5.14 shall survive the Term of this Borrower Loan Agreement and the exercise by the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer, as the case may be, of any of its rights or remedies under the Borrower Loan Documents and the Funding Loan Documents, including the acquisition of the Project by foreclosure or a conveyance in lieu of foreclosure. Notwithstanding the foregoing, the Borrower shall not be obligated to pay amounts incurred as a result of the gross negligence or willful misconduct of any other party, and any obligations of the Borrower to pay for environmental inspections or audits will be governed by Section 18(i) and 43(i) of the Security Instrument. Section 5.15 Indemnity. In addition to its other obligations hereunder, and in addition to any and all rights of reimbursement, indemnification, subrogation and other rights of Governmental Lender, the Fiscal Agent or Funding Lender pursuant hereto, pursuant to the Regulatory Agreement and under law or equity, to the fullest extent permitted by law, the Borrower agrees to indemnify, hold harmless and defend the Governmental Lender, the Funding Lender, the Fiscal Agent, the Servicer, the Beneficiary Parties, Citigroup, Inc., and each of their respective commissioners, officers, directors, employees, attorneys and agents (each an “Indemnified Party”), against any and all losses, damages, claims, actions, liabilities, reasonable costs and e xpenses of any nature, kind or character (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement (to the extent that the Borrower has consented to such settlement) and amounts paid to discharge judgments) (hereinafter, the “Liabilities”) to which the Indemnified Parties, or any of them, may become subject under federal or state securities laws or any other statutory law or at common law or otherwise, to the extent arising out of or based upon or in any way relating to: (a) The Borrower Loan Documents and the Funding Loan Documents or the execution or amendment thereof or in connection with transactions contemplated thereby, including the sale, transfer or resale of the Borrower Loan or the Funding Loan, except with respect to any Secondary Market Disclosure Document (other than any Borrower’s obligations under Article IX); (b) Any act or omission of the Borrower or any of its agents, contractors, servants, employees or licensees in connection with the Borrower Loan, the Funding Loan or the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, construction, installation or rehabilitation of, the Project or any part thereof; (c) Any lien (other than a Permitted Lien) or charge upon payments by the Borrower to the Governmental Lender, the Fiscal Agent or the Funding Lender hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and Other Charges imposed on the Governmental Lender, the Fiscal Agent or the Funding Lender in respect of any portion of the Project; (d) Any violation of any environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Project or any part thereof during the period in which the Borrower is in possession or control of the Project; provided however, Borrower’s liability under this Section 5.15(d) shall not extend to cover a violation that first arose, commenced or occurred as a result of actions of the Indemnified Party, their successors, assigns or designees, after the 2021/10/12 City Council Post Agenda Page 210 of 620 41 4848-7324-3383/024036-0092 satisfaction, discharge, release, assignment, termination or cancellation of the S ecurity Instrument following the payment in full of the Borrower Notes and all other sums payable under the Borrower Loan Documents; (e) The enforcement of, or any action taken by the Governmental Lender, the Fiscal Agent or the Funding Lender related to remedies under, this Borrower Loan Agreement and the other Borrower Loan Documents and the Funding Loan Documents; (f) Any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact by the Borrower made i n the course of Borrower applying for the Borrower Loan or the Funding Loan or contained in any of the Borrower Loan Documents or Funding Loan Documents to which the Borrower is a party; (g) Any Determination of Taxability; (h) Any breach (or alleged breach) by Borrower of any representation, warranty or covenant made in or pursuant to this Borrower Loan Agreement or in connection with any written or oral representation, presentation, report, appraisal or other information given or delivered by Borrower, General Partner, Guarantor or their Affiliates to Governmental Lender, the Fiscal Agent the Funding Lender, Servicer or any other Person in connection with the Borrower’s application for the Borrower Loan and the Funding Loan (including, without limitation, any brea ch or alleged breach by Borrower of any agreement with respect to the provision of any substitute credit enhancement); (i) any failure (or alleged failure) by Borrower, the Funding Lender or Governmental Lender to comply with applicable federal and state laws and regulations pertaining to the making of the Borrower Loan and the Funding Loan; (j) the Project, or the condition, occupancy, use, possession, conduct or management of, or work done in or about, or from the planning, design, acquisition, installation, construction or rehabilitation of, the Project or any part thereof; or (k) the use of the proceeds of the Borrower Loan and the Funding Loan, except in the case of the foregoing indemnification of the Governmental Lender or any related Indemnified Party, to the extent such damages are caused by the willful misconduct of such Indemnified Party, and except in the case of the foregoing indemnification of the Funding Lender or the Servicer or any related Indemnified Party, to the extent such damages are caused by the gross negligence or willful misconduct of such Indemnified Party. Notwithstanding anything herein to the contrary, the Borrower’s indemnification obligations to the parties specified in Section 9.1.4 hereof with respect to any securitization or Secondary Market Transaction described in Article IX hereof shall be limited to the indemnity set forth in Section 9.1.4 hereof. 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 (which notice shall be timely given so as not to materially impair the Borrower’s right to defend), shall assume the investigation and defense thereof, including the employment of counsel rea sonably approved by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement, which 2021/10/12 City Council Post Agenda Page 211 of 620 42 4848-7324-3383/024036-0092 approval shall not be unreasonably withheld. Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the investigation and defense thereof. The Borrower shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Borrower if and only if in such Indemnified Party’s good faith judgment (based on the advice of counsel) a conflict of interest exists or could arise by reason of common representation. Notwithstanding any transfer of the Project to another owner in accordance with the provisions of this Borrower Loan Agreement or the Regulatory Agreement, the Borrower shall remain obligated to indemnify each Indemnified Party pursuant to this Section 5.15 if such subsequent owner fails to indemnify any party entitled to be indemnified hereunder, unless the Governmental Lender and the Funding Lender have consented to such transfer and to the assignment of the rights and obligations of the Borrower hereunder in which event the Borrower shall only be obligated to indemnify for events up to the date the Project is transferred. The rights of any persons to indemnity hereunder shall survive the final payment or defeasance of the Borrower Loan and the Funding Loan and in the case of the Servicer, any resignation or removal. The provisions of this Section 5.15 shall survive the termination of this Borrower Loan Agreement. The foregoing provisions of this Section 5.15 are not intended to and shall not negate, modify, limit or change the provisions of Section 9 of the Borrower Notes. Section 5.16 No Warranty of Condition or Suitability by the Governmental Lender or Funding Lender. Neither the Governmental Lender nor the Funding Lender makes any warranty, either express or implied, as to the condition of the Project or that it will be suitable for the Borrower’s purposes or needs. Section 5.17 Right of Access to the Project. Subject to the rights of tenants and any safety and security procedures (including compliance with any health orders), the Borrower agrees that the Governmental Lender, the Funding Lender, the Servicer and the Construction Consultant, and their duly authorized agents, attorneys, experts, engineers, accountants and representatives shall have the right, but no obligation, at all reasonable times during business hours and upon reasonable notice, to enter onto the Land (a) to examine, test and inspect the Project without material interference or prejudice to the Borrower’s operations and (b) to perform such work in and about the Project made necessary by reason of the Borrower’s default under any of the provisions of this Borrower Loan Agreement. The Governmental Lender, the Funding Lender, the Servicer, and their duly authorized agents, attorneys, accountants and representatives shall also be permitted, without any obligation to do so, at all reasonable times and upon reasonable notice during business hours, to examine the books and records of the Borrower with respect to the Project. Section 5.18 Reserved. Section 5.19 Covenant with Governmental Lender and Funding Lender. The Borrower agrees that this Borrower Loan Agreement is executed and delivered in part to induce the purchase by others of the Governmental Lender Notes and, accordingly, all covenants and agreements of the Borrower contained in this Borrower Loan Agreement are hereby declared to be for the benefit of the Governmental Lender, the Fiscal Agent, the Funding Lender and any lawful 2021/10/12 City Council Post Agenda Page 212 of 620 43 4848-7324-3383/024036-0092 owner, holder or pledgee of the Borrower Notes or the Governmental Lender Notes from time to time. Section 5.20 Obligation of the Borrower to Construct or Rehabilitate the Project. The Borrower shall proceed with reasonable dispatch to construct or rehabilitate, as appropriate, and equip the Project. If the proceeds of the Borrower Loan, together with the Other Borrower Mone ys, available to be disbursed to the Borrower are not sufficient to pay the costs of such construction or rehabilitation, as appropriate, and equipping, the Borrower shall pay such additional costs from its own funds. The Borrower shall not be entitled to any reimbursement from the Governmental Lender, the Fiscal Agent, the Funding Lender or the Servicer in respect of any such costs or to any diminution or abatement in the repayment of the Borrower Loan. The Governmental Lender, the Fiscal Agent and the Funding Lender shall not be liable to the Borrower or any other person if for any reason the Project is not completed or if the proceeds of the Borrower Loan are insufficient to pay all costs of the Project. The Governmental Lender, the Fiscal Agent and th e Funding Lender do not make any representation or warranty, either express or implied, that moneys, if any, which will be made available to the Borrower will be sufficient to complete the Project, and the Governmental Lender, the Fiscal Agent and the Funding Lender shall not be liable to the Borrower or any other person if for any reason the Project is not completed. Section 5.21 Maintenance of Insurance. Borrower will maintain the insurance required by the Security Instrument. Section 5.22 Information; Statements and Reports. Borrower shall furnish or cause to be furnished to Funding Lender and, with respect to subsection (a) only, to Governmental Lender: (a) Notice of Default. As soon as possible, and in any event not later than five (5) Business Days after the occurrence of any Event of Default or Potential Default, a statement of an Authorized Representative of Borrower describing the details of such Event of Default or Potential Default and any curative action Borrower proposes to take; (b) Financial Statements; Rent Rolls. In the manner and to the extent required under the Security Instrument, such financial statements, expenses statements, rent rolls, reports and other financial documents and information as required by the Security Instrument and the other Borrower Loan Documents and Funding Loan Documents, in the form and within the time periods required therein; (c) General Partner. As soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year of General Partner, copies of the financial statements of General Partner as of such date, prepared in substantially the form previously delivered to the Governmental Lender and Funding Lender and in a manner consistent therewith, or in such form (which may include a form prepared in accordance with GAAP) as Funding Lender may reasonably request; (d) Leasing Reports. Prior to the Conversion Date, on a monthly basis (and in any event within fifteen (15) days after the end of each Calendar Month), a report of all efforts made by Borrower, if any, to lease all or any portion of the Project during such Calendar Month and on a cumulative basis since Project inception, which report shall be prepared and delivered by Borrower, shall be in form and substance satisfactory to Funding Lender, and shall, if requeste d by Funding Lender, be supported by copies of letters of intent, leases or occupancy agreements, as applicable; 2021/10/12 City Council Post Agenda Page 213 of 620 44 4848-7324-3383/024036-0092 (e) Audit Reports. Promptly upon receipt thereof, copies of all reports, if any, submitted to Borrower by independent public accountants in connection with each annual, interim or special audit of the financial statements of Borrower made by such accountants, including the comment letter submitted by such accountants to management in connection with their annual audit; (f) Notices; Certificates or Communications. Immediately upon giving or receipt thereof, copies of any notices, certificates or other communications delivered at the Project or to Borrower or General Partner naming Governmental Lender or Funding Lender as addressee or which could reasonably be deemed to affect the structural integrity of the Project or the ability of Borrower to perform its obligations under the Borrower Loan Documents and the Funding Loan Documents; (g) Certification of Non-Foreign Status. Promptly upon request of Funding Lender from time to time, a Certification of Non -Foreign Status, executed on or after the date of such request by Funding Lender; (h) Compliance Certificates. Together with each of the documents required pursuant to Section 5.22(b) hereof submitted by or on behalf of Borrower, a statement, in form and substance satisfactory to Funding Lender and certified by an Authorized Borrower Representative, to the effect that Borrower is in compliance with all covenants, terms and conditions applicable to Borrower, under or pursuant to the Borrower Loan Documents and the Funding Loan Documents and under or pursuant to any other Debt owing by Borrower to any Person, and disclosing any noncompliance therewith, and any Event of Default or Potential Default, and describing the status of Borrower’s actions to correct such noncompliance, Event of Default or Potential Default, as applicable; and (i) Other Items and Information. Such other information concerning the assets, business, financial condition, operations, property and result s of operations of Borrower, General Partner, Guarantor or the Project, as Funding Lender or Governmental Lender reasonably requests from time to time. Borrower shall furnish to Governmental Lender, upon its written request, any of the items described in the foregoing subsections (b) through and including (i) above. Section 5.23 Additional Notices. Borrower will, promptly after becoming aware thereof, give notice to Funding Lender and the Governmental Lender of: (a) any Lien affecting the Project, or any part thereof, othe r than Liens expressly permitted under this Borrower Loan Agreement; (b) any Legal Action which is instituted by or against Borrower, General Partner or Guarantor, or any Legal Action which is threatened against Borrower, General Partner or Guarantor which, in any case, if adversely determined, could have a material adverse effect upon the business, operations, properties, assets, management, ownership or financial condition of Borrower, General Partner, Guarantor or the Project; (c) any Legal Action which constitutes an Event of Default or a Potential Default or a default under any other Contractual Obligation to which Borrower, General Partner or Guarantor is a party or by or to which Borrower, General Partner or Guarantor, or any of their respective properties or assets, may be bound or subject, which default would have a material adverse effect on 2021/10/12 City Council Post Agenda Page 214 of 620 45 4848-7324-3383/024036-0092 the business, operations, assets (including the Project), or financial condition of Borrower, General Partner or Guarantor, as applicable; (d) any default, alleged default or potential default on the part of Borrower under any of the CC&R’s (together with a copy of each notice of default, alleged default or potential default received from any other party thereto); (e) any notice of default, alleged default or potential default o n the part of Borrower received from any tenant or occupant of the Project under or relating to its lease or occupancy agreement (together with a copy of any such notice), if, in the aggregate, notices from at least fifteen percent (15%) of the tenants at the Project have been received by Borrower with respect to, or alleging, the same default, alleged default or potential default; (f) any change in (i) the location of Borrower’s or General Partner’s executive headquarters or principal place of business; (ii) the legal, trade, or fictitious business names used by Borrower or General Partner; or (iii) the nature of the trade or business of Borrower; and (g) any default, alleged default or potential default on the part of any general or limited partner (including, without limitation, General Partner and the Equity Investor) under the Partnership Agreement. Section 5.24 Compliance with Other Agreements; Legal Requirements. (a) Borrower shall timely perform and comply with, and shall cause General Partner to timely perform and comply with the covenants, agreements, obligations and restrictions imposed on them under the Partnership Agreement, and Borrower shall not do or permit to be done anything to impair any such party’s rights or interests under any of the foregoing. (b) Borrower will comply and, to the extent it is able, will require others to comply with, all Legal Requirements of all Governmental Authorities having jurisdiction over the Project or construction and/or rehabilitation of the Improvements, and will furnish Funding Lender with reports of any official searches for or notices of violation of any requirements established by such Governmental Authorities. Borrower will comply and, to the extent it is able, will require others to comply, with applicable CC&R’s and all restrictive covenants and all obligations created by private contracts and leases which affect ownership, construction, rehabilitation, equipping, fixturing, use or operation of the Project, and all other agreements requiring a certain percentage of the Units to be rented to persons of low or moderate income. The Improvements, when completed, shall comply with all applicable building, zoning and other Legal Requirements, and will not violate any restrictions of record against the Project or the terms of any other leas e of all or any portion of the Project. Funding Lender and Governmental Lender shall at all times have the right to audit, at Borrower’s expense, Borrower’s compliance with any agreement requiring a certain percentage of the Units to be rented to persons of low or moderate income, and Borrower shall supply all such information with respect thereto as Funding Lender or Governmental Lender, as applicable, may request and otherwise cooperate with Funding Lender or Governmental Lender, as applicable, in any such audit. Without limiting the generality of the foregoing, Borrower shall properly obtain, comply with and keep in effect (and promptly deliver copies to Funding Lender of) all permits, licenses and approvals which are required to be obtained from Governmental Authorities in order to construct, occupy, operate, market and lease the Project. 2021/10/12 City Council Post Agenda Page 215 of 620 46 4848-7324-3383/024036-0092 Section 5.25 Completion and Maintenance of Project. Borrower shall cause the construction or rehabilitation, as the case may be, of the Improvements, to be prosecuted with diligence and continuity and completed substantially in accordance with the Plans and Specifications, and in accordance with the Construction Funding Agreement, free and clear of any liens or claims for liens (but without prejudice to Borrower’s rights of contest under Section 10.16 hereof) (“Completion”) on or before the Completion Date. Borrower shall thereafter maintain the Project as a residential apartment complex in good order and condition, ordinary wear and tear excepted. A maintenance program shall be in place at all times to assure the continuation of first class maintenance. Section 5.26 Fixtures. Borrower shall deliver to Funding Lender, on demand, any contracts, bills of sale, statements, receipted vouchers or agreements under which Borrower or any other Person claims title to any materials, fixtures or articles incorporated into the Improvements. Section 5.27 Income from Project. Borrower shall first apply all Gross Income to Expenses of the Project, including all amounts then required to be paid under the Borrower Loan Documents and the Funding Loan Documents and the funding of all sums necessary to meet the Replacement Reserve Fund Requirement, before using or applying such Gross Income for any other purpose. Prior to the Conversion Date, except for any asset management fees or tax credit adjuster payments payable to the Equity Investor pursuant to the Partnership Agreement, or as otherwise permitted by the Borrower Loan Documents or the Funding Loan Documents or the Subordinate Loan Documents, Borrower shall not make or permit any distributions or other payments of Net Operating Income to its partners, shareholders or members, as applicable, in each case, without the prior Written Consent of Funding Lender. Section 5.28 Leases and Occupancy Agreements. (a) Lease Approval. (i) Borrower may enter into leases of space within the Improvements (and amendments to such leases) in the ordinary course of business with bona fide third party tenants without Funding Lender’s prior Written Consent if: (A) The lease is a Permitted Lease; (B) Borrower, acting in good faith following the exercise of due diligence, has determined that the tenant meets requirements imposed under any applicable CC&R and is financially capable of performing all of its obligations under the lease; and (C) The lease conforms to the Rent Schedule attached as an exhibit to the Construction Funding Agreement and reflects an arm’s -length transaction, subject to the requirement that the Borrower comply with any applicable CC&R. (ii) If any Event of Default has occurred and is continuing, Funding Lender may make written demand on Borrower to submit all future leases for Funding Lender’s approval prior to execution. Borrower shall comply with any such demand by Funding Lender. (iii) No approval of any lease by Funding Lender shall be for any purpose other than to protect Funding Lender’s security for the Borrower Loan and to preserve Funding 2021/10/12 City Council Post Agenda Page 216 of 620 47 4848-7324-3383/024036-0092 Lender’s rights under the Borrower Loan Documents and the Funding Loan Documents. No approval by Funding Lender shall result in a waiver of any default of Borrower. In no even t shall any approval by Funding Lender of a lease be a representation of any kind with regard to the lease or its enforceability, or the financial capacity of any tenant or guarantor. (b) Landlord’s Obligations. Borrower shall perform all obligations required to be performed by it as landlord under any lease affecting any part of the Project or any space within the Improvements. (c) Leasing and Marketing Agreements. Except as may be contemplated in the Management Agreement with Borrower’s Manager, Borrower shall not without the approval of Funding Lender enter into any leasing or marketing agreement and Funding Lender reserves the right to approve the qualifications of any marketing or leasing agent. Section 5.29 Project Agreements and Licenses. To the extent not heretofore delivered to Funding Lender, Borrower will furnish to Funding Lender, as soon as available, true and correct copies of all Project Agreements and Licenses and the Plans and Specifications, together with assignments thereof to Funding Lender and consents to such assignments where required by Funding Lender, all in form and substance acceptable to Funding Lender. Neither Borrower nor General Partner has assigned or granted, or will assign or grant, a security interest in any of the Project Agreements and Licenses, other than to Funding Lender. Section 5.30 Payment of Debt Payments. In addition to its obligations under the Borrower Notes, Borrower will (i) duly and punctually pay or cause to be paid all principal of and interest on any Debt of Borrower as and when the same become due on or before the due date; (ii) comply with and perform all conditions, terms and obligations of other instruments or agreements evidencing or securing such Debt; (iii) promptly inform Funding Lender of any default, or anticipated default, under any such note, agreement, instrument; and (iv) forward to Funding Lender a copy of any notice of default or notice of any event that might reasonably result in default under any such note, agreement, instrument, including Liens encumbering the Project, o r any portion thereof, which have been subordinated to the Security Instrument (regardless of whether or not permitted under this Borrower Loan Agreement). Section 5.31 ERISA. Borrower will comply, and will cause each of its ERISA Affiliates to comply, in all respects with the provisions of ERISA. Section 5.32 Patriot Act Compliance. Borrower shall use its good faith and commercially reasonable efforts to comply with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and/or the Project, including those relating to money laundering and terrorism. Funding Lender shall have the right to audit Borrower’s compliance with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and/or the Project, including those relating to money laundering and terrorism. In the event that Borrower fails to comply with the Patriot Act or any such requirements of Governmental Authorities, then Funding Lender may, at its option, cause Borrower to comply therewith and any and all costs and expenses incurred by Funding Lender in connection therewith shall be secured by the Security Instrument and shall be immediately due and payable. Borrower covenants that it shall comply with all Legal Requirement s and internal requirements of Funding Lender relating to money laundering, anti-terrorism, trade embargos and 2021/10/12 City Council Post Agenda Page 217 of 620 48 4848-7324-3383/024036-0092 economic sanctions, now or hereafter in effect. Without limiting the foregoing, Borrower shall not take any action, or permit any action to be taken, that would cause Borrower’s representations and warranties in Section 4.1.48 and this Section 5.32 become untrue or inaccurate at any time during the term of the Funding Loan. Upon any Beneficiary Party’s request from time to time during the term of the Funding Loan, Borrower shall certify in writing to such Beneficiary Party that Borrower’s representations, warranties and obligations under Section 4.1.48 and this Section 5.32 remain true and correct and have not been breached, and in addition, upon request of any Beneficiary Party, Borrower covenants to provide all information required to satisfy obligations under all Legal Requirements and internal requirements of Funding Lender relating to money laundering, anti - terrorism, trade embargos and economic sanctions, now or hereafter in effect, during the term of the Funding Loan. Borrower shall immediately notify the Funding Lender in writing of (a) Borrower’s actual knowledge that any of such representations, warranties or covenants are no longer true and have been breached, (b) Borrower has a reasonable basis to believe that they may no longer be true and have been breached or (c) Borrower becomes the subject of an investigation by Governmental Authorities related to money laundering, anti-terrorism, trade embargos and economic sanctions. Borrower shall also reimburse Funding Lender for any expense incurred by Funding Lender in evaluating the effect of an investigation by Governmental Authorities on the Funding Loan and Funding Lender’s interest in the collateral for the Funding Loan, in obtaining necessary license from Governmental Authorities as may be necessary for Funding Lender to enforce its rights under the Funding Loan Documents, and in complying with all Legal Requirements and internal requirements of Funding Lender relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect applicable to Funding Lender as a result of the existence of such an event and for any penalties or fines imposed upon Funding Lender as a result thereof. Section 5.33 Funds from Equity Investor. Borrower shall cause the Equity Investor to fund all installments of the Equity Contributions in the amounts and at the times subject and according to the terms of the Partnership Agreement. Section 5.34 Tax Covenants. The Borrower further represents, warrants and covenants as follows: (a) General. The Borrower shall not take any action or omit to take any action which, if taken or omitted, respectively, would adversely affect the exclusion of interest on th e Tax- Exempt Governmental Lender Note from gross income (as defined in Section 61 of the Code), for federal income tax purposes and, if it should take or permit any such action, the Borrower will take all lawful actions that it can take to rescind such act ion promptly upon having knowledge thereof and that the Borrower will take such action or actions, including amendment of this Borrower Loan Agreement, the Security Instrument and the Regulatory Agreement, as may be necessary, in the opinion of Tax Counsel, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service applicable to the Tax-Exempt Governmental Lender Note, the Funding Loan or affecting the Project. Capitalized terms used in this Section 5.34 shall have the respective meanings assigned to them in the Regulatory Agreement or, if not defined therein, in the Funding Loan Agreement. With the intent not to limit the generality of the foregoing, the Borrower covenants and agrees that, prior to the final maturity of the Tax-Exempt Governmental Lender Note, unless it has received and filed with the Governmental Lender and the Funding Lender a Tax Counsel No Adverse Effect Opinion, as such term is defined in the Funding Loan Agreement (other than with respect to interest on any portion of the Tax-Exempt Governmental Lender Note for a 2021/10/12 City Council Post Agenda Page 218 of 620 49 4848-7324-3383/024036-0092 period during which such portion of the Tax-Exempt Governmental Lender Note are held by a “substantial user” of any facility financed with the proceeds of the Tax-Exempt Governmental Lender Note or a “related person,” as such terms are used in Section 147(a) of the Code), the Borrower will comply with this Section 5.34. (b) Use of Proceeds. The use of the net proceeds of the Funding Loan corresponding to the Tax-Exempt Governmental Lender Note at all times will satisfy the following requirements: (i) Limitation on Net Proceeds. At least 95% of the net proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note (within the meaning of the Code) actually expended by Borrower shall be used to pay Qualified Project Costs that are costs of a “qualified residential rental project” (within the meaning of Sections 142(a)(7) and 142(d) of the Code) and property that is “functionally related and subordinate” thereto (within the meaning of Sections 1.103-8(a)(3) and 1.103-8(b)(4)(iii) of the Regulations). (ii) Limit on Costs of Funding. The proceeds of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note will be expended by Borrower for the purposes set forth in this Borrower Loan Agreement and in the Funding Loan Agreement and no portion thereof in excess of two percent of the proceeds of the portion of t he Funding Loan evidenced by the Tax-Exempt Governmental Lender Note, within the meaning of Section 147(g) of the Code, will be expended to pay Costs of Funding. (iii) Prohibited Facilities. The Borrower shall not use or permit the use of any proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note or any income from the investment thereof to provide any airplane, skybox, or other private luxury box, health club facility, any facility primarily used for g ambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises. (iv) Limitation on Land. Less than 25 percent of the net proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note actually expended by Borrower will be used, directly or indirectly, for the acquisition of land or an interest therein, nor will any portion of the net proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note be used, directly or indirectly, for the acquisition of land or an interest therein to be used for farming purposes. (v) Limitation on Existing Facilities. No portion of the net proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note will be used for the acquisition of any existing property or an interest unless (A) the first use of such property is pursuant to such acquisition or (B) the rehabilitation expenditures with respect to any building and the equipment therefor equal or exceed 15 percent of the cost of acquiring such building financed with the proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note (with respect to structures other than buildings, this clause shall be applied by substituting 100 percent for 15 percent). For purposes of the preceding sentence, the term “rehabilitation expenditures” shall have the meaning set forth in Section 147(d)(3) of the Code. (vi) Accuracy of Information. The information furnished by the Borrower and used by the Governmental Lender in preparing its certifications with respect to Section 148 of the Code and the Borrower’s information statement pursuant to Section 149(e) of the Code is 2021/10/12 City Council Post Agenda Page 219 of 620 50 4848-7324-3383/024036-0092 accurate and complete as of the date of originati on of the Funding Loan evidenced by the Tax- Exempt Governmental Lender Note. (vii) Limitation of Project Expenditures. The acquisition and construction of the Project were not commenced (within the meaning of Section 144(a) of the Code) prior to the 60th day preceding the adoption of the resolution of the Governmental Lender with respect to the Project on __________, 2020, and no obligation for which reimbursement will be sought from proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note relating to the acquisition or construction of the Project was paid or incurred prior to 60 days prior to such date, except for permissible “preliminary expenditures”, which include architectural, engineering surveying, soil testing, reimbursement bond issuance and similar costs incurred prior to the commencement of the acquisition and construction of the Project. (viii) Qualified Costs. The Borrower hereby represents, covenants and warrants that the proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note shall be used or deemed used by Borrower exclusively to pay Qualified Project Costs. (c) Limitation on Maturity. The average maturity of the Tax-Exempt Governmental Lender Note does not exceed 120 percent of the average reasonably expected economic life of the Project to be financed by the Funding Loan, weighted in proportion to the respective cost of each item comprising the property the cost of which has been or will be financed, directly or indirectly, with the net proceeds of the portion of the Funding Loan evidenced by the Tax- Exempt Governmental Lender Note. For purposes of the preceding sentence, the reasonably expected economic life of property shall be determined as of the later of (A) the Closing Date for the Funding Loan or (B) the date on which such property is placed in service (or expected to be placed in service). In addition, land shall not be taken into account in determining the reasonably expected economic life of property. (d) No Arbitrage. The Borrower shall not take any action or omit to take any action with respect to the Gross Proceeds of the Funding Loan or of any amounts expected to be used to pay the principal thereof or the interest thereon which, if taken or omitted, respectively, would cause the Tax-Exempt Governmental Lender Note to be classified as an “arbitrage bond” within the meaning of Section 148 of the Code. Except as provided in the Funding Loan Agreement and this Borrower Loan Agreement, the Borrower shall not pledge or otherwise encumber, or permit the pledge or encumbrance of, any money, investment, or investment property as security for payment of any amounts due under this Borrower Loan Agreement or the Borrower Notes relating to the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note, shall not establish any segregated reserve or similar fund for such purpose and shall not prepay any such amounts in advance of the redemption date of an equal principal amount of the Funding Loan, unless the Borrower has obtained in each case a Tax Counsel No Adverse Effect Opinion with respect to such action, a copy of which shall be provided to the Governmental Lender and the Funding Lender. The Borrower shall not, at any time prior to the final maturity of the Funding Loan, invest or cause any Gross Proceeds to be invested in any investment (or to use Gross Proceeds to replace money so invested), if, as a result of such investment the Yield of all investments acquired with Gross Proceeds (or with money replaced thereby) on or prior to the date of such investment exceeds the Yield of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note to the Maturity Date, except as permitted by Section 148 of the Code and Regulations thereunder or as provided in the Regulatory Agreement. The Borrower further covenants and agrees that it will 2021/10/12 City Council Post Agenda Page 220 of 620 51 4848-7324-3383/024036-0092 comply with all applicable requirements of said Section 148 and the rules and Regulations thereunder relating to the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note and the interest thereon, including the employment of a Rebate Analyst acceptable to the Governmental Lender and Funding Lender for the calculation of rebatable amounts to the United States Treasury Department. The Borrower agrees that it will cause the Rebate Analyst to calculate the rebatable amounts not later than forty-five days after the fifth anniversary of the Closing Date and each five years thereafter, and not later than forty-five days after the final Computation Date, and agrees that the Borrower will pay all costs associated therewith. The Borrower agrees to provide evidence of the employment of the Rebate Analyst satisfactory to the Governmental Lender and Funding Lender and will provide to the Governmental Lender copies of all rebate calculations obtained from the Rebate Analyst. (e) No Federal Guarantee. Except to the extent permitted by Section 149(b) of the Code and the Regulations and rulings thereunder, the Borrower shall not take or omit to take any action which would cause the Tax-Exempt Governmental Lender Note to be “federally guaranteed” within the meaning of Section 149(b) of the Code and the Regulations and rulings thereunder. (f) Representations. The Borrower has supplied or caused to be supplied to Tax Counsel all documents, instruments and written information requested by Tax Counsel, and all such documents, instruments and written information supplied by or on behalf of the Borrower at the request of Tax Counsel, which have been reasonably relied upon by Tax Counsel in rendering its opinion with respect to the exclusion from gross income of the interest on the Tax-Exempt Governmental Lender Note for federal income tax purposes, are true and correct in all material respects, do not contain any untrue statement of a material fact and do not omit to state any material fact necessary to be stated therein in order to make the information provided therein, in light of the circumstances under which such information was provided, not misleading, and the Borrower is not aware of any other pertinent information which Tax Counsel has not requested. (g) Qualified Residential Rental Project. The Borrower hereby covenants and agrees that the Project will be operated as a “qualified residential rental project” within the meaning of Section 142(d) of the Code, on a continuous basis during the longer of the Qualified Project Period (as defined in the Regulatory Agreement) or any period during which any portion of the Tax-Exempt Governmental Lender Note remain outstanding, to the end that the interest on the Tax-Exempt Governmental Lender Note shall be excluded from gross income for federal income tax purposes. The Borrower hereby covenants and agrees, continuously during the Qualified Project Period, to comply with all the provisions of the Regulatory Agreement. (h) Information Reporting Requirements. The Borrower will comply with the information reporting requirements of Section 149(e)(2) of the Code requiring certain information regarding the Tax-Exempt Governmental Lender Note to be filed with the Internal Revenue Service within prescribed time limits. (i) Funding Loan Not a Hedge Bond. The Borrower covenants and agrees that not more than 50% of the proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note will be invested in Nonpurpose Investments having a substantially guaranteed Yield for four years or more within the meaning of Section 149(f)(3)(A)(ii) of the Code, and the Borrower reasonably expects that at least 85% of the spendable proceeds of the por tion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note will be used to carry out the 2021/10/12 City Council Post Agenda Page 221 of 620 52 4848-7324-3383/024036-0092 governmental purposes of the Funding Loan within the three-year period beginning on the Closing Date. (j) Termination of Restrictions. Although the parties hereto recognize that, subject to the provisions of the Regulatory Agreement, the provisions of this Borrower Loan Agreement shall terminate in accordance with Section 10.14 hereof, the parties hereto recognize that pursuant to the Regulatory Agreement, certain requirements, including the requirements incorporated by reference in this Section, may continue in effect beyond the term hereof. (k) Public Approval. The Borrower covenants and agrees that the proceeds of the Tax-Exempt Governmental Lender Note will not be used by Borrower in a manner that deviates in any substantial degree from the Project described in the written notice of a public hearing regarding the Funding Loan. (l) 40/60 Test Election. The Borrower and the Governmental Lender hereby elect to apply the requirements of Section 142(d)(1)(B) to the Project. The Borrower hereby represents, covenants and agrees, continuously during the Qualified Project Period, to comply with all the provisions of the Regulatory Agreement. (m) Modification of Tax Covenants. Subsequent to the origination of the Funding Loan and prior to its payment in full (or provision for the payment thereof having been made in accordance with the provisions of the Funding Loan Agreement), this Section 5.34 hereof may not be amended, changed, modified, altered or terminated except as permitted herein and by the Funding Loan Agreement and with the Written Consent of the Governmental Lender and the Funding Lender. Anything contained in this Borrower Loan Agreement or the Funding Loan Agreement to the contrary notwithstanding, the Governmental Lender, the Funding Lender and the Borrower hereby agree to amend this Borrower Loan Agreement and, if appropriate, the Funding Loan Agreement and the Regulatory Agreement, to the extent required, i n the opinion of Tax Counsel, in order for interest on the Tax-Exempt Governmental Lender Note to remain excludable from gross income for federal income tax purposes. The party requesting such amendment, which may include the Funding Lender, shall notify the other parties to this Borrower Loan Agreement of the proposed amendment and send a copy of such requested amendment to Tax Counsel. After review of such proposed amendment, Tax Counsel shall render to the Funding Lender and the Governmental Lender an opinion as to the effect of such proposed amendment upon the includability of interest on the Tax- Exempt Governmental Lender Note in the gross income of the recipient thereof for federal income tax purposes. The Borrower shall pay all necessary fees and e xpenses incurred with respect to such amendment. The Borrower, the Governmental Lender and, where applicable, the Funding Lender per written instructions from the Governmental Lender shall execute, deliver and, if applicable, the Borrower shall file of record, any and all documents and instruments, including without limitation, an amendment to the Regulatory Agreement, with a file -stamped copy to the Funding Lender, necessary to effectuate the intent of this Section 5.34, and the Borrower and the Governmental Lender hereby appoint the Funding Lender as their true and lawful attorney-in-fact to execute, deliver and, if applicable, file of record on behalf of the Borrower or the Governmental Lender, as is applicable, any such document or instrument (in such form as may be approved by and upon instruction of Tax Counsel) if either the Borrower or the Governmental Lender defaults in the performance of its obligation under this Section 5.34; provided, however, that the Funding Lender shall take no action under this Section 5.34 without first notifying the Borrower or the Governmental Lender in writing, as is applicable, of its intention to take such action and providing the Borrower or the Governmental 2021/10/12 City Council Post Agenda Page 222 of 620 53 4848-7324-3383/024036-0092 Lender, as is applicable, a reasonable opportunity to comply w ith the requirements of this Section 5.34. The Borrower irrevocably authorizes and directs the Funding Lender and any other agent designated by the Governmental Lender to make payment of such amounts from funds of the Borrower, if any, held by the Funding Lender, or any agent of the Governmental Lender or the Funding Lender. The Borrower further covenants and agrees that, pursuant to the requirements of Treasury Regulation Section 1.148-1(b), it (or any related person contemplated by such regulations) will not purchase interests in the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note. Section 5.35 Payment of Rebate. (a) Arbitrage Rebate. The Borrower agrees to take all steps necessary to compute and pay any rebatable arbitrage relating to the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note in accordance with Section 148(f) of the Code including: (i) Delivery of Documents and Money on Computation Dates. The Borrower will deliver to the Fiscal Agent, with a copy to the Funding Lender, within 55 days after each Computation Date: (A) with a copy to the Governmental Lender, a statement, signed by the Borrower, stating the Rebate Amount as of such Computation Date; (B) if such Computation Date is an Installment Computation Date, an amount that, together with any amount then held for the credit of the Rebate Fund, is equal to at least 90% of the Rebate Amount as of such Installment Computation Date, less any “previous rebate payments” made to the United States (as that term is used in Section 1.148-3(f)(1) of the Regulations), or (2) if such Computation Date is the final Computation Date, an amount that, together with any amount then held for the credit of the Rebate Fund, is equal to the Rebate Amount as of such final Computation Date, less any “previous rebate payments” made to the United States (as that term is used in Section 1.148-3(f)(1) of the Regulations); and (C) with a copy to the Governmental Lender, an Internal Revenue Service Form 8038-T properly signed and completed as of such Computation Date. (ii) Correction of Underpayments. If the Borrower shall discover or be notified as of any date that any payment paid to the United States Treasury pursuant to this Section 5.35 of an amount described in Section 5.35(a)(i)(A) or (B) above shall have failed to satisfy any requirement of Section 1.148-3 of the Regulations (whether or not such failure shall be due to any default by the Borrower, the Governmental Lender or the Funding Lender), the Borrower shall (1) pay to the Fiscal Agent (for deposit to the Rebate Fund) and cause the Fiscal Agent to pay to the United States Treasury from the Rebate Fund the underpayment of the Rebate A mount, together with any penalty and/or interest due, as specified in Section 1.148-3(h) of the Regulations, within 175 days after any discovery or notice and (2) deliver to the Fiscal Agent an Internal Revenue Service Form 8038-T completed as of such date. If such underpayment of the Rebate Amount, together with any penalty and/or interest due, is not paid to the United States Treasury in the amount and manner and by the time specified in the Regulations, the Borrower shall take such steps as are 2021/10/12 City Council Post Agenda Page 223 of 620 54 4848-7324-3383/024036-0092 necessary to prevent the Tax-Exempt Governmental Lender Note from becoming arbitrage bonds within the meaning of Section 148 of the Code. (iii) Records. The Borrower shall retain all of its accounting records relating to the funds established under this Borrower Loan Agreement and all calculations made in preparing the statements described in this Section 5.35 for at least six years after the later of the final maturity of the Tax-Exempt Governmental Lender Note or the date the Funding Loan is retired in full. (iv) Costs. The Borrower agrees to pay all of the fees and expenses of a nationally recognized Tax Counsel, the Rebate Analyst a certified public accountant and any other necessary consultant employed by the Borrower or the Funding Lender in connection with computing the Rebate Amount. (v) No Diversion of Rebatable Arbitrage. The Borrower will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any i nvestment arrangement with respect to the Gross Proceeds of the portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note which is not purchased at Fair Market Value or includes terms that the Borrower would not have included if such portion of the Funding Loan were not subject to Section 148(f) of the Code. (vi) Modification of Requirements. If at any time during the term of this Borrower Loan Agreement, the Governmental Lender, the Funding Lender or the Borrower desires to take any action which would otherwise be prohibited by the terms of this Section 5.35, such Person shall be permitted to take such action if it shall first obtain and provide to the other Persons named herein a Tax Counsel No Adverse Effect Opinion (as defined in the Funding Loan Agreement) with respect to such action. (b) Rebate Fund. The Borrower acknowledges that the Fiscal Agent shall establish and hold a separate fund designated as the “Rebate Fund” under the Funding Loan Agreement and deposit or transfer to the credi t of the Rebate Fund each amount delivered to the Fiscal Agent by the Borrower for deposit thereto and each amount directed by the Borrower to be transferred thereto, as further described in Section 7.8 of the Funding Loan Agreement. Section 5.36 Covenants under Funding Loan Agreement. The Borrower will fully and faithfully perform all the duties and obligations which the Governmental Lender has covenanted and agreed in the Funding Loan Agreement to cause the Borrower to perform and any duties and obligations which the Borrower is required in the Funding Loan Agreement to perform. The foregoing will not apply to any duty or undertaking of the Governmental Lender that by its nature cannot be delegated or assigned. Section 5.37 Continuing Disclosure Agreement. The Borrower and the Funding Lender shall enter into the Continuing Disclosure Agreement to provide for the continuing disclosure of information about the Funding Loan, the Borrower and other matters as specifically provided for in such agreement. 2021/10/12 City Council Post Agenda Page 224 of 620 55 4848-7324-3383/024036-0092 ARTICLE VI NEGATIVE COVENANTS Borrower hereby covenants and agrees as follows, which covenants shall remain in effect so long as any Borrower Payment Obligation or other obligation of Borrower under any of the other Borrower Loan Documents or the Funding Loan Documents remains outstanding or u nperformed. Borrower covenants and agrees that it will not, directly or indirectly: Section 6.1 Management Agreement. Without first obtaining the Funding Lender’s prior Written Consent, enter into the Management Agreement, and thereafter the Borrower shall not, without the Funding Lender’s prior Written Consent (which consent shall not be unreasonably withheld) and subject to the Regulatory Agreement: (i) surrender, terminate or cancel the Management Agreement or otherwise replace the Manager or enter into any other management agreement; (ii) reduce or consent to the reduction of the term of the Management Agreement; (iii) increase or consent to the increase of the amount of any charges under the Management Agreement; (iv) otherwise modify, change, supplement, alter or amend in any material respect, or waive or release in any material respect any of its rights and remedies under, the Management Agreement; or (v) suffer or permit the occurrence and continuance of a default beyond any applicable cure period under the Management Agreement (or any successor management agreement) if such default permits the Manager to terminate the Management Agreement (or such successor management agreement); provided, however, the Funding Lender’s prior Written Consent shall not be required for any extension or renewal of the Management Agreement on the substantially the same terms and conditions. Section 6.2 Dissolution. Dissolve or liquidate, in whole or in part, merge with or consolidate into another Person. Section 6.3 Change in Business or Operation of Property. Enter into any line of business other than the ownership and operation of the Project, or make any material change in the scope or nature of its business objectives, purposes or operations, or undertake or participate in activities other than the continuance of its present business and activities incidental or related thereto or otherwise cease to operate the Project as a multi -family property or terminate such business for any reason whatsoever (other than temporary cessation in connection with construction or rehabilitation, as appropriate, of the Project). Section 6.4 Debt Cancellation. Cancel or otherwise forgive or release any claim or debt owed to the Borrower by a Person, except for adequate consideration or in the ordinary course of the Borrower’s business in its reasonable judgment. Section 6.5 Assets. Purchase or own any real property or personal property incidental thereto other than the Project. Section 6.6 Transfers. Make, suffer or permit the occurrence of any Transfer other than a transfer permitted under the Security Instrument and Section 10 of the Regulatory Agreement, nor transfer any material License required for the operation of the Project. Section 6.7 Debt. Other than as expressly approved in writing by the Funding Lender, create, incur or assume any indebtedness for borrowed money (including subordinate debt) whether 2021/10/12 City Council Post Agenda Page 225 of 620 56 4848-7324-3383/024036-0092 unsecured or secured by all or any portion of the Project or interest therein or in the Borrower or any partner thereof (including subordinate debt) other than (i) the Borrower Payment Obligations, (ii) the Subordinate Debt, (iii) secured indebtedness incurred pursuant to or permitted by the Borrower Loan Documents and the Funding Loan Documents, (iv) trade payables incurred in the ordinary course of business, (v) deferred developer fees, and (vi) unsecured loans payable solely from cash flow made by a partner of the Borrower as set forth in the Partnership Agreement. Section 6.8 Assignment of Rights. Without the Funding Lender’s prior Written Consent, attempt to assign the Borrower’s rights or interest under any Borrower Loan Document or Funding Loan Document in contravention of any Borrower Loan Document or Funding Loan Document. Section 6.9 Principal Place of Business. Change its principal place of business without providing 30 days’ prior Written Notice of the change to the Funding Lender and the Servicer. Section 6.10 Partnership Agreement. Without the Funding Lender’s prior Written Consent (which consent shall not be unreasonably withheld) surrender, terminate, cancel, modify, change, supplement, alter or amend in any material respect, or waive or release in any material respect (except as allowed by the Security Instrument), any of its rights or remedies under the Partnership Agreement; provided, however, the consent of Funding Lender is not required for an amendment of the Partnership Agreement resulting solely from the “Permitted Transfer” of partnership interests of Borrower as defined in and permitted by the Security Instrument. Section 6.11 ERISA. Maintain, sponsor, contribute to or become obligated to contribute to, or suffer or permit any ERISA Affiliate of the Borrower to, maintain, sponsor, contribute to or become obligated to contribute to, any Plan, or permit the assets of the Borrower to become “plan assets,” whether by operation of law or under regulations promulgated under ERISA. Section 6.12 No Hedging Arrangements. Without the prior Written Consent of the Funding Lender or unless otherwise required by this Borrower Loan Agreement, the Borrower will not enter into or guarantee, provide security for or otherwise undertake any form of contractual obligation with respect to any interest rate swap, interest rate cap or other arrangement that has the effect of an interest rate swap or interest rate cap or that otherwise (directly or indirectly, derivatively or synthetically) hedges interest rate risk associated with being a debtor of variable rate debt or any agreement or other arrangement to enter into any of the above on a future date or after the occurrence of one or more events in the future. Section 6.13 Loans and Investments; Distributions; Related Party Payments. (a) Without the prior Written Consent of Funding Lender in each instance, Borrower shall not (i) lend money, make investments, or extend credit, other than in the ordinary course of its business as presently conducted; or (ii) repurchase, redeem or otherwise acquire any interest in Borrower, any Borrower Affiliate or any other Person owning an interest, directly or indirectly, in Borrower, or make any distribution, in cash or in kind, in respect of interests in Borrower, any Borrower Affiliate or any other Person owning an interest, directly or indirectly, in Borrower (except to the extent permitted by the Security Instrument and subject to the limitations set forth in Section 5.27 hereof). (b) Disbursements for fees and expenses of any Borrower Affiliate and devel oper fees (however characterized) will only be paid to the extent that such fee or expense bears a 2021/10/12 City Council Post Agenda Page 226 of 620 57 4848-7324-3383/024036-0092 proportionate relationship to the percentage of completion of the construction or rehabilitation, as the case may be, of the Improvements, as determined by t he Construction Consultant, and only after deducting the applicable Retainage. Except as otherwise permitted hereunder or by the Funding Lender, no Disbursements for the Developer Fee or any “deferred developer fees” shall be made prior to the Conversion Date other than in accordance with the Approved Developer Fee Schedule. Section 6.14 Amendment of Related Documents or CC&R’s. Without the prior Written Consent of Funding Lender in each instance, except as provided herein or in the Construction Funding Agreement, Borrower shall not enter into or consent to any amendment, termination, modification, or other alteration of any of the Related Documents or any of the CC&R’s (including, without limitation, those contained in this Borrower Loan Agreement, any Architect’s Agre ement or Engineer’s Contract, any Construction Contract, and any Management Agreement, but excluding the Partnership Agreement, which is covered by Section 6.10), or any assignment, transfer, pledge or hypothecation of any of its rights thereunder, if any. Section 6.15 Personal Property. Borrower shall not install materials, personal property, equipment or fixtures subject to any security agreement or other agreement or contract wherein the right is reserved to any Person other than Borrower to remove or repossess any such materials, equipment or fixtures, or whereby title to any of the same is not completely vested in Borrower at the time of installation, without Funding Lender’s prior Written Consent; provided, however, that this Section 6.15 shall not apply to laundry equipment or other equipment that is owned by a third -party vendor and commercial tenants. Section 6.16 Fiscal Year. Without Funding Lender’s Written Consent, which shall not be unreasonably withheld, neither Borrower nor General Partner shall change the times of commencement or termination of its fiscal year or other accounting periods, or change its methods of accounting, other than to conform to GAAP. Section 6.17 Publicity. Neither Borrower nor General Partner shall issue any publicity release or other communication to any print, broadcast or on-line media, post any sign or in any other way identify Funding Lender or any of its Affiliates as the source of the financing provided for herein, without the prior written approval of Funding Lender in each instance (provided that no thing herein shall prevent Borrower or General Partner from identifying Funding Lender or its Affiliates as the source of such financing to the extent that Borrower or General Partner are required to do so by disclosure requirements applicable to publicly held companies). With the exception of Equity Investor signage posted on the Project, Borrower and General Partner agree that no sign shall be posted on the Project in connection with the construction or rehabilitation of the Improvements unless such sign identifies Citigroup and its affiliates as the source of the financing provided for herein or Funding Lender consents to not being identified on any such sign. Section 6.18 Subordinate Loan Documents. Without Funding Lender’s prior written consent, Borrower will not surrender, terminate, cancel, modify, change, supplement, alter, amend, waive, release, assign, transfer, pledge or hypothecate any of its rights or remedies under the Subordinate Loan Documents. ARTICLE VII RESERVED 2021/10/12 City Council Post Agenda Page 227 of 620 58 4848-7324-3383/024036-0092 ARTICLE VIII DEFAULTS Section 8.1 Events of Default. Each of the following events shall constitute an “Event of Default” under this Borrower Loan Agreement: (a) failure by the Borrower to pay any Borrower Loan Payment in the manner and on the date such payment is due in accordance with the terms and provisions of the Borrow er Notes, or the failure by the Borrower to pay any Additional Borrower Payment on the date such payment is due in accordance with the terms and provisions of the Borrower Notes, the Security Instrument, this Borrower Loan Agreement or any other Borrower Loan Document; (b) failure by or on behalf of the Borrower to pay when due any amount (other than as provided in subsection (a) above or elsewhere in this Section 8.1) required to be paid by the Borrower under this Borrower Loan Agreement, the Borrower Notes, the Security Instrument or any of the other Borrower Loan Documents or Funding Loan Documents, including a failure to repay any amounts that have been previously paid but are recovered, attached or enjoined pursuant to any insolvency, receivership, liquidation or similar proceedings, which default remains uncured for a period of five (5) days after Written Notice thereof shall have been given to the Borrower; (c) an Event of Default, as defined in the Borrower Notes, the Security Instrument or any other Borrower Loan Document, occurs (or to the extent an “Event of Default” is not defined in any other Borrower Loan Document, any default or breach by the Borrower or any Guarantor of its obligations, covenants, representations or warranties under such Borrower Loan Document occurs and any applicable notice and/or cure period has expired); (d) any representation or warranty made by any of the Borrower, the Guarantor or the General Partner in any Borrower Loan Document or Funding Loan Document to which it is a party, or in any report, certificate, financial statement or other instrument, agreement or document furnished by the Borrower, the Guarantor or the General Partner in connection with any Borrower Loan Document or Funding Loan Document, shall be false or misleading in any material respect as of the Closing Date; (e) the Borrower shall make a general assignment for the benefit of creditors, or shall generally not be paying its debts as they become due; (f) the Borrower Controlling Entity shall make a general assignment for the benefit of creditors, shall generally not be paying its debts as they become due, or an Act of Bankruptcy with respect to the Borrower Controlling Entity shall occur, unless in all cases the Borrower Controlling Entity is replaced with a substitute Borrowe r Controlling Entity that satisfies the requirements of Section 21 of the Security Instrument; which, in the case of a nonprofit Borrower Controlling Entity, may be replaced within sixty (60) days of such event with another nonprofit Borrower Controlling Entity acceptable to the Funding Lender, in which case no Event of Default shall be deemed to have occurred; (g) any portion of Borrower Deferred Equity to be made by Equity Investor and required for (i) completion of the construction or rehabilitation, as the case may be, of the Improvements, (ii) the satisfaction of the Conditions of Conversion or (iii) the operation of the 2021/10/12 City Council Post Agenda Page 228 of 620 59 4848-7324-3383/024036-0092 Improvements, is not received in accordance with the Partnership Agreement (and subject to the terms and conditions as set forth therein) after the expiration of all applicable notice and cure periods; (h) the failure by Borrower or any ERISA Affiliate of Borrower to comply in all respects with ERISA, or the occurrence of any other event (with respect to the failure of Borrower or any ERISA Affiliate to pay any amount required to be paid under ERISA or with respect to the termination of, or withdrawal of Borrower or any ERISA Affiliate from, any employee benefit or welfare plan subject to ERISA) the effect of which is to impose upon Borrower (aft er giving effect to the tax consequences thereof) for the payment of any amount in excess of Fifty Thousand Dollars ($50,000); (i) a Bankruptcy Event shall occur with respect to Borrower, any General Partner or Guarantor, or there shall be a change in the asse ts, liabilities or financial position of any such Person which has a material adverse effect upon the ability of such Person to perform such Person’s obligations under this Borrower Loan Agreement, any other Borrower Loan Document or any Related Document, provided that any such Bankruptcy Event with respect to a Guarantor shall not constitute an Event of Default: (i) if such Bankruptcy Event occurs on or after the date upon which the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor), or (ii) if such Bankruptcy Event occurs prior to the date upon which the Guaranty terminates in accordance with its terms (or t he date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage credit standards for principals and acceptable to the Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from the Funding Lender, and provided further that any such Bankruptcy Event with respect to the Managing Gen eral Partner shall not constitute an Event of Default if the Managing General Partner is replaced with a substitute non -profit managing general partner that satisfies the requirements of Section 21 of the Security Instrument and is acceptable to Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from Funding Lender; (j) all or any part of the property of Borrower is attached, levied upon or otherwise seized by legal process, and such attachment, levy or seizure is no t quashed, stayed or released: (i) prior to completion of the construction or rehabilitation, as the case may be, of the Improvements, within ten (10) days of the date thereof or (ii) after completion of the construction or rehabilitation, as the case may be, of the Improvements, within thirty (30) days of the date thereof; (k) subject to Section 10.16 hereof, Borrower fails to pay when due any monetary obligation (other than pursuant to this Borrower Loan Agreement) to any Person in excess of $100,000, and such failure continues beyond the expiration of any applicable cure or grace periods; (l) any material litigation or proceeding is commenced before any Governmental Authority against or affecting Borrower, any General Partner or Guarantor, or property of Borrowe r, any General Partner or Guarantor, or any part thereof, and such litigation or proceeding is not defended diligently and in good faith by Borrower, any General Partner or Guarantor, as applicable, provided that any such material litigation or proceeding against a Guarantor shall not constitute an Event of Default: (i) if such material litigation is commenced on or after the date upon which the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have 2021/10/12 City Council Post Agenda Page 229 of 620 60 4848-7324-3383/024036-0092 terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor), or (ii) if such material litigation or proceeding is commenced prior to the date upon which the Guaranty terminates in accordance with its terms (or the date upon whi ch all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage credit standards for principals and acceptable to the Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from the Funding Lender, and provided further that any such material litigation or proceeding against the Managing General Partner shall not constitute an Event of Default if the Managing General Partner is replaced with a substitute non-profit managing general partner that satisfies the requirements of Section 21 of the Security Instrument and is acceptable to Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from Funding Lender; (m) a final judgment or decree for monetary damages in excess of $50,000 or a monetary fine or penalty (not subject to appeal or as to which the time for appeal has expired) is entered against Borrower, any General Partner or Guarantor by any Governmental Authority, and such judgment, decree, fine or penalty is not paid and discharged or stayed or bonded over to the satisfaction of the Funding Lender (i) prior to completion of the construction or rehabilitation, as the case may be, of the Improvements, within ten (10) days after entry thereof or (ii) after completion of the construction or rehabilitation, as the case may be, of the Improvements, within thirty (30) days after entry thereof (or such longer period as may be permitted for payment by the terms of such judgment, fine or penalty) , provided that any such judgment, decree, fine or penalty against a Guarantor shall not constitute an Event of Default: (i) if such judgment, decree, fine or penalty is entered on or after the date upon which the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor), or (ii) if such judgment, decree, fine or penalty is entered prior to the date upon which the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage credit standards for principals and acceptable to the Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from the Funding Lender, and provided further that any such judgment, decree, fine or penalty against the managing general partner shall not constitute an Event of Default if the mana ging general partner is replaced with a substitute non-profit managing general partner that satisfies the requirements of Section 21 of the Security Instrument and is acceptable to Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from Funding Lender; (n) a final, un-appealable and uninsured money judgment or judgments, in favor of any Person other than a Governmental Authority, in the aggregate sum of $50,000 or more shall be rendered against Borrower, any General Partner or Guarantor, or against any of their respective assets, that is not paid, superseded or stayed (i) prior to completion of the construction or rehabilitation, as the case may be, of the Improvements, within ten (10) days after entry thereof or (ii) after completion of the construction or rehabilitation, as the case may be, of the Improvements, within thirty (30) days after entry thereof (or such longer period as may be permitted for payment by the terms of such judgment); or any levy of execution, writ or warrant of attachment, or similar process, is entered or filed against Borrower, any General Partner or Guarantor, or against any of their respective assets (that is likely to have a material adverse effect upon the ability of Borrower, any General Partner or Guarantor to perform their respective obligations under this Borrower Loan Agreement, any other Borrower Loan Document or any Related Document), and such judgment, 2021/10/12 City Council Post Agenda Page 230 of 620 61 4848-7324-3383/024036-0092 writ, warrant or process shall remain unsatisfied, unsettled, unvacated, unhanded and unstayed (i) prior to completion of the construction or rehabilitation, as the case may be, of the Improvements, for a period of ten (10) days or (ii) after completion of the construction or rehabilitation, as the case may be, of the Improvements, for a period of thirty (30) days, or in any event later than five (5) Business Days prior to the date of any proposed sale thereunder, provided that any such judgment, levy, writ, warrant, attachment or similar process against a Guarantor shall not constitute an Event of Default: (i) if such judgment, levy, writ, warrant, attachment or similar process is entered on or after the date upon which the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor), or (ii) if such judgment, levy, writ, warrant, attachment or similar process is entered prior to the date upon which the Guaranty terminates in accordance with its ter ms (or the date upon which all of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage credit standards for principals and acceptable to the Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from the Funding Lender, and provided further that any such judgment, levy, writ, warrant, attachment or similar process against the managing general partner shall not constitute an Event of Default if the managing general partner is replaced with a substitute non -profit managing general partner that satisfies the requirements of Section 21 of the Security Instrument and is acceptable to Funding Lender in its sole and absolute discretion within thirty (30) days after notice thereof from Funding Lender; (o) the inability of Borrower to satisfy any condition for the receipt of a Disbursement hereunder (other than an Event of Default specifically addressed in this Section 8.1) and failure to resolve the situation to the satisfaction of Funding Lender for a period in excess of thirty (30) days after Written Notice from Funding Lender unless (i) such inability shall have been caused by conditions beyond the control of Borrower, including, without limitation, acts of God or the elements, fire, strikes and disruption of shipping; (ii) Borrower shall have made adequate provision, acceptable to Funding Lender, for the protection of materials stored on-site or off-site and for the protection of the Improvements to the extent then constructed against deterioration and against other loss or damage or theft; (iii) Borrower shall furnish to Funding Lender satisfactory evidence that such cessation of construction or rehabilitation will not adversely affect or interfere with the rights of Borrower under labor and materials contracts or subcontracts relating to the construction or operation of the Improvements; and (iv) Borrower shall furnish to Funding Lender satisfactory evidence that the completion of the construction or rehabilitation of the Improvements can be accomplished by the Completion Date; (p) the construction or rehabilitation of the Improvements is abandoned or halted prior to completion for any period of thirty (30) consecutive days , provided that such cessation of construction or rehabilitation shall not constitute an Event of Default if (i) such cessation of construction shall have been caused by conditions beyond the control of Borrower, including, without limitation, acts of God or the elements, acts of terrorism, acts of war, fire, strikes and disruption of shipping, Borrower notifies Funding Lender of such condition in writing within 15 days, and such cessation does not exceed an aggregate period of sixty (60) consecutive days; (ii) Borrower shall have made adequate provision, acceptable to Funding Lender, for the protection of materials stored on-site or off-site and for the protection of the Improvements to the extent then constructed or rehabilitated against deterioration and against other loss or damage or theft; (iii) Borrower shall furnish to Funding Lender satisfactory evidence that such cessation of construction will not adversely affect or interfere with the rights of Borrower under labor and materials contracts 2021/10/12 City Council Post Agenda Page 231 of 620 62 4848-7324-3383/024036-0092 or subcontracts relating to the construction or operation of the Improvements; and (iv) Borrower shall furnish to Funding Lender satisfactory evidence that the completion of the construction or rehabilitation; (q) Borrower shall fail to keep in force and effect any material permit, license, consent or approval required under this Borrower Loan Agreement, or any Governmental Authority with jurisdiction over the Mortgaged Property or the Project orders or requires that construction or rehabilitation of the Improvements be stopped, in whole or in part, or that any required approval, license or permit be withdrawn or suspended, and the order, requirement, withdrawal or suspension remains in effect for a period of thirty (30) days; (r) failure by the Borrower to Substantially Complete the construction or rehabilitation, as the case may be, of the Improvements in accordance with this Borrower Loan Agreement on or prior to the Substantial Completion Date; (s) failure by Borrower to complete the construction or rehabilitation, as the case may be, of the Improvements in accordance with this Borrower Loan Agreement on or prior to the Completion Date; (t) failure by Borrower to satisfy the Conditions to Conversion on or before the Outside Conversion Date or the Extended Outside Conversion Date, if applicable; (u) failure by any Subordinate Lender to disburse the proceeds of its Subordinate Loan in approximately such amounts and at approximately such times as set forth in the Cost Breakdown and in the Subordinate Loan Documents; (v) an “Event of Default” or “Default” (as defined in the applicable agreement) shall occur under any of the Subordinate Loan Documents, after the expiration of all applicable notice and cure periods; or (w) Borrower fails to obtain all grading, foundation, building and all other construction permits, licenses and authorizations from all applicable Governmental Authorities or third parties necessary for the completion of the construction or rehabilitation, as the case may b e, of the Improvements, and the operation of, and access to, the Project, prior to the commencement of any work for which such permit, license or authorization is required; or (x) any failure by the Borrower to perform or comply with any of its obligations under this Borrower Loan Agreement (other than those specified in this Section 8.1), as and when required, that continues for a period of thirty (30) days after written notice of such failure by Funding Lender or the Servicer on its behalf to the Borrower (with a copy to the limited partner of the Borrower); provided, however, if such failure is susceptible of cure but cannot reasonably be cured within such thirty (30) day period, and the Borrower shall have commenced to cure such failure within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for an additional period of time as is reasonably necessary for the Borrower in the exercise of due diligence to cure such fa ilure, such additional period not to exceed sixty (60) days. However, no such notice or grace period shall apply to the extent such failure could, in the Funding Lender’s judgment, absent immediate exercise by the Funding Lender of a right or remedy under this Borrower Loan Agreement, result in harm to the 2021/10/12 City Council Post Agenda Page 232 of 620 63 4848-7324-3383/024036-0092 Funding Lender, impairment of the Borrower Notes or this Borrower Loan Agreement or any security given under any other Borrower Loan Document. Additionally, except with respect to any payment due on the Borrower Notes and Additional Borrower Payments, (a) any Default or Event of Default that occurs by reason of acts or omissions of a general partner of Borrower shall be deemed cured if such general partner of Borrower is replaced, within thirty (30) days after notice to Borrower and the Equity Investor of such Default or Event of Default by Funding Lender, by a substitute general partner approved by Funding Lender in its sole discretion, except if such replacement is an affiliate of the Equity Investor, no such approval by Funding Lender shall be required, provided in either case such replacement is approved by the Governmental Lender in the manner and to the extent provided in the Regulatory Agreement and such substitute general partner timely cures such Default or Event of Default; and (b) any Default or Event of Default that occurs which can be cured by replacement of any guarantor of the Borrower Loan shall be deemed cured if such guarantor is replaced by a substitute guarantor approved by Funding Lender in its sole discretion, which substitute guarantor executes such guaranty agreements requested by Funding Lender within thirty (30) days after notice to Borrower of such Default or Event of Default by Funding Lender. Section 8.2 Remedies. Section 8.2.1 Acceleration. Upon the occurrence of an Event of Default (other than an Event of Default described in paragraph (e), (f) or (i) of Section 8.1) and at any time and from time to time thereafter, as long as such Event of Default continues to exist, in addition to any other rights or remedies available to the Governmental Lender pursuant to the Borrower Loan Documents or at law or in equity, the Funding Lender may, take such action (whether directly or by directing the actions of the Fiscal Agent), without notice or dema nd, as the Funding Lender deems advisable to protect and enforce its rights against the Borrower and in and to the Project, including declaring the Borrower Payment Obligations to be immediately due and payable (including, without limitation, the principal of, Prepayment Premium, if any, and interest on and all other amounts due on the Borrower Notes to be immediately due and payable), without notice or demand, and apply such payment of the Borrower Payment Obligations in any manner and in any order determined by Funding Lender, in Funding Lender’s sole and absolute discretion; and upon any Event of D efault described in paragraph (e), (f) or (i) of Section 8.1, the Borrower Payment Obligations shall become immediately due and payable, without notice or demand, and the Borrower hereby expressly waives any such notice or demand, anything contained in any Borrower Loan Document to the contrary notwithstanding. Notwithstanding anything herein to the contrary, enforcement of remedies hereunder and under the Funding Loan Agreement shall be controlled by the Funding Lender. Section 8.2.2 Remedies Cumulative. Upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to the Funding Lender against the Borrower under the Borrower Loan Documents or at law or in equity may be exercised by the Funding Lender or the Fiscal Agent, at any time and from time to time, whether or not all or any of the Borrower Payment Obligations shall be declared due and payable, and whether or not the Funding Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Borrower Loan Documents. Any such actions taken by the Funding Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as the Funding Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of the Funding Lender 2021/10/12 City Council Post Agenda Page 233 of 620 64 4848-7324-3383/024036-0092 permitted by law, equity or contract or as set forth in the Borrower Loan Documents. Without limiting the generality of the foregoing, the Borrower agrees that if an Event of Default is continuing, all Liens and other rights, remedies or privileges provided to the Funding Lender shall remain in full force and effect until they have exhausted all of its remedies, the Security Instrument has been foreclosed, the Project has been sold and/or otherwise realized upon satisfaction of the Borrower Payment Obligations or the Borrower Payment Obligations has been paid in full. To the extent permitted by applicable law, nothing contained in any Borrower Loan Document shall be construed as requiring the Funding Lender to resort to any portion of the Project for the satisfaction of any of the Borrower Payment Obligations in preference or priority to any other portion, and the Funding Lender may seek satisfaction out of the entire Project or any part thereof, in its absolute discretion. Notwithstanding any provision herein to the contrary, the Governmental Le nder, the Fiscal Agent and the Funding Lender agree that any cure of any default made or tendered by the Equity Investor under the Borrower Loan Documents or the Funding Loan Documents shall be deemed to be a cure by the Borrower and shall be accepted or rejected on the same basis as if made or tendered by the Borrower. Section 8.2.3 Delay. No delay or omission to exercise any remedy, right, power accruing upon an Event of Default, or the granting of any indulgence or compromise by the Funding Lender or the Fiscal Agent shall impair any such remedy, right or power hereunder or be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Potential Default or Event of Defa ult shall not be construed to be a waiver of any subsequent Potential Default or Event of Default or to impair any remedy, right or power consequent thereon. Notwithstanding any other provision of this Borrower Loan Agreement, the Funding Lender and the Fiscal Agent reserve the right to seek a deficiency judgment or preserve a deficiency claim, in connection with the foreclosure of the Security Instrument to the extent necessary to foreclose on the Project, the Rents, the funds or any other collateral. Section 8.2.4 Set Off; Waiver of Set Off. Upon the occurrence of an Event of Default, Funding Lender may, at any time and from time to time, without notice to Borrower or any other Person (any such notice being expressly waived), set off and appropriate and apply (against and on account of any obligations and liabilities of the Borrower to the Funding Lender or the Fiscal Agent arising under or connected with this Borrower Loan Agreement and the other Borrower Loan Documents and the Funding Loan Documents, irrespective of whether or not the Funding Lender shall have made any demand therefor, and although such obligations and liabilities may be contingent or unmatured), and the Borrower hereby grants to the Funding Lender, as security for the Borrower Payment Obligations, a security interest in, any and all deposits (general or special, including but not limited to Debt evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Debt at any time held or owing by the Fund ing Lender to or for the credit or the account of the Borrower. Section 8.2.5 Assumption of Obligations. In the event that the Funding Lender or its assignee or designee shall become the legal or beneficial owner of the Project by foreclosure or deed in lieu of foreclosure, such party shall succeed to the rights and the obligations of the Borrower under this Borrower Loan Agreement, the Borrower Notes, the Regulatory Agreement, and any other Borrower Loan Documents and Funding Loan Documents to which the Borrower is a party. Such assumption shall be effective from and after the effective date of such acquisition and shall be made 2021/10/12 City Council Post Agenda Page 234 of 620 65 4848-7324-3383/024036-0092 with the benefit of the limitations of liability set forth therein and without any liability for the prior acts of the Borrower. Section 8.2.6 Accounts Receivable. Upon the occurrence of an Event of Default, Funding Lender shall have the right, to the extent permitted by law, to impound and take possession of books, records, notes and other documents evidencing Borrower’s accounts, accounts receivable and other claims for payment of money, arising in connection with the Project, and to make direct collections on such accounts, accounts receivable and claims for the benefit of Funding Lender. Section 8.2.7 Defaults under Other Documents. Funding Lender shall have the right to cure any default under any of the Related Documents and the Subordinate Loan Documents, but shall have no obligation to do so. Section 8.2.8 Abatement of Disbursements. Notwithstanding any provision to the contrary herein or any of the other Borrower Loan Documents or the Funding Loan Documents, Funding Lender’s obligation to make further Disbursements shall abate (i) during the continuance of any Potential Default, (ii) after any disclosure to Funding Lender of any fact or circumstance that, absent such disclosure, would cause any representation or warranty of Borrower to fail to be true and correct in all material respects, unless and until Funding Lender elects to permit further Disbursements notwithstanding such event or circumstance; and (iii) upon the occurrence of any Event of Default. Section 8.2.9 Completion of Improvements. Upon the occurrence of any Event of Default, Funding Lender shall have the right to cause an independent contractor selected by Funding Lender to enter into possession of the Project and to perform any and all work and labor necessary for the completion of the Project substantially in accordance with the Plans and Specifications, if any, and to perform Borrower’s obligations under this Borrower Loan Agreement. All sums expended by Funding Lender for such purposes shall be deemed to have been disbursed to and borrowed by Borrower and shall be secured by the Security Documents. Section 8.2.10 Right to Directly Enforce. Notwithstanding any other provision hereof to the contrary, the Funding Lender shall have the right to directly enforce all rights and remedies hereunder with or without involvement of the Governmental Lender or the Fiscal Agent, provided that only the Governmental Lender may enforce the Unassigned Rights. In the event that any of the provisions set forth in this Section 8.2.10 are inconsistent with the covenants, terms and conditions of the Security Instrument, the covenants, terms and conditions of the Security Instrument shall prevail. Section 8.2.11 Power of Attorney. Effective upon the occurrence of an Event of Default, and continuing until and unless such Event of Default is cured or waived, Borrower hereby constitutes and appoints Funding Lender, or an independent contractor selected by Funding Lender, as its true and lawful attorney-in-fact with full power of substitution, for the purposes of completion of the Project and performance of Borrower’s obligations under this Borrower Loan Agreement in the name of Borrower, and hereby empowers said attorney-in-fact to do any or all of the following upon the occurrence and continuation of an Event of Default (it being understood and agreed that said power of attorney shall be deemed to be a power coupled with an interest which cannot be revoked until full payment and performance of all obligations under this Borrower Lo an Agreement and the other Borrower Loan Documents and the Funding Loan Documents): 2021/10/12 City Council Post Agenda Page 235 of 620 66 4848-7324-3383/024036-0092 (a) to use any of the funds of Borrower or General Partner, including any balance of the Borrower Loan, as applicable, and any funds which may be held by Funding Lender for Borrower (including all funds in all deposit accounts in which Borrower has granted to Funding Lender a security interest), for the purpose of effecting completion of the construction or rehabilitation, as the case may be, of the Improvements, in the manner c alled for by the Plans and Specifications; (b) to make such additions, changes and corrections in the Plans and Specifications as shall be necessary or desirable to complete the Project in substantially the manner contemplated by the Plans and Specifications; (c) to employ any contractors, subcontractors, agents, architects and inspectors required for said purposes; (d) to employ attorneys to defend against attempts to interfere with the exercise of power granted hereby; (e) to pay, settle or compromise all existing bills and claims which are or may be liens against the Project or the Improvements, or may be necessary or desirable for the completion of the construction or rehabilitation, as the case may be, of the Improvements, or clearance of objections to or encumbrances on title; (f) to execute all applications and certificates in the name of Borrower, which may be required by any other construction contract; (g) to prosecute and defend all actions or proceedings in connection with the Project and to take such action, require such performance and do any and every other act as is deemed necessary with respect to the completion of the construction or rehabilitation, as the case may be, of the Improvements, which Borrower might do on its own behalf; (h) to let new or additional contracts to the extent not prohibited by their existing contracts; (i) to employ watchmen and erect security fences to protect the Project from injury; and (j) to take such action and require such performance as it deems necessary under any of the bonds or insurance policies to be furnished hereunder, to make settlements and compromises with the sureties or insurers thereunder, and in connection therewith to execute instruments of release and satisfaction. It is the intention of the parties hereto that upon the occurrence and continuance of an Event of Default, rights and remedies may be pursued pursuant to the terms of the Borrower Loan Documents and the Funding Loan Documents. The parties hereto acknowledge that, among the possible outcomes to the pursuit of such remedies, is the situation where the Funding Lender assignees or designees become the owner of the Project and assume the obligations identified above, and the Borrower Notes, the Borrower Loan and the other Borrower Loan Documents and Funding Loan Documents remain outstanding. 2021/10/12 City Council Post Agenda Page 236 of 620 67 4848-7324-3383/024036-0092 ARTICLE IX SPECIAL PROVISIONS Section 9.1 Sale of Notes and Secondary Market Transaction. Section 9.1.1 Cooperation. Subject to the restrictions of Section 2.4 of the Funding Loan Agreement, at the Funding Lender’s or the Servicer’s request (to the extent not already required to be provided by the Borrower under this Borrower Loan Agreement), the Borrower shall use reasonable efforts to satisfy the market standards to which the Funding Lender or the Servicer customarily adheres or which may be reasonably required in the marketplace or by the Funding Lender or the Servicer in connection with one or more sales or assignm ents of all or a portion of the Governmental Lender Notes or participations therein or securitizations of single or multi -class securities (the “Securities”) secured by or evidencing ownership interests in all or a portion of the Governmental Lender Notes (each such sale, assignment and/or securitization, a “Secondary Market Transaction”); provided that neither the Borrower nor the Governmental Lender shall incur any third party or other out-of-pocket costs and expenses in connection with a Secondary Market Transaction, including the costs associated with the delivery of any Provided Information or any opinion required in connection therewith, and all such costs shall be paid by the Funding Lender or the Servicer, and shall not materially modify Borrower’s rights or obligations. Without limiting the generality of the foregoing, the Borrower shall, so long as the Borrower Loan is still outstanding: (a) (i) provide such financial and other information with respect to the Borrower Loan, and with respect to the Project, the Borrower, the Manager, the contractor of the Project or the Borrower Controlling Entity, (ii) provide financial statements, audited, if available, relating to the Project with customary disclaimers for any forward looking statements or lack of a udit, and (iii), at the expense of the Funding Lender or the Servicer, perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports (Phase I’s and, if appropriate, Phase II’s), engineering reports and other due diligence investigations of the Project, as may be reasonably requested from time to time by the Funding Lender or the Servicer or the Rating Agencies or as may be necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act requirements (the items provided to the Funding Lender or the Servicer pursuant to this paragraph (a) being called the “Provided Information”), together, if customary, with appropriate verification of and/or consents (including, without limitation, auditor consents) to include or incorporate by reference the Provided Information in an offering document or otherwise provide the Provided Information to investors and potential investors or opinions of counsel of independent attorneys acceptable to the Funding Lender or the Servicer and the Rating Agencies; (b) make such representations and warranties as of the closing date of any Secondary Market Transaction with respect to the Project, the Borrower, the Borrower Loan Documents and the Funding Loan Documents reasonably acceptable to the Funding Lender or the Servicer, consistent with the facts covered by such representations and warranties as they exist on the date thereof; and (c) execute such amendments to the Borrower Loan Documents and the Funding Loan Documents to accommodate such Secondary Market Transaction so long as such amendment does not affect the material economic terms of the Borrower Loan Documents and the Funding Loan Documents and is not otherwise adverse to the Borrower in its reasonable discretion. 2021/10/12 City Council Post Agenda Page 237 of 620 68 4848-7324-3383/024036-0092 Section 9.1.2 Use of Information. The Borrower understands that certain of the Provided Information and the required records may be included in disclosure documents in connection with a Secondary Market Transaction, including a prospectus or private placement memorandum (each, a “Secondary Market Disclosure Document”), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies and service providers or other parties relating to the Secondary Market Transaction. In the event that the Secondary Market Disclosure Document is required to be revised, the Borrower shall cooperate, subject to Section 9.1.1(c) hereof, with the Funding Lender and the Servicer in updating the Provided Information or required records for inclusion or summary in the Secondary Market Disclosure Document or for other use reasonably required in connection with a Secondary Market Transaction by providing all current information pertaining to the Borrower and the Projec t necessary to keep the Secondary Market Disclosure Document accurate and complete in all material respects with respect to such matters. The Borrower hereby consents to any and all such disclosures of such information. The Borrower and the Funding Lender agree and acknowledge that the Governmental Lender undertakes no obligation hereunder or in the Funding Loan Agreement to participate in the preparation of, or to approve, any Secondary Market Disclosure Document. Section 9.1.3 Borrower Obligations Regarding Secondary Market Disclosure Documents. In connection with a Secondary Market Disclosure Document, the Borrower shall provide, or in the case of a Borrower-engaged third party such as the Manager, cause it to provide, information reasonably requested by the Funding Lender pertaining to the Borrower, the Project or such third party (and portions of any other sections reasonably requested by the Funding Lender pertaining to the Borrower, the Project or the third party). The Borrower shall, if requested by the Funding Lender and the Servicer, certify in writing that the Borrower has carefully examined those portions of such Secondary Market Disclosure Document, pertaining to the Borrower, the Project or the Manager, and such portions (and portions of any other sections reasonably requested and pertaining to the Borrower, the Project or the Manager) do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; provided that the Borrower shall not be required to make any representations or warranties regarding any Provided Information obtained from a third party except with respect to information it provided to such parties. Furthermore, the Borrower hereby indemnifies the Funding Lender and the Servicer for any Liabilities to which any such parties may become subject to the extent such Liabilities arise out of or are based upon the use of the Provided Information in a Secondary Market Disclosure Document. Section 9.1.4 Borrower Indemnity Regarding Filings. In connection with filings under the Exchange Act or the Securities Act, the Borrower shall (i) indemnify Funding Lender and the underwriter group for any securities (the “Underwriter Group”) for any Liabilities to which Funding Lender, the Servicer or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided Information of a material fact required to be stated in the Provided Information in order to make the statements in the Provided Information, in the light of the circumstances under which they were made not misleading and (ii) reimburse the Funding Lender, the Servicer, the Underwriter Group and other indemnified parties listed above for any legal or other expenses reasonably incurred by the Funding Lender, the Servicer or the Underwriter Group in connection with defending or investigating the Liabilities; provided that the Borrower shall not provide any indemnification regarding any Provided Information obtained from unrelated third parties except with respect to information it provided to such parties. 2021/10/12 City Council Post Agenda Page 238 of 620 69 4848-7324-3383/024036-0092 Section 9.1.5 Indemnification Procedure. Promptly after receipt by an indemnified party under Sections 9.1.3 and 9.1.4 hereof of notice of the commencement of any action for which a claim for indemnification is to be made against the Borrower, such indemnified party shall notify the Borrower in writing of such commencement, but the omission to so noti fy the Borrower will not relieve the Borrower from any liability that it may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the Borrower. In the event that any action is brought against any indemnified party, and it notifies the Borrower of the commencement thereof, the Borrower will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by Written Notice delivered to the indemnified party promptly after receiving the aforesaid notice of commencement, to assume the defense thereof with counsel selected by the Borrower and reasonably satisfactory to such indemnified party in its sole discretion. After notice from the Borrower to su ch indemnified party under this Section 9.1.5, the Borrower shall not be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No in demnified party shall settle or compromise any claim for which the Borrower may be liable hereunder without the prior Written Consent of the Borrower. Section 9.1.6 Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 9.1.4 hereof is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 9.1.4 hereof, the Borrower shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the indemnified parties and the Borrower’s relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances. The parties hereto hereby agree that it may not be equitable if the amount of such contribution were determined by pro rata or per capita allocation. ARTICLE X MISCELLANEOUS Section 10.1 Notices. All notices, consents, approvals and requests required or permitted hereunder or under any other Borrower Loan Document or Funding Loan Document (a “notice”) shall be deemed to be given and made when delivered by hand, recognized overnight delivery service, confirmed facsimile transmission (provided any telecopy or other electronic transmission received by any party after 4:00 p.m., local time, as evidenced by the time shown on such transmission, shall be deemed to have been received the following Business Day), or fi ve (5) calendar days after deposited in the United States mail, registered or certified, postage prepaid, with return receipt requested, addressed as follows: 2021/10/12 City Council Post Agenda Page 239 of 620 70 4848-7324-3383/024036-0092 If to the Fiscal Agent: U.S. Bank National Association Global Corporate Trust 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attention: Ismael Diaz Telephone: (213) 615-6063 If to the Governmental Lender: Chula Vista Housing Authority 276 Fourth Avenue Chula Vista, California 91910 Attention: Executive Director Phone: (619) 691-5263 If to the Borrower: Millenia II CIC, LP c/o Chelsea Investment Corporation 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 Attn: Project Manager with a copy to: Cox, Castle & Nicholson LLP 50 California Street, Suite 3200 San Francisco, CA 94111 Attention: Ofer Elitzur, Esq. If to the Equity Investor: Attention: with a copy to: Attention: If to the Funding Lender: Citibank, N.A. 388 Greenwich Street, Trading 6th Floor New York, New York 10013 Attention: Transaction and Asset Management Group Re: Columba Apartments Deal ID No. 60001029 Facsimile: (212) 723-8209 2021/10/12 City Council Post Agenda Page 240 of 620 71 4848-7324-3383/024036-0092 and to: Citibank, N.A. 325 East Hillcrest Drive, Suite 160 Thousand Oaks, California 91360 Attention: Operations Manager/Asset Manager Re: Columba Apartments Deal ID No. 60001029 Facsimile: (805) 557-0924 prior to the Conversion Date, with a copy to: Citibank, N.A. 388 Greenwich Street, Trading 6th Floor New York, New York 10013 Attention: Account Specialist Re: Columba Apartments Deal ID No. 60001029 Facsimile: (212) 723-8209 following the Conversion Date with a copy to: Citibank, N.A. c/o Berkadia Commercial Servicing Department 323 Norristown Road, Suite 300 Ambler, Pennsylvania 19002 Attention: Client Relations Manager Re: Columba Apartments Deal ID No. 60001029 Facsimile: (215) 328-0305 and a copy of any notices of default sent to: Citibank, N.A. 388 Greenwich Street, 17th Floor New York, New York 10013 Attention: General Counsel’s Office Re: Columba Apartments Deal ID No. 60001029 Facsimile: (212) 723-8939 Any party may change such party’s address for the notice or demands required under this Borrower Loan Agreement by providing written notice of such change of address to the other parties by written notice as provided herein. Section 10.2 Brokers and Financial Advisors. The Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the Borrower Loan, other than those disclosed to the Funding Lender and whose fees shall be paid by the Borrower pursuant to separate agreements. The Borrower and the Funding Lender shall indemnify and hold the other harmless from and against any and all claims, liabilities, costs and expenses of any kind in any way relating to or arising from a claim by any Person that such 2021/10/12 City Council Post Agenda Page 241 of 620 72 4848-7324-3383/024036-0092 Person acted on behalf of the indemnifying party in connection with the transactions contemplated herein. The provisions of this Section 10.2 shall survive the expiration and termination of this Borrower Loan Agreement and the repayment of the Borrower Payment Obligations. Section 10.3 Survival. This Borrower Loan Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by the Governmental Lender of the Borrower Loan and the execution and delivery to the Governmental Lender of the Borrower Notes and the assignment of the Borrower Notes to the Funding Lender, and shall continue in full force and effect so long as all or any of the Borrower Payment Obligations is unpaid. All the Borrower’s covenants and agreements in this Borrower Loan Agreement shall inure to the benefit of the respecti ve legal representatives, successors and assigns of the Governmental Lender, the Fiscal Agent, the Funding Lender and the Servicer. Section 10.4 Preferences. The Governmental Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by the Borrower to any portion of the Borrower Payment Obligations. To the extent the Borrower makes a payment to the Governmental Lender or the Servicer, or the Governmental Lender or the Servicer receives proceeds of any collateral, which is in whole or part subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the Borrower Payment Obligations or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by the Governmental Lender or the Servicer. Section 10.5 Waiver of Notice. The Borrower shall not be entitled to any notices of any nature whatsoever from the Funding Lender, the Fiscal Agent or the Servicer except with respect to matters for which this Borrower Loan Agreement or any other Borrower Loan Document specifically and expressly provides for the giving of notice by the Funding Lender, the Fiscal Agent or the Servicer, as the case may be, to the Borrower and except with respect to matters for which the Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. The Borrower hereby expressly waives the right to receive any notice from the Funding Lender, the Fiscal Agent or the Servicer, as the case may be, with respect to any matter for which no Borrower Loan Document specifically and expressly provides for the giving of notice by the Funding Lender, the Fiscal Agent or the Servicer to the Borrower. Section 10.6 Offsets, Counterclaims and Defenses. The Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by the Funding Lender or the Servicer with respect to a Borrower Loan Payment. Any assignee of Funding Lender’s interest in and to the Borrower Loan Documents or the Fu nding Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses that are unrelated to the Borrower Loan Documents or the Funding Loan Documents which the Borrower may otherwise have against any assignor of such documents, and no such unrelated offset, counterclaim or defense shall be interposed or asserted by the Borrower in any action or proceeding brought by any such assignee upon such documents, and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by the Borrower. 2021/10/12 City Council Post Agenda Page 242 of 620 73 4848-7324-3383/024036-0092 Section 10.7 Publicity. The Funding Lender and the Servicer (and any Affiliates of either party) shall have the right to issue press releases, advertisements and other promot ional materials describing the Funding Lender’s or the Servicer’s participation in the making of the Borrower Loan or the Borrower Loan’s inclusion in any Secondary Market Transaction effectuated by the Funding Lender or the Servicer or one of its or their Affiliates. All news releases, publicity or advertising by the Borrower or Borrower Affiliates through any media intended to reach the general public, which refers to the Borrower Loan Documents or the Funding Loan Documents, the Borrower Loan, the Funding Lender or the Servicer in a Secondary Market Transaction, shall be subject to the prior Written Consent of the Funding Lender or the Servicer, as applicable. Section 10.8 Construction of Documents. The parties hereto acknowledge that they were represented by counsel in connection with the negotiation and drafting of the Borrower Loan Documents and the Funding Loan Documents and that the Borrower Loan Documents and the Funding Loan Documents shall not be subject to the principle of construing their meaning against th e party that drafted them. Section 10.9 No Third Party Beneficiaries. The Borrower Loan Documents and the Funding Loan Documents are solely for the benefit of the Governmental Lender, the Funding Lender, the Servicer, the Fiscal Agent and the Borrower and, with respec t to Sections 9.1.3 and 9.1.4 hereof, the Underwriter Group, and nothing contained in any Borrower Loan Document shall be deemed to confer upon anyone other than the Governmental Lender, the Funding Lender, the Fiscal Agent, the Servicer, and the Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained therein. Section 10.10 Assignment. The Borrower Loan, the Security Instrument, the Borrower Loan Documents and the Funding Loan Documents and all Funding Lender’s o r Fiscal Agent’s rights, title, obligations and interests therein may be assigned by the Funding Lender or the Fiscal Agent, as appropriate, at any time in its sole discretion, whether by operation of law (pursuant to a merger or other successor in interest) or otherwise, subject in any event to the provisions of Section 2.4 of the Funding Loan Agreement. Upon such assignment, all references to Funding Lender or the Fiscal Agent, as appropriate, in this Borrower Loan Agreement and in any Borrower Loan Document shall be deemed to refer to such assignee or successor in interest and such assignee or successor in interest shall thereafter stand in the place of the Funding Lender or the Fiscal Agent, as appropriate. The Borrower shall accord full recognition to any such assignment, and all rights and remedies of Funding Lender in connection with the interest so assigned shall be as fully enforceable by such assignee as they were by Funding Lender before such assignment. In connection with any proposed assignment, Funding Lender may disclose to the proposed assignee any information that the Borrower has delivered, or caused to be delivered, to Funding Lender with reference to the Borrower, General Partner, Guarantor or any Borrower Affiliate, or the Project, including information that the Borrower is required to deliver to Funding Lender pursuant to this Borrower Loan Agreement, provided that such proposed assignee agrees to treat such information as confidential. The Borrower may not assign its rights, interests or obligations under this Borrower Loan Agreement or under any of the Borrower Loan Documents or Funding Loan Documents, or the Borrower’s interest in any moneys to be disbursed or advanced hereunder, except only as may be expressly permitted hereby. Section 10.11 [Reserved]. 2021/10/12 City Council Post Agenda Page 243 of 620 74 4848-7324-3383/024036-0092 Section 10.12 Governmental Lender, Funding Lender and Servicer Not in Control; No Partnership. None of the covenants or other provisions contained in this Borrower Loan Agreement shall, or shall be deemed to, give the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer the right or power to exercise control over the affairs or management of the Borrower, the power of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer being limited to the rights to exercise the remedies referred to in the Borrower Loan Documents and the Funding Loan Documents. The relationship between the Borrower and the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer is, and at all times shall remain, solely that of debtor and creditor. No covenant or provision of the Borrower Loan Documents or the Fund ing Loan Documents is intended, nor shall it be deemed or construed, to create a partnership, joint venture, agency or common interest in profits or income between the Borrower and the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servic er or to create an equity interest in the Project in the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer. Neither the Governmental Lender, the Funding Lender, the Fiscal Agent nor the Servicer undertakes or assumes any responsibility or duty to the Borrower or to any other person with respect to the Project or the Borrower Loan, except as expressly provided in the Borrower Loan Documents or the Funding Loan Documents; and notwithstanding any other provision of the Borrower Loan Documents and the Funding Loan Documents: (1) the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer are not, and shall not be construed as, a partner, joint venturer, alter ego, manager, controlling person or other business associate or participant of any kind of the Borrower or its stockholders, members, or partners and the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer do not intend to ever assume such status; (2) the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer shall in no event be liable for any the Borrower Payment Obligations, expenses or losses incurred or sustained by the Borrower; and (3) the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer shall not be deemed responsible for or a participant in any acts, omissions or decisions of the Borrower, the Borrower Controlling Entities or its stockholders, members, or partners. The Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer and the Borrower disclaim any intention to create any partnership, joint venture, agency or common interest in profits or income between the Governmental Lender, the Funding Lender, the Servicer, the Fiscal Agent and the Borrower, or to create an equity interest in the Project in the Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer, or any sharing of liabilities, losses, costs or expenses. Section 10.13 Release. The Borrower hereby acknowledges that it is executing this Borrower Loan Agreement and each of the Borrower Loan Documents and the Funding Loan Documents to which it is a party as its own voluntary act free from duress and undue influence. Section 10.14 Term of Borrower Loan Agreement. This Borrower Loan Agreement shall be in full force and effect until all payment obligations of the Borrower hereunder have been paid in full and the Borrower Loan and the Funding Loan have been retired or the payment thereof has been provided for; except that on and after payment in full of the Borrower Notes, this Borrower Loan Agreement shall be terminated, without further action by the parties hereto; provided, however, that the obligations of the Borrower under Sections 5.11, 5.14, 5.15, 9.1.3, 9.1.4, 9.1.5, 9.1.6 and 10.15 hereof, as well as under [Section 5.7 of the Construction Funding Agreement], shall survive the termination of this Borrower Loan Agreement. Section 10.15 Reimbursement of Expenses. If, upon or after the occurrence of any Event of Default or Potential Default, the Governmental Lender, the Funding Lender, t he Fiscal Agent or the Servicer shall employ attorneys or incur other expenses for the enforcement of performance or 2021/10/12 City Council Post Agenda Page 244 of 620 75 4848-7324-3383/024036-0092 observance of any obligation or agreement on the part of the Borrower contained herein, the Borrower will on demand therefor reimburse the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer for fees of such attorneys and such other expenses so incurred. The Borrower’s obligation to pay the amounts required to be paid under this Section 10.15 shall be subordinate to its obligations to make payments under the Borrower Notes. Section 10.16 Permitted Contests. Notwithstanding anything to the contrary contained in this Borrower Loan Agreement, Borrower shall have the right to contest or object in good faith to any claim, demand, levy or assessment (other than in respect of Debt or Contractual Obligations of Borrower under any Borrower Loan Document or Related Document) by appropriate legal proceedings that are not prejudicial to Funding Lender’s rights, but this shall not be deemed or construed as in any way relieving, modifying or providing any extension of time with respect to Borrower’s covenant to pay and comply with any such claim, demand, levy or assessment, unless Borrower shall have given prior Written Notice to the Funding Lender of Borrower’s intent to so contest or object thereto, and unless (i) Borrower has, in the Funding Lender’s judgment, a reasonable basis for such contest, (ii) Borrower pays when due any portion of the claim, demand, levy or assessment to which Borrower does not object, (iii) Borrower demonstrates to Funding Lender’s satisfaction that such legal proceedings shall conclusively operate to prevent enforcement prior to final determination of such proceedings, (iv) Borrower furnishes such bond, surety, undertaking or other security in connection therewith as required by law, or as requested by and satisfactory to Funding Lender, to stay such proceeding, which bond, surety, undertaking or other security shall be issued by a bonding company, insurer or surety compan y reasonably satisfactory to Funding Lender and shall be sufficient to cause the claim, demand, levy or assessment to be insured against by the Title Company or removed as a lien against the Project, (v) Borrower at all times prosecutes the contest with due diligence, and (vi) Borrower pays, promptly following a determination of the amount of such claim, demand, levy or assessment due and owing by Borrower, the amount so determined to be due and owing by Borrower. In the event that Borrower does not make, promptly following a determination of the amount of such claim, demand, levy or assessment due and owing by Borrower, any payment required to be made pursuant to clause (vi) of the preceding sentence, an Event of Default shall have occurred, and Funding Le nder may draw or realize upon any bond or other security delivered to Funding Lender in connection with the contest by Borrower, in order to make such payment. Section 10.17 Funding Lender Approval of Instruments and Parties. All proceedings taken in accordance with transactions provided for herein, and all surveys, appraisals and documents required or contemplated by this Borrower Loan Agreement and the persons responsible for the execution and preparation thereof, shall be satisfactory to and subject to approval by Fu nding Lender. Funding Lender’s approval of any matter in connection with the Project shall be for the sole purpose of protecting the security and rights of Funding Lender. No such approval shall result in a waiver of any default of Borrower. In no event shall Funding Lender’s approval be a representation of any kind with regard to the matter being approved. Section 10.18 Funding Lender Determination of Facts. Funding Lender shall at all times be free to establish independently, to its reasonable satisfaction, the exi stence or nonexistence of any fact or facts, the existence or nonexistence of which is a condition of this Borrower Loan Agreement. Section 10.19 Calendar Months. With respect to any payment or obligation that is due or required to be performed within a specified number of Calendar Months after a specified date, such 2021/10/12 City Council Post Agenda Page 245 of 620 76 4848-7324-3383/024036-0092 payment or obligation shall become due on the day in the last of such specified number of Calenda r Months that corresponds numerically to the date so specified; provided, however, that with respect to any obligation as to which such specified date is the 29th, 30th or 31st day of any Calendar Month: if the Calendar Month in which such payment or obligation would otherwise become due does not have a numerically corresponding date, such obligation shall become due on the first day of the next succeeding Calendar Month. Section 10.20 Determinations by Lender. Except to the extent expressly set forth in this Borrower Loan Agreement to the contrary, in any instance where the consent or approval of the Governmental Lender and the Funding Lender may be given or is required, or where any determination, judgment or decision is to be rendered by the Governmental Lender and t he Funding Lender under this Borrower Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision shall be made or exercised by the Governmental Lender and the Funding Lender , as applicable (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion. Section 10.21 Governing Law. This Borrower Loan Agreement shall be governed by and enforced in accordance with the laws of the State, without gi ving effect to the choice of law principles of the State that would require the application of the laws of a jurisdiction other than the State. Section 10.22 Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Borrower Loan Agreement shall be litigated exclusively in the State. The state and federal courts and authorities with jurisdiction in the State shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Borrower Loan Agreement. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing he rein is intended to limit Beneficiary Parties’ right to enforce a judgment against Borrower or any of Borrower’s assets in any court of any other jurisdiction where Borrower’s assets are located. Section 10.23 Successors and Assigns. This Borrower Loan Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, successors-in-interest and assigns, as appropriate. The terms used to designate any of the parties herein shall be deemed to include the heirs, legal representatives, successors, successors-in-interest and assigns, as appropriate, of such parties. References to a “person” or “persons” shall be deemed to include individuals and entities. Section 10.24 Severability. The invalidity, illegality or unenforceability of any provision of this Borrower Loan Agreement shall not affect the validity, legality or enforceability of any other provision, and all other provisions shall remain in full force and effect. Section 10.25 Entire Agreement; Amendment and Waiver. This Borrower Loan Agreement contains the complete and entire understanding of the parties with respect to the matters covered. This Borrower Loan Agreement may not be amended, modified or changed, nor shall any waiver of any provision hereof be effective, except by a written instrument signed by the party against whom enforcement of the waiver, amendment, change, or modification is sought, and then only to the extent set forth in that instrument. No specific waiver of any of the terms of this Borrower Loan Agreement shall be considered as a general waiver. Without limiting the generality 2021/10/12 City Council Post Agenda Page 246 of 620 77 4848-7324-3383/024036-0092 of the foregoing, no Disbursement shall constitute a waiver of any conditions to the Governmental Lender’s or the Funding Lender’s obligation to make further Disbursements nor, in the event Borrower is unable to satisfy any such conditions, shall any such waiver have the effect of precluding the Governmental Lender or the Funding Lender from thereafter declaring such inability to constitute a Potential Default or Event of Default under this Borrower Loan Agreement. Section 10.26 Counterparts. This Borrower Loan Agreement may be executed in multiple counterparts, each of which shall constitute an original document and all of which together shall constitute one agreement. Section 10.27 Captions. The captions of the sections of this Borrower Loan Agreement are for convenience only and shall be disregarded in construing this Borrower Loan Agreement. Section 10.28 Servicer. Borrower hereby acknowledges and agrees that, pursuant to the terms of Section 39 of the Security Instrument: (a) from time to time, the Governmental Lender or the Funding Lender may appoint a servicer to collect payments, escrows and deposits, to give and to receive notices under the Borrower Notes, this Borrower Loan Agreement or the other Borrower Loan Documents, and to otherwise service the Borrower Loan and (b) unless Borrower receives Written Notice from the Governmental Lender or the Funding Lender to the contrary, any action or right which shall or may be taken or exercised by the Govern mental Lender or the Funding Lender may be taken or exercised by such servicer with the same force and effect. Section 10.29 Beneficiary Parties as Third Party Beneficiary. Each of the Beneficiary Parties shall be a third party beneficiary of this Borrower Loan Agreeme nt for all purposes. Section 10.30 Waiver of Trial by Jury. TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF BORROWER AND THE BENEFICIARY PARTIES (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS BORROWER LOAN AGREEMENT OR THE RELATIONSHIP BETWEEN THE PARTIES THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. IF FOR ANY REASON THIS WAIVER IS DETERMINED TO BE UNENFORCEABLE, ALL DISPUTES WILL BE RESOLVED BY JUDICIAL REFERENCE PURSUANT TO THE PROCEDURES SET FORTH IN THE SECURITY INSTRUMENT. Section 10.31 Time of the Essence. Time is of the essence with respect to this Borrower Loan Agreement. Section 10.32 [Reserved]. Section 10.33 Reference Date. This Borrower Loan Agreement is dated for reference purposes only as of the first day of October 2021, and will not be effective and binding on the parties hereto unless and until the Closing Date (as defined herein) occurs. 2021/10/12 City Council Post Agenda Page 247 of 620 78 4848-7324-3383/024036-0092 ARTICLE XI LIMITATIONS ON LIABILITY Section 11.1 Limitation on Liability. Notwithstanding anything to the contrary herein, the liability of the Borrower hereunder and under the other Borrower Loan Documents and the Funding Loan Documents shall be limited to the extent set forth in the Borrower Notes. Section 11.2 Limitation on Liability of Governmental Lender. The Governmental Lender shall not be obligated to pay the principal (or prepayment price) of or interest on the Funding Loan, except from moneys and assets received by the Fiscal Agent or the Funding Lender on behalf of the Governmental Lender pursuant to this Borrower Loan Agreement. Neither the faith and cred it nor the taxing power of the State, or any political subdivision thereof, nor the faith and credit of the Governmental Lender is pledged to the payment of the principal (or prepayment price) of or interest on the Funding Loan. The Governmental Lender shall not be liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Borrower Loan Agreement or the Funding Loan Agreement, except only to the extent amounts are received for the payment thereof from the Borrower under this Borrower Loan Agreement. The Borrower hereby acknowledges that the Governmental Lender’s sole source of moneys to repay the Funding Loan will be provided by the payments made by the Borrower pursuant to this Borrower Loan Agreement, together with investment income on certain funds and accounts held by the Fiscal Agent under the Funding Loan Agreement, and hereby agrees that if the payments to be made hereunder shall ever prove insufficient to pay all principal (or prepayment price) of and interest on the Funding Loan as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice from the Fiscal Agent, the Funding Lender or the Servicer, the Borrower shall pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal (or prepayment price) of or interest on the Funding Loan, including, but not limited to, any deficiency caused by ac ts, omissions, nonfeasance or malfeasance on the part of the Fiscal Agent, the Funding Lender, the Borrower, the Governmental Lender or any third party, subject to any right of reimbursement from the Fiscal Agent, the Funding Lender, the Governmental Lender or any such third party, as the case may be, therefor. Section 11.3 Waiver of Personal Liability. No commissioner, member, officer, agent or employee of the Governmental Lender shall be individually or personally liable for the payment of any principal (or prepayment price) of or interest on the Funding Loan or any other sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Borrower Loan Agreement; but nothing herein contained shall relieve any such me mber, director, officer, agent or employee from the performance of any official duty provided by law or by this Borrower Loan Agreement. Section 11.4 Limitation on Liability of Governmental Lender’s or Funding Lender’s Commissioners, Officers, Employees, Etc. (a) Borrower assumes all risks of the acts or omissions of the Governmental Lender and the Funding Lender, provided, however, this assumption is not intended to, and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the Governmental Lender and the Funding Lender at law or under any other agreement. None of 2021/10/12 City Council Post Agenda Page 248 of 620 79 4848-7324-3383/024036-0092 Governmental Lender, the Fiscal Agent and the Funding Lender, nor the other Beneficiary Parties or their respective commissioners, officers, directors, employees or agents shall be liable or responsible for (i) for any acts or omissions of the Governmental Lender and the Funding Lender; or (ii) the validity, sufficiency or genuineness of any documents, or endorsements, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged. In furtherance and not in limitation of the foregoing, the Governmental Lender and the Funding Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, unless acceptance in light of such notice or information constitutes gross negligence or willful misconduct on the part of the Funding Lender, or willful misconduct of the Governmental Lender. (b) None of the Governmental Lender, the Fiscal Agent, the Funding Lender, the other Beneficiary Parties or any of their respective commissioners, officers, directors, employees or agents shall be liable to any contractor, subcontractor, suppl ier, laborer, architect, engineer or any other party for services performed or materials supplied in connection with the Project. The Governmental Lender and the Funding Lender shall not be liable for any debts or claims accruing in favor of any such parties against the Borrower or others or against the Project. Borrower is not and shall not be an agent of the Governmental Lender and the Funding Lender for any purpose. Neither the Governmental Lender nor the Funding Lender is a joint venture partner with Borrower in any manner whatsoever. Prior to default by Borrower under this Borrower Loan Agreement and the exercise of remedies granted herein, the Governmental Lender and the Funding Lender shall not be deemed to be in privity of contract with any contractor or provider of services to the Project, nor shall any payment of funds directly to a contractor, subcontractor or provider of services be deemed to create any third party beneficiary status or recognition of same by the Governmental Lender and the Funding Lender. Approvals granted by the Governmental Lender and the Funding Lender for any matters covered under this Borrower Loan Agreement shall be narrowly construed to cover only the parties and facts identified in any written approval or, if not in w riting, such approvals shall be solely for the benefit of Borrower. (c) Any obligation or liability whatsoever of the Governmental Lender and the Funding Lender that may arise at any time under this Borrower Loan Agreement or any other Borrower Loan Document shall be satisfied, if at all, out of the Funding Lender’s assets only. No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, the Project or any of the Governmental Lender’s or the Funding Lender’s shareholders (if any), directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise. Section 11.5 Delivery of Reports, Etc. The delivery of reports, information and documents to the Governmental Lender and the Funding Lender as provided herein is for informational purposes only and the Governmental Lender’s and the Funding Lender’s receipt of such shall not constitute constructive knowledge of any information contained therein or determinable from information contained therein. The Governmental Lender and the Funding Lender shall have no duties or responsibilities except those that are specifically set forth herein, and no other duties or obligations shall be implied in this Borrower Loan Agreement against the Governmental Lender and the Funding Lender. [Remainder of Page Intentionally Left Blank] 2021/10/12 City Council Post Agenda Page 249 of 620 [Signature Page to Borrower Loan Agreement – Columba Apartments] S-1 4848-7324-3383/024036-0092 IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Borrower Loan Agreement by their respective authorized representative, as of the date first set forth above. BORROWER: MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Robert W. Laing, President/Executive Director By: CIC Millenia II LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President (signatures follow on subsequent page) 2021/10/12 City Council Post Agenda Page 250 of 620 [Signature Page to Borrower Loan Agreement – Columba Apartments] S-2 4848-7324-3383/024036-0092 GOVERNMENTAL LENDER: CHULA VISTA HOUSING AUTHORITY By: Executive Director Agreed to and Acknowledged by: FUNDING LENDER: CITIBANK, N.A. By: Name: Title: Deal ID No. __________ 2021/10/12 City Council Post Agenda Page 251 of 620 Stradling Yocca Carlson & Rauth Draft dated September 24, 2021 4839-8191-7430/024036-0092 FUNDING LOAN AGREEMENT among CITIBANK, N.A., as Funding Lender and CHULA VISTA HOUSING AUTHORITY, as Governmental Lender and U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent dated as of October 1, 2021 relating to: $______________ Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1 $______________ Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-2 (Taxable) 2021/10/12 City Council Post Agenda Page 252 of 620 TABLE OF CONTENTS Page i 4839-8191-7430/024036-0092 ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION Section 1.1 Definitions ................................................................................................................. 2 Section 1.2 Effect of Headings and Table of Contents ............................................................... 11 Section 1.3 Date of Funding Loan Agreement ........................................................................... 11 Section 1.4 Designation of Time for Performance ..................................................................... 12 Section 1.5 Interpretation ............................................................................................................ 12 ARTICLE II TERMS; GOVERNMENTAL LENDER NOTE Section 2.1 Terms ....................................................................................................................... 12 Section 2.2 Form of Governmental Lender Notes ...................................................................... 14 Section 2.3 Execution and Delivery of Governmental Lender Notes ......................................... 14 Section 2.4 Required Transferee Representations; Participations; Sale and Assignment .......... 14 ARTICLE III PREPAYMENT Section 3.1 Prepayment of the Governmental Lender Notes from Prepayment under the Corresponding Borrower Notes ............................................................................... 15 Section 3.2 Notice of Prepayment .............................................................................................. 16 ARTICLE IV SECURITY Section 4.1 Security for the Funding Loan ................................................................................. 16 Section 4.2 Delivery of Security ................................................................................................. 17 ARTICLE V LIMITED LIABILITY Section 5.1 Source of Payment of Funding Loan and Other Obligations ................................... 18 Section 5.2 Exempt from Individual Liability ............................................................................ 18 ARTICLE VI CLOSING CONDITIONS; APPLICATION OF FUNDS Section 6.1 Conditions Precedent to Closing .............................................................................. 18 ARTICLE VII FUNDS AND ACCOUNTS Section 7.1 Authorization to Create Funds and Accounts .......................................................... 19 Section 7.2 Investment of Funds ................................................................................................. 19 Section 7.3 Establishment of Funds ............................................................................................ 20 Section 7.4 Funding Loan Payment Fund ................................................................................... 20 Section 7.5 Expense Fund ........................................................................................................... 21 Section 7.6 Closing Costs Fund .................................................................................................. 22 Section 7.7 Project Fund ............................................................................................................. 22 Section 7.8 Rebate Fund ............................................................................................................. 24 2021/10/12 City Council Post Agenda Page 253 of 620 TABLE OF CONTENTS (continued) Page ii 4839-8191-7430/024036-0092 Section 7.9 Investments .............................................................................................................. 26 ARTICLE VIII REPRESENTATIONS AND COVENANTS Section 8.1 General Representations .......................................................................................... 26 Section 8.2 No Encumbrance on Security .................................................................................. 27 Section 8.3 Repayment of Funding Loan ................................................................................... 27 Section 8.4 Servicer .................................................................................................................... 28 Section 8.5 Borrower Loan Agreement Performance ................................................................. 28 Section 8.6 Maintenance of Records; Inspection of Records ..................................................... 28 Section 8.7 Tax Covenants ......................................................................................................... 28 Section 8.8 Performance by the Borrower .................................................................................. 29 ARTICLE IX DEFAULT; REMEDIES Section 9.1 Events of Default ..................................................................................................... 30 Section 9.2 Acceleration of Maturity; Rescission and Annulment ............................................. 30 Section 9.3 Additional Remedies; Funding Lender Enforcement .............................................. 31 Section 9.4 Application of Money Collected .............................................................................. 33 Section 9.5 Remedies Vested in Funding Lender ....................................................................... 33 Section 9.6 Restoration of Positions ........................................................................................... 33 Section 9.7 Rights and Remedies Cumulative ............................................................................ 33 Section 9.8 Delay or Omission Not Waiver ............................................................................... 34 Section 9.9 Waiver of Past Defaults ........................................................................................... 34 Section 9.10 Remedies Under Borrower Loan Agreement or Borrower Notes ........................... 34 Section 9.11 Waiver of Appraisement and Other Laws ............................................................... 34 Section 9.12 Suits to Protect the Security ..................................................................................... 34 Section 9.13 Remedies Subject to Applicable Law ...................................................................... 35 Section 9.14 Assumption of Obligations ...................................................................................... 35 ARTICLE X AMENDMENT; AMENDMENT OF BORROWER LOAN AGREEMENT AND OTHER DOCUMENTS Section 10.1 Amendment of Funding Loan Agreement ............................................................... 35 Section 10.2 Amendments Require Funding Lender Consent ...................................................... 35 Section 10.3 Consents and Opinions ............................................................................................ 35 ARTICLE XI THE FISCAL AGENT Section 11.1 Appointment of Fiscal Agent; Acceptance .............................................................. 36 Section 11.2 Certain Duties and Responsibilities of Fiscal Agent ............................................... 36 Section 11.3 Notice of Defaults .................................................................................................... 37 Section 11.4 Certain Rights of Fiscal Agent ................................................................................. 37 Section 11.5 Not Responsible for Recitals ................................................................................... 38 Section 11.6 May Hold Funding Loan .......................................................................................... 39 2021/10/12 City Council Post Agenda Page 254 of 620 TABLE OF CONTENTS (continued) Page iii 4839-8191-7430/024036-0092 Section 11.7 Moneys Held Hereunder .......................................................................................... 39 Section 11.8 Compensation and Reimbursement ......................................................................... 39 Section 11.9 Fiscal Agent Required; Eligibility ........................................................................... 39 Section 11.10 Resignation and Removal; Appointment of Successor ............................................ 40 Section 11.11 Acceptance of Appointment by Successor .............................................................. 40 Section 11.12 Merger, Conversion, Consolidation or Succession to Business .............................. 41 Section 11.13 Appointment of Co-Fiscal Agent ............................................................................. 41 Section 11.14 Loan Servicing ......................................................................................................... 42 Section 11.15 No Recourse Against Officers or Employees of Fiscal Agent................................. 42 ARTICLE XII MISCELLANEOUS Section 12.1 Notices ..................................................................................................................... 42 Section 12.2 Term of Funding Loan Agreement .......................................................................... 45 Section 12.3 Successors and Assigns ........................................................................................... 45 Section 12.4 Legal Holidays ......................................................................................................... 45 Section 12.5 Governing Law ........................................................................................................ 45 Section 12.6 Severability .............................................................................................................. 45 Section 12.7 Execution in Several Counterparts........................................................................... 45 Section 12.8 Nonrecourse Obligation of the Borrower ................................................................ 45 Section 12.9 Waiver of Trial by Jury ............................................................................................ 45 Section 12.10 Electronic Transactions ............................................................................................ 46 Section 12.11 Reference Date ......................................................................................................... 46 EXHIBIT A FORM OF GOVERNMENTAL LENDER NOTES ............................................. A-1 EXHIBIT B FORM OF REQUIRED TRANSFEREE REPRESENTATIONS ........................ B-1 EXHIBIT C FORM OF WRITTEN REQUISITION OF THE BORROWER – PROJECT FUND ................................................................................................... C-1 EXHIBIT D FORM OF WRITTEN REQUISITION OF THE BORROWER – CLOSING COSTS FUND ..................................................................................... D-1 EXHIBIT E FISCAL AGENT WIRING INSTRUCTIONS ..................................................... E-1 2021/10/12 City Council Post Agenda Page 255 of 620 4839-8191-7430/024036-0092 FUNDING LOAN AGREEMENT This Funding Loan Agreement, dated as of October 1, 2021 (this “Funding Loan Agreement”), is entered into by CITIBANK, N.A., (together with any successor hereunder, the “Funding Lender”), the CHULA VISTA HOUSING AUTHORITY, a public body corporate and politic, organized and existing under the laws of the State of California (together with its successors and assigns, the “Governmental Lender”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, as fiscal agent (together with its successors and assigns, the “Fiscal Agent”). R E C I T A L S : WHEREAS, the Governmental Lender is a public body, corporate and politic, duly organized and validly existing under the laws of the State of California; and WHEREAS, the Governmental Lender is empowered pursuant to Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (the “Act”) to: (a) make loans to any person to provide financing for residential rental developments located within the jurisdiction of the Governmental Lender and intended to be occupied in part by persons of low and moderate income; (b) incur indebtedness for the purpose of obtaining moneys to make such loans and provide such financing, to establish any required reserve funds and to pay administrative costs and other costs incurred in connection with the incurrence of such indebtedness of the Governmental Lender; and (c) pledge all or any part of the revenues, receipts or resources of the Governmental Lender, including the revenues and receipts to be received by the Governmental Lender from or in connection with such loans, and to mortgage, pledge or grant security int erests in such loans or other property of the Governmental Lender in order to secure the payment of the principal of, prepayment premium, if any, on and interest on such indebtedness of the Governmental Lender; and WHEREAS, Millenia II CIC, LP, a California limited partnership (the “Borrower”), has requested that the Governmental Lender enter into this Funding Loan Agreement under which the Funding Lender will (i) advance funds (the “Funding Loan”) to or for the account of the Governmental Lender, and (ii) apply the proceeds of the Funding Loan to make a loan (the “Borrower Loan”) to the Borrower to finance the acquisition, construction and equipping of a 198 unit plus 2 manager’s units multifamily rental housing project located at Northwest Corner of Solstice Avenue and Optima Street in the City of Chula Vista, County of San Diego, California, known as Columba Apartments; and WHEREAS, simultaneously with the delivery of this Funding Loan Agreement, the Governmental Lender and the Borrower will enter into a Borrower Loan Agreement of even date herewith (as it may be supplemented or amended, the “Borrower Loan Agreement”), whereby the Borrower agrees to make loan payments to the Governmental Lender in an amount that, when added to other funds available under this Funding Loan Agreement, will be sufficient to enable the Governmental Lender to repay the Funding Loan and to pay all costs and expenses related thereto when due; and WHEREAS, to evidence its payment obligations under the Borrower Loan Agreement, the Borrower will execute and deliver to the Governmental Lender its Borrower Note s (as defined herein) and the obligations of the Borrower under the Borrower Notes will be secured by a lien on 2021/10/12 City Council Post Agenda Page 256 of 620 2 4839-8191-7430/024036-0092 and security interest in the Project (as defined herein) pursuant to a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (California), of even date herewith (the “Security Instrument”), made by the Borrower in favor of the Governmental Lender, as assigned to the Funding Lender to secure the performance by the Governmental Lender of its obligations under the Funding Loan; and WHEREAS, the Governmental Lender has executed and delivered to the Funding Lender its Multifamily Housing Revenue Note (Columba Apartments), 2021 Series A-1 (the “Series A-1 Governmental Lender Note”), dated as of the Closing Date, and its Multifamily Housing Revenue Note (Columba Apartments), 2021 Series A-2 (Taxable) (the “Series A-2 Governmental Lender Note,” and, together with the Series A-1 Governmental Lender Note, the “Governmental Lender Notes”), evidencing its obligation to make the payments due to the Funding Lender under the Funding Loan as provided in this Funding Loan Agreement, all things necessary to make the Funding Loan Agreement the valid, binding and legal limited obligation of the Governmental Lender, have been done and performed and the execution and delivery of this Funding Loan Agreement and the execution and delivery of the Governmental Lender Notes, subject to the terms hereof, have in all respects been duly authorized. A G R E E M E N T : NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements herein contained, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION Section 1.1 Definitions. For all purposes of this Funding Loan Agreement, except as otherwise expressly provided or unless the context otherwise clearly requires: (a) Unless specifically defined herein, all capitalized terms shall have the meanings ascribed thereto in the Borrower Loan Agreement. (b) The terms “herein, “hereof” and “hereunder” and other words of similar import refer to this Funding Loan Agreement as a whole and not to any particular Article, Section or other subdivision. The terms “agree” and “agreements” contained herein are intended to include and mean “covenant” and “covenants.” (c) All references made (i) in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, and (ii) in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well. Singular terms shall include the plural as well as the singular, and vice versa. (d) All accounting terms not otherwise defined herein shall have the meanings assigned to them, and all computations herein provided for shall be made, in accordance with the Approved Accounting Method. All references herein to “Approved Accounting Method” refer to such principles as they exist at the date of application thereof. 2021/10/12 City Council Post Agenda Page 257 of 620 3 4839-8191-7430/024036-0092 (e) All references in this instrument to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed. (f) All references in this instrument to a separate instrument are to such se parate instrument as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof. (g) References to the Series A-1 Governmental Lender Note as “tax-exempt” or to the “tax-exempt status” of the Series A-1 Governmental Lender Note are to the exclusion of interest on the Series A-1 Governmental Lender Note (other than any portion of the Series A-1 Governmental Lender Note held by a “substantial user” of the Project or a “related person” within the meaning of Section 147 of the Code) from gross income for federal income tax purposes pursuant to Section 103(a) of the Code. (h) The following terms have the meanings set forth below: “Act” means Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code. “Additional Borrower Payments” shall have the meaning given such term in the Borrower Loan Agreement. “Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person. “Approved Transferee” means (a) a “qualified institutional buyer” (“QIB”) as defined in Rule 144A promulgated under the Securities Act that is a financial institution or commercial bank having capital and surplus of $5,000,000,000 or more, (b) an affiliate of the Funding Lender, or (c) a trust or custodial arrangement established by the Funding Lender or one of its affiliates the beneficial interests in which will be owned only by QIBs. “Authorized Amount” means $______________, the maximum principal amount of the Funding Loan under this Funding Loan Agreement. “Authorized Governmental Lender Representative” means the Chairperson, Vice Chairperson, Executive Director, or Treasurer of the Governmental Lender, or any person or persons designated to act on behalf of the Governmental Lender by a certificate filed with the Borrower, Funding Lender and Servicer, if any, containing the specimen signatures of such person or persons and signed on behalf of the Governmental Lender by its Chairperson, Vice Chairperson, Executive Director, or Treasurer of the Governmental Lender. “Borrower” means Millenia II CIC, LP, a California limited partnership. “Borrower Loan” shall mean the mortgage loan made by the Governmental Lender to the Borrower pursuant to the Borrower Loan Agreement in the aggregate principal amount of the Borrower Loan Amount, as evidenced by the Borrower Note. “Borrower Loan Agreement” shall mean the Borrower Loan Agreement, of even date herewith, between the Governmental Lender and the Borrower, as supplemented, amended or replaced from time to time in accordance with its terms. 2021/10/12 City Council Post Agenda Page 258 of 620 4 4839-8191-7430/024036-0092 “Borrower Loan Agreement Default” shall mean any event of default set forth in Section 8.1 of the Borrower Loan Agreement. A Borrower Loan Agreement Default shall “exist” if a Borrower Loan Agreement Default shall have occurred and be continuing beyond any applicable cure period. “Borrower Loan Amount” shall mean $______________, the maximum principal amount of the Borrower Loan under the Borrower Loan Agreement. “Borrower Loan Documents” shall have the meaning given such term in the Borrower Loan Agreement. “Borrower Notes” shall mean, collectively, the Series A-1 Borrower Note and the Series A-2 Borrower Note; and a “Borrower Note” shall mean one of such Borrower Notes. “Business Day” shall mean any day other than (i) a Saturday or a Sunday, or (ii) a day on which federally insured depository institutions in New York, New York or California are authorized or obligated by law, regulation, governmental decree or executive order to be closed. “Closing Costs” has the meaning given to the term Costs of Funding in the Borrower Loan Agreement. “Closing Date” shall mean October __, 2021, the date that initial Funding Loan proceeds are disbursed hereunder. “Code” means the Internal Revenue Code of 1986 as in effect on the date of execution and delivery of the Governmental Lender Notes or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. “Construction Funding Agreement” means that certain Construction Funding Agreement of even date herewith, between the Funding Lender, as agent for the Governmental Lender, and Borrower, pursuant to which the Borrower Loan will be advanced by the Funding Lender (or the Servicer on its behalf), as agent of the Governmental Lender, to the Fiscal Agent for disbursement to the Borrower and setting forth certain provisions relating to disbursement of the Borrower Loan during construction, insurance and other matters, as such agreement may be amended, modified, supplemented and replaced from time to time. “Contingency Draw-Down Agreement” means the Contingency Draw-Down Agreement of even date herewith among the Fiscal Agent, the Funding Lender, and the Borrower relating to possible conversion of the portion of the Funding Loan evidenced by the Series A-1 Governmental Lender Note from a draw down loan to a fully funded loan. “Control” shall mean, with respect to any Person, either (a) ownership directly or through other entities of more than 50% of all beneficial equity interest in such Person, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities, by contract or otherwise. “Conversion” has the meaning given to such term in the Borrower Loan Agreement. 2021/10/12 City Council Post Agenda Page 259 of 620 5 4839-8191-7430/024036-0092 “Conversion Date” shall have the meaning given such term in the Construction Funding Agreement. “Default” shall mean the occurrence of an event, which, under any Funding Loan Document, would, but for the giving of notice or passage of time, or both, be an event of default under the applicable Funding Loan Document or a Borrower Loan Agreement Default. “Draw-Down Notice” shall mean a notice described in Section 1.01 of the Contingency Draw-Down Agreement regarding the conversion of the Funding Loan from a draw down loan to a fully funded loan. “Equity Investor” shall mean __________, a __________, and its permitted successors and assigns. “Event of Default” shall have the meaning ascribed thereto in Section 9.1 hereof. “Fair Market Value” shall mean the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as o f the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as referenced above) if (a) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (b) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (c) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (d) any commingled investment fund in which the City and related parties do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the Regulations, the term “investment” will include a hedg e. “Fiscal Agent” shall mean U.S. Bank National Association, which entity is appointed pursuant to Section 11.1 to serve as Fiscal Agent under this Funding Loan Agreement, and any successor thereto pursuant to Section 11.10. “Fiscal Agent’s Fees” shall mean the annual administration fee for the Fiscal Agent’s ordinary fees and expenses in rendering its services under this Funding Loan Agreement during each 12-month period, payable on the Closing Date and annually in advance, which fee is equal to $__________. “Funding Lender” shall mean Citibank N.A., a national banking association, and any successor under this Funding Loan Agreement and the Borrower Loan Documents. “Funding Loan Agreement” shall mean this Funding Loan Agreement, by and among the Funding Lender, the Governmental Lender and the Fiscal Agent, as it may from time to time be supplemented, modified or amended by one or more agreements or other instruments supplemental hereto entered into pursuant to the applicable provisions hereof. 2021/10/12 City Council Post Agenda Page 260 of 620 6 4839-8191-7430/024036-0092 “Funding Loan Documents” shall mean (a) this Funding Loan Agreement, (b) the Borrower Loan Agreement, (c) the Regulatory Agreement, (d) the Tax Certificate, (e) the Borrower Loan Documents, (f) all other documents evidencing, securing, governing or otherwise pertaining to the Funding Loan, and (g) all amendments, modifications, renewals and substitutions of any of the foregoing. “Governmental Lender” shall mean the Chula Vista Housing Authority. “Governmental Lender Note” shall mean that certain Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A, dated the Closing Date, in the original maximum principal amount of $______________, made by the Governmental Lender and payable to the Funding Lender, as executed by the Governmenta l Lender and as it may thereafter be amended or supplemented from time to time. “Highest Rating Category” shall mean, with respect to a Permitted Investment, that the Permitted Investment is rated by S&P or Moody’s in the highest rating category given by t hat rating agency for that general category of security. By way of example, the Highest Rating Category for tax-exempt municipal debt established by S&P is “A1+” for debt with a term of one year or less and “AAA” for a term greater than one year, with corresponding ratings by Moody’s of “MIG1” (for fixed rate) or “VMIG1” (for variable rate) for three months or less and “Aaa” for greater than three months. If at any time (a) both S&P and Moody’s rate a Permitted Investment and (b) one of those ratings is below the Highest Rating Category, then such Permitted Investment will, nevertheless, be deemed to be rated in the Highest Rating Category if the lower rating is no more than one rating category below the highest rating category of that rating agency. For example, a Permitted Investment rated “AAA” by S&P and “Aa3” by Moody’s is rated in the Highest Rating Category. If, however, the lower rating is more than one full rating category below the Highest Rating Category of that rating agency, then the Permitted Investment will be deemed to be rated below the Highest Rating Category. For example, a Permitted Investment rated “AAA” by S&P and “A1” by Moody’s is not rated in the Highest Rating Category. “Maturity Date” shall mean (i) with respect to the Series A-1 Governmental Lender Note _________ 1, 20__, and (ii) with respect to the Series A-2 Governmental Lender Note _________ 1, 20__. “Maximum Rate” shall mean the lesser of (a) 12% per annum, and (b) the maximum interest rate that may be paid on the Funding Loan under State law. “Minimum Beneficial Ownership Amount” shall mean $250,0000, or the full outstanding principal amount of the Funding Loan, if such principal amount is less than $250,0000. “Moody’s” shall mean Moody’s Investors Service, Inc., or its successor. “Negative Arbitrage Account” means the Negative Arbitrage Account of the Project Fund established under Section 7.3, as otherwise described in the Contingency Draw-Down Agreement. “Negative Arbitrage Deposit” has the meaning set forth in the Contingency Draw-Down Agreement. 2021/10/12 City Council Post Agenda Page 261 of 620 7 4839-8191-7430/024036-0092 “Noteowner” or “owner of the Governmental Lender Notes” means the owner of the Governmental Lender Notes as shown on the registration books maintained by the Funding Lender pursuant to Section 2.4(e). “Ongoing Governmental Lender Fee” shall mean the ongoing portion of the Annual Administration Fee (as that term is defined in the Regulatory Agreement) that is payable after the Closing Date. “Opinion of Counsel” shall mean a written opinion from an attorney or firm of attorneys, acceptable to the Funding Lender and the Governmental Lender with experience in the matters to be covered in the opinion; provided that whenever an Opinion of Counsel is required to address the exclusion of interest on the Tax-Exempt Governmental Lender Note from gross income for purposes of federal income taxation, such opinion shall be provided by Tax Counsel. “Permitted Investments” shall mean, to the extent authorized by law for investment of any moneys held under this Funding Loan Agreement, but only to t he extent that the same are acquired at Fair Market Value: (a) Direct obligations of the United States of America including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America (“Government Obligations”). (b) Direct obligations of, and obligations on which the full and timely payment of principal and interest is unconditionally guaranteed by, any agency or instrumentality of the United States of America or direct obligations of the Worl d Bank, which obligations are rated in the Highest Rating Category. (c) Demand deposits or time deposits with certificates of deposit issued by the Fiscal Agent or its affiliates or any bank organized under the laws of the United States of America or any state or the District of Columbia which has combined capital, surplus and undivided profits of not less than $50,000,000 and maturing in less than 365 days; provided that the Fiscal Agent or such other institution has been rated at least “VMIG-1”/”A-1+” by Moody’s/S&P which deposits or certificates are insured by the Federal Deposit Insurance Corporation or collateralized pursuant to the requirements of the Office of the Comptroller of the Currency. (d) Bonds (including tax-exempt bonds), bills, notes or other obligations of or secured by Fannie Mae, Freddie Mac, the Federal Home Loan Bank or the Federal Farm Credit Bank. (e) Money market funds rated AAA by S&P which are registered with the Securities and Exchange Commission and which meet the requirements of Rule 2(a)(7) of the Investment Company Act of 1940, as amended, which may be administered by the Fiscal Agent or its affiliates. (f) Collateralized Investment Agreements or Repurchase Agreements with financial institutions rated in the “A” category or higher without regard to qualifiers, by at least one Rating Agency. The agreement must be continually collateralized with obligations specified in paragraphs (a), (b) and/or (d) above, eligible for wire through the Federal Reserve Bank System or the DTC/PTC as applicable, and at a level of at least 103% of the amount on deposit and valued no 2021/10/12 City Council Post Agenda Page 262 of 620 8 4839-8191-7430/024036-0092 less than daily. The collateral must be held by a third party custodian and be free and clear of all liens and claims of third parties. Securities must be valued daily, marked-to-market at current market price plus accrued interest. If the market value of the securities is found to be below the required level, the provider must restore the market value of the securities to the required level within one (1) business day. Permitted collateral must be delivered to and held in a segregated account by the Fiscal Agent or a custodian (the “Collateral Agent”), and the Collateral Agent cannot be the provider. The collateral must be delivered to the Collateral Agent before/simulta neous with payment (perfection by possession of certificated securities). Acceptable collateral must be free and clear of all liens and claims of third parties and shall be registered in the name of the Collateral Agent for the benefit of the Governmental Lender and Fiscal Agent. The agreement shall state that the Collateral Agent has a valid and perfected first priority security interest in the securities, any substituted securities and all proceeds thereof. (g) Any other investment authorized by the laws of the State, if such investment is approved in advance in writing by the Funding Lender in its sole discretion. Permitted Investments shall not include any of the following: (1) Except for any investment described in the next sentence, any investment or any agreement with a maturity profile greater than the date(s) on which funds representing the corpus of the investment may be needed under the Funding Loan Documents. This exception (1) shall not apply to Permitted Investments listed in paragraph (g). (2) Any obligation bearing interest at an inverse floating rate. (3) Any investment which may be prepaid or called at a price less than its purchase price prior to stated maturity. (4) Any investment the interest rate on which is variable and is established other than by reference to a single index plus a fixed spread, if any, and which interest rate moves proportionately with that index. “Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing. “Pledged Revenues” shall mean the amounts pledged under this Funding Loan Agreement to the payment of the principal of, prepayment premium, if any, and interest on the Funding Loan and the Governmental Lender Notes, consisting of the following: (i) all income, revenues, proceeds and other amounts to which the Governmental Lender is entitled (other than amounts received by the Governmental Lender with respect to the Unassigned Rights) derived from or in connection with the Project and the Funding Loan Documents, including all Borrower Loan Payments due under the Borrower Loan Agreement and the Borrower Notes, payments with respect to the Borrower Loan Payments and all amounts obtained through the exercise of the remedies provided in the Funding Loan Documents and all receipts credited under the provisions of this Funding Loan Agreement against said amounts payable, and (ii) moneys held in the funds and accounts established under this Funding Loan Agreement, together with investment earnings thereon. 2021/10/12 City Council Post Agenda Page 263 of 620 9 4839-8191-7430/024036-0092 “Prepayment Premium” shall mean (i) any premium payable by the Borrower pursuant to the Borrower Loan Documents in connection with a prepayment of the Borrower Note s (including any prepayment premium as set forth in the Borrower Notes) and (ii) any premium payable on the Governmental Lender Notes pursuant to this Funding Loan Agreement. “Project” shall have the meaning given to that term in the Borrower Loan Agreement. “Regulations” shall mean with respect to the Code, the relevant U.S. Treasury regulations and proposed regulations thereunder or any relevant successor provision to such regulations and proposed regulations. “Regulatory Agreement” shall mean that certain Regulatory Agreement and Declaration of Restrictive Covenants, dated as of the date hereof, between the Governmental Lender and the Borrower, as hereafter amended or modified. “Remaining Funding Loan Proceeds Account” means the Remaining Funding Loan Proceeds Account of the Project Fund established under Section 7.3, as otherwise described in the Contingency Draw-Down Agreement. “Required Transferee Representations” shall mean the representations in substantially the form attached to this Funding Loan Agreement as Exhibit B. “Resolution” shall mean the resolution of the Governmental Lender authorizing the Funding Loan and the execution and delivery of the Funding Loan Documents to which the Governmental Lender is a party. “Responsible Officer” means, when used with respect to the Fiscal Agent, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior associate, any associate or any other officer of the Fiscal Agent within the corporate trust office designated for the Fiscal Agent in Section 12.1 hereof (or any successor corporate trust office, the “Corporate Trust Office”) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Funding Loan Agreement. “Securities Act” shall mean the Securities Act of 1933, as amended. “Security” shall have the meaning assigned to it in Section 4.1. “Security Instrument” shall mean the Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (California) (as amended, restated and/or supplemented from time to time) of even date herewith, made by the Borrower in favor of the Governmental Lender, as assigned to the Funding Lender to secure the performance by the Governmental Lender of its obligations under the Funding Loan. “Series A-1 Borrower Note” shall mean that certain Multifamily Note, dated the Closing Date, in the original maximum principal amount of $____________, made by the Borrower and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series A-1 Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse 2021/10/12 City Council Post Agenda Page 264 of 620 10 4839-8191-7430/024036-0092 to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or supplemented from time to time. “Series A-1 Governmental Lender Note” or “Tax-Exempt Governmental Lender Note” shall mean that certain Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1, dated the Closing Date, in the original maximum principal amount of $____________, made by the Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender and as it may thereafter be amended or supplemented from time to time. “Series A-2 Borrower Note” shall mean that certain Multifamily Note (Taxable), dated the Closing Date, in the original maximum principal amount of $____________, made by the Borrower and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series A-2 Governmental Lender Note, as endorsed and assigned by the Governmental Lender w ithout recourse to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or supplemented from time to time. “Series A-2 Governmental Lender Note” or “Taxable Governmental Lender Note” shall mean that certain Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-2 (Taxable), dated the Closing Date, in the original maximum principal amount of $____________, made by the Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender and as it may thereafter be amended or supplemented from time to time. “Servicer” shall mean any Servicer appointed by the Funding Lender to perform certain servicing functions with respect to the Funding Loan and on the Borrower Loan pursuant to a separate servicing agreement to be entered into between the Funding Lender and the Servicer. Initially the Servicer shall be the Funding Lender pursuant to this Funding Loan Agreement. “Servicing Agreement” shall mean any servicing agreement entered into between the Funding Lender and a Servicer with respect to the servicing of the Funding Loan and/or the Borrower Loan. “S&P” shall mean S&P Global Ratings, a business unit of Standard & Poor’s Ratings Services, and its successors “State” shall mean the State of California. “Tax Certificate” shall mean the Tax Certificate and Agreement, dated the Closing Date, executed and delivered by the Governmental Lender and the Borrower, as it may be amended from time to time. “Tax Counsel” shall mean (a) Stradling Yocca Carlson & Rauth, a Professional Corporation, or (b) any other attorney or firm of attorneys designated by the Governmental Lender and approved by the Funding Lender having a national reputation for skill in connection with the authoriz ation and issuance of municipal obligations under Sections 103 and 141 through 150 (or any successor provisions) of the Code. 2021/10/12 City Council Post Agenda Page 265 of 620 11 4839-8191-7430/024036-0092 “Tax Counsel Approving Opinion” shall mean an opinion of Tax Counsel substantially to the effect that the Governmental Lender Notes constitute valid and binding obligations of the Governmental Lender and that, under existing statutes, regulations published rulings and judicial decisions, the interest on the Tax-Exempt Governmental Lender Note is excludable from gross income for federal income tax purposes (subject to the inclusion of such customary exceptions as are acceptable to the recipient thereof). “Tax Counsel No Adverse Effect Opinion” shall mean an opinion of Tax Counsel substantially to the effect that the taking of the actio n specified therein will not, in and of itself, adversely affect any exclusion of interest on the Tax-Exempt Governmental Lender Note from gross income for purposes of federal income taxation (subject to the inclusion of such customary exceptions as are acceptable to the recipient thereof). “UCC” shall mean the Uniform Commercial Code as in effect in the State. “Unassigned Rights” shall mean the Governmental Lender’s rights to (a) reimbursement and payment of its fees, costs and expenses and the Rebate Amo unt under Section 2.5 of the Borrower Loan Agreement and Section 5 of the Regulatory Agreement, (b) access to the Project under Section 5.17 of the Borrower Loan Agreement, (c) indemnification under Section 5.15 of the Borrower Loan Agreement and Section 9 of the Regulatory Agreement, (d) attorneys’ fees under Sections 5.11, 5.14 and 10.05 of the Borrower Loan Agreement and Section 20 of the Regulatory Agreement, (e) receive notices, reports and other statements and its rights to consent to certain matters, including but not limited to its right to consent to amendments to this Funding Loan Agreement, the Borrower Loan Agreement and the Regulatory Agreement, and otherwise as provided in this Funding Loan Agreement and the Borrower Loan Agreement, (f) seek performance by the Borrower of its obligations under the Regulatory Agreement, and (g) seek performance of, and enforce, various tax covenants as described in Section 2.2(b)(i) of the Borrower Loan Agreement, including but not limited to those in Sections 5.34 and 5.35 of the Borrower Loan Agreement. “Written Certificate,” “Written Certification,” “Written Consent,” “Written Direction,” “Written Notice,” “Written Order,” “Written Registration,” “Written Request,” and “Written Requisition” shall mean a written certificate, direction, notice, order or requisition signed by an Authorized Borrower Representative, an Authorized Governmental Lender Representative or an authorized representative of the Funding Lender and delivered to the Funding Lender, the Servicer or such other Person as required under the Funding Loan Documents. “Yield” shall mean yield as defined in Section 148(h) of the Code and any regulations promulgated thereunder. Section 1.2 Effect of Headings and Table of Contents. The Article and Section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.3 Date of Funding Loan Agreement. The date of this Funding Loan Agreement is intended as and for a date for the convenient identification of this Funding Loan Agreement and is not intended to indicate that this Funding Loan Agreement was executed and delivered on said date. 2021/10/12 City Council Post Agenda Page 266 of 620 12 4839-8191-7430/024036-0092 Section 1.4 Designation of Time for Performance. Except as otherwise expressly provided herein, any reference in this Funding Loan Agreement to t he time of day shall mean the time of day in the city where the Funding Lender maintains its place of business for the performance of its obligations under this Funding Loan Agreement. Section 1.5 Interpretation. The parties hereto acknowledge that each of them and t heir respective counsel have participated in the drafting and revision of this Funding Loan Agreement. Accordingly, the parties agree that any rule of construction that disfavors the drafting party shall not apply in the interpretation of this Funding Loan Agreement or any amendment or supplement or exhibit hereto. ARTICLE II TERMS; GOVERNMENTAL LENDER NOTE Section 2.1 Terms. (a) Principal Amount. The total principal amount of the Funding Loan is hereby expressly limited to the Authorized Amount. (b) Draw-Down Funding. The Funding Loan is originated on a draw-down basis. The proceeds of the Funding Loan shall be advanced by the Funding Lender to the Fiscal Agent (pursuant to the wiring instructions on Exhibit E attached hereto) for deposit by the Fiscal Agent to the Project Fund for the account of the Governmental Lender as and when needed to make each advance in accordance with the disbursement provisions of the Borrower Loan Agreement and the Construction Funding Agreement. Subject to the terms and conditions of the Borrower Loan Agreement, the Funding Lender agrees to advance, on behalf of the Governmental Lender, to the Fiscal Agent for deposit by the Fiscal Agent to the Project Fund $__________ on the Closing Date. The Borrower Loan advances and Funding Loan advances shall be allocated first to the Series A-1 Borrower Note and the related Series A-1 Governmental Lender Note and, once the foregoing have been fully funded, then to the Series A-2 Borrower Note and the related Series A-2 Governmental Lender Note. Notwithstanding anything in this Funding Loan Agreement to the contrary, no additional amounts of the Funding Loan may be drawn down and funded hereunder after the third anniversary of the Closing Date; provided, however, that upon the delivery of a Tax Counsel No Adverse Effect Opinion to the Governmental Lender and the Funding Lender such date may be changed to a later date as specified in such Tax Counsel No Adverse Effect Opinion. The portion of the Funding Loan evidenced by the Tax-Exempt Governmental Lender Note shall be drawn down first, in its entirety, before the portion of the Funding Loan evidenced by the Taxable Governmental Lender Note is drawn down. The Governmental Lender consents to the terms of the Contingency Dra w-Down Agreement and agrees to take all actions requested in writing by the Funding Lender or the Borrower that are reasonably required of the Governmental Lender, in connection with the conversion of the Funding Loan to a fully drawn loan pursuant to the provisions of the Contingency Draw-Down Agreement in the event a Draw-Down Notice is filed by the Funding Lender or the Borrower, all at the expense of the Borrower. The Funding Lender authorizes and directs the Fiscal Agent to enter into the Contingency Draw-Down Agreement. 2021/10/12 City Council Post Agenda Page 267 of 620 13 4839-8191-7430/024036-0092 (c) Origination Date; Maturity. The Funding Loan shall be originated on the Closing Date and shall mature on the corresponding Maturity Date at which time the entire principal amount of the portion of the Funding Loan evidenced by the applicable Governmental Note, to the extent not previously paid, and all accrued and unpaid interest, shall be due and payable. (d) Principal. The outstanding principal amount of each Governmental Lender Note and of the Funding Loan as of any given date shall be the total amount advanced to the Fiscal Agent by the Funding Lender to or for the account of the Governmental Lender to fund corresponding advances with respect to the corresponding Borrower Note under the Borrower Loan Agreement and the Construction Funding Agreement as proceeds of the Borrower Loan, less any payments of principal of such Governmental Lender Note previously received upon payment of principal amounts under the corresponding Borrower Note, including regularly scheduled principal payments and voluntary and mandatory prepayments. The principal amount of each Governmental Lender Note and interest thereon shall be payable on the basis specified in this paragraph (d) and in paragraphs (e) and (f) of this Section 2.1. The Fiscal Agent shall keep a record of all principal advances and principal repayments made under each Governmental Lender Note and shall upon written request provide the Governmental Lender with a statement of the outstanding principal balance of each Governmental Lender Note and the Funding Loan. (e) Interest. Interest shall be paid on the outstanding principal amount of each Governmental Lender Note at the rate or rates set forth in each Borrower Note and otherwise as set forth in the Borrower Loan Agreement. (f) Corresponding Payments. The payment or prepayment of principal, interest and premium, if any, due on the Funding Loan and each Governmental Lender Note shall be identical with and shall be made on the same dates, terms and conditions, as the principal, interest, premiums, late payment fees and other amounts due on the corresponding Borrower Note. The Series A-1 Governmental Lender Note shall be payable from payments on the corresponding Series A-1 Borrower Note and the Series A-2 Governmental Lender Note shall be payable from payments on the related Series A-2 Borrower Note. Any payment or prepayment made by the Borrower of principal, interest, Premium, if any, due on a Borrower Note shall be deemed to be like payments or prepayments of principal, interest and Premium, if any, d ue on the Funding Loan and the corresponding Governmental Lender Note. (g) Usury. The Governmental Lender intends to conform strictly to the usury laws applicable to this Funding Loan Agreement and the Governmental Lender Notes and all agreements made in the Governmental Lender Notes, this Funding Loan Agreement and the Funding Loan Documents are expressly limited so that in no event whatsoever shall the amount paid or agreed to be paid as interest or the amounts paid for the use of money advanced or to be advanced hereunder exceed the highest lawful rate prescribed under any law which a court of competent jurisdiction may deem applicable hereto. If, from any circumstances whatsoever, the fulfillment of any provision of the Governmental Lender Notes, this Funding Loan Agreement or the other Funding Loan Documents shall involve the payment of interest in excess of the limit prescribed by any law which a court of competent jurisdiction may deem applicable hereto, then the obligatio n to pay interest hereunder shall be reduced to the maximum limit prescribed by law. If from any circumstances whatsoever, the Funding Lender shall ever receive anything of value deemed interest, the amount of which would exceed the highest lawful rate, such amount as would be excessive interest shall be 2021/10/12 City Council Post Agenda Page 268 of 620 14 4839-8191-7430/024036-0092 deemed to have been applied, as of the date of receipt by the Funding Lender, to the reduction of the principal remaining unpaid hereunder and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance, such excess shall be refunded to the Borrower. This paragraph shall control every other provision of the Governmental Lender Note, this Funding Loan Agreement and all other Funding Loan Documents. In determining whether the amount of interest charged and paid might otherwise exceed the limit prescribed by law, the Governmental Lender intends and agrees that (i) interest shall be computed upon the assumption that payments under the Borrower Loan Agreement and other Funding Loan Documents will be paid according to the agreed terms, and (ii) any sums of money that are taken into account in the calculation of interest, even though paid at one time, shall be spread over the actual term of the Funding Loan. Section 2.2 Form of Governmental Lender Notes. As evidence of its obligation to repay the Funding Loan, simultaneously with the delivery of this Funding Loan Agreement to the Funding Lender, the Governmental Lender hereby agrees to execute and deliver the Governmental Lender Notes. The Governmental Lender Notes shall be substantially in the respective forms set forth in Exhibit A attached hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Funding Loan Agreement. In connection with Conversion, the Funding Lender shall have the right to exchange the then existing Series A-1 Governmental Lender Note on or after the Conversion Date for a new Series A-1 Governmental Lender Note with a dated date of the Conversion Date and in a stated principal amount equal to the then outstanding principal amount of the Series A-1 Governmental Lender Note, which amount will equal the Permanent Period Amount (as defined in the Borrower Loan Agreement) of the Borrower Loan, but shall not otherwise change any material terms of the Series A-1 Governmental Lender Note. Section 2.3 Execution and Delivery of Governmental Lender Notes. The Governmental Lender Notes shall be executed on behalf of the Governmental Lender by the manual or facsimile signature of the Authorized Governmental Lender Representative and attested by the manual or facsimile signature of its Secretary or Deputy Secretary of Chula Vista Housing Authority. The manual or facsimile signatures of individuals who were the proper officers o f the Governmental Lender at the time of execution shall bind the Governmental Lender, notwithstanding that such individuals or any of them shall have ceased to hold such offices prior to the execution and delivery of the Governmental Lender Notes or shall not have held such offices at the date of the Governmental Lender Notes. Section 2.4 Required Transferee Representations; Participations; Sale and Assignment. (a) The Funding Lender shall deliver to the Governmental Lender and the Fiscal Agent the Required Transferee Representations in substantially the form attached hereto as Exhibit B on the Closing Date. (b) The Funding Lender shall have the right to sell (i) the Governmental Lender Notes and the Funding Loan in the Authorized Amount, or (ii) any portion of or a participation interest in the Governmental Lender Notes and the Funding Loan in the Minimum Beneficial Ownership Amount, to the extent permitted by clause (c) below, provided that such sale shall be only 2021/10/12 City Council Post Agenda Page 269 of 620 15 4839-8191-7430/024036-0092 to Approved Transferees that execute and deliver to the Funding Lender, with a copy to the Governmental Lender and the Fiscal Agent, the Required Transferee Representations . (c) Notwithstanding the other provisions of this Section 2.4, the Governmental Lender Notes and the Funding Loan shall not be sold in an amount that is less than the Authorized Amount, and no beneficial ownership interest in the Governmental Lender Notes and Funding Loan shall be sold in an amount that is less than the Minimum Beneficial Ownership Amount. (d) No service charge shall be made for any sale or assignment of any portion of the Governmental Lender Notes, but the Governmental Lender may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with an y such sale or assignment. Such sums shall be paid in every instance by the purchaser or assignee of the Funding Loan or portion thereof. (e) The Governmental Lender Notes, or any interest therein, shall be in fully registered form transferable to subsequent owners only on the registration books which shall be maintained by the Funding Lender for such purpose and which shall be open to inspection by the Governmental Lender. The Governmental Lender Notes shall not be transferred through the services of the Depository Trust Company or any other third party registrar. The Fiscal Agent acknowledges that the Funding Lender is the initial registered owner of the Governmental Lender Notes and shall remain the sole registered owner of the Governmental Lender Notes except as provided herein. The Funding Lender shall provide written notice to the Fiscal Agent of any transfer by the Funding Lender of the Governmental Lender Notes or any interest of the Funding Lender in the Governmental Lender Notes. (f) The parties agree that no rating shall be sought from a rating agency with respect to the Funding Loan or the Governmental Lender Notes. ARTICLE III PREPAYMENT Section 3.1 Prepayment of the Governmental Lender Notes from Prepayment under the Corresponding Borrower Notes. The Governmental Lender Notes are subject to voluntary and mandatory prepayment as follows: (a) Each Governmental Lender Note shall be subject to voluntary prepayment in full or in part by the Governmental Lender, from funds received by the Fiscal Agent from the Borrower under the Borrower Loan Agreement to the extent and in the manner and on any date that the related Borrower Note is subject to voluntary prepayment as set forth therein, at a prepayment price equal to the principal balance of the related Borrower Note to be prepaid, plus interest thereon to the date of prepayment and the amount of any Prepayment Premium payable under the related Borrower Note, plus any Additional Borrower Payments due and payable under the Borrower Loan Agreement through the date of prepayment. Except as specifically permitted in the Borrower Notes, the Borrower shall not have the right to voluntarily prepay all or any portion of the Borrower Notes, thereby causing the related 2021/10/12 City Council Post Agenda Page 270 of 620 16 4839-8191-7430/024036-0092 Governmental Lender Note to be prepaid, without the prior written consent of Funding Lender, which may be withheld in Funding Lender’s sole and absolute discretion. (b) Each Governmental Lender Note shall be subject to mandatory prepayment in whole or in part upon prepayment of the related Borrower Note at the direction of the Funding Lender in accordance with the terms of the related Borrower Note at a prepayment price equal to the outstanding principal balance of the related Borrower Note prepaid, plus accrued interest plus any other amounts payable under the related Borrower Note or the Borrower Loan Agreement. Section 3.2 Notice of Prepayment. Notice of prepayment of a Governmental Lender Note shall be deemed given to the extent that notice of prepayment of the related Borrower Note is timely and properly given to the Funding Lender (with a copy to the Governmental Lender) in accordance with the terms of the related Borrower Note and the Borrower Loan Agreement, and no separate notice of prepayment of a Governmental Lender Note is required to be given. ARTICLE IV SECURITY Section 4.1 Security for the Funding Loan. To secure the payment of the Funding Loan and each Governmental Lender Note, to declare the terms and conditions on which the Funding Loan and each Governmental Lender Note are secured, and in consideration of the premises and of the funding of the Funding Loan by the Funding Lender, the Governmental Lender by these presents does grant, bargain, sell, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to the Funding Lender (except as limited herein), a lien on and security interest in the following described property (excepting, however, in each case, the Unassigned Rights) (said property, rights and privileges being herein collectively called, the “Security”): (a) All right, title and interest of the Governmental Lender in, to and under the Borrower Loan Agreement and the Borrower Notes, including, without limitation, all rents, revenues and receipts derived by the Governmental Lender from the Borrower relating to the Project and including, without limitation, all Pledged Revenues, Borrower Loan Payments and Additional Borrower Payments derived by the Governmental Lender under and pursuant to, and subject to the provisions of, the Borrower Loan Agreement; provided that the pledge and assign ment made under this Funding Loan Agreement shall not impair or diminish the obligations of the Governmental Lender under the provisions of the Borrower Loan Agreement; (b) All right, title and interest of the Governmental Lender in, to and under, together with all rights, remedies, privileges and options pertaining to, the Funding Loan Documents, and all other payments, revenues and receipts derived by the Governmental Lender under and pursuant to, and subject to the provisions of, the Funding Loan Documents; (c) Any and all moneys and investments from time to time on deposit in, or forming a part of, all funds and accounts created and held under this Funding Loan Agreement and any amounts held at any time in the Remaining Funding Loan Proceeds Account, any Negativ e Arbitrage Deposit and any other amounts held under the Contingency Draw-Down Agreement, subject to the provisions of this Funding Loan Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein; and 2021/10/12 City Council Post Agenda Page 271 of 620 17 4839-8191-7430/024036-0092 (d) Any and all other real or personal property of every kind and nature or description, which may from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien of this Funding Loan Agreement as additional security by the Government al Lender or anyone on its part or with its consent, or which pursuant to any of the provisions hereof or of the Borrower Loan Agreement may come into the possession or control of the Fiscal Agent, the Funding Lender or a receiver appointed pursuant to this Funding Loan Agreement; and the Funding Lender and the Fiscal Agent are hereby authorized to receive any and all such property as and for additional security for the Funding Loan and each Governmental Lender Note and to hold and apply all such property subject to the terms hereof. The pledge and assignment of and the security interest granted in the Security pursuant to this Section 4.1 for the payment of the principal of, premium, if any, and interest on each Governmental Lender Note, in accordance with its terms and provisions, and for the payment of all other amounts due hereunder, shall attach and be valid and binding from and after the time of the delivery of the Governmental Lender Notes by the Governmental Lender. The Security so pledged and then or thereafter received by the Governmental Lender, Fiscal Agent or the Funding Lender shall immediately be subject to the lien of such pledge and security interest without any physical delivery or recording thereof or further act, and the lien of such pledge and security interest shall be valid and binding and prior to the claims of any and all parties having claims of any kind in tort, contract or otherwise against the Governmental Lender irrespective of whether such parties have notice thereof. Section 4.2 Delivery of Security. To provide security for the payment of the Funding Loan and each Governmental Lender Note, the Governmental Lender has pledged and assigned to secure payment of the Funding Loan and the Governmental Lender Notes its right, title and interest in the Security to the Funding Lender. In connection with such pledge, assignment, transfer and conveyance, there shall be delivered to the Funding Lender, by or at the expense of the Borrower, the following documents or instruments promptly following their execution and, to the extent applicable, their recording or filing: (a) Each Borrower Note endorsed without recourse to the Funding Lender by the Governmental Lender; (b) The originally executed Borrower Loan Agreement and Regulatory Agreement; (c) The originally executed Security Instrument and all other Borrower Loan Documents existing at the time of delivery of the Borrower Notes and an assignment for security of the Security Instrument from the Governmental Lender to the Funding Lender, in recordable form; (d) Uniform Commercial Code financing statements or other chattel security documents giving notice of the Funding Lender’s status as an assignee of the Governmental Lender’s security interest in any personal property forming part of the Project, in form suitable for filing; and (e) Uniform Commercial Code financing statements giving notice of the pledge by the Governmental Lender of the Security pledged under this Funding Loan Agreement. There shall be delivered and deposited with the Funding Lender such additional docume nts, financing statements, and instruments as the Funding Lender may reasonably require from time to time for the better perfecting and assuring to the Funding Lender of its lien and security interest in 2021/10/12 City Council Post Agenda Page 272 of 620 18 4839-8191-7430/024036-0092 and to the Security including, at the request of the Funding Lender, any amounts held under the Contingency Draw-Down Agreement, in each case at the expense of the Borrower. ARTICLE V LIMITED LIABILITY Section 5.1 Source of Payment of Funding Loan and Other Obligations. The Funding Loan is a limited obligation of the Governme ntal Lender, payable solely from the Pledged Revenues and other funds and moneys and Security pledged and assigned hereunder. NONE OF THE GOVERNMENTAL LENDER (EXCEPT AS PROVIDED IN THE FIRST SENTENCE OF THIS SECTION 5.1), THE CITY OF CHULA VISTA, THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF (EXCEPT THE GOVERNMENTAL LENDER, TO THE LIMITED EXTENT SET FORTH HEREIN), SHALL IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM (IF ANY) OR INTEREST ON THE FUNDING LOAN OR FOR THE PERFORMANCE OF ANY PLEDGE, OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER WITH RESPECT THERETO EXCEPT AS SET FORTH HEREIN, AND NONE OF THE FUNDING LOAN, OR THE GOVERNMENTAL LENDER NOTES OR ANY OF THE GOVERNMENTAL LENDER’S AGREEMENTS OR OBLIGATIONS WITH RESPECT TO THE FUNDING LOAN, THE GOVERNMENTAL LENDER NOTES, OR HEREUNDER OR UNDER ANY OF THE OTHER FUNDING LOAN DOCUMENTS, SHALL BE CONSTRUED TO CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR A LOAN OF THE CREDIT OF OR A MORAL OBLIGATION OF ANY OF THE FOREGOING WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER. THE GOVERNMENTAL LENDER HAS NO TAXING POWER. Section 5.2 Exempt from Individual Liability. No covenant, condition or agreement contained herein shall be deemed to be a covenant, agreement or obligation of any present or future member of the Board of Commissioners, officer, director, employee or agent of the Governmental Lender in his individual capacity, and none of the members of the Board of Commissioners, the officers, directors, employees or agents of the Governmental Lender executing the Governmental Lender Notes or this Funding Loan Agreement shall be liable personally on the Governmental Lender Notes or under this Funding Loan Agreement or be subject to any personal liabilit y or accountability by reason of the issuance of the Governmental Lender Notes or the execution of this Funding Loan Agreement or any of the Funding Loan Documents. ARTICLE VI CLOSING CONDITIONS; APPLICATION OF FUNDS Section 6.1 Conditions Precedent to Closing. Closing of the Funding Loan on the Closing Date shall be conditioned upon satisfaction or waiver by the Funding Lender in its sole discretion of each of the conditions precedent to closing set forth in this Funding Loan Agreement, including but not limited to the following: (a) Receipt by the Funding Lender of the original Governmental Lender Notes; (b) Receipt by the Funding Lender of the original executed Borrower Notes, endorsed without recourse to the Funding Lender by the Governmental Lender; 2021/10/12 City Council Post Agenda Page 273 of 620 19 4839-8191-7430/024036-0092 (c) Receipt by the Funding Lender of executed counterpart copies of this Funding Loan Agreement, the Borrower Loan Agreement, the Construction Funding Agreement, the Regulatory Agreement, the Tax Certificate and the Security Instrument; (d) Receipt by the Funding Lender of a certified copy of the Resolution; (e) Executed Required Transferee Representations from the Funding Lender; (f) Delivery into escrow of all amounts required to be paid in connection with the origination of the Borrower Loan and the Funding Loan and any underlying real estate transf ers or transactions, including the Costs of Funding Deposit, in accordance with Section 2.3(c)(ii) of the Borrower Loan Agreement; (g) Receipt by the Funding Lender of a Tax Counsel Approving Opinion; (h) Receipt by the Funding Lender of an Opinion of Counsel from Tax Counsel to the effect that the Governmental Lender Notes are exempt from registration under the Securities Act of 1933, as amended, and this Funding Loan Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; (i) Delivery of an opinion of counsel to the Borrower addressed to the Governmental Lender to the effect that the Borrower Loan Documents and the Regulatory Agreement are valid and binding obligations of the Borrower that are enforceable against the Borrower in accordance with their terms, subject to such exceptions and qualifications as are acceptable to the Governmental Lender; and (j) Receipt by the Funding Lender of any other documents or opinions that the Funding Lender or Tax Counsel may require. ARTICLE VII FUNDS AND ACCOUNTS Section 7.1 Authorization to Create Funds and Accounts. Except as provided in Section 7.3 hereof, no funds or accounts shall be established in connection with the Funding Loan at the time of closing and origination of the Funding Loan. The Funding Lender, the Fisc al Agent and the Servicer, if any, and any designee of the Funding Lender or the Servicer, are authorized to establish and create from time to time such other funds and accounts or subaccounts as may be necessary for the deposit of moneys (including, without limitation, insurance proceeds and/or condemnation awards), if any, received by the Governmental Lender, the Fiscal Agent, the Funding Lender or the Servicer pursuant to the terms hereof or any of the other Funding Loan Documents and not immediately transferred or disbursed pursuant to the terms of the Funding Loan Documents and/or the Borrower Loan Documents. Section 7.2 Investment of Funds. Amounts held in any funds or accounts created under this Funding Loan Agreement shall be invested by the Fiscal Agent, the Funding Lender, the Servicer or the designee of the Funding Lender or Servicer, as applicable, in Permitted Investments at the written direction of the Borrower, subject in all cases to the restrictions of Section 8.7 hereof and of the Tax Certificate. The Borrower’s instruction shall be sufficient evidence that the investment 2021/10/12 City Council Post Agenda Page 274 of 620 20 4839-8191-7430/024036-0092 constitutes a Permitted Investment (including as to the legality thereof). In the absence of any such instruction, monies shall be held uninvested. Permitted Investments purchased a s an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in such fund or account. For purposes of acquiring any investments hereunder, the Fiscal Agent may commingle funds held by it hereunder, except as provided in Section 7.8(h) hereof with respect to the Rebate Fund. The Fiscal Agent shall incur no liability for losses arising from any investments made pursuant to this Section. The Fiscal Agent shall furnish the Borrower and Funding Lender periodic cash transaction statements that include detail for all investment transactions effected by the Fiscal Agent or brokers selected by the Borrower. Upon the Borrower’s or Funding Lender’s election, such statements will be delivered via the Fiscal Agent’s online service, and upon electing such service, paper statements will be provided only upon request. The Borrower waives the right to receive br okerage confirmations of security transactions effected by the Fiscal Agent as they occur, to the extent permitted by law. The Borrower further understands that trade confirmations for securities transactions effected by the Fiscal Agent will be available upon request and at no additional cost, and other trade confirmations may be obtained from the applicable broker. Section 7.3 Establishment of Funds. There are established with the Fiscal Agent the following funds and accounts: (a) The Funding Loan Payment Fund; (b) The Project Fund (consisting solely of a Note Proceeds Account, an Equity Account, a Remaining Funding Loan Proceeds Account and a Negative Arbitrage Account); (c) The Expense Fund; (d) The Closing Costs Fund; and (e) The Rebate Fund (to be established by the Fiscal Agent once the Fiscal Agent is required to deposit or transfer, as applicable, amounts to the Rebate Fund in accordance with Section 7.8(a)). All money required to be deposited with or paid to the Fiscal Agent for the account of any of the funds or accounts created by this Funding Loan Agreement shall be held by the Fiscal Agent for the benefit of the Funding Lender, and except for money held in the Expense Fund or the Rebate Fund, shall, while held by the Fiscal Agent, constitute part of the Pledged Revenues an d be subject to the lien hereof. All money to be deposited with or paid to the Fiscal Agent shall be wired to the Fiscal Agent pursuant to the wiring instructions contained in Exhibit E attached hereto. The Fiscal Agent shall provide Written Notice of any change to such wiring instructions to the Funding Lender and the Borrower no less than five (5) Business Days prior to the next payment date for which such revised instructions will be applicable. Section 7.4 Funding Loan Payment Fund. The Governmental Lender and the Borrower shall have no interest in the Funding Loan Payment Fund or the moneys therein, which shall always 2021/10/12 City Council Post Agenda Page 275 of 620 21 4839-8191-7430/024036-0092 be maintained by the Fiscal Agent completely separate and segregated from all other moneys held hereunder and from any other moneys of the Governmental Lender and the Borrower. The Fiscal Agent shall deposit into the Funding Loan Payment Fund any amounts received from or on behalf of the Borrower as payments of principal of or premium and interest on the Borrower Loan and any other amounts received by the Fiscal Agent that are subject to the lien and pledge of this Funding Loan Agreement, including any Pledged Revenues not required to be deposited to the Expense Fund or not otherwise specifically directed in writing to be deposited into other funds created by this Funding Loan Agreement. The Fiscal Agent shall apply all amounts on deposit in the Funding Loan Payment Fund in the following order of priority: First, to pay or provide for the payment of the interest then due on the Funding Loan to the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan; Second, to pay or provide for the payment or the prepayment (together with any Prepayment Premium payable in connection with such prepayment) of principal on the Fundi ng Loan to the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan, provided moneys have been transferred or deposited into the Funding Loan Payment Fund for such purpose; and Third, to pay or provide for the payment of the Funding Loan on the Maturity Date to the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan. Section 7.5 Expense Fund. The Fiscal Agent shall deposit into the Expense Fund the amounts required by the Regulatory Agreement or the Borrower Loan Agreement to be paid by the Borrower to the Governmental Lender or the Fiscal Agent on behalf of the Borrower. Amounts on deposit in the Expense Fund shall be used to pay the fees and expenses of the Governmental Lender and the Fiscal Agent, as and when the same become due. In that regard, moneys in the Expense Fund shall be withdrawn or maintained, as appropriate, by the Fiscal Agent to pay (i) the Ongoing Governmental Lender Fee to the Governmental Lender as and when due, (ii) the Fiscal Agent’s Fees to the Fiscal Agent when due, (iii) upon receipt, to the Fiscal Agent, any amounts due to the Fiscal Agent which have not been paid, other than amounts paid in accordance with clause (ii) hereof, and (iv) upon receipt, to, or at the direction of, the Governmental Lender, any amounts owing the Governmental Lender by the Borrower and then due and unpaid, other than amounts paid in accordance with clause (i) hereof. In the event that the amounts on deposit in the Expense Fund are not equal to the amounts payable from the Expense Fund as provided in the preceding paragraph on any date on which such amounts are due and payable, the Fiscal Agent shall give notice to the Borrower of such deficiency and of the amount of such deficiency and request payment within two Business Days to the Fiscal Agent of the amount of such deficiency. Written notice of any insufficiency, which would result in the Governmental Lender not receiving the Ongoing Governmental Lender Fee on the applicable due date, shall be pro vided by the Fiscal Agent to the Governmental Lender (with a copy to the Borrower and the Funding Lender) within 10 days of the respective due date. 2021/10/12 City Council Post Agenda Page 276 of 620 22 4839-8191-7430/024036-0092 Upon payment by the Borrower to the Fiscal Agent of such deficiency, the amounts for which such deficiency was requested shall be paid by the Fiscal Agent. Notwithstanding anything herein to the contrary, the Governmental Lender, shall prepare and submit a written invoice to the Borrower for payment of the Ongoing Governmental Lender Fee not later than 30 days prior to the due date for payment of such Ongoing Governmental Lender Fee, the Fiscal Agent shall remit moneys received by the Borrower to the Governmental Lender for payment of such fee. Section 7.6 Closing Costs Fund. Amounts in the Closing Costs Fund shall be disb ursed by the Fiscal Agent to pay Closing Costs on the Closing Date or as soon as practicable thereafter as follows: moneys on deposit in the Closing Costs Fund shall be applied to pay Closing Costs at the written direction of the Authorized Borrower Representative, consented to by the Funding Lender and the Governmental Lender, in the form attached hereto as Exhibit D. Any interest earnings on amounts on deposit in the Closing Costs Fund shall remain in the Closing Costs Fund. Any moneys remaining in the Closing Costs Fund (including investment proceeds) after the earlier of (i) the payment of all costs of issuance as certified in writing to the Fiscal Agent by the Borrower or (ii) a period of six (6) months after the Closing Date, shall be paid to or at the direction of the Borrower and the Closing Costs Fund shall be closed. Section 7.7 Project Fund. (a) All proceeds of the Funding Loan provided by the Funding Lender shall be deposited to the Note Proceeds Account of the Project Fund and disbursed as herein provided; provided, however, that (i) the initial disbursement of the Funding Loan on the Closing Date shall be sent by the Funding Lender to Fiscal Agent, which shall then transfer such funds to the Title Company, and (ii) any proceeds of the Funding Loan funded pursuant to the Contingency Draw- Down Agreement shall be deposited to the Remaining Funding Loan Proceeds Account of the Project Fund and disbursed as herein provided. The Fiscal Agent shall disburse moneys in the Project Fund for the acquisition, construction, improvement and equipping of the Project, to pay other Qualified Project Costs and to pay other costs related to the Project as provided herein. Not less than 97% of the moneys deposited in and credited to the Note Proceeds Account and Remaining Funding Loan Proceeds Account of the Project Fund representing the proceeds of the Funding Loan, including Investment Income thereon, will be expended for Qualified Project Costs (the “97% Requirement”). The amounts on deposit in the Note Proceeds Account and Remaining Funding Loan Proceeds Account of the Project Fund shall not be applied to the payment of Closing Costs. Before any payment shall be made from the Note Proceeds Account of the Project Fund, the Regulatory Agreement shall have been executed and submitted to a title company for recordation in the official records of San Diego County and there shall be filed with the Fiscal Agent a Written Requisition of the Borrower substantially in the form attached hereto as Exhibit C and approved by the Funding Lender pursuant to the terms, conditions and provisions of the Construction Funding Agreement. 2021/10/12 City Council Post Agenda Page 277 of 620 23 4839-8191-7430/024036-0092 In addition to the above, in connection with a Written Requisition: (i) Only the signature of an authorized officer of the Funding Lender shall be required on a Written Requisition during any period in which a default by the Borrower has occurred and is then continuing under the Borrower Loan (Written Notice of which default has been given in writing by an authorized officer of the Funding Lender to the Fiscal Agent and t he Governmental Lender, and the Fiscal Agent shall be entitled to conclusively rely on any such Written Notice as to the occurrence and continuation of such a default). (ii) The Fiscal Agent shall disburse amounts in the Note Proceeds Account of the Project Fund for the payment of interest due on the Governmental Lender Notes upon receipt from the Funding Lender of a statement detailing the amount due (and without any need for a Written Requisition signed by the Funding Lender or any approval by an Authorized Re presentative of the Borrower) so long as the amounts to be disbursed do not exceed $__________ in the aggregate. (iii) The Fiscal Agent may conclusively rely on all Written Requisitions, the execution of the Written Requisitions by the Authorized Borrower Repres entative and the approval of all Written Requisitions by the Funding Lender, as required by this Section, as conditions of payment from the Project Fund, which Written Requisitions constitute, as to the Fiscal Agent, irrevocable determinations that all conditions to payment of the specified amounts from the Project Fund have been satisfied. These documents shall be retained by the Fiscal Agent, subject at all reasonable times to examination by the Borrower, the Governmental Lender, the Funding Lender and the agents and representatives thereof upon reasonable notice to the Fiscal Agent. The Fiscal Agent is not required to inspect the Project or the rehabilitation or construction work or to make any independent investigation with respect to the matters set f orth in any Written Requisition or other statements, orders, certifications and approvals received by the Fiscal Agent. The Fiscal Agent is not required to obtain completion bonds, lien releases or otherwise supervise the acquisition, rehabilitation, construction, equipping, improvement and installation of the Project. (b) Upon receipt of each Written Requisition submitted by the Borrower and approved in writing by the Funding Lender, the Fiscal Agent shall promptly, but in any case within three Business Days, make payment from the appropriate Account within the Project Fund in accordance with such Written Requisition. The Fiscal Agent shall have no duty to determine whether any requested disbursement from the Project Fund complies with the terms, conditions a nd provisions of the Funding Loan Documents, constitutes payment of Qualified Project Costs or complies with the 97% Requirement. The approval in writing of a Written Requisition by the Funding Lender shall be deemed a certification and, insofar as the Fi scal Agent and the Governmental Lender are concerned, shall constitute conclusive evidence that all of the terms, conditions and requirements of the Funding Loan Documents applicable to such disbursement have been fully satisfied or waived and the Written Requisition from the Borrower shall, insofar as the Fiscal Agent and the Governmental Lender, as applicable, are concerned, constitute conclusive evidence that the costs described in the Written Requisition constitute Qualified Project Costs or other permitted Project costs. The Fiscal Agent shall provide Written Notice to the Borrower, the Funding Lender and the Governmental Lender if there are not sufficient funds available to or on deposit with the Fiscal Agent to make the disbursements as and when required by this Section 7.7(b). Except as provided in the next sentence, all such payments shall be made by check or draft payable, or by wire 2021/10/12 City Council Post Agenda Page 278 of 620 24 4839-8191-7430/024036-0092 transfer, either: (i) directly to the person, firm or corporation to be paid; (ii) to the Borrower and such person, firm or corporation; or (iii) upon receipt by the Funding Lender of evidence that the Borrower has previously paid such amount and Written Direction to the Fiscal Agent as to such as evidenced by the Funding Lender’s approval of the Written Requisition, t o the Borrower. Upon the occurrence of an Event of Default of the Borrower of which the Fiscal Agent has knowledge as provided herein, which is continuing under the Funding Loan Documents, with the Written Consent of the Funding Lender, the Fiscal Agent may apply amounts on deposit in the Project Fund to the payment of principal of and interest on the Funding Loan. If a Written Requisition signed by the Authorized Borrower Representative and countersigned by an authorized officer of the Funding Lender is received by the Fiscal Agent, the requested disbursement shall be paid by the Fiscal Agent as soon as practicable, but in no event later than three Business Days following receipt thereof by the Fiscal Agent. Upon final disbursement of all amounts on depo sit in the Project Fund, the Fiscal Agent shall close the Project Fund. (c) Moneys deposited to the Negative Arbitrage Account of the Project Fund pursuant to the Contingency Draw-Down Agreement, together with investment earnings thereon, which shall be retained therein, shall be transferred to the Funding Loan Payment Fund and applied pursuant to Section 7.4 on each Borrower Loan Payment Date to the extent necessary to enable the Fiscal Agent to pay interest due on the Funding Loan on such date. The transfer of moneys from the Negative Arbitrage Account of the Project Fund to the Funding Loan Payment Fund shall occur automatically without the need for a Written Requisition of the Borrower, or consent of the Funding Lender. (d) Amounts on deposit in the Borrower Equity Account of the Project Fund shall be disbursed from time to time by the Fiscal Agent to pay designated amounts as set forth in and upon receipt of a Written Requisition of the Borrower signed by an Authorized Borrower Representative and the Funding Lender. (e) Prior to any mandatory prepayment of the Funding Loan pursuant to the terms hereof, any amounts then remaining in the Project Fund shall, at the written direction of the Funding Lender, be transferred to the Funding Loan Payment Fund to be applied to the prepayment of the Funding Loan pursuant hereto. Section 7.8 Rebate Fund. (a) The Fiscal Agent shall deposit or transfer to the credit of the Rebate Fund each amount delivered to the Fiscal Agent by the Borrower for deposit thereto and each amount directed by the Borrower to be transferred thereto. (b) Within 15 days after each receipt or transfer of funds to the Rebate Fund, the Fiscal Agent shall withdraw from the Rebate Fund and pay to the United States of America the entire balance of the Rebate Fund. (c) All payments to the United States of America pursuant to this Section shall be made by the Fiscal Agent for the account and in the name of the Governmental Lender and shall be paid through the United States Mail (return receipt requested or overnight delivery), address ed to the appropriate Internal Revenue Service Center and accompanied by the appropriate Internal Revenue Service forms (such completed and signed forms to be provided to the Fiscal Agent by the Borrower or the Rebate Analyst). 2021/10/12 City Council Post Agenda Page 279 of 620 25 4839-8191-7430/024036-0092 (d) The Fiscal Agent shall preserve all statements, forms and explanations received from the Borrower and delivered to the Fiscal Agent and all records of transactions in the Rebate Fund until six years after the retirement of the Tax-Exempt Governmental Lender Note. (e) The Fiscal Agent may conclusively rely on the instructions of the Borrower (based upon the report of the Rebate Analyst) with regard to any actions to be taken by it pursuant to this Section and shall have no liability for any consequences of any failure of the Borrower or th e Rebate Analyst to perform its duties or obligations or to supply accurate or sufficient instructions. Except as specifically provided in subsection (b) above, the Fiscal Agent shall have no duty or responsibility with respect to the Rebate Fund or the B orrower’s duties and responsibilities with respect thereto except to follow the Borrower’s specific written instruction related thereto. (f) If at any time during the term of this Funding Loan Agreement the Governmental Lender or the Borrower desires to take any action that would otherwise be prohibited by the terms of this Section, such person shall be permitted to take such action if it shall first obtain and provide to the other persons named herein, a Tax Counsel No Adverse Effect Opinion and an opinion of Tax Counsel that such action shall be in compliance with the laws of the State and the terms of this Funding Loan Agreement. (g) Moneys and securities held by the Fiscal Agent in the Rebate Fund shall not be deemed funds of the Governmental Lender and are not pledged or otherwise subject to any security interest in favor of the Owners to secure the Governmental Lender Notes or any other obligations. (h) Moneys in the Rebate Fund may be separately invested and reinvested by the Fiscal Agent, at the request of and as directed in writing by the Borrower, in Permitted Investments, subject to the Code. The Fiscal Agent shall sell and reduce to cash a sufficient amount of such Permitted Investments, as directed in writing by the Borrower, whenever the cash balance in the Rebate Fund is insufficient for its purposes. (i) Notwithstanding anything to the contrary in this Funding Loan Agreement, no payment shall be made by the Fiscal Agent to the United States if the Borrower shall furnish to the Governmental Lender and the Fiscal Agent an opinion of Tax Counsel to the effect that such payment is not required under Section 148(d) and (f) of the Code in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Governmental Lender Note. In such event the Borrower shall be entitled to withdraw funds from the Rebate Fund to the extent the Borrower shall provide a Tax Counsel No Adverse Effect Opinion to the Governmental Lender and the Fiscal Agent with respect to such withdrawal. (j) The Fiscal Agent shall keep and make available to the Governmental Lender and the Borrower records concerning the investments of all funds held by the Fiscal Agent pursuant to the Funding Loan Agreement including date bought and sold, price and commission p aid, and bids taken, if any, and shall keep all such records until six years after the date on which neither of the Tax-Exempt Governmental Lender Note is Outstanding in order to enable the Borrower to make the computations required under Section 148(f) of the Code. (k) Notwithstanding the foregoing, the computations and payments of rebate amounts referred to in this Section 7.8 need not be made to the extent that neither the Governmental Lender nor the Borrower will thereby fail to comply with any requirements of Section 148(f) of the 2021/10/12 City Council Post Agenda Page 280 of 620 26 4839-8191-7430/024036-0092 Code based on a Tax Counsel No Adverse Effect Opinion, a copy of which shall be provided to the Fiscal Agent and the Governmental Lender. In the event of any conflict between the requirements of this Section 7.8 and those of the Tax Certificate, the Tax Certificate shall control. Section 7.9 Investments. (a) Amounts on deposit in the Project Fund shall be invested in Permitted Investments directed in writing by the Borrower . Investment Income earned on amounts on deposit in each account of the Project Fund shall be retained in and credited to and become a part of the amounts on deposit in that account of the Project Fund. (b) Amounts on deposit in the Funding Loan Payment Fund, Expense Fund, Rebate Fund and Closing Costs Fund shall be invested in Permitted Investments directed in writing by the Borrower. Investment Income earned on amounts on deposit in each account of the Funding Loan Payment Fund, Expense Fund, Rebate Fund and Closing Costs Fund shall be retained in and credited to and become a part of the amounts on deposit in that account of the Funding Loan Payment Fund, Expense Fund, Rebate Fund and Closing Costs Fund. The Fiscal Agent may make any and all investments permitted under this Funding Loan Agreement through its own trust or banking department or any affiliate and may pay said department reasonable, customary fees for placing such investments. The Fiscal Agent and its affiliates may act as principal, agent, sponsor, advisor or depository with respect to Permitted Investments under thi s Funding Loan Agreement. The Fiscal Agent shall not be liable for any losses from investments made by the Fiscal Agent in accordance with this Funding Loan Agreement. The Governmental Lender, the Funding Lender and the Borrower (by its execution of the Borrower Loan Agreement) acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Governmental Lender or the Funding Lender the right to receive brokerage confirmations of security transac tions as they occur, the Governmental Lender and the Funding Lender will not receive such confirmations to the extent permitted by law. The Fiscal Agent shall furnish the Borrower, the Funding Lender and the Governmental Lender (to the extent requested by such parties) periodic cash transaction statements which shall include detail for all investment transactions, if any, made by the Fiscal Agent hereunder. ARTICLE VIII REPRESENTATIONS AND COVENANTS Section 8.1 General Representations. The Governmental Lender makes the following representations as the basis for the undertakings on its part herein contained: (a) The Governmental Lender is a public body corporate and politic, organized and existing under the laws of the State, has the power and authority to (i) enter into the Funding Loan Documents to which it is a party and the transactions contemplated thereby, (ii) incur the limited obligation represented by the Governmental Lender Notes and the Funding Loan, and apply the proceeds of such obligation or loan to finance the Project, and (iii) carry out its other obligations under this Funding Loan Agreement and the Governmental Lender Notes, and by proper action has duly authorized the Governmental Lender’s execution and delivery of, and its performance under, the Funding Loan Documents to which it is a party. 2021/10/12 City Council Post Agenda Page 281 of 620 27 4839-8191-7430/024036-0092 (b) The Governmental Lender is not in default under or in violation of, and the execution and delivery of the Funding Loan Documents to which it is a party and its compliance with the terms and conditions thereof will not conflict or constitute a default under or a violation of, (i) the Act, (ii) to its knowledge, any other existing laws, rules, regulations, judgments, decrees and orders applicable to it, or (iii) to its knowledge, the provisions of any agreements and instruments to which the Governmental Lender is a party, a default under or violation of which would prevent it from entering into the Funding Loan Agreement, executing and delivering the Governmental Lender Notes, financing the Project, executing and delivering the other Funding Loan Documents to which it is a party or consummating the transactions on its part contemplated thereby, and, to its knowledge, no event has occurred and is continuing under the provisions of any such agreement or instrument or otherwise that with the lapse of time or the giving of notice, or both, would constitute such a default or violation (it being understood, however, that the Governmental Lender is making no representations as to the necessity of re gistering the Governmental Lender Notes or the Borrower Notes pursuant to any securities laws or complying with any other requirements of securities laws). (c) To the best knowledge of the Governmental Lender, no litigation, inquiry or investigation of any kind in or by any judicial or administrative court or agency is pending with respect to which the Governmental Lender has been served with process or, to the knowledge of the Governmental Lender, is threatened against the Governmental Lender with respect to (i) the organization and existence of the Governmental Lender, (ii) its authority to execute or deliver the Funding Loan Documents to which it is a party, (iii) the validity or enforceability of any such Funding Loan Documents or the transactions contemplated thereby, (iv) the title of any officer of the Governmental Lender who executed such Funding Loan Documents or (v) any authority or proceedings relating to the execution and delivery of such Funding Loan Documents on behalf of the Governmental Lender, and no such authority or proceedings have been repealed, revoked, rescinded or amended but are in full force and effect. (d) The revenues and receipts to be derived from the Borrower Loan Agreement, the Borrower Notes and this Funding Loan Agreement have not been pledged previously by the Governmental Lender to secure any of its notes or bonds other than the Funding Loan Agreement as evidenced by the Governmental Lender Notes. THE GOVERNMENTAL LENDER MAKES NO REPRESENTATION, COVENANT OR AGREEMENT AS TO THE FINANCIAL POSITION OR BUSINESS CONDITION OF THE BORROWER OR THE PROJECT AND DOES NOT REPRESENT OR WARRANT AS TO ANY STATEMENTS, MATERIALS, REPRESENTATIONS OR CERTIFICATIONS FURNISHED BY THE BORROWER IN CONNECTION WITH THE FUNDING LOAN OR THE BORROWER LOAN, OR AS TO THE CORRECTNESS, COMPLETENESS OR ACCURACY THEREOF. Section 8.2 No Encumbrance on Security. The Governmental Lender will not knowingly create or knowingly permit the creation of any mortgage, pledge, lien, charge or encumbrance of any kind on the Security or any part thereof prior to or on a parity with the lien of this Funding Loan Agreement, except as expressly permitted or contemplated by the Funding Loan Documents. Section 8.3 Repayment of Funding Loan. Subject to the provisions of Articles III and V hereof, the Governmental Lender will duly and punctually repay, or cause to be repaid, the Funding Loan, as evidenced by the Governmental Lender Notes, as and when the same shall become 2021/10/12 City Council Post Agenda Page 282 of 620 28 4839-8191-7430/024036-0092 due, all in accordance with the terms of the Governmental Lender Notes and this Funding Loan Agreement. Section 8.4 Servicer. The Funding Lender may appoint a Servicer to service and administer the Funding Loan and/or the Borrower Loan on behalf of the Funding Lender, including without limitation the fulfillment of rights and responsibilities granted by Governmental Lender to Funding Lender pursuant to Section 2.1 of the Borrower Loan Agreement. Section 8.5 Borrower Loan Agreement Performance. (a) The Funding Lender and the Servicer, if any, on behalf of the Governmental Lender, may (but shall not be required or obligated to) perform and observe any agreement or covenant of the Governmental Lender under the Borrower Loan Agreement subject to the terms and provisions contained therein, all to the end that the Governmental Lender’s rights under the Borrower Loan Agreement may be unimpaired and free from default. (b) The Governmental Lender will promptly notify the Borrower, the Servicer and the Funding Lender in writing of the occurrence of any Borrower Loan Agreement Default, provided that the Governmental Lender has received written notice or otherwi se has knowledge of such event. Section 8.6 Maintenance of Records; Inspection of Records. (a) The Fiscal Agent shall keep and maintain adequate records pertaining to any funds and accounts established hereunder, including all deposits to and disbursements from said funds and accounts and shall keep and maintain the registration books for the Governmental Lender Notes and interests therein. The Fiscal Agent shall retain in its possession all certifications and other documents presented to it, all such records and all reco rds of principal, interest and premium paid on the Funding Loan, subject to the inspection of the Funding Lender and the Governmental Lender and their representatives at all reasonable times and upon reasonable prior notice. (b) The Governmental Lender and the Funding Lender will at any and all times, upon the reasonable request of the Servicer, if any, the Borrower, the Fiscal Agent, the Governmental Lender or the Funding Lender, afford and procure a reasonable opportunity by their respective representatives to inspect the books, records, reports and other papers of the Governmental Lender or the Funding Lender, as appropriate, relating to the Project and the Funding Loan, if any, and (at their own expense) to make copies thereof. Section 8.7 Tax Covenants. The Governmental Lender covenants to and for the benefit of the Funding Lender that, notwithstanding any other provisions of this Funding Loan Agreement or of any other instrument, it will: (a) Require the Borrower to execute the Regulatory Agreement as a condition of funding the Borrower Loan; (b) Not take or cause to be taken any action or actions, or fail to take any action or actions, which would cause the interest payable on the Tax-Exempt Governmental Lender Note to be includable in gross income for federal income tax purposes; 2021/10/12 City Council Post Agenda Page 283 of 620 29 4839-8191-7430/024036-0092 (c) Whenever and so often as requested in writing by Funding Lender, the Governmental Lender (at the sole cost and expense of the Borrower), shall do and perform all acts and things permitted by law and necessary or desirable in order to assure that inte rest paid by the Governmental Lender on the Tax-Exempt Governmental Lender Note will be excluded from the gross income of the Noteowner, for federal income tax purposes, pursuant to Section 103 of the Code, except in the event where any owner of the Tax-Exempt Governmental Lender Note or a portion thereof is a “substantial user” of the facilities financed with the Funding Loan or a “related person” within the meaning of Section 147(a) of the Code; (d) Not take any action nor, solely in reliance upon the covenants and representations of the Borrower in the Borrower Loan Agreement, in the Regulatory Agreement and in the Tax Certificate, knowingly permit or suffer any action to be taken if the result of the same would be to cause the Tax-Exempt Governmental Lender Note to be “federally guaranteed” within the meaning of Section 149(b) of the Code and the Regulations; (e) Require the Borrower to agree, solely by causing the Borrower to execute and deliver the Borrower Loan Agreement, not to commit any act and not to make any use of the proceeds of the Funding Loan, or any other moneys which may be deemed to be proceeds of the Funding Loan pursuant to the Code, which would cause the Tax-Exempt Governmental Lender Note to be “arbitrage bonds” within the meaning of Sections 103(b) and 148 the Code, and to comply with the requirements of the Code throughout the term of the Funding Loan; and (f) Require the Borrower, solely by causing the Borrower to execute and deliver the Borrower Loan Agreement, to take all steps necessary to compute and pay any rebatable arbitrage in accordance with Section 148(f) of the Code. In furtherance of the covenants in this Section 8.7, the Governmental Lender and the Borrower shall execute, deliver and comply with the provisions of the Tax Certificate (it being understood that the obligations of the Fiscal Agent with respect to the Tax Certificate are to follow the written directions of the Governmental Lender or Borrower, and that the Fiscal Agent shall not be responsible for monitoring the compliance of the Governmental Lender or Borrower therewith), which are by this reference incorporated into this Funding Loan Agreement and made a part of this Funding Loan Agreement as if set forth in this Funding Loan Agreement in full. In the event of any conflict between this Funding Loan Agreement and the Tax Certificate, the requirements of the Tax Certificate shall control. For purposes of this Section 8.7 the Governmental Lender’s compliance shall be based solely on matters within the Governmental Lender’s knowledge and control and no acts, omissions or directions of the Borrower, the Funding Lender or any other Persons shall be attributed to the Governmental Lender. In complying with the foregoing covenants, the Governmental Lender may rely from time to time on a Tax Counsel No Adverse Effect Opinion or other appropriate opinion of Tax Counsel. Section 8.8 Performance by the Borrower. Without relieving the Governmental Lender from the responsibility for performance and observance of the agreements and covenants required t o be performed and observed by it hereunder, the Borrower, on behalf of the Governmental Lender, may (but is under no obligation to) perform any such agreement or covenant if no Borrower Loan 2021/10/12 City Council Post Agenda Page 284 of 620 30 4839-8191-7430/024036-0092 Agreement Default or Potential Default under (and as such term i s defined in) the Borrower Loan Agreement exists. ARTICLE IX DEFAULT; REMEDIES Section 9.1 Events of Default. Any one or more of the following shall constitute an event of default (an “Event of Default”) under this Funding Loan Agreement (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or Governmental Authority): (a) A default in the payment of any interest upon the Governmental Lender Notes when such interest becomes due and payable; (b) A default in the payment of principal of, or premium on, the Governmental Lender Notes when such principal or premium becomes due and payable, whether at its stated maturity, by declaration of acceleration or call for mandatory prepayment or otherwise; (c) Subject to Section 8.8 hereof, default in the performance or breach of any material covenant or warranty of the Governmental Lender in this Funding Loan Agreement (other than a covenant or warranty or default in the performance or breach of which is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 30 days after there has been given written notice, as provided in Section 12.1 hereof, to the Governmental Lender and the Borrower by the Funding Lender or the Servicer, specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under this Funding Loan Agreement; provided that, so long as the Governmental Lender has commenced to cure such failure to observe or perform within the thirty (30) day cure period, the subject matter of the default is not capable of cure within said thirty (30) day period and the Govern mental Lender is diligently pursuing such cure to the Funding Lender’s satisfaction, with the Funding Lender’s Written Direction or Written Consent, then the Governmental Lender shall have an additional period of time as reasonably necessary (not to exceed 30 days unless extended in writing by the Funding Lender) within which to cure such default; (d) A default in the payment of any Additional Borrower Payments; or (e) Any other “Default” or “Event of Default” under any of the other Funding Loan Documents (taking into account any applicable grace periods therein). Section 9.2 Acceleration of Maturity; Rescission and Annulment. (a) Subject to the provisions of Section 9.9 hereof, upon the occurrence of an Event of Default under Section 9.1 hereof, then and in every such case, the Funding Lender may declare the principal of the Funding Loan and the Governmental Lender Notes and the interest accrued to be immediately due and payable, by notice to the Governmental Lender, Borrower and the Equity Investor, and upon any such declaration, all principal of and Prepayment Premium, if any, and interest on the Funding Loan and the Governmental Lender Notes shall become immediately due and payable. 2021/10/12 City Council Post Agenda Page 285 of 620 31 4839-8191-7430/024036-0092 (b) At any time after a declaration of acceleration has been made pursuant to subsection (a) of this Section, the Funding Lender may by Written Notice to the Governmental Lender rescind and annul such declaration and its consequences if: (i) there has been deposited with the Funding Lender a sum sufficient to pay (1) all overdue installments of interest on the Funding Loan, (2) the principal of and Prepayment Premium on the Funding Loan that has become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in the Funding Loan, (3) to the extent that payment of such interest is lawful, interest upon overdue installments of interest at the rate or rates prescribed therefor in the Funding Loan, and (4) all sums paid or advanced by the Funding Lender and the reasonable compensation, expenses, disbursements and advances of the Funding Lender, its agents and counsel (but only to the extent not duplicative wi th subclauses (1) and (3) above); and (ii) all Events of Default, other than the non-payment of the principal of the Funding Loan that has become due solely by such declaration of acceleration, have been cured or have been waived in writing as provided in Section 9.9 hereof. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon. (c) Notwithstanding the occurrence and continuation of an Event of Default, it is understood that the Funding Lender shall pursue no remedies against the Borrower, any of the Borrower’s partners or the Project if no Borrower Loan Agreement Default has occurred and is continuing. An Event of Default hereunder shall not in and of itself constitute a Borrower Loan Agreement Default. Section 9.3 Additional Remedies; Funding Lender Enforcement. (a) Upon the occurrence of an Event of Default, the Funding Lender may, subject to the provisions of this Section 9.3 and Section 9.9 hereof, proceed to protect and enforce its rights by mandamus or other suit, action or proceeding at law or in equity. No remedy conferred by this Funding Loan Agreement upon or remedy reserved to the Funding Lender is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and shall be in addition to any ot her remedy given to the Funding Lender hereunder or now or hereafter existing at law or in equity or by statute. (b) Upon the occurrence and continuation of any Event of Default, the Funding Lender may proceed forthwith to protect and enforce its rights and this Funding Loan Agreement by such suits, actions or proceedings as the Funding Lender, in its sole discretion, shall deem expedient. Funding Lender shall have upon the occurrence and continuation of any Event of Default all rights, powers, and remedies with respect to the Security as are available under the Uniform Commercial Code applicable thereto or as are available under any other applicable law at the time in effect and, without limiting the generality of the foregoing, the Funding Lender may proceed at law or in equity or otherwise, to the extent permitted by applicable law: (i) to take possession of the Security or any part thereof, with or without legal process, and to hold, service, administer and enforce any rights thereunder or thereto, and 2021/10/12 City Council Post Agenda Page 286 of 620 32 4839-8191-7430/024036-0092 otherwise exercise all rights of ownership thereof, including (but not limited to) the sale of all or part of the Security; (ii) to become mortgagee of record for the Borrower Loan including, without limitation, completing the assignment of the Security Instrument by th e Governmental Lender to the Funding Lender as anticipated by this Funding Loan Agreement, and recording the same in the real estate records of the jurisdiction in which the Project is located, without further act or consent of the Governmental Lender, and to service and administer the same for its own account; (iii) to service and administer the Funding Loan as agent and on behalf of the Governmental Lender or otherwise, and, if applicable, to take such actions necessary to enforce the Borrower Loan Documents and the Funding Loan Documents on its own behalf, and to take such alternative courses of action, as it may deem appropriate; or (iv) to take such steps to protect and enforce its rights whether by action, suit or proceeding in equity or at law for the specific p erformance of any covenant, condition or agreement in the Governmental Lender Notes, this Funding Loan Agreement or the other Funding Loan Documents, or the Borrower Loan Documents, or in and of the execution of any power herein granted, or for foreclosure hereunder, or for enforcement of any other appropriate legal or equitable remedy or otherwise as the Funding Lender may elect. (c) Whether or not an Event of Default has occurred, the Funding Lender, in its sole discretion, shall have the sole right to waive or forbear from enforcing any term, condition, covenant or agreement of the Security Instrument, the Borrower Loan Agreement, the Borrower Notes or any other Borrower Loan Documents or Funding Loan Documents applicable to the Borrower, or any breach thereof, other than a covenant that would adversely impact the tax-exempt status of the interest on the Tax-Exempt Governmental Lender Note, and provided that the Governmental Lender may seek specific performance by the Borrower to enforce the Unassigned Rights; provided, however, that any such forbearance by the Funding Lender in the exercise of its remedies under the Funding Loan Documents shall not be construed as a waiver by the Funding Lender of any Conditions to Conversion (as such term is defined in the Borrower Loan Agreement). (d) If the Borrower defaults in the performance or observance of any covenant, agreement or obligation of the Borrower set forth in the Regulatory Agreement, and if such default remains uncured for a period of 60 days after the Borrower, the Equity Investor and the Funding Lender receive Written Notice stating that a default under the Regulatory Agreement has occurred and specifying the nature of the default, the Funding Lender shall have the right to seek specific performance of the provisions of the Regulatory Agreement or to exercise its other rights or remedies thereunder. (e) If the Borrower defaults in the performance of its obligations under the Borrower Loan Agreement (subject to applicable notice and cure periods) to make rebate paym ents, to comply with any applicable continuing disclosure requirements, or to make payments owed pursuant to Sections 2.5, 5.14 or 5.15 of the Borrower Loan Agreement for fees, expenses or indemnification, the Funding Lender shall have the right to exercise all its rights and remedies thereunder (subject to the last paragraph of Section 9.14 hereof). 2021/10/12 City Council Post Agenda Page 287 of 620 33 4839-8191-7430/024036-0092 Section 9.4 Application of Money Collected. Any money collected by the Funding Lender pursuant to this Article and any other sums then held by the Funding Lender as part of the Security, shall be applied in the following order, at the date or dates fixed by the Funding Lender: (a) First: To the payment of any and all amounts due under the Funding Loan Documents other than with respect to principal and interest accrued on the Funding Loan, including, without limitation, any amounts due to the Governmental Lender, the Funding Lender, the Servicer, the Fiscal Agent and the Rebate Analyst; (b) Second: To the payment of the whole amount of the Funding Loan, as evidenced by the Governmental Lender Notes, then due and unpaid in respect of which or for the benefit of which such money has been collected, with interest (to the extent that such interest has been collected or a sum sufficient therefor has been so collected and payment thereof is legally enforceable at the respective rate or rates prescribed therefor in the Funding Loan) on overdue principal of, and Prepayment Premium and overdue installments of interest on the Funding Loan; provided, however, that partial interests in any port ion of the Funding Loan shall be paid in such order of priority as may be prescribed by Written Direction of the Funding Lender in its sole and absolute discretion; and (c) Third: The payment of the remainder, if any, to the Borrower or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. If and to the extent this Section 9.4 conflicts with the provisions of the Servicing Agreement, the provisions of the Servicing Agreement shall control. Capitalized te rms used in this Section 9.4 but not otherwise defined in this Funding Loan Agreement shall have the meanings given such terms in the Servicing Agreement. Section 9.5 Remedies Vested in Funding Lender. All rights of action and claims under this Funding Loan Agreement or the Governmental Lender Notes may be prosecuted and enforced by the Funding Lender without the possession of the Governmental Lender Notes or the production thereof in any proceeding relating thereto. Section 9.6 Restoration of Positions. If Funding Lender shall have instituted any proceeding to enforce any right or remedy under this Funding Loan Agreement and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Funding Lender, then and in every such case the Governmental Lender and the Funding Lender shall, subject to any determination in such proceeding, be restored to their former positions hereunder, and thereafter all rights and remedies of the Governmental Lender and the Funding Lender shall continue as though no such proceeding had been instituted. Section 9.7 Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Funding Lender is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shal l not prevent the concurrent assertion or employment of any other appropriate right or remedy. 2021/10/12 City Council Post Agenda Page 288 of 620 34 4839-8191-7430/024036-0092 Section 9.8 Delay or Omission Not Waiver. No delay or omission of the Funding Lender to exercise any right or remedy accruing upon an Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Funding Lender may be exercised from time to time, and as often as may be deemed expedient, by Funding Lender. No waiver of any default or Event of Default pursuant to Section 9.9 hereof shall extend to or shall affect any subsequent default or Event of Default hereunder or shall impair any rights or remedies consequent thereon. Section 9.9 Waiver of Past Defaults. Before any judgment or decree for payment of money due has been obtained by the Funding Lender, the Funding Lender may, subject to Section 9.6 hereof, by Written Notice to the Governmental Lender and the Borrower, waive any past default hereunder or under the Borrower Loan Agreement and its consequences except for default in obligations due the Governmental Lender pursuant to or under the Unassigned Rights. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Funding Loan Agreement and the Borrower Loan Agreement; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 9.10 Remedies Under Borrower Loan Agreement or Borrower Notes. As set forth in this Section 9.10 but subject to Section 9.9 hereof, the Funding Lender shall have the right, in its own name or on behalf of the Governmental Lender, to declare any default and exercise any remedies under the Borrower Loan Agreement or the Borrower Notes, whether or not the Governmental Lender Notes have been accelerated or declared due and payable by reason of an Event of Default. Section 9.11 Waiver of Appraisement and Other Laws. (a) To the extent permitted by law, the Governmental Lender will not at any time insist upon, plead, claim or take the benefit or advantage of, any appraisement, valuation, stay, extension or redemption law now or hereafter in force, in order to prevent or hinder the enforcement of this Funding Loan Agreement; and the Governmental Lender, for itself and all who may claim under it, so far as it or they now or hereafter may lawfully do so, hereby waives the benefit of all such laws. The Governmental Lender, for itself and all who may claim under it, waives, to the extent that it may lawfully do so, all right to have the property in the Security marshaled upon any enforcement hereof. (b) If any law now in effect prohibiting the waiver referred to in clause (a) shall hereafter be repealed or cease to be in force, such law shall not the reafter be deemed to constitute any part of the contract herein contained or to preclude the application of this Section 9.11. Section 9.12 Suits to Protect the Security. The Funding Lender shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Security by any acts that may be unlawful or in violation of this Funding Loan Agreement and to protect its interests in the Security and in the rents, issues, profits, revenues and other income arising therefrom, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any Governmental Authority enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such en actment, rule or order would impair the security hereunder or be prejudicial to the interests of the Funding Lender. 2021/10/12 City Council Post Agenda Page 289 of 620 35 4839-8191-7430/024036-0092 Section 9.13 Remedies Subject to Applicable Law . All rights, remedies and powers provided by this Article may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law in the premises, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of law which may be controlling in the premises and to be limited to the extent necessary so that they will not render this Funding Loan Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. Section 9.14 Assumption of Obligations. In the event that the Funding Lender or its assignee or designee shall become the legal or beneficial owner of the Project by foreclosure or deed in lieu of foreclosure, such party shall succeed to the rights and the obligations of the Borrower under the Borrower Loan Agreement, the Borrower Notes, the Regulatory Agreement and any other Funding Loan Documents to which the Borrower is a party. Such assumption shall be effective from and after the effective date of such acquisition and shall be made with the benefit of the limitations of liability set forth therein and without any liability for the prior acts of the Borrower. It is the intention of the parties hereto that upon the occurrence and continuance of an Event of Default hereunder, rights and remedies may be pursued pursuant to t he terms of the Funding Loan Documents. ARTICLE X AMENDMENT; AMENDMENT OF BORROWER LOAN AGREEMENT AND OTHER DOCUMENTS Section 10.1 Amendment of Funding Loan Agreement. Any of the terms of this Funding Loan Agreement and the Governmental Lender Notes may be amended or waived only by an instrument signed by the Funding Lender and the Governmental Lender, provided, however, no such amendment which materially affects the rights, duties, obligations or other interests of the Borrower or Fiscal Agent shall be made without the conse nt of the Borrower or Fiscal Agent, as applicable, and, provided further, that if the Borrower is in default under any Funding Loan Document, no Borrower consent shall be required unless such amendment has a material adverse effect on the rights, duties, obligations or other interests of the Borrower. All of the terms of this Funding Loan Agreement shall be binding upon the successors and assigns of and all persons claiming under or through the Governmental Lender or any such successor or assign, and shall inure to the benefit of and be enforceable by the successors and assigns of the Funding Lender. Section 10.2 Amendments Require Funding Lender Consent. The Governmental Lender shall not consent to any amendment, change or modification of the Borrower Loan Agreement or any other Borrower Loan Document or Funding Loan Document without the prior Written Consent of the Funding Lender. Section 10.3 Consents and Opinions. No amendment to this Funding Loan Agreement or any other Funding Loan Document entered into under this Article X or any amendment, change or modification otherwise permitted under this Article X shall become effective unless and until (i) the Funding Lender shall have approved the same in writing in its sole discretion and (ii) the Funding Lender shall have received, at the expense of the Borrower, a Tax Counsel No Adverse Effect Opinion and an Opinion of Counsel substantially to the effect that any such proposed amendment is authorized and complies with the provisions of this Funding Loan Agreement and is a valid and 2021/10/12 City Council Post Agenda Page 290 of 620 36 4839-8191-7430/024036-0092 binding obligation of the parties thereto, subject to normal exceptions relating to bankruptcy, insolvency and equitable principles limitations. ARTICLE XI THE FISCAL AGENT Section 11.1 Appointment of Fiscal Agent; Acceptance. The Governmental Lender hereby appoints Fiscal Agent as fiscal agent hereunder. The Fiscal Agent shall signify its acceptance of the duties and obligations imposed upon it by this Funding Loan Agreement by executing this Funding Loan Agreement. Section 11.2 Certain Duties and Responsibilities of Fiscal Agent. (a) The Fiscal Agent undertakes to perform such duties and only such duties as are specifically set forth in this Funding Loan Agreement, and no implied covenants or obligations shall be read into this Funding Loan Agreement against the Fiscal Agent. (b) If an event of default exists hereunder or under any Borrower Loan Document, the Fiscal Agent shall exercise such of the rights and powers vested in it by this Funding Loan Agreement, and exercise any rights or duties or remedies solely at the written direction of the Funding Lender. (c) No provision of this Funding Loan Agreement shall be construed to relieve the Fiscal Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, in each case, as finally adjudicated by a c ourt of law, except that: (i) This subsection shall not be construed to limit the effect of subsection (a) of this Section; (ii) The Fiscal Agent shall not be liable for any error of judgment made in good faith, unless it shall be proved that the Fiscal Agent was n egligent in ascertaining the pertinent facts; (iii) The Fiscal Agent shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Funding Lender relating to the time, method and place of conducting any proceeding for any remedy available to the Fiscal Agent, or exercising any power conferred upon the Fiscal Agent under this Funding Loan Agreement; and (iv) No provision of this Funding Loan Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity agains t such risk or liability is not assured to it in its sole discretion. (v) Subject to its rights to indemnification pursuant to Section 11.4 hereof, the Fiscal Agent is directed to enter into the Borrower Loan Documents to which it is a party and other related documents (including the Regulatory Agreement), solely in its capacity as Fiscal Agent. 2021/10/12 City Council Post Agenda Page 291 of 620 37 4839-8191-7430/024036-0092 (d) Whether or not therein expressly so provided, every provision of this Funding Loan Agreement and the other Funding Loan Documents relating to the conduct or affecting t he liability of or affording protection to the Fiscal Agent shall be subject to the provisions of this Section. (e) The Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Funding Loan Agreement; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Funding Loan Agreement. (f) The permissive rights of the Fiscal Agent to do things enumerated in this Funding Loan Agreement shall not be construed as a duty. Section 11.3 Notice of Defaults. Upon the occurrence of any default hereunder or under any Borrower Loan Document and provided that a Responsible Officer of the Fiscal Agent has actual knowledge or has received Written Notice of the existence of such default, promptly, and in any event within 15 days, the Fiscal Agent shall transmit to the Governmental Lender, the Borrower, the Equity Investor, the Servicer, if any, and the Funding Lender, in the manner and at the addresses for notices set forth in Section 12.1 hereof, notice of such default hereunder known to the Fiscal Agent pursuant to Section 11.4(g) hereof, unless such default shall have been cured or waived. Section 11.4 Certain Rights of Fiscal Agent. Except as otherwise provided in Section 11.1 hereof: (a) The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, debenture, coupon or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) Any request or direction of the Governmental Lender mentioned herein shall be sufficiently evidenced by a certificate or order executed by an Authorized Governmental Lender Representative; (c) Whenever in the administration of this Funding Loan Agreement, the Regulatory Agreement or any Borrower Loan Document the Fiscal Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Fiscal Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a Written Certificate of the Governmental Lender, the Funding Lender, the Servicer or the Borrower, as appropriate; (d) The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Funding Loan Agreement or any Borrower Loan Document at the request or direction of the Funding Lender, pursuant to this Funding Loan Agreement, unless the Funding Lender shall have offered to the Fiscal Agent in writing security or indemnity reasonably satisfactory to the Fiscal Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction, except costs, expenses and liabilities which are adjudicated to have resulted from its own negligence or willful misconduct, provided, that nothing 2021/10/12 City Council Post Agenda Page 292 of 620 38 4839-8191-7430/024036-0092 contained in this subparagraph (d) shall be construed to re quire such security or indemnity for the performance by the Fiscal Agent of its obligations under Article VII hereof; (e) The Fiscal Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, debenture, coupon or other paper or document but the Fiscal Agent, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Fiscal Agent shall determine to make such further inquiry or investigation, it shall be entitled to examine the books and records of the Governmental Lender, if any, and of the Borrower, in either case personally or by agent or attorney after reasonable notice and during normal business hours; (f) The Fiscal Agent may execute any of its powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and pay reasonable compensation thereto and the Fiscal Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. The Fiscal Agent may act upon the advice of counsel of its choice concerning all matters hereof and the Fiscal Ag ent shall not be responsible for any loss or damage resulting from any action or inaction taken in good faith reliance upon said advice; and (g) The Fiscal Agent shall not be required to take notice or be deemed to have notice of any default hereunder or under any Borrower Loan Document except for failure by the Borrower to make payments of principal, interest, premium, if any, or Ongoing Governmental Lender Fee when due, unless a Responsible Officer of the Fiscal Agent shall be specifically notified by a Written Direction of such default by the Governmental Lender, the Servicer or the Funding Lender, and all notices or other instruments required by this Funding Loan Agreement or under any Borrower Loan Document to be delivered to the Fiscal Agent, must, in orde r to be effective, be delivered in writing to a Responsible Officer of the Fiscal Agent at the Office of the Fiscal Agent, and in the absence of such Written Notice so delivered the Fiscal Agent may conclusively assume there is no default as aforesaid. Section 11.5 Not Responsible for Recitals. The recitals contained herein and in the Governmental Lender Notes shall be taken as the statements of the Governmental Lender, and the Fiscal Agent assumes no responsibility for their correctness. The Fiscal Agent makes no representations as to the value or condition of the Pledged Revenues, the Security or any part thereof, or as to the title of the Governmental Lender thereto or as to the security afforded thereby or hereby, or as to the validity or sufficiency of this Funding Loan Agreement or of the Funding Loan. The Fiscal Agent shall have no responsibility or liability with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the funding of the Funding Loan. The Fiscal Agent shall not be required to monitor the financial condition of the Borrower or the physical condition of the Project. The Fiscal Agent shall be under no obligation to analyze, review or make any credit decisions with respect to any financial statements, reports, notices, certificates or documents received hereunder but shall hold such financial statements reports, notices, certificates and documents solely for the benefit of, and review by, the Funding Lender and su ch other parties to whom the Fiscal Agent may provide such information pursuant to this Funding Loan Agreement. 2021/10/12 City Council Post Agenda Page 293 of 620 39 4839-8191-7430/024036-0092 The Fiscal Agent makes no representations as to and shall have no responsibility for the sufficiency of the insurance required under any of the Borrower Loan Documents. Section 11.6 May Hold Funding Loan. The Fiscal Agent in its individual or any other capacity may become the owner or pledgee of the Funding Loan and may otherwise deal with the Governmental Lender, the Funding Lender and the Borrower with the same rights it would have if it were not Fiscal Agent. Section 11.7 Moneys Held Hereunder. Moneys held by the Fiscal Agent hereunder need not be segregated from other funds except to the extent required by law. The Fiscal Agent shall be under no liability for interest on any moneys received by it hereunder except as otherwise provided herein. Section 11.8 Compensation and Reimbursement. Under the Borrower Loan Agreement, the Borrower has agreed to, except as otherwise expressly provided herein, pay the Fiscal Agent its fees and reimburse the Fiscal Agent as provided in this Funding Loan Agreement or the Borrower Loan Agreement, upon its request for all reasonable expenses, disbursements and advances incurred or made by the Fiscal Agent in accordance with any provision of this Fund ing Loan Agreement (including the reasonable fees, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Fiscal Agent’s negligence or willful misconduct, both as finally adjudicated by a court of law. When the Fiscal Agent incurs expenses or renders service in connection with any bankruptcy or insolvency proceeding, such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors rights generally. (a) The Governmental Lender has no obligation to pay the Fiscal Agent for services rendered. (b) As security for the performance of the obligations of the Borrower under this Section and for the payment of such compensation, expenses, reimbursements and indemnity, the Fiscal Agent shall have the right to use and apply any moneys held by it as Pledged Revenues. (c) The Fiscal Agent’s rights to compensation and reimbursement shall survive its resignation or removal, the payment of the Funding Loan or the Borrower Loan or the release of this Funding Loan Agreement. Section 11.9 Fiscal Agent Required; Eligibility. Any successor Fiscal Agent shall at all times be a trust company, a state banking corporation or a national banking association with the authority to accept trusts in the State approved in writing by the Governmental Lender and either (a) have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition, (b) be a wholly owned subsidiary of a bank holding company, or a wholly owned subsidiary of a company that is a wholly owned subsidiary of a bank holding company, having a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition, have at least $500,000,000 of trust assets under management and have a combined capital and surplus of at least $2,000,000 as set forth in its most recent published annual report of condition, or (c) be otherwise acceptable to the Funding Lender in its sole and absolute discretion. 2021/10/12 City Council Post Agenda Page 294 of 620 40 4839-8191-7430/024036-0092 Section 11.10 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Fiscal Agent hereunder and no appointment of a successor Fiscal Agent pursuant to this Article shall become effective until the written acceptance by the successor Fiscal Agent of such appointment. (b) The Fiscal Agent may resign at any time by giving 60 days’ Written Notice thereof to the Governmental Lender, the Borrower, the Servicer, if any, and the Funding Lender. (c) The Fiscal Agent may be removed at any time with 30 days’ notice by (i) the Governmental Lender, (ii) the Borrower (unless the Borrower is in default under any of the Borrower Loan Documents), subject to applicable notice and cure periods, with the Written Consent of the Funding Lender and the Governmental Lender, or (iii) the Funding Lender with the Written Consent of the Governmental Lender and Written Notice delivered to the Fiscal Agent and the Borrower. (d) If the Fiscal Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the Office of the Fiscal Agent for any cause, the Governmental Lender shall promptly appoint a successor Fiscal Agent, with the consent of the Funding Lender, which consent shall not be unreasonably withheld. In case all or substantially all of the Pledged Revenues and Security shall be in the possession of a receiver or trustee lawfully appointed, such receiver or trustee may similarly appoint a successor to fill such vacancy until a new Fiscal Agent shall be so appointed by the Governmental Lender. If, within 60 days after such resignation, removal or incapability or the occurrence of such vacancy, the Governmental Lender has failed to so appoint a successor Fiscal Agent, then a successor Fiscal Agent shall be appointed by the Funding Lender (from any of the institutions approved by the Governmental Lender to serve as a fiscal agent or trustee) with Written Notice thereof delivered to the G overnmental Lender, the Borrower, the Servicer, if any, and the retiring Fiscal Agent, and the successor Fiscal Agent so appointed shall, forthwith upon its acceptance of such appointment, become the successor Fiscal Agent and supersede the successor Fiscal Agent appointed by such receiver or Fiscal Agent. If no successor Fiscal Agent shall have been appointed by the Governmental Lender or the Funding Lender and accepted appointment within 60 days after such resignation, removal or incapability or the occu rrence of such vacancy, the Fiscal Agent may petition any court of competent jurisdiction for the appointment of a successor Fiscal Agent. (e) The retiring Fiscal Agent shall cause Written Notice of each resignation and each removal of the Fiscal Agent and each appointment of a successor Fiscal Agent to be provided to the Funding Lender. Each notice shall include the name of the successor Fiscal Agent and the address of the office of the successor Fiscal Agent. Section 11.11 Acceptance of Appointment by Successor. (a) Every successor Fiscal Agent appointed hereunder shall execute, acknowledge and deliver to the Governmental Lender and to the retiring Fiscal Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Fiscal Agent shall become effective and such successor Fiscal Agent, without any further act, deed or conveyance, shall become vested with all the estates, properties, rights, powers and duties of the retiring Fiscal Agent; notwithstanding the foregoing, on request of the Governmental Lender or the successor Fiscal Agent, such retiring Fiscal Agent shall, upon payment of its charges, execute and deliver an instrument conveying and transferring to such successor Fiscal Agent all the estates, properties, 2021/10/12 City Council Post Agenda Page 295 of 620 41 4839-8191-7430/024036-0092 rights, powers and trusts of the retiring Fiscal Agent, and shall duly assign, transfer and deliver to such successor Fiscal Agent all property and money held by such retiring Fiscal Agent hereunder. Upon request of any such successor Fiscal Agent, the Governmental Lender s hall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Fiscal Agent all such estates, properties, rights and powers. (b) No successor Fiscal Agent shall accept its appointment unless at the time of such acceptance such successor Fiscal Agent shall be qualified and eligible under this Article, to the extent operative. Section 11.12 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Fiscal Agent may be merged or with which it may b e consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Fiscal Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Fiscal Agent, shall be the successor of the Fiscal Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, to the extent operative, without the execution or filing of any paper or any further act on the part of any of the parties he reto. Notwithstanding the foregoing, any such successor Fiscal Agent shall cause Written Notice of such succession to be delivered to the Funding Lender within 30 days of such succession. Section 11.13 Appointment of Co-Fiscal Agent. It is recognized that in case of litigation under this Funding Loan Agreement, the Borrower Loan Agreement, any other Borrower Loan Document or the Regulatory Agreement, and in particular in case of the enforcement of any of them on default, or in case the Fiscal Agent deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Fiscal Agent or hold title to the properties, as herein provided, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Fiscal Agent appoint an additional individual or institution as a separate or co-fiscal agent. The following provisions of this Section are adopted to these ends. The Fiscal Agent is hereby authorized to appoint an additional individual or institution as a separate or co-fiscal agent hereunder, upon Written Notice to the Governmental Lender, the Funding Lender and the Borrower, and with the consent of the Governmental Lender and the Funding Lender, but without the necessity of further authorization or consent, in which event each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Funding Loan Agreement, any Borrower Loan Document, the Regulatory Agreement or the Borrower Loan Agreement to be exercised by or vested in or conveyed to the Fiscal Agent with respect thereto shall be exercisable by and vest in such separate or co -fiscal agent but only to the extent necessary to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co -fiscal agent shall run to and be enforceable by either of them. Should any instrument in writing from the Governmental Lender be required by the separate fiscal agent or co-fiscal agent appointed by the Fiscal Agent for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, duties and obligations, any and all such instruments in writing shall, on request of the Fiscal Agent, be executed, acknowledged and delivered by the Governmental Lender. In case any separate fiscal agent or co -fiscal agent, or a successor to either, shall die, become incapable of acting, resign or be removed, a ll the estates, properties, rights, powers, duties and obligations of such separate fiscal agent or co-fiscal agent, so far as permitted by 2021/10/12 City Council Post Agenda Page 296 of 620 42 4839-8191-7430/024036-0092 law, shall vest in and be exercised by the Fiscal Agent until the appointment of a successor to such separate fiscal agent or co fiscal agent. Section 11.14 Loan Servicing. The Governmental Lender and the Fiscal Agent acknowledge that the Funding Lender shall have the right to appoint a Servicer to service and administer the Funding Loan and the Borrower Loan as set forth in a Servi cing Agreement. The Governmental Lender and the Fiscal Agent shall not be responsible for monitoring the performance of any Servicer or for any acts or omissions of such Servicer. The Funding Lender may, in its sole discretion, terminate or replace the Servicer. Section 11.15 No Recourse Against Officers or Employees of Fiscal Agent . No recourse with respect to any claim related to any obligation, duty or agreement contained in this Funding Loan Agreement or any other Funding Loan Document shall be had against any off icer or employee, as such, of the Fiscal Agent, it being expressly understood that the obligations, duties and agreements of the Fiscal Agent contained in this Funding Loan Agreement and the other Funding Loan Documents are solely corporate in nature. ARTICLE XII MISCELLANEOUS Section 12.1 Notices. All notices, demands, requests and other communications required or permitted to be given by any provision of this Funding Loan Agreement shall be in writing and sent by first class, regular, registered or certified mail, commercial d elivery service, overnight courier, telegraph, telex, telecopier or facsimile transmission, air or other courier, hand delivery, to the party to be notified addressed as follows: If to the Fiscal Agent: U.S. Bank National Association Global Corporate Trust 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attention: Ismael Diaz Ref: CV MF (Columba Apartments) 2021 Telephone: (213) 615-6063 Facsimile: (213) 615-6197 If to the Governmental Lender: Chula Vista Housing Authority 276 Fourth Avenue Chula Vista, California 91910 Attention: Executive Director Telephone: (619) 691-5263 2021/10/12 City Council Post Agenda Page 297 of 620 43 4839-8191-7430/024036-0092 If to the Borrower: Millenia II CIC, LP c/o Chelsea Investment Corporation 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 Attn: Project Manager with a copy to: Cox, Castle & Nicholson LLP 50 California Street, Suite 3200 San Fransisco, CA 94111 Attention: Ofer Elitzur, Esq. If to the Equity Investor: Attention: with a copy to: Attention: If to the Funding Lender: Citibank, N.A. 388 Greenwich Street, Trading 6th Floor New York, New York 10013 Attention: Transaction Management Group Re: Columba Apartments Deal ID # 60001029 Facsimile: (212) 723-8209 and to: Citibank, N.A. 325 East Hillcrest Drive, Suite 160 Thousand Oaks, California 91360 Attention: Operations Manager/Asset Manager Re: Columba Apartments Deal ID # 60001029 Facsimile: (805) 557-0924 2021/10/12 City Council Post Agenda Page 298 of 620 44 4839-8191-7430/024036-0092 prior to the Conversion Date, with a copy to: Citibank, N.A. 388 Greenwich Street, Trading 6th Floor New York, New York 10013 Attention: Account Specialist Re: Columba Apartments Deal ID# 60001029 Facsimile: (212) 723-8209 following the Conversion Date with a copy to: c/o Berkadia Commercial Servicing Department 323 Norristown Road, Suite 300 Ambler, Pennsylvania 19002 Attention: Client Relations Manager Re: Columba Apartments Deal ID# 60001029 Facsimile: (215) 328-0305 and a copy of any notices of default sent to: Citibank, N.A. 388 Greenwich Street, 17th Floor New York, New York 10013 Attention: General Counsel’s Office Re: Columba Apartments Deal ID# 60001029 Facsimile: (646) 291-5754 Any such notice, demand, request or communication shall be deemed to have been given and received for all purposes under this Funding Loan Agreement: (i) three Business Days after the same is deposited in any official depository or receptacle of the United States Postal Service first class, or, if applicable, certified mail, return receipt requested, postage prepaid; (ii) on the date of transmission when delivered by telecopier or facsimile transmission, telex, telegraph or other telecommunication device, provided any telecopy or other electronic transmission received by any party after 4:00 p.m., local time, as evidenced by the time shown on such transmission, sh all be deemed to have been received the following Business Day; (iii) on the next Business Day after the same is deposited with a nationally recognized overnight delivery service that guarantees overnight delivery; and (iv) on the date of actual delivery to such party by any other means; provided, however, if the day such notice, demand, request or communication shall be deemed to have been given and received as aforesaid is not a Business Day, such notice, demand, request or communication shall be deemed t o have been given and received on the next Business Day. Any facsimile signature by a Person on a document, notice, demand, request or communication required or permitted by this Funding Loan Agreement shall constitute a legal, valid and binding execution thereof by such Person. Any party to this Funding Loan Agreement may change such party’s address for the purpose of notice, demands, requests and communications required or permitted under this Funding Loan 2021/10/12 City Council Post Agenda Page 299 of 620 45 4839-8191-7430/024036-0092 Agreement by providing written notice of such change of address to all of the parties by written notice as provided herein. Section 12.2 Term of Funding Loan Agreement. This Funding Loan Agreement shall be in full force and effect until all payment obligations of the Governmental Lender hereunder have been paid in full and the Funding Loan has been retired or the payment thereof has been provided for; except that on and after payment in full of the Governmental Lender Notes, this Funding Loan Agreement shall be terminated, without further action by the parties hereto. Section 12.3 Successors and Assigns. All covenants and agreements in this Funding Loan Agreement by the Governmental Lender shall bind its successors and assigns, whether so expressed or not. Section 12.4 Legal Holidays. In any case in which the date of payment of any amount due hereunder or the date on which any other act is to be performed pursuant to this Funding Loan Agreement shall be a day that is not a Business Day, then payment of such amount or such act need not be made on such date but may be made on the next succeedi ng Business Day, and such later payment or such act shall have the same force and effect as if made on the date of payment or the date fixed for prepayment or the date fixed for such act, and no additional interest shall accrue for the period from and after such date and prior to the date of payment. Section 12.5 Governing Law. This Funding Loan Agreement shall be governed by and shall be enforceable in accordance with the laws of the State applicable to contracts made and performed in the State. Section 12.6 Severability. If any provision of this Funding Loan Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. In case any covenant, stipulation, obligation or agreement contained in the Governmental Lender Notes or in this Funding Loan Agreement shall for any reason be held to be usurious or in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, ob ligation or agreement of the Governmental Lender or the Funding Lender only to the full extent permitted by law. Section 12.7 Execution in Several Counterparts. This Funding Loan Agreement may be contemporaneously executed in several counterparts, all of which shall c onstitute one and the same instrument and each of which shall be, and shall be deemed to be, an original. Section 12.8 Nonrecourse Obligation of the Borrower. Except as otherwise provided in the Borrower Loan Agreement, any obligations of the Borrower under this Fundi ng Loan Agreement are without recourse to the Borrower or to the Borrower’s partners or members, as the case may be, and the provisions of Section 11.1 of the Borrower Loan Agreement are by this reference incorporated herein. Section 12.9 Waiver of Trial by Jury. IF AND TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF THE GOVERNMENTAL LENDER AND THE FUNDING LENDER (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS FUNDING LOAN AGREEMENT OR THE RELATIONSHIP BETWEEN THE PARTIES THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO 2021/10/12 City Council Post Agenda Page 300 of 620 46 4839-8191-7430/024036-0092 THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. IF FOR ANY REASON THIS WAIVER IS DETERMINED TO BE UNENFORCEABLE, ALL DISPUTES WILL BE RESOLVED BY JUDICIAL REFERENCE PURSUANT TO THE PROCEDURES SET FORTH IN THE SECURITY INSTRUMENT. Section 12.10 Electronic Transactions. The transactions described in this Funding Loan Agreement may be conducted and the related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12.11 Reference Date. This Funding Loan Agreement is dated for reference purposes only as of the first day of October, 2021. [Remainder of Page Intentionally Left Blank] 2021/10/12 City Council Post Agenda Page 301 of 620 [Signature Page to Funding Loan Agreement – Columba Apartments] S-1 4839-8191-7430/024036-0092 IN WITNESS WHEREOF, the Funding Lender, the Fiscal Agent and the Governmental Lender have caused this Funding Loan Agreement to be duly executed as of the date first written above. FUNDING LENDER: CITIBANK, N.A. By: Name: Title: Authorized Signatory GOVERNMENTAL LENDER: CHULA VISTA HOUSING AUTHORITY By: Executive Director FISCAL AGENT: U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Signatory 2021/10/12 City Council Post Agenda Page 302 of 620 A-1 4839-8191-7430/024036-0092 EXHIBIT A FORM OF GOVERNMENTAL LENDER NOTES THIS NOTE MAY BE OWNED ONLY BY A PERMITTED TRANSFEREE IN ACCORDANCE WITH THE TERMS OF THE FUNDING LOAN AGREEMENT, AND THE HOLDER HEREOF, BY THE ACCEPTANCE OF THIS FUNDING LOAN AGREEMENT (A) REPRESENTS THAT IT IS A PERMITTED TRANSFEREE AND (B) ACKNOWLEDGES THAT IT CAN ONLY TRANSFER THIS GOVERNMENTAL LENDER NOTE TO ANOTHER PERMITTED TRANSFEREE IN ACCORDANCE WITH THE TERMS OF THE FUNDING LOAN AGREEMENT. CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE NOTE (COLUMBA APARTMENTS), [2021 SERIES A] [2021 SERIES A-2 (TAXABLE)] $______________ October __, 2021 FOR VALUE RECEIVED, the undersigned CHULA VISTA HOUSING AUTHORITY (“Obligor”) promises to pay to the order of CITIBANK, N.A. (“Holder”) the maximum principal sum of __________ DOLLARS ($______________), on _________ 1, 20____, or earlier as provided herein, together with interest thereon at the rates, at the times and in the amounts provided below. Obligor shall pay to the Holder on or before each date on which payment is due under that certain Funding Loan Agreement, dated as of October 1, 2021 (the “Funding Loan Agreement”), among Obligor, Holder and U.S. Bank National Association, as fiscal agent (“Fiscal Agent”), an amount in immediately available funds sufficient to pay the principal amount of and Prepayment Premium, if any, on this Governmental Lender Note then due and payable, whether by maturity, acceleration, prepayment or otherwise. In the event that amounts held derived from proceeds of this Governmental Lender Note, condemnation awards or insurance proceeds or investment earnings thereon are applied to the payment of principal due on this Governmental Lender Note in accordance with the Funding Loan Agreement, the principal amount due hereunder shall be reduced to the extent of the principal amount of this Governmental Lender Note so paid. Capital ized terms not otherwise defined herein shall have the meaning assigned in the Funding Loan Agreement. Obligor shall pay to the Holder on or before each date on which interest on the Funding Loan is payable interest on the unpaid balance hereof in an amoun t in immediately available funds sufficient to pay the interest on this Governmental Lender Note then due and payable in the amounts and at the rate or rates set forth in the Funding Loan Agreement. This Governmental Lender Note is a pass-through obligation relating to a construction and permanent loan (the “Borrower Loan”) made by Obligor from proceeds of the Funding Loan to Millenia II CIC, LP, a California limited partnership, as borrower (the “Borrower”), under that certain Borrower Loan Agreement, dated as of October 1, 2021, (as the same may be modified, amended or supplemented from time to time, the “Borrower Loan Agreement”), between the Obligor and the Borrower, evidenced by the [Series A-1] [Series A-2] Borrower Note (as defined in the Borrower Loan Agreement). Reference is made to the Borrower Loan Agreement and to the 2021/10/12 City Council Post Agenda Page 303 of 620 A-2 4839-8191-7430/024036-0092 [Series A-1] [Series A-2] Borrower Note for complete payment and prepayment terms of the [Series A-1] [Series A-2] Borrower Note, payments on which are passed-through under this Governmental Lender Note. This Governmental Lender Note is a limited obligation of the Obligor, payable solely from the Pledged Revenues and other funds and moneys and Security pledged and assigned under the Funding Loan Agreement. None of the Governmental Lender, the State, or any political subdivision thereof (except the Governmental Lender, to the limited extent set forth herein) or any public agency shall in any event be liable for the payment of the principal of, premium (if any) or interest on this Governmental Lender Note or the Funding Loan or for the performance of any pledge, obligation or agreement of any kind whatsoever with respect thereto except as set forth herein and in the Funding Loan Agreement, and none of the Funding Loan or this Governmental Lender Note or any of the Governmental Lender’s agreements or obligations with respect to the Funding Loan or this Governmental Lender Note shall be construed to constitute an indebtedness of or a pledge of t he faith and credit of or a loan of the credit of or a moral obligation of any of the foregoing within the meaning of any constitutional or statutory provision whatsoever. The Governmental Lender has no taxing power. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Funding Loan Agreement or in the Borrower Loan Agreement. This Governmental Lender Note is subject to the express condition that at no time shall interest be payable on this Governmental Lender Note or the Funding Loan at a rate in excess of the Maximum Rate provided in the Funding Loan Agreement; and Obligor shall not be obligated or required to pay, nor shall the Holder be permitted to charge or collect, interest at a rate in excess of such Maximum Rate. If by the terms of this Governmental Lender Note or of the Funding Loan Agreement, Obligor is required to pay interest at a rate in excess of such Maximum Rate, the rate of interest hereunder or thereunder shall be deemed to be reduced immediatel y and automatically to such Maximum Rate, and any such excess payment previously made shall be immediately and automatically applied to the unpaid balance of the principal sum hereof and not to the payment of interest. Amounts payable hereunder representing late payments, penalty payments or the like shall be payable to the extent allowed by law. This Governmental Lender Note is subject to all of the terms, conditions, and provisions of the Funding Loan Agreement, including those respecting prepayment and t he acceleration of maturity and those respecting limitations of liability in Article V of the Funding Loan Agreement. If there is an Event of Default under the Funding Loan Documents, then in any such event and subject to the requirements set forth in the Funding Loan Agreement, the Holder may declare the entire unpaid principal balance of this Governmental Lender Note and accrued interest, if any, due and payable at once. All of the covenants, conditions and agreements contained in the Funding Loan Documents are hereby made part of this Governmental Lender Note. No delay or omission on the part of the Holder in exercising any remedy, right or option under this Governmental Lender Note or the Funding Loan Documents shall operate as a waiver of such remedy, right or option. In any event a waiver on any one occasion shall not be construed as a waiver or bar to any such remedy, right or option on a future occasion. The rights, remedies and 2021/10/12 City Council Post Agenda Page 304 of 620 A-3 4839-8191-7430/024036-0092 options of the Holder under this Governmental Lender Note and the Fund ing Loan Documents are and shall be cumulative and are in addition to all of the rights, remedies and options of the Holder at law or in equity or under any other agreement. Obligor shall pay all costs of collection on demand by the Holder, including witho ut limitation, reasonable attorneys’ fees and disbursements, which costs may be added to the indebtedness hereunder, together with interest thereon, to the extent allowed by law, as set forth in the Funding Loan Agreement. This Governmental Lender Note may not be changed orally. Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived. The acceptance by the Holder of any amount after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due hereunder. The acceptance by the Holder of any sum in an amount less than the amount then due shall be deemed an acceptance on account only and upon condition that such acceptance shall not constitute a waiver of the obli gation of Obligor to pay the entire sum then due, and Obligor’s failure to pay such amount then due shall be and continue to be a default notwithstanding such acceptance of such amount on account, as aforesaid. Consent by the Holder to any action of Obligor which is subject to consent or approval of the Holder hereunder shall not be deemed a waiver of the right to require such consent or approval to future or successive actions. This Governmental Lender Note (and the Funding Loan that it represents), and a ny interests herein or therein, are transferable by the registered owner hereof, but only in the manner, subject to the limitations and upon payment of the charges provided in the Funding Loan Agreement. Upon such transfer a new fully registered Governmental Lender Note will be issued to the transferee in exchange herefor. The Obligor, the Funding Lender and the Fiscal Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Obligor and the Funding Lender shall not be affected by any notice to the contrary. The Obligor hereby certifies that all of the conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Governmental Lender Note do exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State (including the Act) and that the amount of this Governmental Lender Note, together with all other indebtedness of the Obligor, does no t exceed any limit prescribed by the Constitution or laws of the State. 2021/10/12 City Council Post Agenda Page 305 of 620 A-4 4839-8191-7430/024036-0092 IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Governmental Lender Note by its authorized representative as of the date first set forth above. The undersigned intends that this instrument shall be deemed to be signed and delivered as a sealed instrument. OBLIGOR: CHULA VISTA HOUSING AUTHORITY By: Executive Director [SEAL] ATTEST: By: Secretary [Signature Page to Governmental Lender Note – Columba Apartments] 2021/10/12 City Council Post Agenda Page 306 of 620 A-5 4839-8191-7430/024036-0092 CERTIFICATE OF AUTHENTICATION This Governmental Lender Note is the Governmental Lender Note described in the within mentioned Funding Loan Agreement. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By Authorized Signatory [Signature Page to Governmental Lender Note – Columba Apartments] 2021/10/12 City Council Post Agenda Page 307 of 620 B-1 4839-8191-7430/024036-0092 EXHIBIT B FORM OF REQUIRED TRANSFEREE REPRESENTATIONS [_________________, 20__] The undersigned, as holder (the “Holder”) of a loan (the “Funding Loan”) in the maximum principal amount of $______________ from CITIBANK, N.A. (“Funding Lender”) to CHULA VISTA HOUSING AUTHORITY (“Governmental Lender”) pursuant to a Funding Loan Agreement dated as of October 1, 2021 (the “Funding Loan Agreement”) among the Funding Lender, the Governmental Lender and U.S. Bank National Association, as fiscal agent (the “Funding Loan”), evidenced by the Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series [A-1] [A-2 (Taxable)] (the “Governmental Lender Note”), or an interest therein, hereby represents that: 1. The Holder has sufficient knowledge and experience in financial and business matters with respect to the evaluation of residential real estate developments such as the Project to be able to evaluate the risk and merits of the investment represented by the Funding Loan. We are able to bear the economic risks of such investment. 2. The Holder acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and the Holder has had t he opportunity to ask questions and receive answers from knowledgeable individuals concerning the Governmental Lender, the Project, the use of proceeds of the Funding Loan and the Funding Loan and the security therefor so that, as a reasonable investor, th e Holder has been able to make its decision to [extend/purchase] the Funding Loan [or an interest therein]. In entering into this transaction, the Holder acknowledges that it has not relied upon any representations or opinions of the Governmental Lender relating to the legal consequences to the Funding Lender or other aspects of its making the Funding Loan and acquiring the Governmental Lender Note, nor has it looked to or expected, the Governmental Lender to undertake or require any credit investigation o r due diligence reviews relating to the Borrower, its financial condition or business operations, the Project (including the financing or management thereof), or any other matter pertaining to the merits or risks of the transactions contemplated by the Funding Loan Agreement and the Borrower Loan Agreement, or the adequacy of the funds pledged to the Funding Lender to secure repayment of the Governmental Lender Note. 3. The Holder is an Approved Transferee. 4. The Holder acknowledges that it is purchasing [an interest in] the Funding Loan for investment for its own account and not with a present view toward resale or the distribution thereof, in that it does not now intend to resell or otherwise dispose of all or any part of its interests in the Funding Loan; provided, however, that the Holder may sell or transfer the Governmental Lender Note and the Funding Loan as provided in Section 2.4 of the Funding Loan Agreement. 5. In the event any placement memorandum to be provided to any subsequent buyer or beneficial owner of such portion of the Funding Loan will disclose information with respect to the Governmental Lender other than its name, location and type of political subdivision and general 2021/10/12 City Council Post Agenda Page 308 of 620 B-2 4839-8191-7430/024036-0092 information with respect to the Funding Loan and Borrower Loan and related documents, the Holder will provide the Governmental Lender with a draft of such placement memorandum and the Governmental Lender shall have the right to approve any description of the Governmental Lender therein (which approval shall not be unreasonably withheld). 6. The Holder understands that the Funding Loan is a limited obligation of the Governmental Lender; payable solely from funds and moneys pledged and assigned under the Funding Loan Agreement, and that the liabilities and obligations of the Governmental Lender with respect to the Funding Loan are expressly limited as set forth in the Funding Loan Agreement and related documents. 7. Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Funding Loan Agreement. [_______________], as Holder By Name Its 2021/10/12 City Council Post Agenda Page 309 of 620 C-1 4839-8191-7430/024036-0092 EXHIBIT C FORM OF WRITTEN REQUISITION OF THE BORROWER – PROJECT FUND Draw #______ To: U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”) under that certain Funding Loan Agreement, dated as of October 1, 2021, among Citibank, N.A., as Funding Lender, the Chula Vista Housing Authority, as Governmental Lender, and the Fiscal Agent (the “Funding Loan Agreement”), pursuant to which the Chula Vista Housing Authority Multifamily Housing Revenue Notes (Columba Apartments) 2021 Series A-1 and 2021 Series A-2 (Taxable) (collectively, the “Governmental Lender Notes”) were issued. 1. You are requested to disburse funds from the Project Fund pursuant to Section 7.7 of the Funding Loan Agreement in the amount(s) and to the person(s) as follows: [Insert grid (see below) summarizing all funds, including amount, source and payee, which are being requisitioned from the Fiscal Agent pursuant to this requisition.] Amount Funding Source Payable To 2. The undersigned certifies that: (i) the obligation stated on the requisition has been incurred in or about the rehabilitation or equipping of the Project, each item is a proper charge against the Project Fund, and the obligation has not been the basis for a prior requisition that has been paid; (ii) such requisition contains no items representing any Costs of Issuance or any other amount constituting an issuance cost under Section 147(g) of the Code, unless such item is being paid solely from the Equity Account of the Project Fund; (iii) not less than 97% of the sum of: (A) the amounts requisitioned by this Requisition to be funded with the proceeds of the Tax-Exempt Governmental Lender Note plus (B) all amounts allocated to the Tax-Exempt Governmental Lender Note previously disbursed from the Note Proceeds Account of the Project Fund, have been or will be applied by the Borrower to pay Qualified Project Costs; (iv) to the undersigned’s current, actual knowledge, as of the date hereof no event or condition has happened or is happening or exists that constitutes, or that with notice or lapse of time or both, would constitute, an Event of Default under the Funding Loan Agreement; and (v) attached as Schedule I to this Requisition is an exhibit that allocates the amount requested hereby from each account of the Project Fund among the sources for payment. 2021/10/12 City Council Post Agenda Page 310 of 620 C-2 4839-8191-7430/024036-0092 3. You hereby authorize Funding Lender to use the wire instructions contained in Exhibit E of the Funding Loan Agreement to wire the funds to, and Funding Lender may continue to rely on these instructions until it shall have received any written notice of modification or revocation from you. Dated:______________________ MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Robert W. Laing, President/Executive Director By: CIC Millenia II, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 311 of 620 C-3 4839-8191-7430/024036-0092 Approved by: CITIBANK, N.A., as Funding Lender By: Authorized Signer 2021/10/12 City Council Post Agenda Page 312 of 620 D-1 4839-8191-7430/024036-0092 EXHIBIT D FORM OF WRITTEN REQUISITION OF THE BORROWER – CLOSING COSTS FUND To: U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”) under that certain Funding Loan Agreement, dated as of October 1, 2021, among Citibank, N.A., as Funding Lender, Chula Vista Housing Authority, as Governmental Lender, and the Fiscal Agent (the “Funding Loan Agreement”). 1. You are requested to disburse funds from the Closing Costs Fund pursuant to Section 7.6 of the Funding Loan Agreement in the amount(s), to the person(s) and for the purpose(s) set forth on Schedule I attached hereto and incorporated herein by reference. An invoice or other appropriate evidence of the obligations described on Schedule I is attached hereto. All payments will be made by check or wire transfer in accordance with the payment instructions set forth on Schedule I (or on the attached invoice) and the Fiscal Agent shall have no obli gation to authenticate such payment instructions or the authority under which they were given. 2. The undersigned certifies that as of the date hereof no event or condition has happened or is happening or exists that constitutes, or that with notice or lap se of time or both, would constitute, an Event of Default under the Funding Loan Agreement. Dated: ____________________ BORROWER: MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Robert W. Laing, President/Executive Director By: CIC Millenia II, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 313 of 620 D-2 4839-8191-7430/024036-0092 The foregoing Requisition is hereby consented to: FUNDING LENDER: CITIBANK, N.A. By: Authorized Representative GOVERNMENTAL LENDER: CHULA VISTA HOUSING AUTHORITY By: Executive Director 2021/10/12 City Council Post Agenda Page 314 of 620 D-3 4839-8191-7430/024036-0092 Schedule I Payment Instructions Payee Purpose Amount of Payment 2021/10/12 City Council Post Agenda Page 315 of 620 E-1 4839-8191-7430/024036-0092 EXHIBIT E FISCAL AGENT WIRING INSTRUCTIONS Bank Name: U.S. Bank, N.A. Bank City and State: Minneapolis, MN ABA Number: 091000022 Account Name: U.S. Bank Trust N.A. Account Number: 180121167365 Reference: CV MF (Columba Apartments) 2021 2021/10/12 City Council Post Agenda Page 316 of 620 Stradling Yocca Carlson & Rauth draft dated October 3, 2021 4818-3408-2039/024036-0092 SUBORDINATE INDENTURE OF TRUST between CHULA VISTA HOUSING AUTHORITY, as Issuer and U.S. BANK NATIONAL ASSOCIATION, as Trustee Relating to $2,400,000 CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE 2021 SERIES A-3 Dated as of October 1, 2021 2021/10/12 City Council Post Agenda Page 317 of 620 TABLE OF CONTENTS i 4818-3408-2039/024036-0092 ARTICLE I DEFINITIONS Section 1.01 Definitions ................................................................................................................. 4 Section 1.02 Interpretation............................................................................................................ 10 ARTICLE II THE SUBORDINATE BONDS Section 2.01 The Subordinate Bonds ............................................................................................ 11 Section 2.02 Limited Obligations ................................................................................................. 12 Section 2.03 Indenture Constitutes Contract ................................................................................ 13 Section 2.04 Form and Execution ................................................................................................. 13 Section 2.05 Authentication.......................................................................................................... 13 Section 2.06 Mutilated, Lost, Stolen or Destroyed Subordinate Bonds ....................................... 13 Section 2.07 Transfer and Exchange of Subordinate Bonds; Persons Treated as Owners; Restrictions on Transfer ........................................................................................... 14 Section 2.08 Delivery of Subordinate Bonds ............................................................................... 14 Section 2.09 Establishment of Subordinate Loan Fund; Application of Bond Proceeds and Other Money; Assignment of Subordinate Loan to Trustee ............................. 15 Section 2.10 Subordination ........................................................................................................... 16 ARTICLE III REDEMPTION OF SUBORDINATE BONDS PRIOR TO MATURITY Section 3.01 Redemption of Subordinate Bonds Prior to Maturity .............................................. 17 Section 3.02 Notice of Redemption .............................................................................................. 18 Section 3.03 Effect of Notice of Redemption ............................................................................... 19 ARTICLE IV REVENUES AND FUNDS Section 4.01 Pledge of Revenues and Assets; Establishment of Funds........................................ 19 Section 4.02 Subordinate Loan Fund ............................................................................................ 20 Section 4.03 Application of Revenues .......................................................................................... 20 Section 4.04 Application of Subordinate Bond Fund ................................................................... 20 Section 4.05 Investment of Funds ................................................................................................ 20 Section 4.06 Money Held for Particular Subordinate Bonds; Funds Held in Trust ..................... 21 Section 4.07 Accounting Records ................................................................................................. 21 Section 4.08 Amounts Remaining in Funds ................................................................................. 21 ARTICLE V GENERAL COVENANTS AND REPRESENTATIONS Section 5.01 Payment of Principal and Interest ............................................................................ 22 Section 5.02 Performance of Covenants ....................................................................................... 22 Section 5.03 Representations and Warranties of the Issuer .......................................................... 22 Section 5.04 Inspection of Project Books ..................................................................................... 22 Section 5.05 Damage, Destruction or Condemnation................................................................... 22 Section 5.06 Tax Covenants ......................................................................................................... 23 2021/10/12 City Council Post Agenda Page 318 of 620 TABLE OF CONTENTS (continued) ii 4818-3408-2039/024036-0092 ARTICLE VI DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND SUBORDINATE BONDHOLDERS Section 6.01 Events of Default ..................................................................................................... 24 Section 6.02 Acceleration; Other Remedies Upon Event of Default ........................................... 25 Section 6.03 Rights of Subordinate Bondholders ......................................................................... 26 Section 6.04 Waiver by Issuer ...................................................................................................... 26 Section 6.05 Application of Money After Default ....................................................................... 27 Section 6.06 Remedies Vested in Trustee .................................................................................... 28 Section 6.07 Remedies of Subordinate Bondholders ................................................................... 28 Section 6.08 Termination of Proceedings ..................................................................................... 28 Section 6.09 Waivers of Events of Default .................................................................................. 28 Section 6.10 Notice to Subordinate Bondholders if Default Occurs ............................................ 29 ARTICLE VII CONCERNING THE TRUSTEE Section 7.01 Standard of Care ...................................................................................................... 29 Section 7.02 Reliance Upon Documents ...................................................................................... 30 Section 7.03 Use of Proceeds ....................................................................................................... 32 Section 7.04 Trustee May Hold Subordinate Bonds .................................................................... 33 Section 7.05 Trust Imposed .......................................................................................................... 33 Section 7.06 Compensation of Trustee ......................................................................................... 33 Section 7.07 Qualifications of Trustee ......................................................................................... 34 Section 7.08 Merger of Trustee .................................................................................................... 34 Section 7.09 Resignation by the Trustee ...................................................................................... 34 Section 7.10 Removal of the Trustee ............................................................................................ 34 Section 7.11 Appointment of Successor Trustee .......................................................................... 35 Section 7.12 Concerning Any Successor Trustee ......................................................................... 35 Section 7.13 Successor Trustee as Trustee, Paying Agent and Subordinate Bond Registrar ................................................................................................................... 36 Section 7.14 Appointment of Co-Trustee or Separate Trustee ..................................................... 36 Section 7.15 Notice of Certain Events .......................................................................................... 37 Section 7.16 Filing of Financing Statements ................................................................................ 38 ARTICLE VIII SUPPLEMENTAL INDENTURES AND AMENDMENTS OF CERTAIN DOCUMENTS Section 8.01 Supplemental Indentures Not Requiring Consent of Subordinate Bondholders ............................................................................................................. 38 Section 8.02 Supplemental Indentures Requiring Consent of Subordinate Bondholders ............ 39 Section 8.03 Amendments to Subordinate Loan Agreement Not Requiring Consent of Subordinate Bondholders ......................................................................................... 40 Section 8.04 Amendments to Subordinate Loan Agreement Requiring Consent of Subordinate Bondholders ......................................................................................... 40 Section 8.05 Consent of Senior Funding Lender .......................................................................... 41 Section 8.06 Opinion of Bond Counsel Required ........................................................................ 41 2021/10/12 City Council Post Agenda Page 319 of 620 TABLE OF CONTENTS (continued) iii 4818-3408-2039/024036-0092 ARTICLE IX SATISFACTION AND DISCHARGE OF INDENTURE Section 9.01 Discharge of Lien .................................................................................................... 41 Section 9.02 Discharge of Liability on Subordinate Bonds.......................................................... 42 Section 9.03 Payment of Subordinate Bonds After Discharge of Indenture ................................ 42 Section 9.04 Deposit of Money or Securities With Trustee ......................................................... 42 ARTICLE X MISCELLANEOUS Section 10.01 Consents and Other Instruments of Subordinate Bondholders ................................ 43 Section 10.02 Limitation of Rights ................................................................................................. 44 Section 10.03 Severability .............................................................................................................. 44 Section 10.04 Notices ..................................................................................................................... 44 Section 10.05 Trustee as Paying Agent and Subordinate Bond Registrar ...................................... 46 Section 10.06 Payments Due on Non-Business Days .................................................................... 46 Section 10.07 Counterparts ............................................................................................................. 46 Section 10.08 Laws Governing Indenture and Administration of Trust ......................................... 46 Section 10.09 No Recourse............................................................................................................. 46 EXHIBIT A FORM OF SUBORDINATE BOND .................................................................... A-1 EXHIBIT B FORM OF PURCHASER’S LETTER .................................................................. B-1 2021/10/12 City Council Post Agenda Page 320 of 620 4818-3408-2039/024036-0092 SUBORDINATE INDENTURE OF TRUST THIS SUBORDINATE INDENTURE OF TRUST (this “Indenture”), made and entered into and dated as of October 1, 2021, by and between the CHULA VISTA HOUSING AUTHORITY (together with any successor to its rights, duties and obligations, the “Issuer”), a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California (the “State”), and U.S. Bank National Association, a national banking association organized and existing under and by virtue of the laws of the United States of America, qualified to accept and administer the trusts hereby created (together with any successor trustee hereunder and their respective successors and assigns, the “Trustee”); W I T N E S S E T H: WHEREAS, the Issuer is authorized by Chapter 1 of Part 2 of Division 24 of the Health and Safety Code of the State of California, as amended (the “Act”), to issue one or more series of its revenue bonds and loan the proceeds thereof to finance, among other things, the construction and equipping of multifamily rental housing for persons and families of low or moderate income; and WHEREAS, pursuant to the Act and this Subordinate Indenture, the Issuer proposes to finance the acquisition, rehabilitation and equipping of an 198-unit plus two manager’s units multifamily rental housing development to be located within the City of Chula Vista, California known as “Columba Apartments” (as more particularly described herein, the “Project”); and WHEREAS, in order to provide a portion of the funds necessary to finance the Project, pursuant to and in accordance with the Act, the Issuer has entered into a Funding Loan Agreement, by and among the Issuer, Citibank, N.A., as funding lender (the “Senior Funding Lender”), and U.S. Bank National Association, as fiscal agent (the “Senior Fiscal Agent”), dated as of October 1, 2021 (the “Senior Funding Loan Agreement”), pursuant to which the Senior Funding Lender will (i) advance funds (the “Senior Funding Loan”) to or for the account of the Issuer, and (ii) apply the proceeds of the Senior Funding Loan to make a loan (the “Senior Borrower Loan,” and, together with the Senior Funding Loan, collectively, the “Senior Loans”) pursuant to a Borrower Loan Agreement, by and between the Issuer and Millenia II CIC, LP, a California limited partnership (the “Borrower”), dated as of October 1, 2021 (the “Senior Borrower Loan Agreement,” and, together with the Senior Funding Loan Agreement, the “Senior Loan Agreements”); and WHEREAS, pursuant to the Senior Funding Loan Agreement, the Issuer executed and delivered a Governmental Lender Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________, a Governmental Lender Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________ and a Governmental Lender Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________ ( collectively, the “Senior Governmental Notes”), and, pursuant to the Senior Borrower Loan Agreement, the Borrower executed and delivered a Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________, a Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________ and a Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________ (collectively, the “Senior Borrower Notes,” and, together with the Senior Funding Loan Agreement, the Senior Borrower Loan Agreement, the Senior Governmental Notes and the Regulatory Agreement (as defined herein), the “Senior Loan Documents”); and 2021/10/12 City Council Post Agenda Page 321 of 620 2 4818-3408-2039/024036-0092 WHEREAS, pursuant to and in accordance with the Act, the Issuer has authorized and undertaken to issue revenue bonds to be designated the Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3, in the original aggregate principal amount of $2,400,000 (the “Subordinate Bonds”) pursuant to this Subordinate Indenture in order to provide a portion of the funds necessary to finance the Project; and WHEREAS, the Issuer has duly entered into a Subordinate Loan Agreement of even date herewith (the “Subordinate Loan Agreement”) with the Borrower and the Trustee specifying the terms and conditions under which it will issue the Subordinate Bonds and use the proceeds of the sale thereof to make a mortgage loan in the original aggregate principal amount of $2,400,000 (the “Subordinate Loan”), to the Borrower for the financing of the Project, evidenced by a Subordinate Promissory Note (the “Subordinate Note”), endorsed by the Issuer to the Trustee pursuant to this Subordinate Indenture; and WHEREAS, to secure the Borrower’s obligations under the Subordinate Note, the Borrower will execute and deliver to the Issuer a Subordinate Multifamily Deed of Trust, A ssignment of Rents, Security Agreement and Fixture Filing dated as of even date herewith (the “Subordinate Mortgage”) with respect to the Project, which Subordinate Mortgage will be assigned to the Trustee; and WHEREAS, to provide for the authentication and delivery of the Subordinate Bonds, to establish and declare the terms and conditions upon which the Subordinate Bonds are to be issued and secured and to secure the payment of the principal thereof and of the interest thereon, the Issuer has authorized the execution and delivery of this Subordinate Indenture; and WHEREAS, the Issuer has determined that all acts and proceedings required by law necessary to make the Subordinate Bonds, when executed by the Issuer, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligations of the Issuer, and to constitute this Subordinate Indenture a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken, and the execution and delivery of this Subordinate Indenture have been in all respects duly authorized; and WHEREAS, the Trustee has trust powers and the power and authority to enter into this Subordinate Indenture, to accept trusts generally and to accept and execute the trust created by this Subordinate Indenture; the Trustee has accepted the trust so created and, to evidence such acceptance, has joined in the execution of this Subordinate Indenture. NOW, THEREFORE, the Issuer, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Subordinate Bonds by the holders and owners thereof, and for other good and valuable consideration, the receipt of which is hereby acknowledged, to secure the payment of the principal of, and interest on the Subordinate Bonds according to their tenor and effect, and the performance and observance by the Issuer of all the covenants expressed or implied herein and in the Subordinate Bonds, does hereb y grant, bargain, sell, convey, pledge and assign a security interest, unto the Trustee, and its successors in trust and its and their assigns in and to the following (said property being herein referred to as the “Subordinate Trust Estate”), to wit: GRANTING CLAUSE FIRST All right, title and interest of the Issuer in and to all Revenues. 2021/10/12 City Council Post Agenda Page 322 of 620 3 4818-3408-2039/024036-0092 GRANTING CLAUSE SECOND All right, title and interest of the Issuer in and to the Subordinate Loan Agreement, the Subordinate Note and the Subordinate Mortgage (other than the Unassigned Rights), including all extensions and renewals of the terms thereof, if any, including, but without limiting the generality of the foregoing, the present and continuing right to receive, receipt for, collect or make claim for any of the money, income, revenues, issues, profits and other amounts payable or receivable thereunder (including all casualty insurance benefits or condemnation awards subject to the interests of the holders of the Senior Obligations (as defined herein)), whether payable under the above-referenced documents or otherwise, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Issuer or any other Person is or may become entitled to do under said documents. GRANTING CLAUSE THIRD All funds, money and securities and any and all other rights and interests in property whether tangible or intangible from time to time hereafter by delivery or by writing of any kind, conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder for the Subordinate Bonds by the Issuer or by anyone on its behalf or with its written consent to the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD, all the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and its successors in said trust and to them and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all Holders of the Subordinate Bonds issued under and secured by this Subordinate Indenture without privilege, priority or distinction as to lien or otherwise of any of the Subordinate Bonds over any of the other Subordinate Bonds, except as set forth in this Subordinate Indenture; PROVIDED, HOWEVER, that if the Issuer or its successors or assigns shall pay or cause to be paid to the Holders of the Subordinate Bonds the principal, interest and, to become due thereon at the times and in the manner provided in Article IX hereof, and if the Issuer shall keep, perform and observe, or cause to be kept, performed and observed, all of its covenants, warranties and agreements contained herein, then these presents and the estate and rights hereby granted shall, at the option of the Issuer, cease, terminate and be void, and thereupon the Trustee shall cancel and discharge the li en of this Subordinate Indenture and execute and deliver to the Issuer such instruments in writing as shall be requisite to satisfy the lien hereof, and, subject to the provisions of Sections 4.06 and 4.08 hereof and Article IX hereof, reconvey to the Issuer the estate hereby conveyed, and assign and deliver to the Issuer any property at the time subject to the lien of this Subordinate Indenture which may then be in its possession; otherwise this Subordinate Indenture to be and remain in full force and effect and upon the trusts and subject to the covenants and conditions hereinafter set forth. AND IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto, that the terms and provisions upon which the Subordinate Bonds are to be issued, executed, authenticated, delivered and secured, and the trusts and conditions upon which the Subordinate Trust Estate is to be held and disposed of, which said trusts and conditions the said Trustee hereby accepts 2021/10/12 City Council Post Agenda Page 323 of 620 4 4818-3408-2039/024036-0092 and agrees to discharge, are as follows (except that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall not be a general obligation of the Issuer nor a debt or pledge of the faith and credit of the Issuer or the State, but shall be payable solely from the revenues and funds pledged for its payment in accordance with this Subordinate Indenture): ARTICLE I DEFINITIONS Section 1.01 Definitions. Terms used herein and not otherwise defined shall have the meaning provided in the Senior Loan Documents. The terms used in this Subordinate Indenture (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Subordinate Indenture and of any indenture supplemental hereto shall have the respective meanings specified below: “Act” means Chapter 1 of Part 2 of Division 24 of the Health and Safety Code of the State of California, as amended, as now in effect and as it may from time to time hereafter be amended and supplemented. “Authorized Amount” shall mean $2,400,000, the principal amount of Subordinate Bonds authorized to be issued under this Subordinate Indenture. “Authorized Officer” means (a) when used with respect to the Issuer, its Chairperson, Vice Chairperson, Executive Director or Treasurer, and any other officer or employee of the Issuer designated by certificate of any of the foregoing as authorized by the Issuer, acting alone, to perform a specified act, sign a specified document or otherwise take action with respect to the Subordinate Bonds, (b) when used with respect to the Borrower, any general partner of the Borrower and such additional Person or Persons, if any, duly designated by the Borrower in writing to act on its behalf, and (c) when used with respect to the Trustee, any authorized signat ory of the Trustee, or any Person who is authorized in writing to take the action in question on behalf of the Trustee. “Bond Counsel” means (i) on the Closing Date, the law firm delivering the approving opinion(s) with respect to the Subordinate Bonds, or (ii) any other firm of attorneys selected by the Issuer that is experienced in matters relating to the issuance of obligations by states and their political subdivisions that is listed as municipal bond attorneys in The Bond Buyer’s Municipal Marketplace. “Bond Resolution” means the resolution adopted by the Issuer authorizing the issuance of the Subordinate Bonds. “Borrower” means Millenia II CIC, LP, a limited partnership duly organized and existing under the laws of the State of California, or any of its permitted successors or assigns, as owner of the Project. “Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which the Federal Reserve Bank of New York is authorized or obligated by law or executive order to remain closed, (d) a day on which the Principal Office of the Subordinate Bondholder Re presentative is closed, or (e) a day on which (i) banking institutions in the City of New York or in the city in which the Principal Office of the Trustee or the Subordinate Bondholder Representative is located 2021/10/12 City Council Post Agenda Page 324 of 620 5 4818-3408-2039/024036-0092 are authorized or obligated by law or executi ve order to be closed or (ii) the New York Stock Exchange is closed. “Certificate of the Issuer” and “Request of the Issuer” mean, respectively, a written certificate or request signed in the name of the Issuer by an Authorized Officer of the Issuer or suc h other Person as may be designated and authorized to sign for the Issuer. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Closing Date” means October __, 2021, the date of issuance of the Subordinate Bonds. “Code” means the Internal Revenue Code of 1986 and the regulations promulgated thereunder. “Default Rate” shall mean a rate per annum equal to the lesser of (i) the maximum interest rate that may be paid on the Bonds under State law, currently twelve percent per annum (12%), or (ii) the Subordinate Bond Rate plus five (5) percentage points, and shall compound monthly. “Determination of Taxability” shall mean, (a) a determination by the Commissioner or any District Director of the Internal Revenue Service, (b ) a private ruling or Technical Advice Memorandum issued by the National Office of th e Internal Revenue Service in which Issuer and Borrower were afforded the opportunity to participate, (c) a determination by any court of competent jurisdiction, (d) the enactment of legislation or (e) receipt by Trustee or Subordinate Bondholder Representative, at the request of Issuer, Borrower, Trustee or Subordinate Bondholder Representative, of an opinion of Bond Counsel, in each case to the effect that the interest on the Subordinate Bonds is includable in gross income for federal income tax purposes of any bondholder or any former bondholder, other than a bondholder who is a “substantial user” of the Project or a “related person” (as such terms are defined in Section 147(a) of the Code); provided, however, that no such Determination of Taxability under clause (a) or (c) shall be deemed to have occurred if the Issuer (at the sole expense of the Borrower) or the Borrower is contesting such determination, has elected to contest such determination in good faith and is proceeding with all applicable dispatc h to prosecute such contest until the earliest of (i ) a final determination from which no appeal may be taken with respect to such determination, (ii ) abandonment of such appeal by the Issuer or the Borrower, as the case may be, or (iii) unless otherwise agreed to by the Subordinate Bondholder Representative in its sole and reasonable discretion, one year from the date of initial determination. “Electronic Notice” means delivery of notice in a Word format or a Portable Document Format (PDF) by electronic mail to the electronic mail addresses listed in Section 10.04 hereof; provided, that if a sender receives notice that the electronic mail is undeliverable, notice must be sent as otherwise required by Section 10.04 hereof. “Enforcement Action” shall have the meaning given to that term in the Subordination Agreement. “Event of Default” or “event of default” means any of those events specified in and defined by the applicable provisions of Article VI hereof to constitute an event of default. 2021/10/12 City Council Post Agenda Page 325 of 620 6 4818-3408-2039/024036-0092 “Extraordinary Services” means and includes, but not by way of limitation, services, actions and things carried out and all expenses incurred by the Trustee in respect of or to prevent default under this Subordinate Indenture or the Subordinate Loan Documents, including any reasonable attorneys’ or agents’ fees and expenses and other litigation costs that are entitled to reimbursement under the terms of the Subordinate Loan Agreement, and other actions taken and carried out by the Trustee which are not expressly set forth in this Subordinate Indenture or the Subordinate Loan Documents. “Government Obligations” means investments meeting the requirements of clauses (a) or (b) of the definition of “Permitted Investments.” “Indenture” means this Subordinate Indenture of Trust, as the same may be amended, modified or supplemented from time to time. “Investor Limited Partner” means RJ HOF 71-Millenia II CIC L.L.C., a Florida limited liability company, or any other successor entity or assignee in such entity’s capacity as an equit y investor in the Borrower. “Issuer” means the Chula Vista Housing Authority, a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California, and its successors and assigns. “Maturity Date” means October [__], 2076. “Net Cash Flow” means, collectively, [(i) the “Net Cash Flow” as defined in the Partnership Agreement that is allocable to the payment of debt service on the Subordinate Bonds as set forth in Section 7.03 of the Partnership Agreement, and (ii) any proceeds from “Capital Transactions” as defined in the Partnership Agreement that is allocable to the payment of debt service on the Subordinate Bonds as set forth in Section 7.05 of the Partnership Agreement.] “Net Proceeds”, when used with respect to any insurance proceeds or condemnation award with respect to the Project, shall mean the amount remaining (i) after deducting from the gross proceeds thereof all expenses (including attorneys’ fees) incurred in the collection of such proceeds or award and (ii) after applying such amounts as set forth in the Senior Loan Documents. “Outstanding” when used with respect to the Subordinate Bonds or “Subordinate Bonds Outstanding” means, as of any date, all Subordinate Bonds that have been d uly authenticated and delivered by the Trustee under this Subordinate Indenture, except: (a) Subordinate Bonds surrendered and replaced upon exchange or transfer, or cancelled because of payment or redemption, at or prior to such date; (b) Subordinate Bonds for the payment, redemption or purchase for cancellation of which sufficient money has been deposited prior to such date with the Trustee (whether upon or prior to the maturity, amortization or redemption date of any such Subordinate Bonds), or which are deemed to have been paid and discharged pursuant to the provisions of Section 9.01 hereof; provided that if such Subordinate Bonds are to be redeemed prior to the maturity thereof, other than by scheduled amortization, notice of such redemption shall have been given or arrangements satisfactory 2021/10/12 City Council Post Agenda Page 326 of 620 7 4818-3408-2039/024036-0092 to the Trustee shall have been made therefor, or waiver of such notice satisfactory in form to the Trustee shall have been filed with the Trustee; and (c) Subordinate Bonds in lieu of which others have been authenticated (or payment, when due, of which is made without replacement) under Section 2.05 hereof. “Partnership Agreement” means the [First Amended and Restated Limited Partnership Agreement of the Borrower], dated as of October __, 2021. “Permitted Investments” shall have the same meaning as defined in the Senior Funding Loan Agreement. “Person” means an individual, a corporation, a partnership, an association, a joint stock company, a joint venture, a trust, an unincorporated association, a limited liability company or a government or any agency or political subdivision thereof, or any other organization or entity (whether governmental or private). “Pledged Revenues” means the amounts pledged under the Senior Loan Documents. “Principal Office of the Trustee” means the office of the Trustee referenced in Section 10.04(a) hereof, or such other office or offices as the Trustee may designate in writing from time to time, or the office of any successor Trustee where it principally conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued. “Project” means, collectively, the land and residential rental apartment units, and related fixtures, equipment, furnishings and site improvements known as Columba Apartments located in Chula Vista, California, including the real estate described in the Subordinate Mortgage. “Record Date” means the 15th day of the month preceding the month in which any Subordinate Bond Payment Date falls. “Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants dated as of October 1, 2021, by and between the Issuer and the Borrower with respect to the Project. “Responsible Officer” means any officer of the Trustee employed within or otherwise having regular responsibility in connection with the corporate trust department of the Trustee and the trusts created hereunder. “Revenue Fund” means the Revenue Fund established by the Trustee pursuant to Section 4.01 hereof. “Revenues” means [90% of Net Cash Flow]. “Senior Fiscal Agent” means U.S. Bank National Association, as fiscal agent under the Senior Funding Loan Agreement. “Senior Funding Lender” means the Funding Lender as defined in the Senior Funding Loan Agreement. 2021/10/12 City Council Post Agenda Page 327 of 620 8 4818-3408-2039/024036-0092 “Senior Funding Loan” means the Funding Loan made to the Issuer pursuant to the Senior Funding Loan Agreement. “Senior Funding Loan Agreement” means that certain Funding Loan Agreement, by and among the Issuer, the Senior Fiscal Agent and the Senior Funding Lender, dated as of October 1, 2021, as amended and supplemented from time to time. “Senior Governmental Notes” means, collectively, the Senior Series A-1 Governmental Note and the Senior Series A-2 Governmental Note. “Senior Loan Documents” means, collectively, the Senior Funding Loan Agreement, the Senior Borrower Loan Agreement, the Senior Governmental Notes, the Senior Borrower Notes and the Regulatory Agreement. “Senior Mortgage” means the Security Instrument as defined in the Borrower Loan Agreement. “Senior Obligations” means, collectively, the Senior Governmental Notes and the Senior Borrower Notes. “Senior Borrower Loan” means the Borrower Loan made to the Borrower pursuant to the Senior Borrower Loan Agreement. “Senior Borrower Loan Agreement” means that certain Borrower Loan Agreement, by and between the Issuer and the Borrower, dated as of October 1, 2021, as amended and supplemented from time to time. “Senior Borrower Notes” means, collectively, the Senior Series A-1 Borrower Note and the Senior Series A-2 Borrower Note. “Senior Series A-1 Borrower Note” means that certain Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $____________, executed and delivered by the Borrower pursuant to the Senior Borrower Loan Agreement. “Senior Series A-2 Borrower Note” means that certain Borrower Multifamily Note (Taxable) dated October __, 2021 in the aggregate principal amount of $____________, executed and delivered by the Borrower pursuant to the Senior Borrower Loan Agreement. “Servicer” means the Servicer under and as defined in the Senior Funding Loan Agreement. “Sophisticated Investor” means (1) a “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”); (2 ) an “accredited investor” as defined in Sections 501(a)(1) through (3) of Regulation D promulgated under the Securities Act; (3) an entity that is directly or indirectly wholly owned or controlled by or under common control with the holder of the Subordinate Bonds; (4) an entity all of the investors in which are described in (1), (2) or (3) above; or (5) a custodian or trustee for a party described in (1), (2) or (3) above. “Subordinate Bond Documents” shall mean (a) the Subordinate Loan Documents, (b) this Subordinate Indenture, (c) the Regulatory Agreement, (d) the Tax Certificate, (e) the Subordinate 2021/10/12 City Council Post Agenda Page 328 of 620 9 4818-3408-2039/024036-0092 Bond Purchase Agreement, (f) UCC financing statements, (g) such assignments of management agreements, contracts and other rights as may be reasonably requir ed, (h) all other documents evidencing, securing, governing or otherwise pertaining to the Subordinate Bonds or any other Subordinate Bond Documents, and (i) all amendments, modifications, renewals and substitutions of any of the foregoing. “Subordinate Bond Fund” means the Subordinate Bond Fund established by the Trustee pursuant to Section 4.01 hereof. “Subordinate Bond Payment Date” means (i) the [INSERT PAYMENT DATE], (ii) any date on which the Bonds are subject to mandatory redemption pursuant to the p rovisions hereof, and (iii) the Maturity Date. “Subordinate Bond Purchase Agreement” shall mean the Subordinate Bond Purchase Agreement by and among the Issuer, the Subordinate Bondholder Representative and the Borrower executed in connection with the Subordinate Bonds. “Subordinate Bond Rate” the lesser of (i) seven and a half percent (7.5%) per annum, compounding annually, or (ii) the maximum interest rate allowable on the Subordinate Bonds under State law, from the Closing Date to the Maturity Date. “Subordinate Bond Register” means the books or other records maintained by the Subordinate Bond Registrar setting forth the registered Holders from time to time of the Subordinate Bonds. “Subordinate Bond Registrar” means the Trustee acting as such, and any other bond registrar appointed pursuant to this Subordinate Indenture. “Subordinate Bondholder” or “Holder” or “Owner” means any Person who shall be the registered owner of any Outstanding Subordinate Bond or Subordinate Bonds. “Subordinate Bondholder Representative” means any Person appointed to such position by written instrument signed by 100% of the Holders of the Outstanding Subordinate Bonds. If there is no appointed Subordinate Bondholder Representative, the Holder of a majority or plurality of the Outstanding Subordinate Bonds shall be deemed to be the Subordinate Bondholder Representative. The initial Subordinate Bondholder Representative is CIC Opportunities Fund III LLC, a California limited liability company. “Subordinate Bonds” means the Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3 issued pursuant to the provisions of this Subordinate Indenture. “Subordinate Bonds Conversion Date” shall have the same meaning as “Conversion Date” as set forth in the Senior Funding Loan Agreement. “Subordinate Loan” means the loan made by the Issuer to the Borrower in the original principal amount of $2,400,000 pursuant to the Subordinate Loan Agreement. 2021/10/12 City Council Post Agenda Page 329 of 620 10 4818-3408-2039/024036-0092 “Subordinate Loan Agreement” means the Subordinate Loan Agreement dated as of the date hereof among the Borrower, the Issuer and the Trustee, as such Subordinate Loan Agreement may from time to time be amended or supplemented. “Subordinate Loan Documents” means, collectively, this Subordinate Indenture, the Subordinate Loan Agreement, the Subordinate Note, the Subordinate Mortgage, the Subordinate Bond Purchase Agreement, and all other documents securing the Subordinate Loan. “Subordinate Mortgage” means the Subordinate Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date hereof, together with all riders and addenda thereto, granting a second priority mortgage and security interest in the Project to the Issuer to secure the repayment of the Subordinate Loan which Subordinate Mortgage has been assigned by the Issuer to the Trustee as the same may be amended, supplemented or restated. “Subordinate Note” means the Subordinate Promissory Note dated the Closing Date from the Borrower, including all riders and addenda thereto, evidencing the Borrower’s obligation to repay the Subordinate Loan, as the same may be amended, supplemented or restated from time to time, which Subordinate Promissory Note will be delivered to the Issuer and endorsed by the Issuer to the Trustee. “Subordinate Trust Estate” shall have the meaning given to that term in the Granting Clauses. [“Subordination Agreement” means the Subordination Agreement, dated as of October 1, 2021, by and between the Trustee and the Senior Funding Lender.] “State” means the State of California. “Tax Certificate” shall mean the Tax Certificate, dated the Closing Date, executed and delivered by the Issuer and the Borrower. “Trustee” means U.S. Bank National Association and its successors in trust hereunder. “Unassigned Rights” means all of the rights of the Issuer and its directors, officers, commissioners, elected officials, attorneys, accountants, employees, agents and consultants to be held harmless and indemnified, to be paid its fees and expenses, to give or withhold consent to amendments, changes, modifications and alterations, to receive notices and the right to enforce such rights. Section 1.02 Interpretation. The words “hereof,” “herein,” “hereunder,” and other words of similar import refer to this Subordinate Indenture as a whole and not to any particular Article, Section or other subdivision. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise indicate. All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as in effect from time to time. References to Articles, Sections, and other subdivisions of this Subordinate Indenture are to the designated Articles, Sections and other subdivisions of this Subordinate Indenture as originally executed. The headings of this Subordinate Indenture are for convenience only and shall not define or limit the provisions hereof. 2021/10/12 City Council Post Agenda Page 330 of 620 11 4818-3408-2039/024036-0092 ARTICLE II THE SUBORDINATE BONDS Section 2.01 The Subordinate Bonds. (a) The Subordinate Bonds are hereby authorized to be issued hereunder as revenue bonds of the Issuer in accordance with the Bond Resolution. The Subordinate Bonds are hereby authorized to be designated “Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3” in the original aggregate principal amount of $2,400,000. The Subordinate Bonds shall be fully registered as to principal and interest, without coupons, and shall be numbered by series, if any, in the manner and with any additional designation as the Trustee, as Subordinate Bond Registrar, deems necessary for the purpose of identification. All of the Subordinate Bonds are equally and ratably secured. Subordinate Bonds issued on the Closing Date shall be dated such date; Subordinate Bonds issued after the Closing Date shall be dated the date they are authenticated by the Trustee. The Subordinate Bonds shall be due and payable in full on the Maturity Date. (b) The Subordinate Bonds shall be issued as one bond in the principal amount of $2,400,000 and shall bear interest only at the Subordinate Bond Rate. Interest shall accrue on the Subordinate Bonds at the Subordinate Bonds Rate, and interest-only payments of the Subordinate Bonds (but no principal payments on the Subordinate Bonds) shall be made prior to the Subordinate Bonds Conversion Date. On each Subordinate Bond Payment Date following the Subordinate Bonds Conversion Date until the earlier of the Maturity Date or the date on which no principal of or interest on the Subordinate Bonds remains outstanding, payment of interest shall be payable, solely from available Revenues received by the Trustee pursuant to the provisions of the Subordinate Note and the Subordinate Loan Agreement. The Subordinate Bonds shall also be subject to mandatory redemption in part (i.e. payment of the principal of the Subordinate Bond) on each Subordinate Bond Payment Date, solely from available Revenues received by the Trustee pursuant to the provisions of the Subordinate Note and the Subordinate Loan Agreement which remain after the payment of interest on the Subordinate Bonds on such Subordinate Bond Payment Date , which mandatory redemption payments shall be applied first to amortizing payments of principal on the Subordinate Bonds, and then to prepayments of the remaining principal amount of the Subordinate Bo nd. Unpaid interest on the Subordinate Bonds, and other unpaid amounts under this Subordinate Indenture, shall accrue interest at the Subordinate Bond Rate. (i) Interest on the Subordinate Bonds shall be computed on the basis of a 360-day year of twelve months. Interest on the Subordinate Bonds shall be payable on each Subordinate Bond Payment Date, in each case from the Subordinate Bond Payment Date next preceding the date of authentication thereof to which interest has been paid or duly provided for, unless the date of authentication is an Subordinate Bond Payment Date to which interest has been paid or duly provided for, in which case from the date of authentication of the Subordinate Bond, or unless no interest has been paid or duly provided for on the Subordinate Bonds, in which case from the Closing Date, until payment of the principal of the Subordinate Bond has been made or duly provided for. Notwithstanding the foregoing, if a Subordinate Bond is authenticated after a Record Date and before the following Subordinate Bond Payment Date, such Subordinate Bond shall bear interest from such Subordinate Bond Payment Date; provided, however, that if there shall be a default in the payment of interest due on such Subordinate Bond Payment Date, then the Subordi nate Bonds shall bear interest from the next preceding Subordinate Bond Payment Date to which interest 2021/10/12 City Council Post Agenda Page 331 of 620 12 4818-3408-2039/024036-0092 has been paid or duly provided for, or, if no interest has been paid or duly provided for on the Subordinate Bonds, from the Closing Date. (c) The Person in whose name any Subordinate Bond is registered on the Record Date with respect to an Subordinate Bond Payment Date shall be entitled to receive the interest paid on such Subordinate Bond Payment Date (unless such Subordinate Bond has been called for redemption on a redemption date which is prior to such Subordinate Bond Payment Date) notwithstanding the cancellation of such Subordinate Bond upon any registration of transfer or exchange thereof subsequent to such Record Date and prior to such Subordinate Bond Payment Date. (d) No Subordinate Bonds may be issued under the provisions of this Subordinate Indenture except in accordance with this Article. The total principal amount of Subordinate Bonds that may be issued hereunder, or in substitution for other Subordi nate Bonds pursuant to Section 2.06 hereof, is expressly limited to $2,400,000. Section 2.02 Limited Obligations. The Subordinate Bonds are limited obligations of the Issuer, payable solely from the Revenues and other funds and money pledged and assigned hereunder. Neither the Issuer, the State of California (the “State”), nor any political subdivision thereof (except the Issuer, to the limited extent set forth herein) nor any public agency shall in any event be liable for the payment of the principal of, or interest on the Subordinate Bonds or for the performance of any pledge, obligation or agreement of any kind whatsoever except as set forth herein, and none of the Subordinate Bonds or any of the Issuer’s agreements or obligations shall be construed to constitute an indebtedness of or a pledge of the faith and credit of or a loan of the credit of or a moral obligation of any of the foregoing within the meaning of any constitutional or statutory provision whatsoever. The Issuer has no taxing power. No recourse shall be had for the payment of the principal of, or interest on any Subordinate Bond or for any claim based thereon or upon any obligation, covenant or agreement in this Subordinate Indenture contained, against, the Issuer, any past, present or future member of its governing body, its officers, attorneys, accountants, financial advisors, agents or staff or the officers, attorneys, accountants, financial advisors, agents or staff of any successor public entity, as such, either directly or through the Issuer or any successor public entity, under any rule of law or penalty or otherwise, and all such liability of the Issuer, any member of its governing body and its officers, attorneys, accountants, financial advisors, agents and staff is hereby, and by the acceptance of the Subordinate Bonds, expressly waived and released as a condition of, and in consideration for, the execution of this Subordinate Indenture and the issuance of the Subordinate Bonds. It is recognized that notwithstanding any other provision of this Subordinate Indenture, neither the Borrower, the Trustee nor any Subordinate Bondholder shall look to the Issuer for damages suffered by the Borrower, the Trustee or such Subordinate Bondholder as a result of the failure of the Issuer to perform any covenant, undertaking or obligation under this Subordinate Indenture, the Subordinate Loan Agreement, the Subordinate Bonds or any of the other documents referred to herein, or as a result of the incorrectness of any representation made by the Issuer in any of such documents, nor for any other reason. Although this Subordinate Indenture recognizes that such documents shall not give rise to any pecuniary liability of the Issuer, nothing contained in this Subordinate Indenture shall be construed to preclude in any way any action or proceeding (other than that element of any action or proceeding involving a claim for monetary damages against the Issuer) in any court or before any governmental body, agency or instrumentality or otherwise against the Issuer or any of its officers or employees to enforce the provisions of any of such documents which 2021/10/12 City Council Post Agenda Page 332 of 620 13 4818-3408-2039/024036-0092 the Issuer is obligated to perform and the performance of which the Issuer has not assigned to the Trustee or any other person; provided, however, that as a condition precede nt to the Issuer proceeding pursuant to this Section 2.02, the Issuer shall have received satisfactory indemnification. Section 2.03 Indenture Constitutes Contract. In consideration of the purchase and acceptance of the Subordinate Bonds issued hereunder by those who shall hold them from time to time, the provisions of this Subordinate Indenture shall be part of the contract of the Issuer with the Holders of the Subordinate Bonds and shall be deemed to be a contract between the Issuer and the Holders of the Subordinate Bonds from time to time. Section 2.04 Form and Execution. The Subordinate Bonds shall be in substantially the form attached as Exhibit A, with necessary and appropriate variations, omissions and insertions as are customary, permitted or required by this Subordinate Indenture. The Subordinate Bonds shall be executed on behalf of the manual or facsimile signature of the Authorized Officer of the Issuer, and attested by the manual or facsimile signature of the Secretary of the Issuer. Any facsimile signatures shall have the same force and effect as if said officers had manually signed the Subordinate Bonds. Any reproduction of the official seal of the Issuer on the Subordinate Bonds shall have the same force and effect as if the official seal of the Issuer had been impressed on the Subordinate Bonds. In case any officer of the Issuer whose manual or facsimile signature shall appear on any Subordinate Bond shall cease to be such officer before the delivery of such Subordinate Bond such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery, and also any Subordinate Bond may bear the facsimile signatures of, or may be signed by, such Persons as at the actual time of the execut ion of such Subordinate Bond shall be the proper officers to sign such Subordinate Bond although at the date of such Subordinate Bond such Persons may not have been such officers. Section 2.05 Authentication. No Subordinate Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Subordinate Indenture unless a certificate of authentication on such Subordinate Bond, substantially in the form set forth in Exhibit A, shall have been duly executed by an Authorized Officer of the Trustee; and such executed certificate of authentication upon any such Subordinate Bond shall be conclusive evidence that such Subordinate Bond has been duly executed, registered, authenticated and delivered under this Subordinate Indenture. It shall not be necessary that the same Person sign the certificate of authentication on all of the Subordinate Bonds. Section 2.06 Mutilated, Lost, Stolen or Destroyed Subordinate Bonds. In the event any Subordinate Bond is mutilated, lost, stolen or destroyed, the Issuer shall execute and the Trustee shall authenticate a new Subordinate Bond of like interest rate, series, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Subordinate Bond or in lieu of and in substitution for such lost, stolen or destroyed Subordinate Bond, upon payment by the Owner thereof of any applicable tax or governmental charge and the reasonable expenses and charges of the Issuer and the Trustee in connection therewith, and in the case of a Subordinate Bond lost, s tolen or destroyed, the filing with the Trustee of evidence satisfactory to it that such Subordinate Bond was lost, stolen or destroyed, and of the ownership thereof, and furnishing the Issuer and the Trustee with indemnity satisfactory to each of them. In the event any such Subordinate Bond shall have matured, instead of issuing a duplicate Subordinate Bond or Subordinate Bonds the Issuer may pay the same without surrender thereof. 2021/10/12 City Council Post Agenda Page 333 of 620 14 4818-3408-2039/024036-0092 Section 2.07 Transfer and Exchange of Subordinate Bonds; Persons Treated as Owners; Restrictions on Transfer. The Trustee as Subordinate Bond Registrar shall cause a Subordinate Bond Register to be kept for the registration of transfers of Subordinate Bonds. Any Subordinate Bond may be transferred only upon an assignment duly executed by t he registered Owner or such registered Owner’s duly authorized representative in such form as shall be satisfactory to the Subordinate Bond Registrar and upon surrender of such Subordinate Bond to the Trustee for cancellation. Whenever any Subordinate Bond or Subordinate Bonds shall be surrendered for transfer, the Issuer shall execute and the Trustee shall authenticate and deliver to the transferee a replacement fully registered Subordinate Bond for the amount of such Subordinate Bond so surrendered. In all cases in which Subordinate Bonds shall be transferred or exchanged hereunder, the Trustee may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. The cost of printing Subordinate Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer or exchange shall be paid by the Borrower. The Person in whose name any Subordinate Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal of and interest on any such Subordinate Bond shall be made only to or upon the order of the registered Owner thereof, or such registered Owner’s legal repre sentative, and neither the Issuer nor the Trustee shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Subordinate Bond to the extent of the sum or sums to be paid. Neither the Issuer nor the Trustee shall be required to make any such exchange, registration or transfer of Subordinate Bonds during the period of fifteen (15) days immediately preceding an Subordinate Bond Payment Date or, in the case of any proposed redemption of Subordinate Bonds, during the period of fifteen (15) days immediately preceding the selection of Subordinate Bonds for such redemption and after the giving of notice of redemption, the Trustee is not required to transfer or exchange any Subordinate Bond or portion thereof which has been called for redemption. Restrictions on Transfer. The following shall apply to all sales and transfers of the Subordinate Bonds after the applicable initial sale and delivery of the Subordinate Bonds: (a) The Subordinate Bonds, including participation interests therein, in the form attached hereto as Exhibit A, shall be physical certificated instruments, and shall not be held in a book-entry only system unless approved in advance by the Issuer; (b) The Subordinate Bonds shall be sold in whole only; (c) The Trustee shall not authenticate or register a Subordinate Bond unless it has received a certificate from the Issuer stating that the conditions of this Section 2.07 have been satisfied and there shall have been delivered to the Trustee an Investor Letter executed by the transferee of the Subordinate Bonds; Section 2.08 Delivery of Subordinate Bonds. Upon the execution and delivery of this Subordinate Indenture, the Issuer shall execute and deliver to the Trustee, and the Trustee shall 2021/10/12 City Council Post Agenda Page 334 of 620 15 4818-3408-2039/024036-0092 authenticate the Subordinate Bonds and deliver them to or upon the order of the Issuer upon receipt by the Trustee of the following: (a) executed counterparts of this Subordinate Indenture, the Subordinate Loan Agreement, the Regulatory Agreement, and the Tax Certificate; (b) an opinion of Bond Counsel to the effect that the Subordinate Bonds are valid and binding special obligations of the Issuer; (c) evidence satisfactory to the Trustee of the Subordinate Loan and Subordinate Note (representing the purchase price of the Subordinate Bonds); (d) a copy of the Subordinate Mortgage; (e) an opinion of counsel to the Borrower to the effect that the Borrower is duly organized and validly existing and in good standing under the laws of the state in which it has been organized and in good standing under the laws of each other state in which the Borrower transacts business and has full power and authority to enter into the agreements described herein to which it is a party, that its execution and delivery of and performance of its covenant s in such agreements do not contravene law or any provision of any other agreement to which it is a party or by which it or such property is bound or affected, and that all such agreements have been duly authorized, executed and delivered by the Borrower, and are legal, valid and binding agreements of the Borrower enforceable against the Borrower in accordance with their respective terms; (f) an opinion of Bond Counsel to the effect that the interest on the Subordinate Bonds, under laws in effect on the date of such opinion, is excluded from gross income for federal income tax purposes and, where applicable, for State income tax purposes; (g) a certified copy of the Bond Resolution; (h) the written request and authorization to the Trustee by the Issuer to authenticate and deliver the Subordinate Bonds in accordance with the provisions of this Subordinate Indenture. Section 2.09 Establishment of Subordinate Loan Fund; Application of Bond Proceeds and Other Money; Assignment of Subordinate Loan to Trustee. (a) The Trustee shall establish, maintain and hold in trust and there is hereby established with the Trustee a Subordinate Loan Fund. No amount shall be charged against the Subordinate Loan Fund except as expressly provided in this Section 2.09 and Section 4.02. (b) On the Closing Date, the principal amount of the proceeds of the Bonds shall be deposited in the Subordinate Loan Fund. Amounts in the Subordinate Loan Fund shall be disbursed as provided in Section 4.02, subject to the conditions set forth in Section 3.1 of the Subordinate Loan Agreement. Upon the disbursement of all amounts in the Subordinate Loan Fund, the Trustee shall close the Subordinate Loan Fund. (c) Upon the deposit of money to the credit of the Subordinate Loan Fund, the Issuer shall originate the Subordinate Loan pursuant to the Subordinate Loan Agreement and the 2021/10/12 City Council Post Agenda Page 335 of 620 16 4818-3408-2039/024036-0092 Trustee shall make disbursements of amounts in the Subordinate Loan Fund to the Borrower or otherwise as provided in Section 4.02. Section 2.10 Subordination. This Subordinate Indenture and the Subordinate Loan Agreement are and at all times shall be subject and subordinate in all respects to the terms, provisions, conditions, covenants, liens and security interests of the Senior Loan Documents. Correspondingly, payment of the indebtedness evidenced by the Subordinate Bonds is and shall be subject and subordinate in all respects to the prior payment in full of all amounts due and payable in respect of the Senior Obligations and the Senior Loan Documents, and otherwise under the Senior Loan Documents. Accordingly, the Subordinate Bondholders expressly subject and subordinate all of their right, title and interest in and to the Subordinate Bonds in all respects to (i ) the payment in full of the Senior Obligations, (ii) the payment in full of the Senior Loan, (iii) the lien of the Pledged Revenues under the Senior Funding Loan Agreement and of the Senior Mortgage and (iv) the payment in full of all amounts owed to the Funding Lender under the Senior Loan Documents. In addition, notwithstanding anything contained in this Subordinate Indenture, the Subordinate Loan Agreement, the Subordinate Note or the Subordinate Mortgage to the contrary, the Issuer and the Trustee agree, and the Subordinate Bondholders by their acc eptance of the Subordinate Bonds agree, that: (a) the sole source of funds available to the Issuer for the purpose of paying the principal of, and interest on, the Subordinate Bonds shall be the Revenues, if and to the extent available; (b) the Subordinate Note is payable solely from, and only to the extent of, the Revenues, if and to the extent available; (c) payments of the principal of, and interest on, the Subordinate Note shall be made only after all current and past due Senior Obligations have been paid in full and shall be subject to the terms and conditions of the Subordination Agreement; (d) the security for the Subordinate Loan and the Subordinate Note shall be the Subordinate Mortgage, which shall be wholly subordinate to the Senior Mortgage encumbering the same Project; (e) the obligation of the Borrower to repay the Subordinate Loan is and shall be subject and subordinate in all respects to the obligations of the Borrower to pay all amounts due in respect of the Senior Obligations, whether under the Senior Loan Documents or otherwise; (f) so long as any amounts are currently due and owing in respect of the Senior Obligations, whether under the Senior Loan Documents or otherwise, the Trustee shall not be entitled to foreclose on the Subordinate Mortgage notwithstanding (1) any arrearages in the payments of any amounts due and owing under or with respect to the Subordinate Bonds or (2) any default in respect of the Subordinate Bonds, the Subordinate Note, the Subordinate Mortgage or the Subordinate Loan except as consented to in writing by the Senior Funding Lender[; or (3) take any other action except as expressly permitted under the Subordination Agreement;] (g) unpaid principal and interest on the Subordinate Bonds resulting from insufficient Revenues will accrue and shall be payable solely from, and only to the extent of, 2021/10/12 City Council Post Agenda Page 336 of 620 17 4818-3408-2039/024036-0092 Revenues, provided further that payment of such principal and interest is and shall remain subject and subordinate to the Senior Obligations; and (h) notwithstanding the foregoing, unpaid principal and such interest on the Subordinate Bonds shall be payable at maturity, subject to mandatory redemption, and shall remain subject and subordinate to the Senior Obligations. Failure to make any payment in respect of the Subordinate Bonds or otherwise under this Subordinate Indenture shall not constitute an Event of Default under (and as defined in) this Subordinate Indenture. The Trustee shall not, after the Trustee receives a notice of default or otherwise acquires knowledge of a default or an Event of Default by the Borrower with respect to the Senior Obligations, the Senior Loan or under any Senior Loan Document, make any payments in respect of the Subordinate Bonds unless and until such default or Event of Default or potential default has been cured or waived by the Subordinate Bondholder Representative. The parties to this Subordinate Indenture acknowledge that the terms of this Subordinate Indenture are in all respects subject to the Senior Loan Documents. ARTICLE III REDEMPTION OF SUBORDINATE BONDS PRIOR TO MATURITY Section 3.01 Redemption of Subordinate Bonds Prior to Maturity. The Subordinate Bonds are subject to redemption upon the circumstances, on the dates and at the prices set forth as follows: (a) The Subordinate Bonds shall be subject to mandatory redemption in whole or in part, after satisfaction of all requirements of the Senior Loan Documents, on the next Subordinate Bond Payment Date for which notice of redemption can timely be given, at a redemption price equal to the principal amount of Subordinate Bonds to be redeemed plus i nterest accrued thereon to the date fixed for redemption upon prepayment of the Subordinate Loan in whole or in part following a casualty to or condemnation of the Project (unless the Borrower has elected to repair and restore the Project in accordance with the terms of the Subordinate Bond Documents); such mandatory redemption shall be in an amount as nearly equal as possible to, but not exceeding, the amount of any Net Proceeds of insurance or condemnation awards not used to repair or replace the Project. (b) The Subordinate Bonds shall be subject to mandatory redemption in whole on the next date for which notice of redemption can timely be given at a redemption price equal to the principal amount of the Subordinate Bonds to be redeemed plus interest accrued t hereon to the date fixed for redemption upon acceleration of the Subordinate Loan in whole following an Event of Default under Article VII of the Subordinate Loan Agreement, except as otherwise provided in Article VI of this Indenture. (c) Except as otherwise provided in this Article III, including but not limited to Section 3.01(f) hereof, the Subordinate Bonds are subject to optional redemption in whole or in part on any Business Day for which notice of redemption can timely be given, in the event and to the extent that the Subordinate Loan is prepaid pursuant to the Subordinate Note as set forth in Section 4.3 of the Subordinate Loan Agreement, at a redemption price equal to the principal amount of Subordinate Bonds to be redeemed, plus accrued interest to the date fixed for redemption. Any 2021/10/12 City Council Post Agenda Page 337 of 620 18 4818-3408-2039/024036-0092 optional redemption of the Subordinate Bonds are subject to the approval rights of (i) the Investor Limited Partner as set forth in the Partnership Agreement , and (ii) the Senior Funding Lender as set forth in the Senior Loan Documents. (d) The Subordinate Bonds are subject to mandatory redemption in whole or in part on any Business Day for which notice of redemption can timely be given, in the event and to the extent the Subordinate Bondholder Representative notifies the Trust ee in writing that, subject to and in accordance with the terms and conditions of the Partnership Agreement, there are net proceeds available from (i) a sale or exchange of any assets of the Borrower, (ii) any financing or refinancing of the Project, (iii) the liquidation of the Borrower, or (iv) any other transaction where the proceeds are deemed attributable to capital under generally accepted accounting principles. (e) The Subordinate Bonds are subject to mandatory redemption in whole or part on each Subordinate Bond Payment Date, without notice, solely from available Revenues received by the Trustee pursuant to the provisions of the Subordinate Note and the Subordinate Loan Agreement which remain after the payment of interest on the Subordinate Bonds on such Subordinate Bond Payment Date, which mandatory redemption payments shall be applied first to amortizing payments of principal on the Subordinate Bonds, and then to prepayments of the remaining principal amount of the Subordinate Bond. (f) The Subordinate Bonds shall be subject to optional redemption in whole or in part on any Business Day for which notice of redemption can timely be given, at a redemption price equal to the principal amount of the Subordinate Bonds to be redeemed plus interest accrued thereon to the date fixed for redemption, subject to the consent of the Senior Funding Lender, so long as the Senior Obligations are outstanding. Section 3.02 Notice of Redemption. Notice of the intended redemption of each Subordinate Bond shall be given by the Trustee by first class mail, postage prepaid, or by facsimile transmission, to the registered Owner at the address of such Owner shown on the Subordinate Bond Register. All such redemption notices shall be given not less than ten (10) days prior to the date fixed for redemption. The Trustee may provide a conditional notice of redemption. Notices of redemption shall state the redemption date and the redemption price, the place or places where amounts due upon such redemption will be payable, and, if less than all of the then Outstanding Subordinate Bonds are called for redemption, shall state (i) the numbers of the Subordinate Bonds to be redeemed by giving the individual certificate number of each Subordinate Bond to be redeemed or shall state that all Subordinate Bonds between two stated certificate numbers, both inclusive, are to be redeemed or that all of the Subordinate Bonds of one or more maturities have been called for redemption only if bonds cease to be book entry-bonds; (ii) the Maturity Date of each Subordinate Bond being redeemed; (iii) the conditions, if any, which must be satisfied in order for the redemption to take place on the scheduled date of redemption, and (iv) any other descriptive information needed to identify accurately the Subordinate Bonds being redeemed. Failure to give notice by mailing to the registered Owner of any Subordinate Bond designated for redemption or to any depository or information service shall not affect the validity of the proceedings for the redemption of any other Subordinate Bond if notice of such redemption shall have been mailed as herein provided. 2021/10/12 City Council Post Agenda Page 338 of 620 19 4818-3408-2039/024036-0092 Section 3.03 Effect of Notice of Redemption. If a conditional notice of redemption has been provided pursuant to the terms of this Subordinate Indenture and the conditions are not satisfied, such notice of redemption shall be of no force and effect and the Subordinate Bondholders shall be restored to their former positions as though no such notice of redemption had been delivered. Notice of redemption having been given in the manner provided in this Article III and if either there were no conditions to such redemption or the conditions have been satisfied (or in the event no such notice is required under Section 3.02), and money for the redemption being held by the Trustee for that purpose, thereupon the Subordinate Bonds so called for redemption shall become due and payable on the redemption date, and interest thereon shall cease to accrue on such date; and such Subordinate Bonds shall thereafter no longer be entitled to any security or benefi t under this Subordinate Indenture except to receive payment of the redemption price thereof. ARTICLE IV REVENUES AND FUNDS Section 4.01 Pledge of Revenues and Assets; Establishment of Funds. The pledge and assignment of and the security interest granted in the Subordinate Tru st Estate pursuant to the Granting Clauses hereof shall attach, be perfected and be valid and binding from and after the time of the delivery of the Subordinate Bonds by the Trustee or by any Person authorized by the Trustee to deliver the Subordinate Bonds. The Subordinate Trust Estate so pledged and then or thereafter received by the Trustee shall immediately be subject to the lien of such pledge and security interest without any physical delivery thereof or further act, and the lien of such pledge and s ecurity interest shall be valid and binding and prior to the claims of any and all parties having claims of any kind in tort, contract or otherwise against the Issuer irrespective of whether such parties have notice thereof. In addition to the Subordinate Loan Fund established therein pursuant to Section 2.09 hereof, the Trustee shall establish, maintain and hold in trust the following funds and accounts, each of which is hereby established and each of which shall be disbursed and applied only as herein authorized: (a) Revenue Fund; and (b) Subordinate Bond Fund. The funds and accounts established pursuant to this Section 4.01 shall be maintained in the corporate trust department of the Trustee as segregated trust accounts, separate and identifiable from all other funds held by the Trustee. The funds and accounts established hereunder shall bear a designation clearly indicating that the funds deposited therein are held for the benefit of the Holders of the Subordinate Bonds, respecting the Revenue Fund and the Subor dinate Bond Fund. The Trustee shall, at the written direction of an Authorized Officer of the Issuer, and may, in its discretion, establish such additional accounts within any Fund, and subaccounts within any of the accounts, as the Issuer or the Trustee may deem necessary or useful for the purpose of identifying more precisely the sources of payments into and disbursements from that Fund and its accounts, or for the purpose of complying with the requirements of the Code relating to arbitrage, but the establishment of any such account or subaccount shall not alter or modify any of the requirements of this Subordinate Indenture with respect to a deposit or use of money in the funds established hereunder, or result in commingling of funds not permitted hereunder. 2021/10/12 City Council Post Agenda Page 339 of 620 20 4818-3408-2039/024036-0092 Section 4.02 Subordinate Loan Fund. The Trustee shall deposit the proceeds of the Bonds as provided in Section 2.09 and disburse amounts deposited in the Subordinate Loan Fund immediately upon receipt to the Borrower in funding of the Subordinate Loan. No amount s shall be invested or retained in the Subordinate Loan Fund. Section 4.03 Application of Revenues. (a) All Revenues, if any, shall be deposited by the Trustee, promptly upon receipt thereof, to the Revenue Fund, except (i) with respect to investment earnings to the extent required under the terms hereof to be retained in the funds and accounts to which they are attributable; and (ii) with respect to amounts required to be transferred between funds and accounts as provided in this Article IV. (b) There are no Subordinate Bond Payment Dates prior to the first Business Day of the month proceeding the Subordinate Bonds Conversion Date. On each Subordinate Bond Payment Date or any other date on which payment of principal of or interest on the Subordinate Bonds becomes due and payable, the Trustee shall credit from the Revenue Fund to the Subordinate Bond Fund an amount equal to the principal of and interest payable from Revenues to such period on the Subordinate Bonds on such date. (c) Promptly upon receipt, the Trustee shall deposit directly to the Subordinate Bond Fund (i) Net Proceeds representing casualty insurance proceeds or condemnati on awards paid as a prepayment of the Subordinate Loan, after reimbursement of any and all amounts owed to the Subordinate Bondholder Representative (and subject to the Borrower’s right to repair and restore the Property as set forth in the Subordinate Loa n Documents) and (ii) amounts paid to the Trustee to be applied to the redemption of all or a portion of the Subordinate Bonds pursuant to Article III hereof. (d) Should the amount in the Subordinate Bond Fund be insufficient to pay the amount due on the Subordinate Bonds on any given Subordinate Bond Payment Date or other payment date, the Trustee shall credit to the Subordinate Bond Fund the amount of such deficiency by charging the Revenue Fund; provided, however, in no event shall the amount due on the Subordinate Bonds exceed the Revenues, if any, for such applicable period. Section 4.04 Application of Subordinate Bond Fund. The Trustee shall charge the Subordinate Bond Fund, on each Subordinate Bond Payment Date, an amount equal to available Revenues, if any, for such period, which shall be applied to interest due on the Subordinate Bonds on such Subordinate Bond Payment Date, and shall cause the same to be applied to the payment of such interest when due. Income realized from the investment or deposit of money in the Subordinate Bond Fund shall be deposited by the Trustee upon receipt thereof in the Revenue Fund. No amount shall be charged against the Subordinate Bond Fund except as expressly provided in this Article IV and in Section 6.05. Section 4.05 Investment of Funds. The money held by the Trustee shall constitute trust funds for the purposes hereof. Any money attributable to each of the funds and accounts hereunder shall be, except as otherwise expressly provided herein, invested by the Trustee, at the written direction of the Borrower in Permitted Investments. The Trustee may purchase from or sell to itself 2021/10/12 City Council Post Agenda Page 340 of 620 21 4818-3408-2039/024036-0092 or an affiliate, as principal or agent, securities herein authorized. The Trustee shall be entitled to assume, absent receipt by the Trustee of written notice to the co ntrary, that any investment which at the time of purchase in a Permitted Investment remains a Permitted Investment thereafter. Permitted Investments representing an investment of money attributable to any fund or account shall be deemed at all times to be a part of said fund or account, and, except as otherwise may be provided expressly in other Sections hereof, the interest thereon and any profit arising on the sale thereof shall be credited to the Revenue Fund, and any loss resulting on the sale thereof s hall be charged against the Revenue Fund. Such investments shall be sold at the best price obtainable (at least par) whenever it shall be necessary so to do in order to provide money to make any transfer, withdrawal, payment or disbursement from said fund or account. In the case of any required transfer of money to another such fund or account, such investments may be transferred to that fund or account in lieu of the required money if permitted hereby as an investment of money in that fund or account. The Trustee shall not be liable or responsible for any loss resulting from any investment made in accordance herewith. The Issuer acknowledges that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory agency grant the Issuer the right to receive brokerage confirmations of the security transactions as they occur. To the extent permitted by law, the Issuer specifically waives compliance with 12 C.F.R. 12 and hereby notifies the Trustee hereunder, that no brokerage confirmations need be sent relating to the security transactions as they occur. Section 4.06 Money Held for Particular Subordinate Bonds; Funds Held in Trust . The amounts held by the Trustee for the payment of the interest, principal or redemption price due on any date with respect to particular Subordinate Bonds pending such payment, shall be set aside and held in trust by it for the Holders of the Subordinate Bonds entitled thereto, and for the purposes hereof such interest, principal or redemption price, after the due date thereof, shall no longer be considered to be unpaid. All money held by the Trustee for such purpose at any time pursuant to the terms of this Subordinate Indenture shall be and hereby are assigned, transferred and set over unto the Trustee in trust for the purposes and under the terms and conditions of this Subordinate Indenture. Section 4.07 Accounting Records. The Trustee shall maintain accurate books and records for all funds and accounts established hereunder and provide monthly statements (or other electroni c access as agreed to by the parties) of such funds and accounts to the Issuer and the Borrower upon request. Section 4.08 Amounts Remaining in Funds. After full payment of the Subordinate Bonds (or provision for payment thereof having been made in accordance with Section 9.01 hereof) and full payment of the fees, charges and expenses of the Issuer and the Trustee and other amounts required to be paid hereunder or under any Subordinate Loan Document, any amounts remaining in any fund or account hereunder shall be paid to the Borrower. 2021/10/12 City Council Post Agenda Page 341 of 620 22 4818-3408-2039/024036-0092 ARTICLE V GENERAL COVENANTS AND REPRESENTATIONS Section 5.01 Payment of Principal and Interest. The Issuer covenants that it will promptly pay or cause to be paid, but only from the sources identified herein, sufficient amounts to provide for the payment of the principal of, and interest on the Subordinate Bonds at the place, on the dates and in the manner provided herein and in the Subordinate Bonds, according to the true intent and meaning thereof. Section 5.02 Performance of Covenants. The Issuer covenants that it will faithfully perform at all times any and all of its covenants, undertakings, stipulations and provisions contained in this Subordinate Indenture, in any and every Subordinate Bond executed, authenticated and delivered hereunder and in all proceedings pertaining thereto. Section 5.03 Representations and Warranties of the Issuer. The Issuer hereby represents and warrants as follows: (a) The Issuer is a public instrumentality and political subdivision of the State of California. (b) The Issuer has all necessary power and authority to issue the Subordinate Bonds and to execute and deliver this Subordinate Indenture, the Subordinate Loan Agreement and the other Subordinate Bond Documents to which it is a party, and to perform its duties and discharge its obligations hereunder and thereunder. (c) The revenues and assets pledged for the repayment of the Subordinate Bonds are and will be free and clear of any pledge, lien or encumbrance prior to, or equal with, the pledge created by this Subordinate Indenture, and all action on the part of the Issuer to that end has been duly and validly taken. (d) The Subordinate Bond Documents to which the Issuer is a party have been validly authorized, executed and delivered by the Issuer, and assuming due authorization, execution and delivery by the other parties thereto, constitute valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium or other laws affecting c reditors’ rights generally and the application of equitable principles. Section 5.04 Inspection of Project Books. The Issuer covenants and agrees that all books and documents in its possession relating to the Project shall, upon reasonable prior notice, during normal business hours, be open to inspection and copying by such accountants or other agents as the Trustee or the Subordinate Bondholder Representative may from time to time reasonably designate. Section 5.05 Damage, Destruction or Condemnation. Net Proceeds resulting from casualty to or condemnation of the Project shall be applied, after satisfaction of all payment requirements under the Senior Loan Documents, as provided in the Subordinate Loan Documents. 2021/10/12 City Council Post Agenda Page 342 of 620 23 4818-3408-2039/024036-0092 Section 5.06 Tax Covenants. (a) Issuer’s Covenants. The Issuer covenants to and for the benefit of the Holders of the Subordinate Bonds that it will: (i) neither make or use nor cause to be made or used any investment or other use of the proceeds of the Subordinate Bonds or the money and investments held in the funds and accounts in any manner which would cause the Subordinate Bonds to be arbitrage bonds under Section 148 of the Code and the Regulations issued under Section 148 of the Code (the “Regulations”) or which would otherwise cause the interest payable on the Subordinate Bonds to be includable in gross income for federal income tax purposes; (ii) enforce or cause to be enforced all obligations of the Borrower under the Regulatory Agreement in accordance with its terms and seek to cause the Borrower to correct any violation of the Regulatory Agreement within a reasonable period after it first discovers or becomes aware of any such violation; (iii) not take or cause to be taken any other action or actions, or fail to take any action or actions, if the same would cause the interest payable on the Subordinate Bonds to be includable in gross income for federal income tax purposes; (iv) at all times do and perform all acts and things permitted by law and necessary or desirable in order to assure that interest paid by the Issuer on the Subordinate Bonds will be excluded from the gross income for federal income tax purposes, of the Subordinate Bondholders pursuant to the Code, except in the event where any such owner of Subordinate Bonds is a “substantial user” of the facilities financed with the Subordinate Bonds or a “related person” within the meaning of the Code; and (v) not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Subordinate Bonds to be “federally guaranteed” withi n the meaning of Section 149(b) of the Code and the Regulations. In furtherance of the covenants in this Section 5.0 6, the Issuer and the Borrower shall execute, deliver and comply with the provisions of the Tax Certificate, which is by this reference incorporated into this Subordinate Indenture and made a part of this Subordinate Indenture as if set forth in this Subordinate Indenture in full, and by its acceptance of this Subordinate Indenture the Trustee acknowledges receipt of the Tax Certificate and ac knowledges its incorporation into this Subordinate Indenture by this reference and agrees to comply with the terms specifically applicable to it. In the event of a conflict between the terms of this Subordinate Indenture and the Tax Certificate, the terms of the Tax Certificate shall control. (b) Trustee’s Covenants. The Trustee agrees that it will invest funds held under this Subordinate Indenture in accordance with the covenants and terms of this Subordinate Indenture and the Tax Certificate (this covenant shall extend through the term of the Subordinate Bonds, to all funds and accounts created under this Subordinate Indenture and all money on deposit to the credit of any such fund or account). The Trustee covenants to and for the benefit of the Subordinate Bondholders that, notwithstanding any other provisions of this Subordinate Indenture or of any other Loan Document, it will not knowingly make or cause to be made any investment or other use of the money in the funds or accounts created hereunder which wo uld cause the Subordinate Bonds to be 2021/10/12 City Council Post Agenda Page 343 of 620 24 4818-3408-2039/024036-0092 classified as “arbitrage bonds” within the meaning of Sections 103(b) and 148 of the Code or would cause the interest on the Subordinate Bonds to be includable in gross income for federal income tax purposes; provided that the Trustee shall be deemed to have complied with such requirements and shall have no liability to the extent it reasonably follows the written directions of the Borrower or the Issuer. This covenant shall extend, throughout the term of the Subordina te Bonds, to all funds created under this Subordinate Indenture and all money on deposit to the credit of any such fund. Pursuant to this covenant, with respect to the investments of the funds and accounts under this Subordinate Indenture, the Trustee obligates itself to comply throughout the term of the issue of the Subordinate Bonds with the requirements of Sections 103(b) and 148 of the Code; provided that the Trustee shall be deemed to have complied with such requirements and shall have no liability to the extent it reasonably follows the written directions of the Borrower or the Issuer. The Trustee further covenants that should the Issuer or the Borrower file with the Trustee (it being understood that neither the Issuer nor the Borrower has an obligation to so file), or should the Trustee receive, an opinion of Bond Counsel to the effect that any proposed investment or other use of proceeds of the Subordinate Bonds would cause the Subordinate Bonds to become “arbitrage bonds,” then the Trustee will comply with any written instructions of the Issuer, the Borrower or Bond Counsel regarding such investment (which shall, in any event, be a Permitted Investment) or use so as to prevent the Subordinate Bonds from becoming “arbitrage bonds,” and the Trustee will bear no liability to the Issuer, the Borrower or the Subordinate Bondholders for investments made in accordance with such instructions. ARTICLE VI DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND SUBORDINATE BONDHOLDERS Section 6.01 Events of Default. Subject to applicable notice and cure rights each of the following shall be an event of default with respect to the Subordinate Bonds (an “Event of Default”) under this Subordinate Indenture: (a) failure to pay the principal of, or interest on any Subordinate Bond when due, to the extent sufficient Revenues are available therefor; (b) failure by the Issuer or the Trustee to perform or observe any other of the covenants, agreements or conditions on its part in this Subordinate Indenture or in the Subordinate Bonds contained, and the continuation of such failure for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Issuer or the Trustee by the Borrower, the Trustee or the Issuer, as applicable, or by the holders of not less than a majority in aggregate principal amount of the Subordinate Bonds at the time Outstanding; or if the breach is not reasonably capable of being cured, the Issuer or the Trustee does not commence to cure, correct or remedy such breach within thirty (30) days after receipt of a written notice specifying such breach and does not thereafter prosecute such cure, correction or remedy with diligence to completion; or (c) the occurrence of any Event of Default under the Subordinate Loan Agreement upon written notice thereof, specifying such default and requiring the same to be remedied, delivered to the Issuer or the Trustee by the Borrower, the Trustee or the Issuer, as applicable, or by the holders of not less than a majority in aggregate principal amount of the Subordinate Bonds at the time Outstanding. 2021/10/12 City Council Post Agenda Page 344 of 620 25 4818-3408-2039/024036-0092 Prior to the Maturity Date, the Trustee and the Issuer agree that a failure to pay any amounts required to be paid under this Subordinate Indenture as a result of a deficiency of av ailable Revenues shall not constitute an Event of Default hereunder. Notwithstanding anything to the contrary contained herein, the Borrower’s Investor Limited Partner shall have the right, but not the obligation, to cure an Event of Default hereunder. Any cure of any default made or tendered by Investor Limited Partner shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower. Section 6.02 Acceleration; Other Remedies Upon Event of Default. (a) Upon the occurrence of an Event of Default under Section 6.01(b) hereof, the Trustee shall, upon the written direction of the Subordinate Bondholder Representative, and the consent of the Senior Funding Lender, if required, and receipt of indemnity satisfa ctory to it, by notice in writing delivered to the Issuer, declare the principal of all Subordinate Bonds then Outstanding and the interest accrued thereon immediately due and payable, and interest shall continue to accrue thereon until such amounts are paid. (b) Upon the occurrence of an Event of Default (other than an Event of Default under Section 6.01(b) hereof), the Trustee shall, but only upon the written direction of the Subordinate Bondholder Representative, by notice in writing delivered to the Issuer, declare the principal of all Subordinate Bonds then Outstanding and the interest accrued thereon immediately due and payable and interest on the Subordinate Bonds shall cease to accrue, anything contained in this Subordinate Indenture or in the Subordinate Bonds to the contrary notwithstanding. If at any time after the Subordinate Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the money due shall have been obtained or entered, the Issuer or the Borrower shall pay to or deposit with the Trustee a sum sufficient to pay all principal of the Subordinate Bonds then due (other than solely by reason of such declaration) and all unpaid installments of interest (if any) upon all the Subordinate Bonds then due, with interest at the rate borne by the Subordinate Bonds on such overdue principal and (to the extent legally enforceable) on such overdue installments of interest, and the reasonable fees and expenses of the Trustee (including its counsel) shall have been made good or cured or adequate provision shall have been made therefor (collectively, the “Cure Amount”)) shall have been paid in full, and all other defaults hereunder shall have been made good or cured or waived in writing by the Subordinate Bondholder Representative, then and in every case, the Trustee on behalf of the Holders of all the Outstanding Subordinate Bonds shall rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, nor shall it impair or exhaust any right or power consequent thereon. Upon the occurrence and during the continuance of an Event of Default, the Trustee in its own name and as trustee of an express trust, on behalf and for the benefit an d protection of the Holders of all Subordinate Bonds with respect to which such an Event of Default has occurred (if no Event of Default has occurred and is continuing under Section 6.01(b)), may also proceed to protect and enforce any rights of the Trustee and, to the full extent that the Holders of such Subordinate Bonds themselves might do, the rights of such Subordinate Bondholders under the laws of the State or under this Subordinate Indenture by such of the following remedies as the Trustee shall deem most effectual to protect and enforce such rights: 2021/10/12 City Council Post Agenda Page 345 of 620 26 4818-3408-2039/024036-0092 (i) by mandamus or other suit, action or proceeding at law or in equity, to enforce the payment of the principal of or interest on the Subordinate Bonds then Outstanding and to require the Issuer to carry out any covenants or agreements with or for the benefit of the Subordinate Bondholders and to perform its duties under the Act, this Subordinate Indenture, the Subordinate Loan Agreement or the Regulatory Agreement to the extent permitted under the applicable provisions thereof; (ii) by pursuing any available remedies under the Subordinate Loan Agreement or any Subordinate Loan Document or the Regulatory Agreement; (iii) by realizing or causing to be realized through sale or otherwise upon the security pledged hereunder; and (iv) by action or suit in equity enjoin any acts or things that may be unlawful or in violation of the rights of the Holders of the Subordinate Bonds and execute any other papers and documents and do and perform any and all such acts and things as may be n ecessary or advisable in the opinion of the Trustee in order to have the respective claims of the Subordinate Bondholders against the Issuer allowed in any bankruptcy or other proceeding. No remedy by the terms of this Subordinate Indenture conferred upon or reserved to the Trustee or to the Subordinate Bondholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee, the Subordinate Bondholders hereunder or under the Subordinate Loan Agreement or any other Subordinate Loan Document or the Regulatory Agreement, as applicable, or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed exp edient. No waiver of any Event of Default hereunder, whether by the Trustee or the Subordinate Bondholders, shall extend to or shall affect any subsequent default or event of default or shall impair any rights or remedies consequent thereto. Section 6.03 Rights of Subordinate Bondholders. If an Event of Default under Section 6.01(b) hereof shall have occurred and is then continuing, and if requested in writing so to do by the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding with respect to which there is a default, and if indemnified to its satisfaction, the Trustee shall exercise one or more of the rights and powers conferred by this Article as the Trustee, being advised by counsel or a committee of Responsible Officers, shall deem to be in the best interest of the affected Subordinate Bondholders. If an Event of Default under Section 6.01(b) hereof shall have occurred and is then continuing, the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding with respect to which an Event of Default has occurred shall have the right at any time, subject to the provisions of Section 6.07 hereof, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Subordinate Indenture, or for the appointment of a receiver or any other proceedings hereunder, in accordance with the provisions of law and of this Subordinate Indenture. Section 6.04 Waiver by Issuer. Upon the occurrence of an Event of Default, to the extent that such right may then lawfully be waived, neither the Issuer nor anyone claiming through or under 2021/10/12 City Council Post Agenda Page 346 of 620 27 4818-3408-2039/024036-0092 it shall set up, claim or seek to take advantage of any appraisal, valuation, stay, extension or redemption laws now or hereinafter in force, in order to prevent or hinder the enforcement of this Subordinate Indenture; and the Issuer, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws and all right of appraisement and redemption to which it may be entitled under the laws of the State and the United States. Section 6.05 Application of Money After Default. All money collected by the Trustee at any time pursuant to this Article VI shall, except to the extent, if any, otherwise directed by a court of competent jurisdiction, be credited by the Trustee to the Revenue Fund. Such money so credited to the Revenue Fund and all other money from time to time credited to the Revenue Fund shall at all times be held, transferred, withdrawn and applied as prescribed by the provisions of Article IV hereof and this Section 6.05. In the event that at any time the money credited to the Revenue Fund and the Subordinate Bond Fund available for the payment of interest or principal then due with respect to the Subordinate Bonds shall be insufficient for such payment, such money (other than money held for the payment or redemption of particular Subordinate Bonds as provided in Section 4.08 hereof) shall be applied as follows and in the following order of priority: (a) For payment of all amounts due to the Trustee incurred in performance of its duties under this Subordinate Indenture, including, without limitation, the payment of all reasonable fees and expenses of the Trustee incurred in exercising any remedies under this Subordinate Indenture; (b) Unless the principal of all Subordinate Bonds shall have become or have been declared due and payable: FIRST: to the payment to the Persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available is not sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; and SECOND: to the payment to the Persons entitled thereto of the unpaid principal of and, on any Subordinate Bonds which shall have become due, whether at maturity or by call for redemption, in the order in which they became due and payable, and, if the amount available is not sufficient to pay in full all the principal of and, on the Subordinate Bonds so due on any date, then to the payment of principal ratably, according to the amounts due on such date, to the Persons entitled thereto, without any discrimination or preference, and then to the payment of any premium due on the Subordinate Bonds, ratably, according to the amounts due on such date, to the Persons entitled thereto, without any discrimination or preference. (c) If the principal of all of the Subordinate Bonds shall have become or have been declared due and payable, to the payment of the principal of, and interest then due and unpaid upon the Subordinate Bonds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Subordinate Bond over any other Subordinate Bond, ratably, according to the amounts due, respectively, for principal and interest, to the Persons entitled thereto without any discrimination or 2021/10/12 City Council Post Agenda Page 347 of 620 28 4818-3408-2039/024036-0092 preference except as to any differences in the respective rates of interest specified in the Subordinate Bonds. Section 6.06 Remedies Vested in Trustee. All rights of action, including the right to file proof of claims, under this Subordinate Indenture or under any of the Subordinate Bonds may be enforced by the Trustee without the possession of any of the Subordinate Bonds or the production thereof in any trial or other proceedings relating thereto and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any Holders of the Subordinate Bonds, and any recovery or judgment shall be for the mutual benefit as provided herein of all of the Holders of the Outstanding Subordinate Bonds. Section 6.07 Remedies of Subordinate Bondholders. No Holder of any Subordinate Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Subordinate Indenture or for the execution of any trust hereunder or for the appointment of a receiver or any other remedy hereunder, unless (a) a default shall have occurred of which the Trustee shall have been notified as provided herein; (b) such default shall have become an Event of Default under Section 6.01(b) hereof; (c) the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding with respect to which there is such an Event of Default shall have made written request to the Trustee and shall have offered reasonable opportunity to the Trustee either to proceed to exercise the powers hereinbefore granted or to inst itute such action, suit or proceeding in its own name; (d) such Holders shall have offered to the Trustee indemnity as provided in this Subordinate Indenture; and (e) the Trustee shall within sixty (60) days thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding; it being understood and intended that no one or more Holders of the Subordinate Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Subordinate Indenture or the rights of any other Holders of Subordinate Bonds or to obtain priority or preference over any other Holders or to enforce any right under this Subordinate Indenture, except in the manner herein provided with respect to the equal and ratable benefit of all Holders of Subordinate Bonds with respect to which there is a default. Nothing contained in this Subordinate Indenture shall, however, affect or impair the right of any Subordinate Bondholder to enforce the payment of the principal of and interest on any Subordinate Bond at the maturity thereof or the obligation of the Issuer to pay the principal of, and interest on the Subordinate Bonds issued hereunder to the respective holders thereof, at the time, in the place, from the sources and in the manner expressed herein and in said Subordinate Bonds. Section 6.08 Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Subordinate Indenture by the appointment of a receiver, by entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case the Issuer, the Trustee, the Subordinate Bondholder Representative, the Borrower and the Subordinate Bondholders sha ll be restored to their former positions and rights hereunder with respect to the Subordinate Trust Estate herein conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 6.09 Waivers of Events of Default. So long as no Event of Default has occurred and is then continuing under Section 6.01(b) or Section 6.01(c) hereof, the Trustee shall waive any Event of Default hereunder and its consequences and rescind any declaration of maturity of principal of, and interest on the Subordinate Bonds only upon the written direction of the Subordinate Bondholder Representative. If there shall have occurred and is then continuing an Event of Default 2021/10/12 City Council Post Agenda Page 348 of 620 29 4818-3408-2039/024036-0092 under Section 6.01(b) or Section 6.01(c) hereof, the Trustee shall waive any Event of Default hereunder and its consequences and rescind any declaration of maturity of principal of, and interest on the Subordinate Bonds upon the written request of the Holders of 100% of the Subordinate Bonds then Outstanding with respect to which there is a default; provided, however, that there shall not be waived (a) any Event of Default in the payment of the principal of any Subordinate Bonds at the date of maturity specified therein, or upon proceedings for mandatory redemption of any Subordinate Bonds, (b) any default in the payment when due of the interest on any such Subordinate Bonds, unless prior to such waiver or rescission all arrears of interest, with interest (to the extent permitted by law) at the rate borne by the Subordinate Bonds in respect of which such default shall have occurred on overdue installments of interest or all arrears of payments of principal or when due (whether at the stated maturity thereof or upon proceedings for mandatory redemption) as the case may be, and all expenses of the Trustee in connection with such default shall have been paid or provided for, and in case of any such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such default shall have been discontinued or abandoned or determined adversely, then and in every such case the Issuer, the Trustee, and the Subordinate Bondholders shall be restored to their former positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right consequent thereto. Section 6.10 Notice to Subordinate Bondholders if Default Occurs. Upon the occurrence of an Event of Default, or if an event occurs which could lead to an Event of Default with the passage of time and of which the Trustee is required to take notice pursuant to Section 7.02(k) hereof, the Trustee shall, within thirty (30) days, give written notice thereof by first class mail to the registered Owners of all Subordinate Bonds then Outstanding. Notwithstand ing the foregoing, except in the case of an Event of Default with respect to the payment of principal of or and interest on the Subordinate Bonds, the Trustee shall be protected in withholding such notice if and so long as the board of directors of the Trustee, the executive committee, or a trust committee of directors or officers of the Trustee in good faith determines that the withholding of such notice is in the best interests of the Holders of the Subordinate Bonds. ARTICLE VII CONCERNING THE TRUSTEE Section 7.01 Standard of Care. The Trustee, prior to an Event of Default as defined in Section 6.01 and after the curing or waiver of all such events which may have occurred, shall perform such duties and only such duties as are specifically set forth in this Subordinate Indentur e. The Trustee, during the existence of any such Event of Default (which shall not have been cured or waived), shall exercise such rights and powers vested in it by this Subordinate Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under similar circumstances in the conduct of such Person’s own affairs. No provision of this Subordinate Indenture shall be construed to relieve the Trustee from liability for its breach of trust, own negligence or willful misconduct, except that: (a) prior to an Event of Default hereunder, and after the curing or waiver of all such Events of Default which may have occurred: (i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Subordinate Indenture, and the Trustee shall not be liable except with 2021/10/12 City Council Post Agenda Page 349 of 620 30 4818-3408-2039/024036-0092 regard to the performance of such duties and obligations as are specifically set forth in this Subordinate Indenture; and (ii) in the absence of bad faith on the part of the Trustee, t he Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Trustee by the Person or Persons authorized to furnish the same; (b) at all times, regardless of whether or not any such Event of Default shall exist: (i) the Trustee shall not be liable for any error of judgment made in good faith by an officer or employee of the Trustee except for willful misconduct or negligence by the officer or employee of the Trustee as the case may be; and (ii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Subordinate Bondholder Representative or the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding (or such lesser or greater percentage as is specifically required or permitted by this Subordinate Indenture) relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Subordinate Indenture. Section 7.02 Reliance Upon Documents. Except as otherwise provided in Section 7.01: (a) the Trustee may rely upon the authenticity or truth of the state ments and the correctness of the opinions expressed in, and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, notarial seal, stamp, acknowledgment, verification, request, consent, order, bond, or other paper or document of the proper party or parties, including any facsimile transmission as permitted hereunder or under the Subordinate Loan Agreement; (b) any notice, request, direction, election, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an instrument signed in the name of the Issuer by an Authorized Officer of the Issuer (unless other evidence in respect thereof be herein specifically prescribed), and any resolution of the Issuer may be evidenced to the Trustee b y a copy of such resolution duly certified by an Authorized Officer of the Issuer; (c) any notice, request, certificate, statement, requisition, direction, election, order or demand of the Borrower mentioned herein shall be sufficiently evidenced by an instrum ent purporting to be signed in the name of the Borrower by any Authorized Officer of the Borrower (unless other evidence in respect thereof be herein specifically prescribed), and any resolution or certification of the Borrower may be evidenced to the Trustee by a copy of such resolution duly certified by a secretary or other authorized representative of the Borrower; (d) any notice, request, direction, election, order or demand of the Subordinate Bondholder Representative mentioned herein shall be sufficiently evidenced by an instrument purporting to be signed in the name of the Subordinate Bondholder Representative by any 2021/10/12 City Council Post Agenda Page 350 of 620 31 4818-3408-2039/024036-0092 Authorized Officer of the Subordinate Bondholder Representative (unless other evidence in respect thereof be herein specifically prescribed); (e) in the administration of the trusts of this Subordinate Indenture, the Trustee may execute any of the trusts or powers hereby granted directly or through its agents, receivers or attorneys, and the Trustee may consult with counsel and the opinion or advi ce of such counsel shall be full and complete authorization and protection in respect of any action taken or permitted by it hereunder in good faith and in accordance with the opinion of such counsel; (f) whenever in the administration of the trusts of this Su bordinate Indenture, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or permitting any action hereunder, such matters (unless other evidence in respect thereof be herein specifically prescribed), may in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by a certificate of an officer or authorized agent of the Issuer or the Borrower and such certificate shall in the absence of bad faith on the part of the Trustee be full warrant to the Trustee for any action taken or permitted by it under the provisions of this Subordinate Indenture, but in its discretion the Trustee may in lieu thereof accept other evidence of such matter or may require such further or additional evidence as it may deem reasonable; (g) the recitals herein and in the Subordinate Bonds (except the Trustee’s certificate of authentication thereon) shall be taken as the statements of the Issuer and the Borrower and shall not be considered as made by or imposing any obligation or liability upon the Trustee. The Trustee makes no representations as to the value or condition of the Subordinate Trust Estate or any part thereof, or as to the title of the Issuer or the Borrower to the Subordinate Trust Estate, or as to the security of this Subordinate Indenture, or of the Subordinate Bonds issued hereunder, and the Trustee shall incur no liability or responsibility in respect of any of such matters; (h) the Trustee shall not be personally liable for debts contracted or liability for damages incurred in the management or operation of the Subordinate Trust Estate except for its own willful misconduct or negligence; and every provision of this Subordinate Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.02(h); (i) the Trustee shall not be required to ascertain or inquire as to the performance or observance of any of the covenants or agreements (except to the extent they obligate the Trustee) herein or in any contracts or securities assigned or conveyed to or pledged with the Trustee hereunder, except Events of Default that are evident under Section 6.01(a) or Section 6.01(b) hereof. The Trustee shall not be required to take notice or be deemed to have notice or actual knowledge of any default or Event of Default specified in Section 6.01 hereof (except defaults under Section 6.01(a) or Section 6.01(b) hereof) unless the Trustee shall receive from the Issuer, the Subordinate Bondholder Representative or the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding written notice stating that a default or Event of Default has occurred and specifying the same, and in the absence of such notice the Trustee may conclusively assume that there is not such default. Every provision contained in this Subordinate Indenture or related instruments or in any such contract or security wherein the duty of the Trustee dep ends on the occurrence and continuance of such default shall be subject to the provisions of this Section 7.02(k); 2021/10/12 City Council Post Agenda Page 351 of 620 32 4818-3408-2039/024036-0092 (j) the Trustee shall be under no duty to confirm or verify any financial or other statements or reports or certificates furnished pursuant to any provisions hereof, except to the extent such statement or reports are furnished by or under the direction of the Trustee, and shall be under no other duty in respect of the same except to retain the same in its files and permit the inspection of the same at reasonable times by the Holder of any Subordinate Bond; and (k) the Trustee shall be under no obligation to exercise those rights or powers vested in it by this Subordinate Indenture, other than such rights and powers which it shall be obliged to exercise in the ordinary course of its trusteeship under the terms and provisions of this Subordinate Indenture and as required by law, at the request or direction of any of the Subordinate Bondholders pursuant to Sections 6.03 and 6.07 of this Subordinate Indenture, unless such Subordinate Bondholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in the compliance with such request or direction. None of the provisions contained in this Subordinate Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. The Trustee is authorized and directed to execute in its capacity as Trustee the Subordinate Loan Agreement, the Subordination Agreement and the Regulatory Agreement and shall have no responsibility or liability with respect to any information, statement or recital in any offer ing memorandum or other disclosure material prepared or distributed with respect to the issuance of the Subordinate Bonds. The Trustee or any of its affiliates may act as advisor or sponsor with respect to any Permitted Investments. The Trustee agrees to accept and act upon facsimile transmission or Electronic Notice of written instructions and/or directions pursuant to this Subordinate Indenture provided, however, that: (a) subsequent to such facsimile transmission or Electronic Notice of written instruct ions and/or directions the Trustee shall forthwith receive the originally executed instructions and/or directions, (b) such originally executed instructions and/or directions shall be signed by such Person as may be designated and authorized to sign for the party signing such instructions and/or directions, and (c) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated Person. Any resolution, certification, notice, request, direction, election, order or demand delivered to the Trustee pursuant to this Section 7.02 shall remain in effect until the Trustee receives written notice to the contrary from the party that delivered such instrument accompanied by revised information for such party. The Trustee shall have no responsibility for the value of any collateral or with respect to the perfection or priority of any security interest in any collateral except as otherwise provided in Section 7.16 hereof. Section 7.03 Use of Proceeds. The Trustee shall not be accountable for the use or application of any of the Subordinate Bonds authenticated or delivered hereunder or of the proceeds of the Subordinate Bonds except as provided herein. 2021/10/12 City Council Post Agenda Page 352 of 620 33 4818-3408-2039/024036-0092 Section 7.04 Trustee May Hold Subordinate Bonds. The Trustee and its officers and directors may acquire and hold, or become pledgees of Subordinate Bonds and otherwise may deal with the Issuer and the Borrower in the same manner and to the same extent and with like effect as though it were not Trustee hereunder. Section 7.05 Trust Imposed. All money received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Section 7.06 Compensation of Trustee. The Trustee shall be entitled to its acceptance fee and its annual administration fee, payable by the Borrower pursuant to the Subordinate Loan Agreement, in connection with the services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties of the Trustee hereunder. The Trustee shall be entitled to extraordinary fees and expenses in connection with any Extraordinary Services performed consistent with the duties hereunder or under any of the Subordinate Loan Documents; provided the Trustee shall not incur any extraordinary fees and expenses without the consent of the Subordinate Bondholder Representative (except that no consent shall be required if an Event of Default under 6.01(b) has occurred and is continuing). If any property, other than cash, shall at any time be held by the Tr ustee subject to this Subordinate Indenture, or any supplemental indenture, as security for the Subordinate Bonds, the Trustee, if and to the extent authorized by a receivership, bankruptcy, or other court of competent jurisdiction or by the instrument subjecting such property to the provisions of this Subordinate Indenture as such security for the Subordinate Bonds, shall be entitled to make advances for the purpose of preserving such property or of discharging tax liens or other liens or encumbrances ther eon. Payment to the Trustee for its services and reimbursement to the Trustee for its expenses, disbursements, liabilities and advances, shall be limited to the sources described in the Subordinate Loan Agreement and in Sections 4.08 and 6.05 hereof. The Issuer shall have no liability for Trustee’s fees, costs or expenses. Subject to the provisions of Section 7.09 hereof, the Trustee agrees that it shall continue to perform its duties hereunder (including, but not limited to, its duties as Paying Agent a nd Subordinate Bond Registrar) and under the Subordinate Loan Documents even in the event that money designated for payment of its fees shall be insufficient for such purposes or in the event that the Borrower fails to pay the Trustee’s fees and expenses as required by the Subordinate Loan Agreement. The Borrower shall indemnify and hold harmless the Trustee and its officers, directors, officials, employees, agents, receivers, attorneys, accountants, advisors, consultants and servants, past, present or future, from and against (a) any and all claims by or on behalf of any Person arising from any cause whatsoever in connection with this Subordinate Indenture or transactions contemplated hereby, the Project, or the issuance of the Subordinate Bonds; (b) any and all claims arising from any act or omission of the Borrower or any of its agents, contractors, servants, employees or licensees in connection with the Project, or the issuance of the Subordinate Bonds; and (c) all costs, counsel fees, expenses or liabilities incurred in connection with any such claim or proceeding brought thereon; except that the Borrower shall not be required to indemnify any Person for damages caused by the negligence, willful misconduct or unlawful acts of such Person or which arise from events occurring after the Borrower ceases to own the Project. In the event that any action or proceeding is brought or claim made against the Trustee, or any of its officers, directors, officials, employees, agents, receivers, attorneys, accountants, advisors, consultants or servants, with respect to which indemnity may be sought hereunder, the Borrower, upon written notice thereof from the indemnified party, shall assume the investigation and defense thereof, including the employment of counsel and the payment of all expenses. The indemnified party shall have the right to approve a settlement to which it is a party and to employ separate counsel in any such action or proceedings 2021/10/12 City Council Post Agenda Page 353 of 620 34 4818-3408-2039/024036-0092 and to participate in the investigation and defense thereof, and the Borr ower shall pay the reasonable fees and expenses of such separate counsel. The provisions of this Section shall survive the termination of this Subordinate Indenture. Section 7.07 Qualifications of Trustee. There shall at all times be a Trustee hereunder which shall be an association or a corporation organized and doing business under the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers. Any successor Trustee shall have a combined capital and surplus of at least $50,000,000 (or shall be a wholly owned subsidiary of an association or corporation that has such combined capital and surplus), and be subject to supervision or examination by federal or state authority, or shall have been appointed by a court of competent jurisdiction pursuant to Section 7.09. If such association or corporation publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority referred to above, then for the purposes of this Section, the combined capital and surplus of such association or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section and another association or corporation is eligible, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.09. Section 7.08 Merger of Trustee. Any association or corporation into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any association or corporation resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party shall, ipso facto, be and become successor Trustee hereunder and vested with all the title to the whole property or Subordinate Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instruments or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding, and shall also be and become successor Trustee in respect of the beneficial interest of the Trustee in the Subordinate Loan. Section 7.09 Resignation by the Trustee. The Trustee may at any time resign from the trusts hereby created by giving written notice to the Issuer, the Borrower and the Subordinate Bondholder Representative, and by giving notice by certified mail or overnight delivery service to each Holder of the Subordinate Bonds then Outstanding. Such notice to the Issuer, the Borrower and the Subordinate Bondholder Representative may be served personally or sent by certified mail or overnight delivery service. The resignation of the Trustee shall not be effective until a successor Trustee has been appointed as provided herein and such successor Trustee shall have agreed in writing to be bound by the duties and obligations of the Trustee hereunder. Section 7.10 Removal of the Trustee. The Trustee may be removed at any time, either with or without cause, with the consent of the Subordinate Bondholder Representative (which consent of the Subordinate Bondholder Representative shall not be unreasonably withheld and which approval shall be deemed given after fifteen (15) days if the Subordinate Bondholder Representative has not responded to a written request for such approval) by a written instrument signed by the Issuer and delivered to the Trustee and the Borrower, and if an Event of Default shall have occurred and be continuing, other than an Event of Default under Section 6.01(b), by a written instrument signed by the Subordinate Bondholder Representative and delivered to the Trustee, the Issuer and the Borrower. The Trustee may also be removed, if an Event of Default under Section 6.01(b) shall have occurred and be continuing, by a written instrument or concurrent instruments signed by the Holder 2021/10/12 City Council Post Agenda Page 354 of 620 35 4818-3408-2039/024036-0092 of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding and delivered to the Trustee, the Issuer, the Borrower and the Subordinate Bondholder Representative. The Trustee may also be removed by the Subordinate Bondholder Representative following notice to the Issuer and after a thirty (30) day period during which the Issuer may attempt to cause the Trustee to discharge its duties in a manner acceptable to Subordinate Bondholder Representati ve, and in each case written notice of such removal shall be given to the Servicer, the Borrower and to each registered Owner of Subordinate Bonds then Outstanding as shown on the Subordinate Bond Registrar. Any such removal shall take effect on the day s pecified in such written instrument(s), but the Trustee shall not be discharged from the trusts hereby created until a successor Trustee has been appointed and has accepted such appointment and has agreed in writing to be bound by the duties and obligations of the Trustee hereunder. Section 7.11 Appointment of Successor Trustee. (a) In case at any time the Trustee shall resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or shall be adjudged a bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or if a public supervisory office shall take charge or control of the Trustee or of its property or affairs, a vacancy shall forthwith and ipso facto be created in the office of such Trustee hereunder, and the Issuer, with the written consent of the Subordinate Bondholder Representative (which consent shall not be unreasonably withheld and which consent shall be deemed given after fifteen (15) days if the applicable party has not responded to a written request from the Issuer for such consent), shall promptly appoint a successor Trustee. Any such appointment shall be made by a written instrument executed by an Authorized Officer of the Issuer. (b) If, in a proper case, no appointment of a successor Trustee shall be made pursuant to subsection (a) of this Section 7.11 within sixty (60) days following delivery of all required notices of resignation given pursuant to Section 7.09 or of removal of the Trustee pursuant to Section 7.10, the retiring Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee. The court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Section 7.12 Concerning Any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Issuer a written instrument accepting such appointment hereunder, accepting assignment of the beneficial interest in the Subordinate Mortgage, and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the Subordinate Trust Estate and the rights, powers, trusts, duties and obligations of its predecessor; but suc h predecessor shall, nevertheless, on the written request of the Issuer, the Borrower or the Subordinate Bondholder Representative, or of its successor, and upon payment of all amounts due such predecessor, including but not limited to fees and expenses of counsel, execute and deliver such instruments as may be appropriate to transfer to such successor Trustee all the Subordinate Trust Estate and the rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all sec urities and money held by it as Trustee hereunder to its successor. Should any instrument in writing from the Issuer be required by a successor Trustee for more fully and certainly vesting in such successor the Subordinate Trust Estate and all rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Issuer. The resignation of any Trustee and the instrument or instruments removing any Trustee and appointing a successor hereunder, together with all other instruments provided for in this Article, 2021/10/12 City Council Post Agenda Page 355 of 620 36 4818-3408-2039/024036-0092 shall be filed and/or recorded by the successor Trustee in each recording office where this Subordinate Indenture shall have been filed and/or recorded. Each successor Trustee shall mail notice by first class mail, postage prepaid, at least once within 30 days of such appointment, to the Owners of all Subordinate Bonds Outstanding at their addresses on the Subordinate Bond Register. Section 7.13 Successor Trustee as Trustee, Paying Agent and Subordinate Bond Registrar. In the event of a change in the office of Trustee, the predecessor Trustee which shall have resigned or shall have been removed shall cease to be trustee and paying agent on the Subordinate Bonds and Subordinate Bond Registrar, and the successor Trustee shall become such Trustee, Paying Agent and Subordinate Bond Registrar. Section 7.14 Appointment of Co-Trustee or Separate Trustee. It is the intent of the Issuer and the Trustee that there shall be no violation of any law of any jurisdiction (including particularly the laws of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in case of litigation under or connected with this Subordinate Indenture, the Subordinate Loan Agreement or any of the other Subordinate Loan Documents, and, in particular, in case of the enforcement of any remedies on default, or in case the Trustee deems that by rea son of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein or therein granted to the Trustee or hold title to the properties in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee, with the consent of the Issuer, appoint an additional individual or institution as a co -trustee or separate trustee. In the event that the Trustee appoints an additional individual or institution as a co-trustee or separate trustee, in the event of the incapacity or lack of authority of the Trustee, by reason of any present or future law of any jurisdiction, to exercise any of the rights, powers, trusts and remedies granted to the Trustee herein or to hold title to the Subordinate Trust Estate or to take any other action that may be necessary or desirable in connection therewith, each and every remedy, power, right, obligation, claim, demand, cause of action, immunity, estate, t itle, interest and lien expressed or intended by this Subordinate Indenture to be imposed upon, exercised by or vested in or conveyed to the Trustee with respect thereto shall be imposed upon, exercisable by and vest in such separate trustee or co-trustee, but only to the extent necessary to enable such co -trustee or separate trustee to exercise such powers, rights, trusts and remedies, and every covenant and obligation necessary to the exercise thereof by such co-trustee or separate trustee shall run to and be enforceable by either of them, subject to the remaining provisions of this Section 7.14. Such co -trustee or separate trustee shall deliver an instrument in writing acknowledging and accepting its appointment hereunder to the Issuer and the Trustee. Should any instrument in writing from the Issuer be required by the co -trustee or separate trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties and obligation s, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Issuer, the Trustee and the Borrower. If the Issuer shall fail to deliver the same within thirty (30) days of such request, the Trustee is hereby appointed attorney-in-fact for the Issuer to execute, acknowledge and deliver such instruments in the Issuer’s name and stead. In case any co -trustee or separate trustee, or a successor to either, shall die, become incapable of acting, resign or be remove d, all the estates, properties, rights, powers, trusts, duties and obligations of such co-trustee or separate trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such co-trustee or separate trustee. 2021/10/12 City Council Post Agenda Page 356 of 620 37 4818-3408-2039/024036-0092 Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (a) The Subordinate Bonds shall be authenticated and delivered, and all right s, powers, trusts, duties and obligations by this Subordinate Indenture conferred upon the Trustee in respect of the custody, control or management of money, papers, securities and other personal property shall be exercised solely by the Trustee; (b) all rights, powers, trusts, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon or exercised or performed by the Trustee, or by the Trustee and such co-trustee, or separate trustee jointly, as shall be provided in the ins trument appointing such co-trustee or separate trustee, except to the extent that under the law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in whic h event such act or acts shall be performed by such co-trustee or separate trustee; (c) any request in writing by the Trustee to any co-trustee or separate trustee to take or to refrain from taking any action hereunder shall be sufficient warrant for the takin g or the refraining from taking of such action by such co-trustee or separate trustee; (d) any co-trustee or separate trustee to the extent permitted by law shall delegate to the Trustee the exercise of any right, power, trust, duty or obligation, discretionary or otherwise; (e) the Trustee at any time by an instrument in writing with the concurrence of the Issuer evidenced by a certified resolution may accept the resignation of or remove any co -trustee or separate trustee appointed under this Section and in case an Event of Default shall have occurred and be continuing, the Trustee shall have power to accept the resignation of or remove any such co - trustee or separate trustee without the concurrence of the Issuer, and upon the request of the Trustee, the Issuer shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co - trustee or separate trustee so resigned or removed may be appointed i n the manner provided in this Section; (f) no Trustee or co-trustee hereunder shall be personally liable by reason of any act or omission of any other Trustee hereunder; (g) any demand, request, direction, appointment, removal, notice, consent, waiver or other action in writing executed by the Subordinate Bondholders and delivered to the Trustee shall be deemed to have been delivered to each such co-trustee or separate trustee; and (h) any money, papers, securities or other items of personal property received by any such co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by law, be turned over to the Trustee. The total compensation of the Trustee and co-trustee or separate trustee shall be as, and may not exceed the amount, provided in Section 7.06 hereof. Section 7.15 Notice of Certain Events. The Trustee shall give written notice to the Issuer, the Servicer and the Subordinate Bondholder Representative of any failure by the Borrower to 2021/10/12 City Council Post Agenda Page 357 of 620 38 4818-3408-2039/024036-0092 comply with the terms of the Regulatory Agreement of which a Responsible Officer has actual knowledge. Section 7.16 Filing of Financing Statements. The Trustee shall, at the expense of the Borrower, file or record or cause to be filed or recorded all UCC continuation statements for the purpose of continuing without lapse the effectiveness of those financing statements which have been filed on or approximately on the Closing Date in connection with the security for the Subordinate Bonds pursuant to the authority of the UCC. Upon the filing of any such continuation statement the Trustee shall immediately notify the Issuer, the Borrower, the Subordinate Bondholder Representative and the Servicer that the same has been done. If direction is given by the Servicer or the Subordinate Bondholder Representative, the Trustee shall file a ll continuation statements in accordance with such directions. ARTICLE VIII SUPPLEMENTAL INDENTURES AND AMENDMENTS OF CERTAIN DOCUMENTS Section 8.01 Supplemental Indentures Not Requiring Consent of Subordinate Bondholders. The Issuer and the Trustee may from time to time and at any time, without the consent of, or notice to, any of the Subordinate Bondholders, but with the prior written consent of the Subordinate Bondholder Representative, enter into an indenture or indentures supplemental to this Subordinate Indenture for any one or more of the following purposes: (a) to cure any formal defect, omission, inconsistency or ambiguity herein in a manner not materially adverse to the Holder of any Subordinate Bond to be Outstanding after the effective date of the change; (b) to grant to or confer upon the Trustee for the benefit of the Holders of the Subordinate Bonds any additional rights, remedies, powers or authority that may lawfully be granted or conferred and that are not contrary to or inconsistent with this Subordinate Indenture or the rights of the Trustee hereunder as theretofore in effect; (c) to subject to the lien and pledge of this Subordinate Indenture additional revenues, properties or collateral; (d) to modify, amend or supplement this Subordinate Indenture or any indenture supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of the Subordinate Bonds for sale under any state blue sky laws; (e) to make such additions, deletions or modifications as may be, in the opinion of Bond Counsel delivered to the Issuer and the Trustee, necessary to maintain the exclusion from gross income for federal income tax purposes of interest on the Subordinate Bonds; or (f) to modify, amend or supplement this Subordinate Indenture in any other respect which is not materially adverse to the Holders of the Subordinate Bonds to be Outstanding after the effective date of the change and which does not involve a change described in Section 8.02. 2021/10/12 City Council Post Agenda Page 358 of 620 39 4818-3408-2039/024036-0092 Section 8.02 Supplemental Indentures Requiring Consent of Subordinate Bondholders. With the prior written consent of the Subordinate Bondholder Representative, the Holders of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding shall have the right, from time to time, to consent to and approve the execution by the Issuer and the Trustee of such indenture or indentures supplemental hereto as shall be deemed necessary and desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Subordinate Indenture; provided, however, that nothing in this Section contained shall permit, or be construed as permitting, (a) an extension of the time for payment of, or an extension of the stated maturity or reduction in the principal amount or reduction in the rate of interest on or extension of the time of payment, of interest on, or reduction of any premium payable on the redemption of, any Subordinate Bonds, or a reduction in the Borrower’s obligation on the Subordinate Note, without the consent of the Holders of all of the Subordinate Bonds then Outstanding, (b) the creation of any lien prior to or on a parity with the lien of this Subordinate Indenture, (c) a reduction in the aforesaid percentage of the principal amount of Subordinate Bonds which is required in connection with the giving of consent to any such supplemental indenture, without the consent of the Holders o f all of the Subordinate Bonds then Outstanding, (d) the modification of the rights, duties or immunities of the Trustee, without the written consent of the Trustee, (e) a privilege or priority of any Subordinate Bond over any other Subordinate Bonds, or (f) any action that results in the interest on the Subordinate Bonds becoming included in gross income for federal income tax purposes. If at any time the Issuer shall request the Trustee to enter into any such supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such supplemental indenture to be mailed, postage prepaid, to all registered Subordinate Bondholders and to the Subordinate Bondholder Representative. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the corporate trust office of the Trustee for inspection by all Subordinate Bondholders. Thirty (30) days after the date of the mailing of such notice, the Issuer and the Trustee may enter into such supplemental indenture substantially in the form described in such notice, but only if there shall have first been or is simultaneously delivered to the Trustee the required consents, in writing, of the Subordinate Bondholder Representative and the Holders of not less than the percentage of Subordinate Bonds required by this Section 8.02. If the Holders of not less than the percentage of Subordinate Bonds required by this Section 8.02 shall have consented to and approved the execution and delivery of a supplemental indenture as provided herein, no Holder of any Subordinate Bond shall have any right to object to any of the terms and provisio ns contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such supplemental indenture as in this Section 8.02 permitted and provided, this Subordinate Indenture shall be and be deemed to be modified and amended in accordance therewith. The Trustee may rely upon an opinion of counsel as conclusive evidence that execution and delivery of a supplemental indenture has been effected in compliance with the provisions of this Article VIII. Anything in this Article VIII to the contrary notwithstanding, unless the Borrower shall then be in default of any of its obligations under the Subordinate Loan Agreement, the Regulatory Agreement, the Subordinate Note or the Subordinate Mortgage, a supplemental indenture under this Article VIII which affects any rights of the Borrower shall not become effective unless and until the 2021/10/12 City Council Post Agenda Page 359 of 620 40 4818-3408-2039/024036-0092 Borrower shall have expressly consented in writing to the execution and delivery of such supplemental indenture. In this regard, the Trustee shall cause notice of the proposed execution and delivery of any such supplemental indenture to be mailed by certified or registered mail to the Borrower or the Borrower’s attorney at least fifteen (15) days prior to the proposed date of execution and delivery of any supplemental indenture. Notwithstanding any other provision of this Subordinate Indenture, the Issuer and the Trustee may consent to any supplemental indenture upon receipt of the consent of the Subordinate Bondholder Representative, the Holders of all Subordinate Bonds then Outstanding and, as applicable, the Borrower. Section 8.03 Amendments to Subordinate Loan Agreement Not Requiring Consent of Subordinate Bondholders. The Trustee shall, without the consent of, or notice to, the Subordinate Bondholders, but with the consent of the Borrower and the Subordinate Bondholder Representative, consent to any amendment, change or modification of the Subordinate Loan Agreement as follows: (a) as may be required by the provisions of Subordinate Loan Agreement or this Subordinate Indenture; (b) to cure any formal defect, omission, inconsistency or ambiguity in the Subordinate Loan Agreement in a manner not materially adverse to the Holder of any Subordinate Bond to be Outstanding after the effective date of the change; (c) to make such additions, deletions or modifications as may be necessary, in the opinion of Bond Counsel delivered to the Issuer and the Trustee, to maintain the exclusion from gross income for federal income tax purposes of interest on the Subordinate Bonds; or (d) to modify, amend or supplement the Subordinate Loan Agreement in any other respect which is not materially adverse to the Trustee or Holders of the Subordinate Bonds to be Outstanding after the effective date of the change and which does not involve a change described in Section 8.04. Section 8.04 Amendments to Subordinate Loan Agreement Requiring Consent of Subordinate Bondholders. Except for the amendments, changes or modifications of the Subordinate Loan Agreement as provided in Section 8.03 hereof, neither the Issuer nor the Trustee shall consent to any other amendment, change or modification of the Subor dinate Loan Agreement without the consent of the Subordinate Bondholder Representative, and the Borrower and without the giving of notice and the written approval or consent of the Holder of 100% of the aggregate principal amount of the Subordinate Bonds then Outstanding given and procured in accordance with the procedure set forth in Section 8.02 hereof; provided, however, that nothing contained in this Section 8.04 shall permit, or be construed as permitting, any amendment, change or modification of the Borrower’s obligation to make the payments required under the Subordinate Loan Agreement without the consent of the Holders of all of the Subordinate Bonds then Outstanding. If at any time the Issuer and the Borrower shall request the consent of the Truste e to any such proposed amendment, change or modification of the Subordinate Loan Agreement, the Trustee shall cause notice of such proposed amendment, change or modification to be given in the same manner as provided in Section 8.02 hereof. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the Principal Office of the Trustee for inspection by Subordinate Bondholders. 2021/10/12 City Council Post Agenda Page 360 of 620 41 4818-3408-2039/024036-0092 Section 8.05 Consent of Senior Funding Lender. So long as the Senior Obligations remain outstanding, no supplement or amendment to the Subordinate Loan Agreement or this Subordinate Indenture, as described in this Article VIII, shall be effective except upon receipt by the Trustee of the written consent, which consent shall not be unreasonably withheld, conditioned, or delayed, thereto of the Senior Funding Lender. Section 8.06 Opinion of Bond Counsel Required. No supplement or amendment to the Subordinate Loan Agreement or this Subordinate In denture, as described in this Article VIII, shall be effective until the Issuer, the Trustee and the Subordinate Bondholder Representative shall have received an opinion of Bond Counsel to the effect that such supplement or amendment is authorized or permitted by this Subordinate Indenture and, upon execution and delivery thereof, will be valid and binding upon the Issuer in accordance with its terms and will not cause interest on the Subordinate Bonds to be includable in gross income of the Holders thereof for federal income tax purposes. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, the opinion of any counsel approved by it as conclusive evidence that (i) any proposed supplemental indenture or amendment permitted by this Article VIII complies with the provisions of this Subordinate Indenture, (ii) it is proper for the Trustee to join in the execution of that supplemental indenture or amendment under the provisions of this Article VIII, and (iii) if applicable, such proposed supplemental indenture or amendment is not materially adverse to the interests of the Subordinate Bondholders. ARTICLE IX SATISFACTION AND DISCHARGE OF INDENTURE Section 9.01 Discharge of Lien. If the Issuer shall pay or cause to be paid to the Holders of the Subordinate Bonds the principal and interest to become due thereon at the times and in the manner stipulated therein and herein, in any one or more of the following ways: (a) by the payment of the principal of and interest on all Subordinate Bonds Outstanding; or (b) by the deposit or credit to the account of the Trustee, in trust, of money or securities in the necessary amount (as provided in Section 9.04) to pay the principal, redemption price and interest to the date established for redemption whether by redempt ion or otherwise; or (c) by the delivery to the Trustee, for cancellation by it, of all Subordinate Bonds Outstanding; and shall have paid all amounts due and owing to the Subordinate Bondholder Representative hereunder, and shall have paid all fees and expenses of and any other amounts due to the Trustee, and if the Issuer shall keep, perform and observe all and singular the covenants and promises in the Subordinate Bonds and in this Subordinate Indenture expressed as to be kept, performed and observed by it or on its part, then these presents and the estates and rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of this Subordinate Indenture and execute and deliver to the Issuer such instruments in writing as shall be requisite to satisfy the lien hereof, and reconvey to the Issuer the estate hereby conve yed, and assign and deliver to the Issuer any interest in property at the time subject to the lien of this Subordinate 2021/10/12 City Council Post Agenda Page 361 of 620 42 4818-3408-2039/024036-0092 Indenture which may then be in its possession, except amounts held by the Trustee for the payment of principal of, interest, on the Subordinate Bonds. Any Outstanding Subordinate Bond shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in the first paragraph of this Section 9.01 if, under circumstances which do not cause interest on the Subordinate Bonds to become includable in the Holders’ gross income for purposes of federal income taxation, the following conditions shall have been fulfilled: (a) in case such Subordinate Bond is to be redeemed on any date prior to its maturity, the Trustee shall have given to the Subordinate Bondholder irrevocable notice of redemption of such Subordinate Bond on said date; (b) there shall be on deposit with the Trustee, pursuant to Section 9.04 hereof, either money or direct obl igations of the United States of America in an amount, together with anticipated earnings thereon (but not including any reinvestment of such earnings), which will be sufficient to pay, when due, the principal or redemption price, if applicable, and interest due and to become due on such Subordinate Bond on the redemption date or Maturity Date thereof, as the case may be; and (c) in the case of Subordinate Bonds which do not mature or will not be redeemed within Sixty (60) days of such deposit, the Trustee shall have received a verification report of a firm of certified public accountants reasonably acceptable to the Trustee as to the adequacy of the amounts so deposited to fully pay the Subordinate Bonds deemed to be paid. The Trustee shall in no event cause the Subordinate Bonds to be optionally redeemed from money deposited pursuant to this Article IX unless the requirements of Article III have been met with respect to such redemption. Section 9.02 Discharge of Liability on Subordinate Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 9.01) to pay or redeem Outstanding Subordinate Bonds (whether upon or prior to their maturity or the redemption date of such Subordinate Bonds) provided that, if such Subordinate Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article III provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, all liability of the Issuer in respect of such Subordinate Bonds shall cease, terminate and be completely discharged, except only that thereafter the holders thereof shall be entitled to payment by the Issuer, and the Issuer shall remain liable for su ch payment, but only out of the money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 9.04. Section 9.03 Payment of Subordinate Bonds After Discharge of Indenture. Notwithstanding any provisions of this Subordinate Indenture, and subject to applicable unclaimed property laws of the State, any money deposited with the Trustee or any paying agent in trust for the payment of the principal of, interest on the Subordinate Bonds remaining unclaimed for t wo (2) years after the payment thereof, to the extent permitted by applicable law, shall be paid to the Borrower, whereupon all liability of the Issuer and the Trustee with respect to such money shall cease, and the holders of the Subordinate Bonds shall thereafter look solely to the Borrower for payment of any amounts then due. All money held by the Trustee and subject to this Section 9.04 shall be held uninvested and without liability for interest thereon. Section 9.04 Deposit of Money or Securities With Trustee. Whenever in this Subordinate Indenture it is provided or permitted that there be deposited with or credited to the 2021/10/12 City Council Post Agenda Page 362 of 620 43 4818-3408-2039/024036-0092 account of or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Subordinate Bonds, the money or securities so to be deposited or held shall consist of: (a) lawful money of the United States of America in an amount equal to the principal amount of such Subordinate Bonds and all unpaid interest thereon to maturity, except that, in the case of Subordinate Bonds which are to be redeemed prior to maturity and in respect of which there shall have been furnished to the Trustee proof satisfactory to it that notice of such redemption on a specified redemption date has been duly given or provision satisfactory to the Trustee shall be made for such notice, the amount so to be deposited or held shall be the principal amount of such Subordinate Bonds and interest thereon to the redemption date; or (b) noncallable and nonprepayable direct obligations of the United States of America or noncallable and nonprepayable obligations which as to principal and interest constitute full faith and credit obligations of the United States of America, in such amounts and maturing at such times that the proceeds of said obligations received upon their respective maturities and interest payment dates, without further reinvestment, will provide funds sufficient, in the opinion of a nationally recognized firm of certified public accountants, to pay the principal, and interest to maturity, or to the redemption date, as the case may be, with respect to all of the Subordinate Bonds to be paid or redeemed, as such principal, and interest become due; provided that the Trustee shall have been irrevocably instructed by the Issuer to apply the proceeds of said obligations to the payment of said principal, and interest with respect to such Subordinate Bonds. ARTICLE X MISCELLANEOUS Section 10.01 Consents and Other Instruments of Subordinate Bondholders. Any consent, request, direction, approval, waiver, objection, appointment or other instrument required by this Subordinate Indenture to be signed and executed by the Subordinate Bondholders may be signed and executed in any number of concurrent writings of similar tenor and may be signed or executed by such Subordinate Bondholders in person or by agent appointed in writing. Proof of the execution of any such instrument, if made in the following manner, shall be sufficient for any of the purposes of this Subordinate Indenture, and shall be conclusive in favor of the Trustee with re gard to any action taken under such instrument, namely: (a) the fact and date of the execution by any Person of any such instrument may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such instrument acknowledged the execution thereof. Where such execution is by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such affidavit or certificate shall also constitute sufficient proof of such authority; (b) the ownership of registered Subordinate Bonds shall be proved by the Subordinate Bond Register; and (c) any request, consent or vote of the Holder of any Subordinate Bond shall bind every future Holder of the same Subordinate Bond and the Holder of every Subordinate Bond issued 2021/10/12 City Council Post Agenda Page 363 of 620 44 4818-3408-2039/024036-0092 in exchange therefor or in lieu thereof, in respect of anything done or permitt ed to be done by the Trustee or the Issuer in pursuance of such request, consent or vote. Section 10.02 Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or to be implied from this Subordinate Indenture or the Subordinate Bonds is intended or shall be construed to give to any Person other than the Parties hereto, the Subordinate Bondholder Representative, the Borrower and the Holders of the Subordinate Bonds, any legal or equitable right, remedy or claim under or in respect to this Subordinate Indenture or any covenants, conditions and provisions hereof. Section 10.03 Severability. If any provision of this Subordinate Indenture shall be held or deemed to be, or shall in fact be inoperative or unenforceable as applied in any particular ca se in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution, statute, rule of law or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or sections in this Subordinate Indenture contained, shall not affect the remaining portions of this Subordinate Indenture, or any part thereof. Section 10.04 Notices. (a) Any provision of this Subordinate Indenture relating to the mailing of notice or other communication to Subordinate Bondholders shall be deemed fully complied with if such notice or other communication is mailed, by first class mail, postage prepaid, to each registered Owner of any Subordinate Bonds then Outstanding at the address of such registered Owner as it appears on the Subordinate Bond Register. Whenever in this Subordinate Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing b y the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Any notice, request, complaint, demand, communicatio n or other paper required or permitted to be delivered to the Issuer, the Trustee, the Subordinate Bondholder Representative, or the Borrower shall be sufficiently given and shall be deemed given (unless another form of notice shall be specifically set forth herein) on the Business Day following the date on which such notice or other communication shall have been delivered to a national overnight delivery service (receipt of which to be evidenced by a signed receipt from such overnight delivery service) add ressed to the appropriate party at the addresses set forth below or as may be required or permitted by this Subordinate Indenture by Electronic Notice or by a facsimile transmission for which a confirmation of receipt has been delivered. The Issuer, the Trustee, the Subordinate Bondholder Representative, or the Borrower may, by notice given as provided in this paragraph, designate any further or different address to which subsequent notices or other communication shall be sent. 2021/10/12 City Council Post Agenda Page 364 of 620 45 4818-3408-2039/024036-0092 Issuer: Chula Vista Housing Authority 276 Fourth Avenue Chula Vista, California 91910 Attention: Executive Director Telephone: (619) 691-5263 Trustee: U.S. Bank National Association Global Corporate Trust 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attention: Ismael Diaz Ref: CV MF (Columba Apartments) 2021 Telephone: (213) 615-6063 Facsimile: (213) 615-6197 Reference: Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3 Borrower: Millenia II CIC, LP 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 Attn: Project Manager c/o Chelsea Investment Corporation 6339 Paseo del Lago Carlsbad, CA 92011 Attn: Project Manager with a copy to: Cox, Castle & Nicholson LLP 50 California Street, Suite 3200 San Francisco, CA 94111 Attention: Ofer Elitzur, Esq. with a copy to: RJ HOF 71-Millenia CIC L.L.C. c/o Raymond James Tax Credit Funds, Inc. 880 Carillon Parkway St. Petersburg, FL 33716 Attention: Steven J. Kropf, President and to: Bocarsly Emden Cowan Esmail & Arndt 633 W. 5th Street, 64th Floor Los Angeles, California 90071 Attention: Kyle Arndt 2021/10/12 City Council Post Agenda Page 365 of 620 46 4818-3408-2039/024036-0092 Subordinate Bondholder Representative: CIC Opportunities Fund III LLC 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 Attention: Project Manager The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Subordinate Indenture, provided, however, that subsequent to such facsimile transmission of written instructions, the originally executed instructions and/or directions shall be provided to the Trustee in a timely manner. (b) The Trustee shall provide to the Subordinate Bondholder Representative (i) prompt notice of the occurrence of any Event of Default pursuant to Section 6.01 hereof and (ii) any written information or other written communication received by the Trustee hereunder within ten (10) Business Days of receiving a written request from the Subordinate Bondholder Representative for any such information or other communication. Section 10.05 Trustee as Paying Agent and Subordinate Bond Registrar. The Trustee is hereby designated and agrees to act as Paying Agent and Subordinate Bond Registrar for and in respect to the Subordinate Bonds. When acting in either such capacity, the Trustee will receive the same rights, protections and indemnifications afforded to the Trustee hereunder. Section 10.06 Payments Due on Non-Business Days. In any case where a date of payment with respect to any Subordinate Bonds shall be a day other than a Business Day, then such payment need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on such date, and no interest shall accrue for the period fro m and after such date providing that payment is made on such next succeeding Business Day. Section 10.07 Counterparts. This Subordinate Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and t he same instrument. Section 10.08 Laws Governing Indenture and Administration of Trust. The effect and meanings of this Subordinate Indenture and the rights of all parties hereunder shall be governed by, and construed according to, the laws of the State without regard to conflicts of laws principles. Section 10.09 No Recourse. No recourse under or upon any obligation, covenant or agreement contained in this Subordinate Indenture or in any Subordinate Bond shall be had against any member, officer, commissioner, director or employee (past, present or future) of the Issuer, either directly or through the Issuer or its governing body or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Holder of any Subordinate Bond issued hereunder, or otherwise, of any sum that may be due and unpaid by the Issuer or its governing body upon any such Subordinate Bond. Any and all personal liability of every nature whether at common law or in equity or by statute or by constitution or otherwise of any such member, o fficer, commissioner, director or employee, as such, to respond by reason of any act of omission on his/her part or otherwise, for the payment for or to the Holder of any Subordinate Bond issued hereunder or 2021/10/12 City Council Post Agenda Page 366 of 620 47 4818-3408-2039/024036-0092 otherwise of any sum that may remain due and unpaid upon any Subordinate Bond hereby secured is, by the acceptance hereof, expressly waived and released as a condition of and in consideration for the execution of this Subordinate Indenture and the issuance of the Subordinate Bonds. [Signature Pages Follow] 2021/10/12 City Council Post Agenda Page 367 of 620 [Signature page – Subordinate Indenture of Trust – Columba Apartments] 4818-3408-2039/024036-0092 IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Subordinate Indenture to be executed and delivered by duly authorized officers thereof as of the day and year first written above. CHULA VISTA HOUSING AUTHORITY By: Executive Director U.S. BANK NATIONAL ASSOCIATION, as Subordinate Trustee By: Authorized Signatory 2021/10/12 City Council Post Agenda Page 368 of 620 A-1 4818-3408-2039/024036-0092 EXHIBIT A FORM OF SUBORDINATE BOND $_________________ $_________________ CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE 2021 SERIES A-3 THIS SUBORDINATE BOND MAY ONLY BE TRANSFERRED IN WHOLE UPON SATISFACTION OF THE REQUIREMENTS IN THE INDENTURE, INCLUDING THE DELIVERY TO THE TRUSTEE OF THE DOCUMENTS REQUIRED THEREIN IN CONNECTION WITH ANY TRANSFER OF THIS SUBORDINATE BOND. ANY TRANSFER OF THIS SUBORDINATE BOND IN VIOLATION OF THE TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE SHALL BE VOID AND OF NO EFFECT. MATURITY DATE DATED DATE INTEREST RATE Subordinate Bond Rate Registered Owner: Principal Amount: The Chula Vista Housing Authority, a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California (the “Issuer”), for value received, hereby promises to pay (but only out of Revenues as her einafter provided) to the registered owner identified above or registered assigns, on the Maturity Date set forth above, the principal sum set forth above and to pay (but only out of Revenues as hereinafter provided) interest on the balance of said principal amount from time to time remaining unpaid from and including the date hereof until payment of said principal amount has been made or duly provided for, at the rates and on the dates determined as described herein and in the Indenture (as hereinafter defined). The principal of and, interest on this Subordinate Bond are payable at final maturity, acceleration or redemption in lawful money of the United States of America upon surrender hereof at the principal corporate trust office of U.S. Bank National Association, as Trustee, or its successor in trust (the “Trustee”). Payment of the interest on any Subordinate Bond and the principal amount of the Subordinate Bond shall be made on each Subordinate Bond Payment Date (as hereinafter defined) (but only out of Revenues as hereinafter provided) to the Person appearing on the bond registration books of the Subordinate Bond Registrar as the Owner thereof on the Record Date, such interest and principal, if applicable, to be paid by the Paying Agent (i) to such Owner by check or draft mailed on the Subordinate Bond Payment Date, to such Owner’s address as it appears on the registration books or at such other address as has been furnished to the Subordinate Bond Registrar as provided below, in writing by such Owner not later than the Record Date or (ii) upon written request, at least three Business Days prior to the applicable Record Date, to the Owner of Subordinate Bonds aggregating not less than 2021/10/12 City Council Post Agenda Page 369 of 620 A-2 4818-3408-2039/024036-0092 $1,000,000 in principal amount, by wire transfer in immediately available funds at an account maintained in the United States at such wire address as such Owner shall specify in its written notice; except, in each case, that, if and to the extent that there shall be a default in the payment of the interest due on such Subordinate Bond Payment Date, such defaulted interest shall be paid to the Owner in whose name any such Subordinate Bonds are registered at the close of business on the fifth to last Business Day next preceding the date of payment of such defaulted interest. The Subordinate Bonds are authorized to be issued pursuant to Act and are designated as the “Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3”, limited in aggregate principal amount of $______________. The Subordinate Bonds are limited obligations of the Issuer and, as and to the extent set forth in the Indenture, are payable solely from, and secured by a pledge of and lien on, the Revenues. Proceeds from the sale of the Subordinate Bonds will be loaned by the Issuer to Millenia II CIC, LP, a California limited partnership (the “Borrower”) under the terms of a Subordinate Loan Agreement, dated as of October 1, 2021 (the “Agreement”), among the Issuer, the Borrower and the Trustee. The Subordinate Bonds are all issued under and secured by and entitled to the benefits of a Subordinate Indenture of Trust, dated as of October 1, 2021 (the “Indenture”) between the Issuer and the Trustee. No holder of this Subordinate Bond shall ever have the right to compel the exercise of the taxing power the State or any political subdivision of the State to pay the principal of this Subordinate Bond or the interest on it or any other cost incident to this Subordinate Bond, or to enforce payment of this Subordinate Bond against any property of the Issuer, the Governing Body of the Issuer, the State or any political subdivision of the State. The Issuer has no taxing power. Reference is hereby made to the Indenture and all indentures supplemental the reto for a description of the rights thereunder of the registered owners of the Subordinate Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the Issuer thereunder, to all of the provisions of the Indenture and of the Subordinate Loan Agreement the holder of this Subordinate Bond, by acceptance hereof, assents and agrees. The Subordinate Bonds are issued simultaneously with the issuance of the Issuer’s Senior Obligations (as defined in the Indenture). As set forth in the Indenture, the Subordinate Bonds are subordinate in all respects to the Senior Obligations. All terms not herein defined shall have the meanings ascribed to them in the Indenture. The Subordinate Bonds are issuable as one fully registered bond. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, Subordinate Bonds may be exchanged in whole at the Principal Corporate Trust Office of the Trustee and the Subordinate Bond Registrar. The Subordinate Bonds may only be held by, or transferred to, Sophisticated Investors (as defined in the Indenture) which are not a “substantial user” of the property financed with the proceeds of the Subordinate Bonds or a “related person” of the Borrower, as such terms are used in Section 147(a) of the Code, with such Sophisticated Investors executing and delivering an Investor Letter in the form attached as Exhibit B to the Indenture as Exhibit B. This Subordinate Bond is transferable by the registered owner hereof, in person, or by its attorney duly authorized in writing, at the Principal Corporate Trust Office of the Trustee and the Subordinate Bond Registrar, but only in the manner, subject to the limitations and upon payment of 2021/10/12 City Council Post Agenda Page 370 of 620 A-3 4818-3408-2039/024036-0092 the charges provided in the Indenture, and upon surrender and cancellation of this Subordinate Bond. Upon such transfer a new fully registered Subordinate Bond, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. The Issuer, the Trustee and the Subordinate Bond Registrar may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Issuer, the Trustee and the Subordinate Bond Registrar shall not be affected by any notice to the contrary. Interest on the Subordinate Bonds Subordinate Bond Payment Date has the meaning set forth in the Indenture. Interest on the Subordinate Bonds is due on each Subordinate Bonds Payment Date, to the extent there are available Revenues therefor, as set forth in the Indenture. Record Date means the 15th day of the month prior to a Subordinate Bond Payment Date. Redemption of Subordinate Bonds The Subordinate Bonds are subject to optional, mandatory and extraordinary redemption as set forth in the Indenture. General Matters The holder of this Subordinate Bond shall have no right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon the Indenture, except as provided in the Indenture. No recourse shall be had for the payme nt of the principal of, or interest on any of the Subordinate Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future member, director, officer, employee or agent of the Issuer, or through the Issuer, or any successor to the Issuer, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such member, director, officer, empl oyee or agent as such is hereby expressly waived and released as a condition of and in consideration for the execution of the Indenture and the issuance of any of the Subordinate Bonds. Except as otherwise provided in the Subordinate Promissory Note, no re course shall be had for the payment of the principal of, or interest on any of the Subordinate Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future partner, member, director, officer, employee or agent of the Borrower, or through the Borrower, or any successor to the Borrower under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liabil ity of any such partner, member, director, officer, employee or agent as such is hereby expressly waived and released as a condition of and in consideration for the execution of the Indenture and the issuance of any of the Subordinate Bonds. Amendments Permitted The Indenture contains provisions permitting the Issuer and the Trustee to execute supplemental indentures with the written consent of the Subordinate Bondholder Representative and 2021/10/12 City Council Post Agenda Page 371 of 620 A-4 4818-3408-2039/024036-0092 the Owners of 100% in aggregate principal amount of Subordinate Bond s at the time Outstanding, subject to certain conditions as set forth in the Indenture. The Indenture also contains provisions permitting the Issuer and the Trustee to execute supplemental indentures without consent of the Owners of the Subordinate Bonds, subject to certain conditions as set forth in the Indenture. The Indenture prescribes the manner in which it may be discharged and after which the Subordinate Bonds shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of transfer and exchange of Subordinate Bonds and of payment of the principal of and interest on the Subordinate Bonds as the same become due and payable, including a provision that under certain circumstances the Subordinate Bonds shall be deemed to be paid if certain securities, as defined therein, maturing as to principal and interest in such amounts and at such times as to ensure the availability of sufficient moneys to pay the principal of, and interest on the Subordinate Bonds and all necessary and proper fees, compensation and expenses of the Trustee shall have been deposited with the Trustee. No member or officer of the Issuer, nor any Person executing this Subordinate Bond, shall in any event be subject to any personal liability or accountability by reason of the issuance of the Subordinate Bonds. It is hereby certified that all of the conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Subordinate Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California. This Subordinate Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Subordinate Bond Registrar. In the event of any inconsistency between the provisions of this Subordinate Bond and the provisions of the Indenture, the provisions of the Indenture shall control. 2021/10/12 City Council Post Agenda Page 372 of 620 A-5 4818-3408-2039/024036-0092 IN WITNESS WHEREOF, the Chula Vista Housing Authority has caused this Bond to be executed in its name by the manual or facsimile signature of its Executive Director and attested by the manual or facsimile signature of its Secretary. CHULA VISTA HOUSING AUTHORITY By: Executive Director ATTEST: Secretary 2021/10/12 City Council Post Agenda Page 373 of 620 A-6 4818-3408-2039/024036-0092 CERTIFICATE OF AUTHENTICATION This Subordinate Bond is one of the Subordinate Bonds issued under the provisions of and described in the within-mentioned Indenture. Date of Authentication: _______________ U.S. BANK NATIONAL ASSOCIATION, as Trustee By Authorized Officer ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please insert Social Security Number or other identifying number of assignee) (Please Print or Typewrite Name and Address of Assignee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints_____________________ attorney to transfer the within Subordinate Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: ________________. Signature Guaranteed NOTICE: Signature(s) must be guaranteed by an eligible guaranty institution. Signature NOTICE: The Signature to this assignment must correspond with the name as it appears upon the face of the within Subordinate Bond in every particular, without alteration or enlargement or any change whatever. 2021/10/12 City Council Post Agenda Page 374 of 620 B-1 4818-3408-2039/024036-0092 EXHIBIT B FORM OF PURCHASER’S LETTER [To be prepared on letterhead of Purchaser] [Date] Chula Vista Housing Authority U.S. Bank National Association Re: Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3 Ladies and Gentlemen: The undersigned (the “Purchaser”) hereby acknowledges receipt as [original provider] [transferee], from the previous owner thereof, of the above-referenced bonds (the “Subordinate Bonds”) in fully registered form and in the original aggregate principal amount of $______________, constituting all of the Subordinate Bonds currently outstanding. The Subordinate Bonds have been checked, inspected and approved by the Purchaser. The undersigned acknowledges that the Subordinate Bonds were issued for the purpose of making a loan to assist in financing a multifamily rental housing development known as Columba Apartments located in the City of Chula Vista, California (the “Project”), as more particularly described in that certain Subordinate Loan Agreement dated as of October 1, 2021, as may be amended and supplemented from time to time (the “Subordinate Loan Agreement”), by and among the Chula Vista Housing Authority (the “Issuer”), Millenia II CIC, LP, a limited partnership duly organized and existing under the laws of the State of California (the “Borrower”), and U.S. Bank National Association (the “Trustee”). The undersigned further acknowledges that the Subordinate Bonds are secured by a certain Subordinate Indenture of Trust dated as of October 1, 2021, as amended and supplemented (the “Indenture”), between the Issuer and the Trustee, which creates a security interest in loan repayments made pursuant to the Subordinate Loan Agreement for the benefit of the holders and Owners of the Subordinate Bonds, and by a Subordinate Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing with respect to the Project (the “Subordinate Mortgage”), which creates a security interest in the Project, subject to permitted encumbrances, as provided therein. Terms not otherwise defined herein shall have the meani ngs assigned thereto in the Indenture. In connection with the sale of the Subordinate Bonds to the Purchaser, the Purchaser hereby makes the following representations upon which you may rely: 1. The Purchaser hereby certifies that it is (a) a bank as defined in Section 3(a)(2) of the Securities Act of 1933 (the “Act”) or a bank holding company or a wholly owned subsidiary of a 2021/10/12 City Council Post Agenda Page 375 of 620 B-2 4818-3408-2039/024036-0092 bank holding company, or a savings and loan association or other institution as defined in Section 3(a)(5)(a) of that act whether acting in its individual or fiduciary capacity; or (b) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; or (c) an insurance company as defined in Section 2(13) of that act; or (d) an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; or (e) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; or (f) a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivision for the benefit of its employees, if investment decisions are made by a plan fiduciary which is a bank, savings and loan association, insurance company, or registered investment advisor and the plan establishes fiduciary principles the same as or similar to those contained in Sections 404-407 of Title I of the Employee Retirement Income Security Act of 1974; or (g) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if investment decisions are made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $100,000,000, or, if a self - directed plan, with investment decisions made solely by Persons that are accredit ed investors or (h) an “accredited investor” as defined in Rule 501 of Regulation D of the Act, as amended. 2. The Subordinate Bonds are being acquired by the Purchaser for its own account and for investment and not with a view to, or for resale in connect ion with, any public distribution of the Subordinate Bonds. The Purchaser understands that it may need to bear the risks of this investment for an indefinite time, since any sale prior to maturity may not be possible due to unmarketability of the Subordinate Bonds; provided, however, the Purchaser acknowledges and agrees that it may transfer the Subordinate Bonds in whole only and in accordance with the Indenture and this letter. 3. The Purchaser understands that the Subordinate Bonds have not been registered under the Act. 4. The Purchaser acknowledges that it is familiar with the conditions, financial and otherwise, of the Borrower and understands that the Borrower has no significant assets other than the Project. To the extent deemed appropriate in maki ng its investment decision, the Purchaser has discussed the Borrower’s financial condition and the Borrower’s current and proposed business activities with the Borrower. The Purchaser further acknowledges that it has such knowledge and experience in business matters that it is fully capable of evaluating the merits and risks of this investment and it is able to bear the economic risk of the investment. The Subordinate Bonds are a security of the kind the Purchaser wishes to purchase and hold for investmen t, and the nature and amount of the Subordinate Bonds are consistent with the Purchaser’s investment program. The Purchaser has been furnished such information and such documents as the Purchaser deems necessary to make a decision to purchase the Subordin ate Bonds, including copies or forms of the Indenture, the Subordinate Loan Agreement, the Subordinate Mortgage and the Regulatory Agreement (as defined in the Indenture), and certain other documents relating to the Subordinate Bonds and the Project, all of which documents the Purchaser has reviewed. Specifically, but without limitation, the Purchaser has reviewed information about the Project, project cashflow and the property manager for the Project, if any, as well as information about the investment ri sks relating to the Subordinate Bonds, and the Purchaser understands that the Subordinate Bonds involve a high degree of risk. SPECIFICALLY, AND WITHOUT IN ANY MANNER LIMITING THE FOREGOING, THE PURCHASER UNDERSTANDS AND ACKNOWLEDGES THAT, AMONG OTHER RISKS, THE SUBORDINATE BONDS ARE INTEREST ONLY AND PAYABLE 2021/10/12 City Council Post Agenda Page 376 of 620 B-3 4818-3408-2039/024036-0092 SOLELY FROM REVENUES (AS DEFINED IN THE INDENTURE) DERIVED FROM THE PROJECT, THAT THE SUBORDINATE BONDS ARE NOT ENTITLED TO THE BENEFIT OF ANY CREDIT FACILITY, THAT THE SUBORDINATE BONDS ARE NOT RATED BY ANY RATING AGENCY AND THAT. THE PURCHASER ALSO UNDERSTANDS THAT (A) THE SUBORDINATE BONDS ARE NOT SECURED BY ANY PLEDGE OF ANY MONEYS RECEIVED OR TO BE RECEIVED FROM TAXATION BY THE CITY OF CHULA VISTA, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF AND THAT THE ISSUER HAS NO TAXING POWER, NOR ARE THE SUBORDINATE BONDS SECURED BY ANY REVENUES OR FUNDS OF ANY KIND OF THE CHULA VISTA HOUSING AUTHORITY, THE CITY OF CHULA VISTA, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF, (B) THE SUBORDINATE BONDS DO NOT AND WILL NOT REPRESENT OR CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER, THE CITY OF CHULA VISTA, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF; AND (C) THE LIABILITY OF THE ISSUER WITH RESPECT TO THE BONDS IS LIMITED TO THE TRUST ESTATE AS SET FORTH IN THE INDENTURE. THE PURCHASER UNDERSTANDS THAT THE SUBORDINATE BONDS ARE NONRECOURSE TO THE BORROWER. The Purchaser has made such inquiry with respect to all of the foregoing as it believed to be desirable for its purposes. 5. The Purchaser has received from the Issuer no formal or informal offering or disclosure document relating to the Subordinate Bonds and has concluded that the receipt of one prior to the purchase of the Subordinate Bonds is not required. It is acknowledged that no written information has been provided by the Issuer, and that any written information furnished by any other party to the transaction does not purport to fully disclose all information pertinent t o the Subordinate Bonds. 6. Except as disclosed to the Issuer, the Purchaser is not now and has never been controlled by, or under common control with, the Borrower. Except as disclosed to the Issuer, the Borrower has never been and is not now controlled by the Purchaser. THE PURCHASER HAS ENTERED INTO NO ARRANGEMENTS WITH THE BORROWER OR WITH ANY AFFILIATE OF THE BORROWER IN CONNECTION WITH THE SUBORDINATE BONDS, OTHER THAN AS DISCLOSED TO THE ISSUER. The Purchaser hereby agrees to deliver to the Issuer a copy of any agreement between the Purchaser and the Borrower or any affiliate of the Borrower relating to the Subordinate Bonds. 7. The Purchaser has authority to purchase the Subordinate Bonds and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with the purchase of the Subordinate Bonds. 8. In entering into this transaction the Purchaser has not relied upon any representations or opinions made by the Issuer relating to the legal conse quences or other aspects of the transactions, nor has it looked to, nor expected, the Issuer to undertake or require any credit investigation or due diligence reviews relating to the Borrower, its financial condition or business operations, the Project (including the refinancing, operation or management thereof), or any other matter pertaining to the merits or risks of the transaction, or the adequacy of any collateral pledged to the Trustee to secure repayment of the Subordinate Bonds. 9. The Purchaser understands that the Subordinate Bonds are not secured by any pledge of any money received or to be received from taxation by the State of California or any political 2021/10/12 City Council Post Agenda Page 377 of 620 B-4 4818-3408-2039/024036-0092 subdivision or taxing district thereof, including, without limitation, the Issuer; that the Subordinate Bonds will never represent or constitute a general obligation or a pledge of the faith and credit of the Issuer, the State of California or any political subdivision thereof; that no right will exist to have taxes levied by the Issuer, the State of California or any political subdivision thereof for the payment of principal, and interest on the Subordinate Bonds; and that the liability of the Issuer with respect to the Subordinate Bonds is subject to further limitations as set forth in the Subor dinate Bonds and the Indenture. 10. The Purchaser has been informed that the Subordinate Bonds have not been and will not be registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any jurisdiction, (ii) will not be listed on any stock or other securities exchange, and (iii) will carry no rating from any rating service. 11. The Purchaser has obtained, from representatives of the Borrower and others, all information regarding the Subordinate Bonds that it has deemed relevant. The Purchaser has asked of the Borrower and all other relevant parties all the questions to which the Purchaser desired answers, and has had those questions satisfactorily answered. Neither the Borrower nor the Issuer nor any other relevant party has refused to disclose any information that Purchaser deems necessary or appropriate to its decision to purchase the Subordinate Bonds. 12. The Purchaser is not and may not become a “substantial user” of the property financed with the proceeds of the Subordinate Bonds or a “related person” of the Borrower, as such terms are used in Section 147(a) of the Code. 13. Although the Purchaser does not intend at this time to dispose of the Subordinate Bonds, the Purchaser acknowledges that it has the right to sell and tr ansfer the Subordinate Bonds, subject to the following requirements: (a) The Purchaser may not dispose of the Subordinate Bonds to a Person or entity other than as described in Section 1 without the prior written consent of the Issuer; (b) The Purchaser will only sell or otherwise transfer the Subordinate Bonds in whole, except with the prior written approval of the Issuer; (c) Prior to any transfer of the Subordinate Bonds, the Purchaser shall deliver to the Issuer and the Trustee a certificate identifying any and all documents that have been executed by the Purchaser and the Borrower or any affiliate of the Borrower with respect to the Subordinate Bonds; and (d) The Purchaser will not sell or otherwise transfer the Subordinate Bonds without requiring the transferee to deliver to the Issuer and to the Trustee an investor’s letter to the same effect as this Purchaser’s Letter, including this paragraph 12, with no revisions except as may be approved in writing by the Issuer. [Purchaser] 2021/10/12 City Council Post Agenda Page 378 of 620 Stradling Yocca Carlson & Rauth Draft dated October 3, 2021 4813-6726-9111/024036-0092 SUBORDINATE LOAN AGREEMENT among CHULA VISTA HOUSING AUTHORITY, as Issuer U.S. BANK NATIONAL ASSOCIATION, as Subordinate Trustee and MILLENIA II CIC, LP, a California limited partnership, as Borrower Relating to $____________ CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE 2021 SERIES A-3 Dated as of October 1, 2021 All of the right, title and interest of the Chula Vista Housing Authority (except for its Unassigned Rights) in and to this Subordinate Loan Agreement are being assigned to U.S. Bank National Association, as Subordinate Trustee, as security for the above -referenced bonds pursuant to a certain Subordinate Indenture of Trust dated as of October 1, 2021. 2021/10/12 City Council Post Agenda Page 379 of 620 TABLE OF CONTENTS Page i 4813-6726-9111/024036-0092 ARTICLE I DEFINITIONS Section 1.1 Definitions ................................................................................................................. 2 Section 1.2 Interpretation.............................................................................................................. 2 ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1 Representations, Warranties and Covenants of the Issuer ......................................... 3 Section 2.2 Representations, Warranties and Covenants of the Borrower ................................... 4 Section 2.3 Representations and Warranties of the Subordinate Trustee ..................................... 8 Section 2.4 Tax Covenants of the Borrower ................................................................................. 8 Section 2.5 Enforcement of Subordinate Loan Documents .......................................................... 9 ARTICLE III THE SUBORDINATE LOAN Section 3.1 Conditions to Funding the Subordinate Loan ............................................................ 9 Section 3.2 Terms of the Subordinate Loan ............................................................................... 10 Section 3.3 Assignment to Subordinate Trustee ......................................................................... 10 Section 3.4 Investment of Funds ................................................................................................ 10 Section 3.5 Damage; Destruction and Eminent Domain ............................................................ 10 ARTICLE IV LOAN PAYMENTS Section 4.1 Payments Under the Subordinate Note; Independent Obligation of Borrower .................................................................................................................. 10 Section 4.2 Payment of Certain Fees and Expenses Under the Subordinate Note ..................... 11 Section 4.3 Prepayment of Subordinate Loan ............................................................................ 11 Section 4.4 Borrower’s Obligations Upon Redemption ............................................................. 12 ARTICLE V SPECIAL COVENANTS OF BORROWER Section 5.1 Performance of Obligations ..................................................................................... 12 Section 5.2 Compliance With Applicable Laws ......................................................................... 13 Section 5.3 Subordinate Indenture Provisions ............................................................................ 13 Section 5.4 Participations in Subordinate Bonds ........................................................................ 13 Section 5.5 Borrower to Maintain Its Existence ......................................................................... 13 Section 5.6 Borrower to Remain Qualified in State and Appoint Agent .................................... 13 Section 5.7 Sale or Other Transfer of Project ............................................................................. 13 Section 5.8 Right to Perform Borrower’s Obligations ............................................................... 13 Section 5.9 Notice of Certain Events .......................................................................................... 13 Section 5.10 Survival of Covenants .............................................................................................. 13 Section 5.11 Access to Project; Records ...................................................................................... 13 Section 5.12 Damage, Destruction and Condemnation ................................................................ 14 Section 5.13 Obligation of the Borrower to Acquire and Construct the Project .......................... 14 2021/10/12 City Council Post Agenda Page 380 of 620 TABLE OF CONTENTS (continued) Page ii 4813-6726-9111/024036-0092 ARTICLE VI INDEMNIFICATION Section 6.1 Indemnification ........................................................................................................ 14 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default ..................................................................................................... 17 Section 7.2 Remedies on Default ................................................................................................ 17 Section 7.3 No Remedy Exclusive ............................................................................................. 18 Section 7.4 Agreement to Pay Attorneys’ Fees and Expenses ................................................... 18 Section 7.5 No Additional Waiver Implied by One Waiver ....................................................... 18 ARTICLE VIII MISCELLANEOUS Section 8.1 Notices ..................................................................................................................... 19 Section 8.2 Concerning Successors and Assigns ........................................................................ 19 Section 8.3 Governing Law ........................................................................................................ 19 Section 8.4 Modifications in Writing ......................................................................................... 19 Section 8.5 Further Assurances and Corrective Instruments ...................................................... 20 Section 8.6 Captions ................................................................................................................... 20 Section 8.7 Severability .............................................................................................................. 20 Section 8.8 Counterparts ............................................................................................................. 20 Section 8.9 Amounts Remaining in Subordinate Bond Fund or Other Funds ............................ 20 Section 8.10 Effective Date and Term .......................................................................................... 20 Section 8.11 Cross References ..................................................................................................... 20 Section 8.12 Waiver of Personal Liability .................................................................................... 20 Section 8.13 No Liability of Issuer ............................................................................................... 20 Section 8.14 No Liability of Officers ........................................................................................... 21 Section 8.15 Capacity of the Subordinate Trustee ........................................................................ 21 Section 8.16 Reliance ................................................................................................................... 21 EXHIBIT A – FORM OF SUBORDINATE PROMISSORY NOTE ............................................... A-1 2021/10/12 City Council Post Agenda Page 381 of 620 4813-6726-9111/024036-0092 SUBORDINATE LOAN AGREEMENT THIS SUBORDINATE LOAN AGREEMENT (this “Subordinate Loan Agreement”), made and entered into October 1, 2021, by and among the CHULA VISTA HOUSING AUTHORITY (together with any successor to its rights, duties and obligations, the “Issuer”), a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California (the “State”), U.S. BANK NATIONAL ASSOCIATION, a national banking association, organized and operating under the laws of the United States of America (together with any successor trustees appointed under the Subordinate Indenture, the “Subordinate Trustee”), and MILLENIA II CIC, LP, a limited partnership duly organized and existing under the laws of the State of California (together with its successors and assigns permitte d hereunder, the “Borrower”); W I T N E S S E T H: WHEREAS, the Issuer is authorized by Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (the “Act”) to issue revenue bonds for the purpose of financing, among other things, the acquisition, construction, rehabilitation and equipping of multifamily rental housing and for the provision of capital improvements in connection therewith and determined necessary thereto; and WHEREAS, the Borrower has requested the assistance of the City in financing the construction and development of a 198-unit plus two manager’s units multifamily rental housing development to be located within the City of Chula Vista, California known as “Columba Apartments” (the “Project”), and as a condition to such financial assistance the Borrower has agreed to enter into a Regulatory Agreement and Declaration of Restrictive Covenants of even date herewith (the “Regulatory Agreement”) setting forth certain restrictions with respect to the Project; and WHEREAS, the Issuer has determined to assist in the financing of the Project by issuing its Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3, in the original aggregate principal amount of $2,400,000 (the “Subordinate Bonds”), pursuant to a Subordinate Indenture of Trust, dated as of October 1, 2021 (the “Subordinate Indenture”), by and between the Issuer and the Subordinate Trustee, and the Act, and making a subordinate loan to the Borrower in the amo unt of the sum of such principal amount (the “Subordinate Loan”), evidenced by a Subordinate Promissory Note (the “Subordinate Note”) upon the terms and conditions set forth herein; and WHEREAS, in order to provide a portion of the funds necessary to finance the Project, pursuant to and in accordance with the Act, the Issuer has also entered into a Funding Loan Agreement, by and among the Issuer, Citibank, N.A., as funding lender (the “Senior Funding Lender”), and U.S. Bank National Association, as fiscal agent (the “Senior Fiscal Agent”), dated as of October 1, 2021 (the “Senior Funding Loan Agreement”), pursuant to which the Senior Funding Lender will (i) advance funds (the “Senior Funding Loan”) to or for the account of the Issuer, and (ii) apply the proceeds of the Senior Funding Loan to make a loan (the “Senior Borrower Loan,” and, together with the Senior Funding Loan, collectively, the “Senior Loans”) pursuant to a Borrower Loan Agreement, by and between the Issuer and the Borrower, dated as of October 1, 2021 (the “Senior Borrower Loan Agreement,” and, together with the Senior Funding Loan Agreement, the “Senior Loan Agreements”); and 2021/10/12 City Council Post Agenda Page 382 of 620 2 4813-6726-9111/024036-0092 WHEREAS, pursuant to the Senior Funding Loan Agreement, the Issuer executed and delivered that certain Governmental Lender Multifamily Note dated October __, 2021 in the aggregate principal amount of $__________, that certain Governmental Lender Multifamily Note dated October __, 2021 in the aggregate principal amount of $__________, and that certain taxable Governmental Lender Multifamily Note (Taxable) dated October __, 2021 in the aggregate principal amount of $__________ ( collectively, the “Senior Governmental Notes,” and, together with the Senior Borrower Notes (defined below), the “Senior Obligations”), and, pursuant to the Senior Borrower Loan Agreement, the Borrower executed and delivered that certain Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $__________, that certain Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $__________, and that certain Borrower Multifamily Note dated October __, 2021 in the aggregate principal amount of $__________ (collectively, the “Senior Borrower Notes,” and, together with the Senior Funding Loan Agreement, the Senior Borrower Loan Agreement, the Senior Governmental Notes and the Regulatory Agreement, the “Senior Loan Documents”); and WHEREAS, the Borrower’s obligations under this Subordinate Loan, the Subordinate Note and this Subordinate Loan Agreement are subordinate in all respects to all payment obligations under Senior Loan Documents. NOW, THEREFORE, for and in consideration of the mutual covenants and representations hereinafter contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 Definitions. All words and phrases (except for “Event of Default”) defined in the Subordinate Indenture shall have the same meanings for the purposes of this Subordinate Loan Agreement. In addition to the words and phrases defined in the Subordinate Indenture and el sewhere herein, the following words and phrases shall have the following meanings: “Event of Default” means any of those events specified in and defined by the applicable provisions of Article VII hereof to constitute an event of default. “Subordinate Loan Agreement” means this Subordinate Loan Agreement, together with any amendments hereto. “Taxes” means all taxes, water rents, sewer rents, assessments and other governmental or municipal or public or private dues, fees, charges and levies and any liens (in cluding federal tax liens) which are or may be levied, imposed or assessed upon the Project or any part thereof, or upon any leases pertaining thereto, or upon the rents, issues, income or profits thereof, whether any or all of the aforementioned be levied directly or indirectly or as excise taxes or as income taxes. Section 1.2 Interpretation. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise indicate. Words importing persons include firms, partnerships, limited liability companies, joint ventures, associations and corporations. References to Articles, Sections and other subd ivisions of 2021/10/12 City Council Post Agenda Page 383 of 620 3 4813-6726-9111/024036-0092 this Subordinate Loan Agreement are the Articles, sections and other subdivisions of this Subordinate Loan Agreement as originally executed. The terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof” and any similar terms refer to this Subordinate Loan Agreement; the term “heretofore” means before the date of execution of this Subordinate Loan Agreement; and the term “hereafter” means after the date of execution of this Subordinate Loan Agreement. ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1 Representations, Warranties and Covenants of the Issuer. The Issuer makes the following representations, warranties and covenants: (a) The Issuer is a public body, corporate and politic, organized and existing under the laws of the State. (b) The Issuer has all necessary power and authority to issue the Subordinate Bonds and to execute and deliver this Subordinate Loan Agreement, the Subordinate Indenture, and the other Subordinate Loan Documents to which it is a party, and to perform its duties and discharge its obligations hereunder and thereunder. (c) The Issuer has taken all action on its part for the issuance of the Subordinate Bonds and for the execution and delivery thereof. (d) Each of the Subordinate Loan Documents to which the Issuer is a party has been duly validly authorized, executed and delivered by the Issuer and, assuming due authorization, execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with it s respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and general equitable principles. (e) To the best knowledge of the Issuer, the Issuer has complied with the provisions of the Act and the laws of the State which are prerequisites to the consummation of the transactions on the part of the Issuer described or contemplated in the Subordinate Loan Documents. To the best knowledge of the Issuer, the execution and deli very of the Subordinate Bonds and the Subordinate Loan Documents to which the Issuer is a party, the consummation of the transactions on the part of the Issuer contemplated thereby and the fulfillment of or compliance with the terms and conditions thereof do not conflict with or result in the breach of any of the terms, conditions or provisions of any agreement or instrument or judgment, order or decree to which the Issuer is now a party or by which it is bound, nor do they constitute a default under any of the foregoing or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature upon any property or assets of the Issuer under the terms of any instrument or agreement. (f) To the best knowledge of the Issuer, no authorizati on or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by the Issuer of, and performance by the Issuer of its obligations under, any of the Subordinate Loan Documents, which has not been obtained. 2021/10/12 City Council Post Agenda Page 384 of 620 4 4813-6726-9111/024036-0092 (g) To the best knowledge of the Issuer, there is no action, suit, proceeding, inquiry or investigation pending or threatened against the Issuer by or before any court, governmental agency or public board or body, nor, to the Issuer’s knowledge, any basis therefor, which (i) affects or questions the existence or the territorial jurisdiction of the Issuer or the title to office of any member of the governing body of the Issuer; (ii) affects or seeks to prohibit, restrain or enjoin the execution and delivery of any Subordinate Loan Documents or the issuance, execution or delivery of the Subordinate Bonds, as applicable; (iii) affects or questions the validity or enforceability of the Subordinate Bonds; or (iv) questions the power or authority of the Issuer to perform its obligations under the Subordinate Bonds or to carry out the transactions contemplated by the Subordinate Bonds and the Subordinate Loan Documents. It is expressly acknowledged that the Issuer makes no representation as to the financial position or business condition of the Borrower and does not represent or warrant as to any of the statements, materials (financial or otherwise), representations or certifications furnished or to be made and furnished by the Borrower in connection with the issuance, execution and delivery of the Subordinate Bonds, as applicable, or as to the correctness, completeness or accuracy of such statements. Section 2.2 Representations, Warranties and Covenants of the Borrower. The Borrower makes the following representations, warranties and covenants, all of which, together with the other representations and agreements of the Borrower contained in this Subordinate Loan Agreement, are relied upon by the Issuer and the Subordinate Trustee and se rve as a basis for the undertakings of the Issuer and the Subordinate Trustee contained in this Subordinate Loan Agreement: (a) The Borrower is a limited partnership duly organized, validly existing and in good standing under the laws of the State of California and duly qualified to conduct its business under the laws of the State and in every other state in which the nature of its business requires such qualification, has full legal right, power and authority to enter into this Subordinate Loan Agreement and the other Subordinate Loan Documents, and to carry out and consummate all transactions contemplated hereby and by the other Subordinate Loan Documents, and by proper partnership action has duly authorized the execution, delivery and performance of this Subo rdinate Loan Agreement and the other Subordinate Loan Documents. All general partners, if any, of the Borrower are duly incorporated, organized and in good standing under the laws of their respective states of organization and are duly qualified to transact business in the State. (b) The Borrower has the legal right, power and authority to (i) own its properties and assets, including, but not limited to, the Project, (ii) to carry on its business as now being conducted and the Borrower contemplates it to be conducted with respect to the Project and (iii) execute and deliver, carry out its obligations under, and close the transactions provided for in, the Subordinate Loan Documents to which it is a party. (c) The officers of the Borrower executing this Subordinate Loan Agreement and the other Subordinate Loan Documents are duly and properly in office and fully authorized to execute the same. This Subordinate Loan Agreement and the other Subordinate Loan Documents have been duly authorized, executed and delivered by the Borrower and, assuming due authorization, execution and delivery by the other parties thereto, will constitute the legal, valid and binding agreements of the Borrower enforceable against the Borrower; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights 2021/10/12 City Council Post Agenda Page 385 of 620 5 4813-6726-9111/024036-0092 generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. (d) No consent or approval of any trustee or holder of any indebtedness of the Borrower, and to the best knowledge of the Borrower and with respect to the Borrower, no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of this Subordinate Loan Agreement or the other Subordinate Loan Documents or the consummation of any transaction herein or therein contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect. (e) The execution and delivery of this Subordinate Loan Agreement and the ot her Subordinate Loan Documents, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under (i) the organizational or other governing documents of the Borrower or to the best knowledge of the Borrower and with respect to the Borrower, (ii) any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, (iii) any mortgage, deed of trust, Subordinate Loan Agreement, lease, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties or assets are otherwise subject or bound, or (iv) except as provided in the Subordinate Loan Documents, result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrower, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Subordinate Loan Agreement or the Subordinate Loan Documents, or the financial condition, assets, properties or operations of the Borrower. (f) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state, municipal or other governmental authority, pending, or to the knowledge of the Borrower, after reasonable investigation, threatened, against or affecting the Borrower or the assets, properties or operations of the Borrower which, if determined adversely to the Borrower or its interests, would have a material adverse effect upon the cons ummation of the transactions contemplated by, or the validity of, this Subordinate Loan Agreement or the other Subordinate Loan Documents or upon the financial condition, assets, properties or operations of the Borrower, and the Borrower is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Subordinate Loan Agreement or the other Subordinate Loan Documents or the financial condition, assets, properties or operations of the Borrower. All tax returns (federal, state and local) required to be filed by or on behalf of the Borrower have been filed, and all taxes shown thereon to be due, including interest and penalties, except such, if any, as are being actively contested by the Borrower in good faith, have been paid or adequate reserves have been made for the payment thereof which reserves, if any, are reflected in the audited financial statements described therein. The Borrower e njoys the peaceful and undisturbed possession of all of the Property. 2021/10/12 City Council Post Agenda Page 386 of 620 6 4813-6726-9111/024036-0092 (g) The Project and the operation of the Project (in the manner contemplated by the Subordinate Loan Documents) conform in all material respects with the requirements of the Act as well as all applicable zoning, planning, building and environmental laws, ordinances and regulations of governmental authorities having jurisdiction over the Project. (h) The Borrower has filed or caused to be filed all federal, state and local tax returns which are required to be filed or has obtained appropriate extensions therefor, and has paid or caused to be paid all taxes as shown on said returns or on any assessment received by it, to the extent that such taxes have become due. (i) The Borrower is not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party which default would materially adversely affect the transactions contemplated by the Subordinate Loan Documents or the operations of the Borrower or the enforceability of the Subordinate Loan Documents to which the Borrower is a party or the ability of the Borrower to perform all obligations thereunder. (j) The Borrower agrees to pay all costs of maintenan ce and repair, all Taxes and assessments, insurance premiums (including public liability insurance and insurance against damage to or destruction of the Project) concerning or in any way related to the Project, or any part thereof, and any expenses or renewals thereof, and any other governmental charges and impositions whatsoever, foreseen or unforeseen, and all utility and other charges and assessments concerning or in any way related to the Project. (k) If the Borrower is a partnership, all of the partnership interests in the Borrower are validly issued and are fully registered, if required, with the applicable governmental authorities and/or agencies, and, except as set forth in the Borrower’s Partnership Agreement, there are no outstanding options or rights to purchase or acquire those interests. If the Borrower is a limited liability company, all of the ownership interests in the Borrower are validly issued and are fully registered, if required, with the applicable governmental authorities and/or agencies, and there are no outstanding options or rights to purchase or acquire those interests. Nothing in this Subordinate Loan Agreement shall prevent the Borrower from issuing additional partnership interests or ownership interests if such units are issued in a ccordance with all applicable securities laws, provided such issuance is in accordance with the Borrower’s Partnership Agreement. (l) The representations and warranties of the Borrower contained in the Regulatory Agreement are true and accurate in all material respects. (m) The information, statements or reports furnished in writing to the Issuer by the Borrower in connection with this Subordinate Loan Agreement or the consummation of the transactions contemplated hereby do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; and the representations and warranties of the Borrower and the statements, information and descriptions contained in the Borrower’s closing certificates, as of the Closing Date, are true and correct in all material respects, do not contain any untrue statement of a material fact, and do not omit to state a material fact necessary to make th e representations, warranties, statements, information and descriptions contained therein, in the light of the circumstances under which they were made, not misleading; and any estimates or the assumptions contained in any certificate of the Borrower delivered as of the Closing Date are reasonable. 2021/10/12 City Council Post Agenda Page 387 of 620 7 4813-6726-9111/024036-0092 (n) The Borrower acknowledges that (i) it understands the nature and structure of the transactions relating to the financing of the Project, (ii) it is familiar with the provisions of all of the documents and instruments relating to the financing, (iii) it understands the risks inherent in such transactions, including without limitation the risk of loss of the Project, and (iv) it has not relied on the Issuer or the Subordinate Trustee for any guidance or expertise in analyzing the financial or other consequences of the transactions contemplated by the Subordinate Loan Documents or otherwise relied on the Issuer or the Subordinate Trustee in any manner. (o) The Borrower covenants to pay all third-party fees of the financing, including but not limited to the following: (i) All taxes and assessments of any type or character charged to the Issuer or to the Subordinate Trustee affecting the amount available to the Issuer or the Subordinate Trustee from payments to be received hereunder or in any way arising due to the transactions contemplated hereby (including taxes and assessments assessed or levied by any public agency or governmental authority of whatsoever character having power to levy taxes or assessments) but excluding franchise taxes based upon the capital and/or income of the Subordinate Trustee and taxes based upon or measured by the net income of the Subordinate Trustee or the Issuer; provided, however, that the Borrower shall have the right to protest any such taxes or a ssessments and to require the Issuer or the Subordinate Trustee, at the Borrower’s expense, to protest and contest any such taxes or assessments levied upon them and that the Borrower shall have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would adversely affect the rights or interests of the Issuer or the Subordinate Trustee; (ii) All fees, charges and expenses of the Subordinate Trustee for services rendered under the Subordinate Indenture, as and when the same become due and payable; (iii) The portion of the annual fee of the Issuer attributable to the Subordinate Bonds (in addition to the fee attributable to the Senior Obligations, which shall be payable in accordance with and pursuant to the Senior Loan Documents), payable as set forth in Section 19 of the Regulatory Agreement, and the fees and expenses of the Issuer or any agents, attorneys, accountants, consultants selected by the Issuer to act on its behalf in connection with this Subordinate Loan Agreement, the Regulatory Agreement or the Subordinate Loan Documents, including, without limitation, any and all expenses incurred in connection with the authorization, issuance and delivery of the Subordinate Bonds, as applicable, or in connection with any litigation which may at any time be instituted involving this Subordinate Loan Agreement, the Regulatory Agreement, or the Subordinate Loan Documents or any of the other documents contemplated thereby, or in connection with the reasonable supervision or inspection of the Borrower, its properties, assets or operations or otherwise in connection with the administration of the foregoing (except to the extent any such fees or expenses are payable as a result of the gross negligence or willful misconduct of the Issuer); and (iv) These obligations and those in Section 6.1 shall remain valid and in effect notwithstanding repayment of the loan hereunder or termination of this Subordinate Loan Agreement or the Subordinate Indenture. 2021/10/12 City Council Post Agenda Page 388 of 620 8 4813-6726-9111/024036-0092 Section 2.3 Representations and Warranties of the Subordinate Trustee. The Subordinate Trustee makes the following representations and warranties: (a) The Subordinate Trustee is a national banking association, duly organized and existing under the laws of the United States of America. The Subordinate Trustee is duly authorized to act as a fiduciary and to execute the trust created by the Subordinate Indenture, and meets the qualifications to act as Subordinate Trustee under the Subordinate Indenture. (b) The Subordinate Trustee has complied with the provisions of law which are prerequisite to the consummation of, and has all necessary power (including trust powers) and authority (i) to execute and deliver this Subordinate Loan Agreement and the other Subordinate L oan Documents to which it is a party, (ii) to perform its obligations under this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party, and (iii) to consummate the transactions contemplated by this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party. (c) The Subordinate Trustee has duly authorized (i) the execution and delivery of this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party, (ii) the performance by the Subordinate Trustee of its obligations under this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party, and (iii) the actions of the Subordinate Trustee contemplated by this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party. (d) Each of the Subordinate Loan Documents to which the Subordinate Trustee is a party has been duly executed and delivered by the Subordinate Trustee and, assuming due authorization, execution and delivery by the other parties thereto, constitutes a valid and binding obligation of the Subordinate Trustee, enforceable against the Subordinate Trustee in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (e) No approval, permit, consent, authorization or order of any court, governmental agency or public board or body not already obtained is required to be obtained by the Subordinate Trustee as a prerequisite to (i) the execution and delivery of this Subordinate Loan Agreement and the other Subordinate Loan Documents to which the Subordinate Trustee is a party (ii) the authentication or delivery of the Subordinate Bonds, (iii) the performance by the Subordinate Trustee of its obligations under this Subordinate Loan Agreement and the other Subordinate Loan Documents to which it is a party, or (iv) the consummation of the transactions contemplated by this Subordinate Loan Agreement and the other Subordinate Loan Documents to which the Subordinate Trustee is a party. The Subordinate Trustee makes no representation or warranty relating to compliance with any federal or state securities laws. Section 2.4 Tax Covenants of the Borrower. The Borrower covenants and agrees that: (a) It will at all times comply in all material respects with the terms of the Tax Certificate and the Regulatory Agreement; 2021/10/12 City Council Post Agenda Page 389 of 620 9 4813-6726-9111/024036-0092 (b) It will not take, or permit to be taken on its behalf, any action which would cause the interest payable on the Subordinate Bonds to be included in gross income, for federal income tax purposes, and will take such action as may be necessary in the opinion of Bond Counsel to continue such exclusion from gross income, including, without limitation, the preparation and filing of all statements required to be filed by it in order to maintain the exclusion (including, but not limited to, the filing of all reports and certifications required by the Regulatory Agreement); (c) No changes will be made to the Project, no actions will be taken by the Borrower and the Borrower will not omit to take any actions, which will in any way a dversely affect the tax-exempt status of the Subordinate Bonds; (d) It will comply with the requirements of Section 148 of the Code and the Regulations issued thereunder throughout the term of the Subordinate Bonds and will not make any use of the proceeds of the Subordinate Bonds, or of any other funds which may be deemed to be proceeds of the Subordinate Bonds under the Code and the related regulations of the United States Treasury, which would cause the Subordinate Bonds to be “arbitrage bonds” within the me aning of Section 148 of the Code; (e) If the Borrower becomes aware of any situation, event or condition which would, to the best of its knowledge, result in the interest on the Subordinate Bonds becoming includable in gross income for purposes of federal income tax purposes, it will promptly give written notice of such circumstance, event or condition to the Issuer and the Subordinate Trustee. In the event of a conflict between the terms of this Section 2.4 and the Tax Certificate, the terms of the Tax Certificate shall control. Section 2.5 Enforcement of Subordinate Loan Documents. The Subordinate Trustee may enforce and take all reasonable steps, actions and the proceedings necessary for the enforcement of all terms, covenants and conditions of the Subordinate Loan Documents as and to the extent set forth therein. ARTICLE III THE SUBORDINATE LOAN Section 3.1 Conditions to Funding the Subordinate Loan. The Subordinate Loan shall be deemed funded upon delivery of the Subordinate Note (representing the purchase price of the Subordinate Bonds) and satisfaction of the following conditions: (a) The Borrower shall have executed and delivered to the Issuer the Subordinate Note in the form attached hereto as Exhibit A, with only such changes therein as shall be approved in writing by the Issuer, and the Issuer shall have endorsed the Subordinate Note to the Subordinate Trustee; (b) The Subordinate Mortgage shall have been executed and delivered by the Borrower and delivered to the title company for recording in the appropriate office for officially recording real estate documents in the jurisdiction in which the Project is located (the “Recorder’s Office”); 2021/10/12 City Council Post Agenda Page 390 of 620 10 4813-6726-9111/024036-0092 (c) The Regulatory Agreement shall have been executed and delivered by the parties thereto and shall have been delivered to the title company for record ing in the Recorder’s Office, and the Subordinate Trustee shall have received evidence satisfactory to it of such delivery; (d) All other Subordinate Loan Documents not listed above shall have been executed and delivered by all parties thereto and delivered to the Subordinate Trustee; and (e) The Borrower shall have delivered to the Subordinate Trustee and the Issuer an opinion of its counsel or other counsel satisfactory to the Subordinate Trustee and the Issuer. Section 3.2 Terms of the Subordinate Loan. The Subordinate Loan shall (i) be evidenced by the Subordinate Note; (ii) be secured by the Subordinate Mortgage; (iii) be in the original aggregate principal amount of $2,400,000; (iv) bear interest as provided in the Subordinate Note; (v) provide for payments on the Subordinate Bonds from available Revenues, if any, in accordance with the Subordinate Note; and (vi) be subject to optional and mandatory prepayment at the times, in the manner and on the terms, and have such other terms and provisions, as provided herein and in the Subordinate Note. Section 3.3 Assignment to Subordinate Trustee. The parties hereto acknowledge, and the Borrower consents to, the assignment by the Issuer to the Subordinate Trustee pursuant to the Subordinate Indenture of all of the Issuer’s right, title and interest in this Subordinate Loan Agreement (excluding the Unassigned Rights), the Subordinate Loan, the Subordinate Mortgage and the Revenues as security for the payment of the principal of, and interest on the Subordinate Bonds. Section 3.4 Investment of Funds. Except as otherwise provided in the Subordinate Indenture, any money held as a part of any fund or account established under the Subordinate Indenture shall be invested or reinvested by the Subordinate Trustee in Investment Securities in accordance with the Subordinate Indenture. Section 3.5 Damage; Destruction and Eminent Domain. If, prior to payment in full of the Subordinate Bonds, the Project or any portion thereof is destroyed or damaged in whole or in part by fire or other casualty, or title to, or the temporary use of, the Project or any portion thereof shall have been taken by the exercise of the power of eminent domain, and the Issuer, the Borrower, or the Subordinate Trustee receives Net Proceeds from insurance or any condemnation award in connection therewith, such Net Proceeds shall be utilized, after satisfaction of all payment requirements of the Senior Loan Documents, as provided in the Subordinate Loan Documents and the Subordinate Indenture. ARTICLE IV LOAN PAYMENTS Section 4.1 Payments Under the Subordinate Note; Independent Obligation of Borrower. (a) The Borrower agrees to repay the Subordinate Loan from Net Cash Flow as provided in the Subordinate Note, and in all instances at the times and in the amounts necessary to enable the Subordinate Trustee, on behalf of the Issuer, to pay all amounts payable with respect to the Subordinate Bonds, when due, whether at maturity or upon redemption, acceleration or otherwise. 2021/10/12 City Council Post Agenda Page 391 of 620 11 4813-6726-9111/024036-0092 The obligation of the Borrower to make the payments set forth in this Article IV shall be an independent and separate obligation of the Borrower from its obligation to make payments under the Subordinate Note, provided that in all events payments made by the Borrower under and pursuant to the Subordinate Note shall be credited against the Borrower’s obligations hereunde r on a dollar-for- dollar basis. If for any reason the Subordinate Note or any provision of the Subordinate Note shall be held invalid or unenforceable against the Borrower by any court of competent jurisdiction, the Subordinate Note or such provision of the Subordinate Note shall be deemed to be the obligation of the Borrower pursuant to this Subordinate Loan Agreement to the full extent permitted by law and such holding shall not invalidate or render unenforceable any of the provisions of this Article IV and shall not serve to discharge any of the Borrower’s payment obligations hereunder or eliminate the credit against such obligations to the extent of payments made under the Subordinate Note. (b) The obligations of the Borrower to repay the Subordinate Loan, to perform all of its obligations under the Subordinate Loan Documents, to provide indemnification pursuant to Section 6.1 hereof, to pay costs, expenses and charges pursuant to Section 4.2 hereof and to make any and all other payments required by this Sub ordinate Loan Agreement, the Subordinate Indenture or any other documents contemplated by this Subordinate Loan Agreement or by the Subordinate Loan Documents shall, subject to the limitations set forth in Section 5.1 hereof, be absolute and unconditional and shall not be subject to diminution by setoff, recoupment, counterclaim, abatement or otherwise. (c) Notwithstanding anything contained in any other provision of this Subordinate Loan Agreement to the contrary (but subject to the provisions of Section 5.1 hereof and the Intercreditor Agreement), the following obligations of the Borrower shall be and remain the joint and several full recourse obligations of the Borrower and each of the Borrower’s general partners, payable from and enforceable against any and all income, assets and properties of the Borrower: (i) the Borrower’s obligations to the Issuer and the Subordinate Trustee under Section 4.2 of this Subordinate Loan Agreement; (ii) the Borrower’s obligations under Section 6.1 of this Subordinate Loan Agreement; and (iii) the Borrower’s obligation to pay legal fees and such expenses under Section 7.4 of this Subordinate Loan Agreement. Section 4.2 Payment of Certain Fees and Expenses Under the Subordinate Note. (a) The Borrower shall pay (or cause to be paid by the Subordinate Trustee), in consideration of the funding of the Subordinate Loan, the following fees, expenses and other money payable in connection with the Subordinate Loan: (i) On or prior to the Closing Date, to the Issuer, an initial financing fee attributable to the Subordinate Bonds (in addition to the fee attributable to the Senior Obligations, which shall be payable in accordance with and pursuant to the Senior Loan Documents) in an amount equal to $2,400,000, together with all third-party and out-of-pocket expenses of the Issuer (including but not limited to the fees and expenses of counsel to the Issuer) in connection with the Subordinate Loan and the issuance of the Subordinate Bonds. (ii) All other fees and expenses of the Subordinate Trustee and the Issuer described in Sections 2.2(o)(ii) and 2.2(o)(iii) hereof. Section 4.3 Prepayment of Subordinate Loan. Subject to the terms and conditions of the Subordination Agreement (defined in the Subordinate Indenture), the Borrower shall have the 2021/10/12 City Council Post Agenda Page 392 of 620 12 4813-6726-9111/024036-0092 option to prepay the Subordinate Loan in full or in part prior to the payment and discharge of all the outstanding Subordinate Bonds on any Business Day in accordance with the provisions of the Subordinate Indenture, this Subordinate Loan Agreement and the Subordinate Note, without the payment of any premium or fee. The Borrower shall be required to prepay the Subordinate Loan in each case that Subordinate Bonds are required to be redeemed in accordance with the terms and conditions set forth in the Subordinate Indenture. The Subordinate Bonds are subject to redemption in accordance with the terms and conditions set forth in the Subordinate Indenture. In connection with any prepayment, whether optional or mandatory, in addition to all other payments required under the Subordinate Note or th e Subordinate Indenture, the Borrower shall pay an amount sufficient to pay the redemption price of the Subordinate Bonds to be redeemed, including principal and interest, and further including any interest to accrue with respect to the Subordinate Loan an d such Subordinate Bonds between the prepayment date and the redemption date, together with a sum sufficient to pay all fees, costs and expenses in connection with such redemption and, in the case of redemption in whole, to pay all other amounts payable under this Subordinate Loan Agreement and the Subordinate Indenture. The Borrower shall provide notice of the prepayment to the Issuer, and the Subordinate Trustee in writing ten (10) days, or such shorter time as is possible in the case of mandatory prepayments, prior to the date on which the Borrower will make the prepayment. Each such notice shall state, to the extent such information is available, (a) the amount to be prepaid, and (b) the date on which the prepayment will be made by the Borrower. Section 4.4 Borrower’s Obligations Upon Redemption. In the event of any redemption, the Borrower will timely pay, to the Subordinate Trustee an amount equal to the principal amount of such Subordinate Bonds or portions thereof called for redemption, together with interest accrued to the redemption date. In addition, the Borrower will timely pay all fees, costs and expenses associated with any redemption of Subordinate Bonds. ARTICLE V SPECIAL COVENANTS OF BORROWER Section 5.1 Performance of Obligations. The Borrower shall keep and faithfully perform all of its covenants and undertakings contained herein and in the Subordinate Loan Documents, including, without limitation, its obligations to make all payments set forth herein and therein in the amounts, at the times and in the manner set forth herein and therein. Except as otherwise provided herein or in the Subordinate Loan Documents, the obligations of the Borrower under this Subordinate Loan Agreement are non-recourse liabilities of the Borrower and its partners. However, nothing in this Section 5.1 shall limit the right of the Issuer or the Subordinate Trustee to proceed against the Borrower to recover any fees owing to any of them or any actual out-of-pocket expenses (including but not limited to actual out-of-pocket attorneys’ fees incurred by any of them) incurred by any of them in connection with the enforcement of any rights under this Subordinate Loan Agreement or the other Subordinate Loan Documents. In any action or proceeding brought with respect to the Subordinate Loan or the Subordinate Bonds, no deficiency or other money judgment shall be enforced against the Borrower or any partner of the Borrower or any successor or assign of the Borrower, and any judgment obtained shall be enforced only against the Project and other property of the Borrower encumbered by the Subordinate Loan Documents and not against the Borrower or any partner of the Borrower or any successor or assign of the Borrower. 2021/10/12 City Council Post Agenda Page 393 of 620 13 4813-6726-9111/024036-0092 Section 5.2 Compliance With Applicable Laws. All work performed in connection with the Project shall be performed in strict compliance with all applicable federal, state, county and municipal laws, ordinances, rules and regulations now in force or that may be enacted hereafter. Section 5.3 Subordinate Indenture Provisions. The execution of this Subordinate Loan Agreement shall constitute conclusive evidence of approval of the Subordinate Indenture by the Borrower. Whenever the Subordinate Indenture by its terms imposes a duty or obligation upon the Borrower, such duty or obligation shall be binding upon the Borrower to the same extent as if the Borrower were an express party to the Subordinate Indenture, and the Borrower shall carry out and perform all of its obligations under the Subordinate Indenture as fully as if the Borrower were a party to the Subordinate Indenture. Section 5.4 Participations in Subordinate Bonds. The Borrower agrees that no “substantial user” of the property financed with the proceeds of the Subordinate Bonds or a ny “related person” of the Borrower, as such terms are used in Section 147(a) of the Code, shall own the Subordinate Bonds. Section 5.5 Borrower to Maintain Its Existence. The Borrower agrees to maintain its existence and maintain its current legal status with authority to own and operate the Project. Section 5.6 Borrower to Remain Qualified in State and Appoint Agent. The Borrower will remain duly qualified to transact business in the State and will maintain an agent in the State on whom service of process may be made in connection with any actions against the Borrower. Section 5.7 Sale or Other Transfer of Project. The Borrower may convey and transfer the Project only upon strict compliance with the provisions of the Senior Loan Documents, the Regulatory Agreement and the Subordinate Loan Documents. Section 5.8 Right to Perform Borrower’s Obligations. In the event the Borrower fails to perform any of its obligations under this Subordinate Loan Agreement, and during the continuance of any Event of Default the Issuer or the Subordinate Trustee, after giving requisite notice, if any, may, but shall be under no obligation to, perform such obligation and pay all costs related thereto, and all such costs so advanced by the Issuer or the Subordinate Trustee shall become an additional obligation of the Borrower hereunder, payable on demand and if not paid on demand with interest thereon at the default rate of interest payable under the Subordinate Loan Documents. Section 5.9 Notice of Certain Events. The Borrower shall promptly advise the Issuer and the Subordinate Trustee in writing of the occurrence of any Event of Default hereunder or any event which, with the passage of time or service of notice or both, would constitute an Event of Default, specifying the nature and period of existence of such event and the actions being taken or proposed to be taken with respect thereto. Section 5.10 Survival of Covenants. The provisions of Sections 2.4, 4.2, 6.1 and 7.4 of this Subordinate Loan Agreement shall survive the expiration or earlier termination of this Subordinate Loan Agreement and, with regard to the Subordinate Trustee, the resignation or removal of the Subordinate Trustee. Section 5.11 Access to Project; Records. Subject to reasonable notice, the Issuer and the Subordinate Trustee, and the respective duly authorized agents of each, shall have the right (but not 2021/10/12 City Council Post Agenda Page 394 of 620 14 4813-6726-9111/024036-0092 any duty or obligation) at all reasonable times and during normal business hours: (a) to enter the Project and any other location containing the records relating to the Borrower, the Project, the Subordinate Loan and the Borrower’s compliance with the terms and conditions of the Subordinate Loan Documents; (b) to inspect and audit any and all of the Borrower’s records or accounts pertaining to the Borrower, the Project, the Subordinate Loan and the Borrower’s compliance with the terms and conditions of the Subordinate Loan Documents; and (c) to require the Borrower, at the Borrower’s sole expense, (i) to furnish such documents to the Issuer and the Subordinate Trustee, as the Issuer or the Subordinate Trustee, as the case may be, from time to time, deems reasonably necessary in order to determine that the provisions of the Subordinate Loan Documents have been complied with and (ii) to make copies of any records that the Issuer or the Subordinate Trustee or the respective duly authorized agents of each, may reasonably require. The Borrower shall make available to the Issuer and the Subordinate Trustee, such information concerning the Project, the Subordinate Mortgage and the Subordinate Loan Documents as any of them may reasonably request. Section 5.12 Damage, Destruction and Condemnation. If prior to full payment of the Subordinate Bonds (or provision for payment of the Subordinate Bonds in accordance with the provisions of the Subordinate Indenture) the Project or any portion of it is destroyed (in whole or in part) or is damaged by fire or other casualty, or title to, or the temporary use of, the Project or any portion of it shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, or shall be transferred pursuant to an agreement or settlement in lieu of emi nent domain proceedings, the Borrower shall nevertheless be obligated to continue to pay the amounts specified in this Subordinate Loan Agreement and in the Subordinate Note to the extent the Subordinate Loan is not prepaid in accordance with the terms of the Subordinate Loan Documents. Section 5.13 Obligation of the Borrower to Acquire and Construct the Project . The Borrower shall proceed with reasonable dispatch to complete the construction, development and equipping of the Project. If amounts on deposit in the Subordinate Loan Fund designated for the Project and available to be disbursed to the Borrower are not sufficient to pay the costs of such construction, development and equipping, the Borrower shall pay such additional costs from its own funds. The Borrower shall not be entitled to any reimbursement from the Issuer, the Subordinate Trustee, or the Subordinate Bondholders in respect of any such costs or to any diminution or abatement in the repayment of the Subordinate Loan. Neither of the Subordinate Trustee nor the Issuer makes any representation or warranty, either express or implied, that money, if any, which will be paid into the Subordinate Loan Fund or otherwise made available to the Borrower will be sufficient to complete the construction of the Project, and neither of the Subordinate Trustee nor the Issuer shall be liable to the Borrower, the Subordinate Bondholders or any other person if for any reason the Project is not completed. ARTICLE VI INDEMNIFICATION Section 6.1 Indemnification. (a) To the fullest extent permitted by law, the Borrower agrees to indemnify, hold harmless and defend the Issuer, the Subordinate Trustee, and each of their respective officers, governing members, directors, officials, employees, attorneys and agents (collectively, the “Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities, costs and 2021/10/12 City Council Post Agenda Page 395 of 620 15 4813-6726-9111/024036-0092 expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement (to the ext ent that the Borrower has consented to such settlement) and amounts paid to discharge judgments) and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject under or any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: (i) the Subordinate Bonds, the Subordinate Loan Documents, or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including, as applicable, the issuance, issuance, sale or resale of the Subordinate Bonds; (ii) any act or omission of the Borrower or any of its agents, contractors, servants, employees or licensees in connection with the Project, the o peration of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, installation or construction of, the Project or any part thereof; (iii) any lien (other than a permitted encumbrance) or charge upon payments by the Borrower to the Issuer and the Subordinate Trustee hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Issuer or the Subordinate Trustee in respect of any portion of the Project (other than income and similar taxes on fees received or earned in connection therewith); (iv) any violation of any environmental regulations with respect to, or the release of any hazardous substances from, the Project or any part thereof during the period in which the Borrower is in possession or control of the Project; (v) the enforcement of, or any action taken by, the Issuer or the Subordinate Trustee related to remedies under, this Subordinate Loan Agreement or the Subordinate Indenture; (vi) any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in any offering statement or disclosure or continuing disclosure document for the Subordinate Bonds or any of the documents relating to the Subordinate Bonds, or any omission or alleged omission from any offering statement or disclosure or continuing disclosure document for the Subordinate Bonds of any material fact necessary to be stated therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (vii) any Determination of Taxability; (viii) any breach (or alleged breach) by Borrower of any representation, warranty or covenant made in or pursuant to this Subordinate Loan Agreement; (ix) the Project, or the condition, occupancy, use, possession, conduct or management of, or work done in or about, or from the planning, design, installation, or r construction of, the Project or any part thereof; or 2021/10/12 City Council Post Agenda Page 396 of 620 16 4813-6726-9111/024036-0092 (x) the Subordinate Trustee’s acceptance or administration of the trust of the Subordinate Indenture, or the exercise or performance of any of its powers or duties thereunder or under any of the documents relating to the Subordinate Bonds to which it is a party; except (a) in the case of the foregoing indemnification of (1) the Subordinate Bondholder Representative or any related Indemnified Party, to the extent such damages are caused by the gross negligence or willful misconduct of such Indemnified Party, or (2) in the case of the Subordinate Trustee or any related Indemnified Party, the negligence or willful misconduct of the Subordinate Trustee, or any breach by such party of its obligations under any of the Subordina te Loan Documents or any untrue statement or misleading statement of a material fact by such Indemnified Party contained in any offering statement or document for the Subordinate Bonds or any of the Subordinate Loan Documents or any omission or alleged omission from any such offering statement or document of any material fact necessary to be stated therein in order to make the statements made therein by such Indemnified Party not misleading; or (b) in the case of the foregoing indemnification of the Issuer or any related Indemnified Party, they shall not be indemnified by the Borrower with respect to liabilities arising from their own bad faith, fraud or willful misconduct. 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 (which notice shall be timely given so as not to materially impair the Borrower’s right to defend), shall assume the investigation and defense thereof, including the employment of counsel reasonably approved by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion so long as the Indemnified Party is fully released (otherwise the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement, which approval shall not be unreasonably withheld). Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the investigation and defense thereof. The Borrower shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Borrower if and only if in such Indemnified Party’s good faith judgment (based on the advice of counsel) an actual conflict of interest exists by reason of common representation. In addition thereto, the Borrower will pay upon demand all of the fees and expenses paid or incurred by the Subordinate Trustee and/or the Issuer in enforcing the provisions hereof, as more fully set forth in this Subordinate Loan Agreement. (b) The rights of any persons to indemnity hereunder and rights to payment of fees and reimbursement of expenses pursuant this Subordinate Loan Agreement shall survive the final payment or defeasance of the Subordinate Bonds and in the case of the Subordinate Trustee any resignation or removal. The provisions of this Section shall survive the termination of this Subordinate Loan Agreement. Nothing contained in this Section 6.1 shall in any way be construed to limit the indemnification rights of the Issuer contained in Section 9 of the Regulatory Agr eement. With respect to the Issuer, the Regulatory Agreement shall control in any conflicts between this Section 6.1 and Section 9 of the Regulatory Agreement. 2021/10/12 City Council Post Agenda Page 397 of 620 17 4813-6726-9111/024036-0092 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default. Subject to applicable notice and cure rights the following shall be “Events of Default” under this Subordinate Loan Agreement and the term “Event of Default” shall mean, whenever it is used in this Subordinate Loan Agreement, one or all of the following events after the expiration of any applicable cure periods: (a) Any representation or warranty made by the Borrower in the Subordinate Loan Documents or any certificate, statement, data or information furnished by the Borrower in connection therewith or included by the Borrower in its application to the Issuer for assistance proves at any time to have been incorrect when made in any material respect; (b) Failure by the Borrower to pay from Revenues any amounts due under this Subordinate Loan Agreement, the Subordinate Note or the Subordinate Mortgage at the times and in the amounts required by this Subordinate Loan Agreement, the Subordinate Note and the Subordinate Mortgage, as applicable; or (c) The Borrower’s failure to observe and perform any of its other covenants, conditions or agreements contained herein, other than as referred to in clause (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given by the Issuer or the Subordinate Trustee to the Borrower; provided, however, that if th e failure shall be such that it can be corrected but not within such period, the Issuer and the Subordinate Trustee will not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Borrower within such period and diligently pursued until the failure is corrected; Notwithstanding anything herein to the contrary, the Investor Limited Partner shall have the right, but not the obligation, to cure defaults hereunder in the same manner as the Borrower. A ny cure of any default made or tendered by Investor Limited Partner shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower. Section 7.2 Remedies on Default. Whenever any Event of Default hereunder shall have occurred and be continuing, the Subordinate Trustee or the Issuer where so provided may take any one or more of the following remedial steps: (a) The Issuer shall cooperate with the Subordinate Trustee as the Subordinate Trustee acts pursuant to Section 6.02 of the Subordinate Indenture. (b) In the event any of the Subordinate Bonds shall at the time be Outstanding and not paid and discharged in accordance with the provisions of the Subordinate Indenture, the Issuer or the Subordinate Trustee may have access t o and inspect, examine and make copies of the books and records and any and all accounts, data and income tax and other tax returns of the Borrower. (c) The Issuer or the Subordinate Trustee may, without being required to give any notice (other than to the Issuer or the Subordinate Trustee, as applicable), except as provided herein, pursue all remedies of a creditor under the laws of the State, as supplemented and amended, or any other applicable laws. 2021/10/12 City Council Post Agenda Page 398 of 620 18 4813-6726-9111/024036-0092 (d) The Issuer or Subordinate Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the payments due under this Subordinate Loan Agreement then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Subordinate Loan Agreement. Any amounts collected pursuant to Article IV and any other amounts which would be applicable to payment of principal of and interest on the Subordinate Bonds collected pursuant to action taken under this Section shall be applied in accordance with the provisions of the Subordinate Indenture. The provisions of this Section are subject to the further limitation that if, after any Event of Default hereunder all amounts which would then be payable hereunder by the Borrowe r if such Event of Default had not occurred and was not continuing shall have been paid by or on behalf of the Borrower, and the Borrower shall have also performed all other obligations in respect of which it is then in default hereunder, and shall have paid the reasonable charges and expenses of the Issuer and the Subordinate Trustee, including reasonable attorneys’ fees paid or incurred in connection with such default, and if there shall then be no default existing under the Subordinate Indenture, then an d in every such case such Event of Default hereunder shall be waived and annulled, but no such waiver or annulment shall affect any subsequent or other Event of Default or impair any right consequent thereon. Section 7.3 No Remedy Exclusive. No remedy conferred upon or reserved to the Issuer or the Subordinate Trustee by this Subordinate Loan Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Subordinate Loan Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer or the Subordinate Trustee to exercise any remedy reserved to it in this Article VII, it shall not be necessary to give any notice, other than such notice as may be expressly required by this Subordinate Loan Agreement. Section 7.4 Agreement to Pay Attorneys’ Fees and Expenses. In the event the Borrower should default under any of the provisions of this Subord inate Loan Agreement and the Issuer or the Subordinate Trustee should employ attorneys or incur other expenses for the collection of loan payments or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower contained in this Subordinate Loan Agreement or in the Subordinate Note, the Borrower shall on demand therefor reimburse the reasonable fees of such attorneys and such other expenses so incurred. Section 7.5 No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Subordinate Loan Agreement should be breached by any party and thereafter waived by the other parties, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. 2021/10/12 City Council Post Agenda Page 399 of 620 19 4813-6726-9111/024036-0092 ARTICLE VIII MISCELLANEOUS Section 8.1 Notices. Whenever in this Subordinate Loan Agreement the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Any notice, request, complaint, demand, communication or other paper required or permitted to be delivered to the Issuer, the Subordinate Trustee, or the Borrower shall be sufficiently given and shall be deemed given (unless another form of notice shall be specifically set forth herein) on the Business Day following the date on which such notice or other communication shall have been delivered to a national overnight delivery service (receipt of which to be evidenced by a signed receipt from such overnight delivery service) addressed to the appropriate party at the addresses set forth in Section 10.04 of the Subordinate Indenture or upon receipt such notice or other communication delivered by facsimile transmission as required or permitted by this Subordinate Loan Agreement (receipt of which shall be evidenced by confirmation of transmission). The Issuer, the Subordinate Trustee, or the Borrower may, by notice given as provided in this paragraph, designate any further or different address to which subsequent notices or other communication shall be sent. The Subordinate Trustee agrees to accept and act upon facsimile transmission of wri tten instructions and/or directions pursuant to this Subordinate Loan Agreement, provided, however, that subsequent to such facsimile transmission of written instructions shall provide the originally executed instructions and/or directions shall be provided to the Subordinate Trustee in a timely manner. Section 8.2 Concerning Successors and Assigns. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the financing herein contemplated and shall continue in full force and effect so long as the obligations hereunder are outstanding. Whenever in this Subordinate Loan Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower which are contained in this Subordinate Loan Agreement shall bind its successors and assigns and inure to the benefit of the successors and assigns of the Issuer and the Subordinate Trustee. Section 8.3 Governing Law. This Subordinate Loan Agreement and the Exhibits attached hereto shall be construed in accordance with and governed by the laws of the State and, where applicable, the laws of the United States of America. Section 8.4 Modifications in Writing. Modification or the waiver of any provisions of this Subordinate Loan Agreement or consent to any departure by the parties therefrom, shall in no event be effective unless the same shall be in writing approved by the parties hereto and then s uch waiver or consent shall be effective only in the specific instance and for the purpose for which given and so long as the interests of any Subordinate Bondholders are not adversely affected and the Subordinate Trustee consents in writing thereto. No notice to or demand on the Borrower in any case shall entitle it to any other or further notice or demand in the same circumstances. 2021/10/12 City Council Post Agenda Page 400 of 620 20 4813-6726-9111/024036-0092 Section 8.5 Further Assurances and Corrective Instruments. The Issuer, the Subordinate Trustee and the Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the performance of this Subordinate Loan Agreement. Section 8.6 Captions. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Subordinate Loan Agreement. Section 8.7 Severability. The invalidity or unenforceability of any provision of this Subordinate Loan Agreement shall not affect the validity of any other provision, and all other provisions shall remain in full force and effect. Section 8.8 Counterparts. This Subordinate Loan Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Section 8.9 Amounts Remaining in Subordinate Bond Fund or Other Funds. It is agreed by the parties hereto that any amounts remaining in the Subordinate Bon d Fund or other funds and accounts established under the Subordinate Indenture upon expiration or sooner termination of the term hereof, shall be paid in accordance with the Subordinate Indenture. Section 8.10 Effective Date and Term. This Subordinate Loan Agreement shall become effective upon its execution and delivery by the parties hereto, shall be effective and remain in full force from the date hereof, and, subject to the provisions hereof, shall expire on such date as the Subordinate Indenture shall terminate. Section 8.11 Cross References. Any reference in this Subordinate Loan Agreement to an “Exhibit,” an “Article,” a “Section,” a “Subsection” or a “Paragraph” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit attached to th is Subordinate Loan Agreement, an article of this Subordinate Loan Agreement, a section of this Subordinate Loan Agreement, a subsection of the section of this Subordinate Loan Agreement in which the reference appears and a paragraph of the subsection within this Subordinate Loan Agreement in which the reference appears. All exhibits attached to or referred to in this Subordinate Loan Agreement are incorporated by reference into this Subordinate Loan Agreement. Section 8.12 Waiver of Personal Liability. No member, officer, agent or employee of the Issuer or any director, officer, agent or employee of the Borrower shall be individually or personally liable for the payment of any principal (or redemption price) or interest on the Subordinate Bonds or any other sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Subordinate Loan Agreement; but nothing herein contained shall relieve any such member, director, officer, agent or employee from the performance of any official duty provided by law or by this Subordinate Loan Agreement. Section 8.13 No Liability of Issuer. The Issuer shall not be obligated to pay the principal (or redemption price) of or interest on the Subordinate Bonds, except from Revenues and other money and assets received by the Subordinate Trustee on behalf of the Issuer pursuant to this Subordinate Loan Agreement. Neither the faith and credit nor the taxing power of the State or any 2021/10/12 City Council Post Agenda Page 401 of 620 21 4813-6726-9111/024036-0092 political subdivision thereof, nor the faith and credit of the Issuer or any member is pledged to the payment of the principal (or redemption price) or interest on the Subordinate Bonds. The Issuer shall not be liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Subordinate Loan Agreement, the Subordinate Bonds or the Subordinate Indenture, except only to the extent amounts are received for the payment thereof from the Borrower under this Subordinate Loan Agreement. The Borrower hereby acknowledges that the Issuer’s sole source of money to repay the Subordinate Bonds will be provided by the payments made by the Borrower pursuant to this Subordinate Loan Agreement, together with investment income on certain fund s and accounts held by the Subordinate Trustee under the Subordinate Indenture, and hereby agrees that if the payments to be made hereunder shall ever prove insufficient to pay all principal (or redemption price) and interest on the Subordinate Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice from the Subordinate Trustee, the Borrower shall pay such amounts as are required from time to time to prevent any deficiency or default in the payment o f such principal (or redemption price) or interest, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Subordinate Trustee, the Borrower, the Issuer or any third party, subject to any righ t of reimbursement from the Subordinate Trustee, the Issuer or any such third party, as the case may be, therefor. Section 8.14 No Liability of Officers. No recourse under or upon any obligation, covenant, or agreement or in any Subordinate Bonds, or under any judgmen t obtained against the Issuer, or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution or statute or otherwise or under any circumstances, shall be had against any incorporator, member, director, commissioner, employee, agent or officer, as such, past, present, or future, of the Issuer, either directly or through the Issuer, or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Owner of any Subordinate Bonds, of any sum that may be due and unpaid by the Issuer upon any of the Subordinate Bonds. Any and all personal liability of every nature, whether at common law or in equity, or by statute or by constitution or otherwise, of any such incorporator, member, director, commissioner, employee, agent or officer, as such, to respond by reason of any act or omission on his or her part or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Owner of any Subordinate Bonds, of any sum that may remain due and unpaid upon the Subordinate Bonds or any of them, is hereby expressly waived and released as a condition of and consideration for the execution of this Subordinate Loan Agreement and the issuance of the Subordinate Bonds. Section 8.15 Capacity of the Subordinate Trustee. The Subordinate Trustee is entering into this Subordinate Loan Agreement solely in its capacity as Subordinate Trustee and shall be entitled to the rights, protections, limitations from liability and immunities afforded it as Subordi nate Trustee under the Subordinate Indenture. The Subordinate Trustee shall be responsible only for the duties of the Subordinate Trustee expressly set forth herein and in the Subordinate Indenture. Section 8.16 Reliance. The representations, covenants, agreements and warranties set forth in this Subordinate Loan Agreement may be relied upon by the Issuer and the Subordinate Trustee. In performing their duties and obligations under this Subordinate Loan Agreement and under the Subordinate Indenture, the Issuer and the Subordinate Trustee may rely upon statements and certificates of the Borrower, upon certificates of tenants believed to be genuine and to have been executed by the proper person or persons, and upon audits of the books and records of the Borrower pertaining to occupancy of the Project. In addition, the Issuer and the Subordinate Trustee may 2021/10/12 City Council Post Agenda Page 402 of 620 22 4813-6726-9111/024036-0092 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 Subordinate Trustee under this Subordinate Loan Agreement and under the Subordinate Indenture in good faith and in conformity with the opinion of such counsel. It is expressly understood and agreed by the parties to this Subordinate Loan Agreement (other than the Issuer) that: (a) the Issuer may rely conclusively on the truth and accuracy of any certificate, opinion, notice or other instrument furnished to the Issuer by the Subordinate Trustee, any Subordinate Bondholder or the Borrower as to the existence of a fact or state of affairs required under this Subordinate Loan Agreement to be noticed by the Issuer; (b) the Issuer shall not be under any obligation to perform any record keeping or to provide any legal service, it being understood that such services shall be performed or caused to be performed by the Subordinate Trustee or the Borrower, as applicable; and (c) none of the provisions of this Subordinate Loan Agreement shall require the Issuer or the Subordinate Trustee to expend or risk its own funds (apart from the proceeds of Subordinate Bonds issued under the Subordinate Indenture) or otherwise endure financial liability in the performance of any of its duties or in the exercise of any of its rights under this Subordinate Loan Agreement, unless it shall first have been adequately indemnified to its satisfaction against the costs, expenses and liabilities which may be incurred by taking any such action. [Signature Pages Follow] 2021/10/12 City Council Post Agenda Page 403 of 620 [Signature page – Subordinate Loan Agreement – Columba Apartments] 4813-6726-9111/024036-0092 IN WITNESS WHEREOF, the parties hereto have executed this Subordinate Loan Agreement, all as of the date first set forth above. CHULA VISTA HOUSING AUTHORITY By: Executive Director ATTEST: Secretary U.S. BANK NATIONAL ASSOCIATION, as Subordinate Trustee By: Authorized Officer MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Robert W. Laing, President/Executive Director By: CIC Millenia II, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 404 of 620 A-1 4813-6726-9111/024036-0092 EXHIBIT A FORM OF SUBORDINATE PROMISSORY NOTE $_________________ CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE 2021 SERIES A-3 SUBORDINATE PROMISSORY NOTE US $2,400,000 ____________, 2021 FOR VALUE RECEIVED, MILLENIA II CIC, LP, a California limited partnership organized and existing under the laws of the State of California (together with its permitted successors and assigns, “Maker”), promises to pay to the CHULA VISTA HOUSING AUTHORITY, a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California, or its successors or assigns (the “Issuer” or the “Holder” as the context requires), in legal tender of the United States, the Principal Sum of $2,400,000, on ___________, 20__, or earlier as provided herein and in the Subordinate Loan Agreement (hereinafter defined), together with interest thereon at the rates, at the times and in the amounts necessary to make payments on the Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments), Subordinate 2021 Series A-3 (the “Subordinate Bonds”), issued under that certain Subordinate Indenture of Trust, dated as of October 1, 2021 (the “Subordinate Indenture”), by and between the Issuer and U.S. Bank National Association, as trustee (the “Subordinate Trustee”), when such payments become due and payable on each Subordinate Bond Payment Date (as defined in the Subordinate Indenture). Maker shall pay to the Holder, on each Subordinate Bond Payment Date (as defined in the Subordinate Indenture) on which principal and interest on the Subordinate Bonds is payable, and solely from Revenues (as defined in the Subordinate Indenture, (i) interest on the Subordinate Bonds at the Subordinate Bond Rate (as defined in the Subordinate Indenture) then due and payable in accordance with the Subordinate Indenture, and (ii) if any Revenues remain after payment of such interest, then to amortizing payments of principal on the Subordinate Bonds, and (iii) if any Revenues remain after payment of such interest and amortizing payments or principal, then the balance of Revenues shall be applied to make a prepayment of the principal amount of the Subordinate Bond. Maker shall pay to the Holder on the Maturity Date an amount in immediately available funds sufficient to pay the principal amount of the Subordinate Bonds and all accrued but unpaid interest thereon. In the event that amounts held under the Subordinate Indenture and derived from Subordinate Bond proceeds, condemnation awards or insurance proceeds or investment earnings thereon are applied to the payment of principal due on the Subordinate Bonds in accordance with the Subordinate Indenture, the principal amount due hereunder shall be reduced to the extent of the principal amount of the Subordinate Bonds so paid. “Indebtedness” means the principal of, interest on, and any other amounts due at a ny time under, this Note, the Mortgage (as defined herein) or any other Subordinate Loan Document, 2021/10/12 City Council Post Agenda Page 405 of 620 A-2 4813-6726-9111/024036-0092 including late charges, default interest, and advances to protect the security of the Mortgage as described in Section 12 of the Mortgage. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Subordinate Indenture. All payments under this Note shall be applied first to the payment of interest due and the balance, if any, shall be applied to the payment of principal. This Note is secured by a Subordinate Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of October 1, 2021 (as the same may be modified, amended or supplemented from time to time, the “Mortgage”) made by Maker to a trustee for the benefit of the Subordinate Trustee covering property, with improvements thereon, as more fully described therein (the “Mortgaged Property”) and certain other security as more fully set forth in the Subordinate Loan Agreement. 1. This Note is subject to the express condition that at no time shall interest be payable on this Note or under the Mortgage or the Subordinate Loan Agreement at a rate in excess of the maximum permitted by law; and Maker shall not be obligated or required to pay, nor shall the Holder be permitted to charge or collect, interest at a rate in excess of such maximum rate. If by the terms of this Note or of the Mortgage or Subordinate Loan Agreement, Maker is required to pay interest at a rate in excess of such maximum rate, the rate of interest hereunder or thereunder shall be deemed to be reduced immediately and automatically to such maximum rate, and any such excess payment previously made shall be immediately and automatically applied to the unpaid balance of the principal sum hereof and not to the payment of interest. 2. Amounts payable hereunder representing late payments, penalty payments or the like shall be payable to the extent allowed by law. 3. This Note is subject to all of the terms, conditions, and provis ions of the Subordinate Loan Agreement, including those respecting prepayment and the acceleration of maturity and the provisions of Section 4.4 thereof, and is further subject to all of the terms, conditions and provisions of the Subordinate Indenture. The outstanding principal hereof is subject to acceleration at the same time or times and under the same terms and conditions, and with the same notice, if any, as provided under the Subordinate Indenture for the acceleration of payment of the Subordinate Bonds. 4. If there is an Event of Default, then in any such event and subject to the provisions and requirements of the Subordinate Loan Agreement and the Subordinate Indenture, the Holder may declare the entire unpaid principal balance of this Note and acc rued interest, if any, due and payable at once. All of the covenants, conditions and agreements contained in the Subordinate Loan Agreement, the Regulatory Agreement, the Mortgage and all other security instrument and related documents, instruments and assignments evidencing or securing the Borrower’s obligations to the Issuer or to the Subordinate Trustee relating to the Project and all other documents and instruments delivered simultaneously herewith, as the same may be supplemented and amended from time to time (the “Loan Documents”) are hereby made part of this Note. 5. No delay or omission on the part of the Holder in exercising any remedy, right or option under this Note or the Loan Documents shall operate as a waiver of such remedy, right or option. In any event a waiver on any one occasion shall not be construed as a waiver or bar to any 2021/10/12 City Council Post Agenda Page 406 of 620 A-3 4813-6726-9111/024036-0092 such remedy, right or option on a future occasion. The rights, remedies and options of the Holder under this Note and the Loan Documents are and shall be cumulative and are in addition to all of the rights, remedies and options of the Holder at law or in equity or under any other agreement. 6. Maker shall pay all costs of collection on demand by the Holder, including without limitation, reasonable attorneys’ fees and disbursements, which costs may be added to the Indebtedness hereunder, together with interest thereon at the Default Rate to the extent allowed by law. 7. No amendments or other changes of any nature may be made to this Note except in writing and subject in all events to the provisions of the Subordinate Indenture and the Subordinate Loan Agreement. Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived. The acceptance by the Holder of any amount after the same is d ue shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due hereunder. The acceptance by the Holder of any sum in an amount less than the amount then due shall be deemed an acceptance on account only and upo n condition that such acceptance shall not constitute a waiver of the obligation of Maker to pay the entire sum then due, and Maker’s failure to pay such amount then due shall be and continue to be a default notwithstanding such acceptance of such amount on account, as aforesaid. Consent by the Holder to any action of Maker which is subject to consent or approval of the Holder hereunder shall not be deemed a waiver of the right to require such consent or approval to future or successive actions. 8. (a) Neither Borrower nor any of its partners, members and/or managers shall have any personal liability under this Note, the Mortgage or any other Loan Document for the repayment of the Indebtedness or for the performance of any other obligations of Borrower unde r the Loan Documents, and Holder’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be Holder’s exercise of its rights and remedies with respect to the Mortgaged Property and any other collateral held by Holder as security for the Indebtedness. This limitation on Borrower’s liability shall not limit or impair Holder’s enforcement of its rights against any guarantor of the Indebtedness or any guarantor of any obligations of Borrower. (b) Borrower shall be personally liable to Holder for the repayment of a portion of the Indebtedness equal to any loss or damage suffered by Holder (the “Losses”) as a result of (1) fraud or material misrepresentation by Borrower or Guarantor or any general partner, managing member, manager, officer, director, partner, member, agent or employee of Borrower or Guarantor in connection with the application for or creation of the Indebtedness or any request for any action or consent by or on behalf of Holder; or (5) failure to apply Rents, first, to the payment of reasonable operating expenses (other than property management fees that are not currently payable or any other Loan Document) and then to amounts (“Debt Service Amounts”) payable under this Note, the Mortgage or any other Loan Document (except that Borrower will not be personally liable (i) to the extent that Borrower lacks the legal right to direct the disbursement of such sums because of a bankruptcy, receivership or similar judicial proceeding, or (ii) with respect to Ren ts that are distributed on account of any calendar year if Borrower has paid all operating expenses and Debt Service Amounts for that calendar year); (c) Holder may exercise its rights against Borrower personally without regard to whether Holder has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any guarantor, or pursued any other rights available to Holder under this Note, the Mortgage, any other Loan Document or applicable law. For purposes of thi s Section 9, the 2021/10/12 City Council Post Agenda Page 407 of 620 A-4 4813-6726-9111/024036-0092 term “Mortgaged Property” shall not include any funds that (1) have been applied by Borrower as required or permitted by the Mortgage prior to the occurrence of an Event of Default or (2) Borrower was unable to apply as required or permitted by the Mortgage because of a bankruptcy, receivership, or similar judicial proceeding. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability. (d) Nothing herein or in the other Loan Documents shall be deemed to be a waiver of any right which the Holder or the Servicer may have under Sections 506(a), 506(b), 1111(b) or any other provision of the United States Bankruptcy Code, as such sections may be amended, or corresponding or superseding sections of the Bankruptcy Amendments and Federal Judgeship Act of 1984, to file a claim for the full amount due to the Holder and the Service r hereunder and under the other Loan Documents or to require that all collateral shall continue to secure the amounts due hereunder and under the other Loan Documents. 9. In addition, the Indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of all amounts then due and payable (including, but not limited to, all amounts due and payable by virtue of any default or acceleration or upon maturity) with respect to the Indebtedness evidenced by the Note (as defined by that certain Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing by the Borrower for the benefit of the Issuer (the “Senior Deed of Trust”) and assigned to Citibank, N.A., as Senior Funding Lender (the “Senior Funding Lender”), in the original aggregate maximum principal amount of $____________, executed by Borrower and payable to the Issuer and assigned to the Senior Funding Lender to the extent and in the manner provided in that certain Subordination Agre ement, dated as of October 1, 2021, by and among the Subordinate Trustee, the Funding Lender, the Senior Fiscal Agent and the Borrower (the “Subordination Agreement”). The rights and remedies of the Holder and each subsequent holder of this Note shall be deemed, by virtue of such holder’s acquisition of this Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by the “Subordinate Lender” under the Subordination Agreement. 10. Standstill. Notwithstanding anything to the contrary contained herein, Holder shall not accelerate this Note or exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto any time prior to the expiration of the 15-year tax credit compliance period for the Project (the “Compliance Period”) determined pursuant to Section 42(i)(1) of the Internal Revenue Code of 1986, as amended. 2021/10/12 City Council Post Agenda Page 408 of 620 A-5 4813-6726-9111/024036-0092 Maker agrees that this Note shall be construed in accordance with and governed by the laws of the State of California. MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Robert W. Laing, President/Executive Director By: CIC Millenia II, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 409 of 620 A-6 4813-6726-9111/024036-0092 ASSIGNMENT Pay to the order of U.S. Bank National Association, without recourse or warranty, as Subordinate Trustee under the Subordinate Indenture referred to in the attached Note. CHULA VISTA HOUSING AUTHORITY By: Authorized Signatory 2021/10/12 City Council Post Agenda Page 410 of 620 Stradling Yocca Carlson & Rauth Draft dated October 3, 2021 4825-6756-1207/024036-0092 SUBORDINATE BOND PURCHASE AGREEMENT by and among CHULA VISTA HOUSING AUTHORITY, MILLENIA II CIC, LP, and CIC OPPORTUNITIES FUND III LLC Dated October 1, 2021 Relating to: $2,400,000 CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS) SUBORDINATE 2021 SERIES A-3 2021/10/12 City Council Post Agenda Page 411 of 620 TABLE OF CONTENTS Page i 4825-6756-1207/024036-0092 Section 1. Definitions ..................................................................................................................... 1 Section 2. Purchase and Sale ......................................................................................................... 1 Section 3. Closing .......................................................................................................................... 1 Section 4. Representations and Warranties of Issuer ..................................................................... 2 Section 5. Representations and Warranties of Borrower ............................................................... 3 Section 6. Covenants ...................................................................................................................... 4 Section 7. Conditions of Closing ................................................................................................... 5 Section 8. Actions and Events at the Closing ................................................................................ 7 Section 9. Termination of Agreement ............................................................................................ 7 Section 10. Fees and Expenses; Costs of Issuance .......................................................................... 8 Section 11. Indemnification by Borrower ........................................................................................ 8 Section 12. Miscellaneous ............................................................................................................. 10 EXHIBIT A Glossary of Terms ..................................................................................................... A-1 EXHIBIT B Terms of Bonds ......................................................................................................... B-1 EXHIBIT C Form of Supplemental Opinion of Bond Counsel .................................................... C-1 EXHIBIT D Points To Be Covered in Opinion of Counsel to the Issuer/Certificate of Issuer ..... D-1 EXHIBIT E Points To Be Covered in the Opinion of Trustee’s Counsel/Trustee’s Certificate ... F-1 2021/10/12 City Council Post Agenda Page 412 of 620 4825-6756-1207/024036-0092 SUBORDINATE BOND PURCHASE AGREEMENT CIC OPPORTUNITIES FUND III LLC, a California limited liability company, solely in its capacity as purchaser of the Bonds described herein (together with its designees, successors and assigns, the “Purchaser”), hereby offers to enter into the following agreement with the CHULA VISTA HOUSING AUTHORITY, a public body, corporate and politic organized and existing under the laws of the State of California (together with its successors and assigns, the “Issuer”), and MILLENIA II CIC, LP, a California limited partnership (together with its permitted successors and assigns, the “Borrower”). Upon your acceptance of this offer and your execution and delivery of this Subordinate Bond Purchase Agreement (this “Agreement”), this Agreement will be binding upon each of you and the Purchaser. This offer is made subject to your acceptance, evidenced by your execution and delivery of this Agreement to the Purchaser, at or prior to 12:00 P.M. Chula Vista, California time on October __, 2021 and will expire if not so accepted at or prior to such time (or such later time as the Purchaser may agree in writing). Section 1. Definitions. The capitalized terms used in this Agreement have the meanings assigned to them in the Glossary of Terms attached as Exhibit A hereto. Section 2. Purchase and Sale. 2.1 Subject to the terms and conditions set forth in this Agreement and the Exhibits attached hereto, the Purchaser hereby agrees to purchase, or to cause its designee to purchase, all (but not less than all) of the Bonds from the Issuer and the Issuer hereby agrees to sell to the Purchaser or to the Purchaser’s designee, when, as and if issued, all (but not less than all) of the Bonds identified in Item 1 in Exhibit B attached hereto for a total purchase price equal to the purchase price set forth as Item 2 on Exhibit B attached hereto. 2.2 The Bonds will (i) be issued in accordance with the Issuer’s enabling legislation and all applicable procedural and substantive requirements and the Indenture and (ii ) have the payment related terms (that is, the dated date, maturity date, interest rates, interest payment dates and redemption provisions) set forth in Item 3 of Exhibit B attached hereto. Section 3. Closing. The Closing will take place at the time and on the date set forth in Item 4 of Exhibit B attached hereto or at such other time or on such other date as may be mutually agreed upon by the parties hereto. At or prior to the Closing, the Issuer will direct the Trustee to deliver the Bonds to or upon the order of the Purchaser or its designee, in definitive form, duly executed and authenticated by the Trustee. If the Purchaser receives the Bonds in advance of the Closing, the Purchaser will hold the Bonds in escrow pending Closing. If Closing does not occur, the Purchaser will either return the Bonds to the Trustee or destroy the Bonds, as directed by the Trustee . Subject to the terms and conditions hereof, the Issuer will deliver or cause to be delivered at the Place of Closing as set forth in Item 4 of Exhibit B attached hereto, the other documents and instruments to be delivered pursuant to this Agreement (the “Closing Documents”) and the Purchaser will accept delivery of the Bonds and Closing Documents and pay the purchase price for the Bonds as set forth in Section 2.1 above by wire transfer, to the Trustee, in immediately available federal funds, for the account of the Issuer or as the Issuer directs. The Bonds will be made available to the Purchaser at least one business day before the Closing for purposes of inspection. The Bonds will be prepared and delivered as fully registered Bonds without coupons in the denominations set forth in the Indenture. 2021/10/12 City Council Post Agenda Page 413 of 620 2 4825-6756-1207/024036-0092 Section 4. Representations and Warranties of Issuer. 4.1 The Issuer hereby makes the following representations and warranties to the Purchaser and the Borrower, all of which will continue in effect subsequent to the purchase of the Bonds: (a) The Issuer is a public body corporate and politic, organized and existing under the laws of the State of California, has the power and authority to (i) enter into the Resolution and the Issuer Documents to which it is a party and the transactions contemplated thereby, (ii ) issue the Bonds in the manner contemplated by the Resolution, this Agreement and the Indenture, and (iii) otherwise consummate the transactions contemplated by the Issuer Documents, and (iii ) carry out its other obligations under this Bond Purchase Agreement and the Issuer Documents, and by proper action has duly authorized the Issuer’s execution and delivery of, and its performance under, the Issuer Documents to which it is a party. (b) The Issuer is not in default under or in violation of, and the execution and delivery of the Issuer Documents to which it is a party and its compliance with the terms and conditions thereof will not conflict or constitute a default under or a violation of, (i ) the Act, (ii) to its knowledge, any other existing laws, rules, regulations, judgments, decrees and orders applicable to it, or (iii) to its knowledge, the provisions of any agreements and i nstruments to which the Issuer is a party, a default under or violation of which would prevent it from entering into this Bond Purchase Agreement, financing the Project, executing and delivering the other Issuer Documents to which it is a party or consummating the transactions on its part contemplated thereby, and, to its knowledge, no event has occurred and is continuing under the provisions of any such agreement or instrument or otherwise that with the lapse of time or the giving of notice, or both, would constitute such a default or violation (it being understood, however, that the Issuer is making no representations as to the necessity of registering the Note pursuant to any securities laws or complying with any other requirements of securities laws). (c) No litigation, inquiry or investigation of any kind in or by any judicial or administrative court or agency is pending with respect to which the Issuer has been served with process or, to the knowledge of the Issuer, is threatened against the Issuer with res pect to (i) the organization and existence of the Issuer, (ii) its authority to execute or deliver the Issuer Documents to which it is a party, (iii) the validity or enforceability of any such Issuer Documents or the transactions contemplated thereby, (iv) the title of any officer of the Issuer who executed such Issuer Documents or (v) any authority or proceedings relating to the execution and delivery of such Issuer Documents on behalf of the Issuer, and no such authority or proceedings have been repealed, revoked, rescinded or amended but are in full force and effect. (d) The revenues and receipts to be derived from the Note and this Bond Purchase Agreement have not been pledged previously by the Issuer to secure any of its notes or bonds. (e) On the Closing Date, each of the representations and warranties of the Issuer contained herein and in the Issuer Documents and all other documents executed by the Issuer in connection with the Bonds shall be true, correct and complete. 4.2 Each of the representations and warranties set forth in this section will survive until ninety (90) days after the Closing Date. 2021/10/12 City Council Post Agenda Page 414 of 620 3 4825-6756-1207/024036-0092 4.3 Any certificate signed by any official of the Issuer and delivered to the Borrower or the Purchaser in connection with the delivery of the Bonds will be deemed to be a representation and warranty by the Issuer to the Borrower or the Purchaser, as appropriate, as to the statements made therein. Section 5. Representations and Warranties of Borrower. 5.1 The Borrower makes the following representations and warranties to the Issuer and the Purchaser as of the date hereof, all of which will continue in effect in accordance with Section 12.5 hereof: (a) The Borrower is, and at all times will be, a limited partnership, duly organized, validly existing and in good standing under the laws of the State and duly qualified, authorized and licensed under the laws of the State to transact business as a limited partnership for the purpose of owning and operating a multifamily housing facility in the State . All general partners of the Borrower (collectively, the “Partners”), are, and at all times will be organized, existing and in good standing under the laws of the State and are in good standing and duly qualified, authorized and licensed under the laws of the State, to the extent required by applicable l aw. There are no other general partners of the Borrower, other than the managing general partner and the administrative general partner. (b) The Borrower has, and on the Closing Date will have, full legal right, power and authority (i) to execute and deliver the Loan Documents and (ii) to consummate the transactions contemplated by this Agreement and the Loan Documents. The Partners have, and on the Closing Date will have, full legal right, power and authority to execute and deliver this Agreement and the other Loan Documents on behalf of the Borrower. (c) Prior to the acceptance hereof, the Borrower has duly authorized the execution and delivery of this Agreement and the performance by the Borrower of the obligations contained herein and prior to the Closing Date the Borrower will have duly authorized the (i) execution and delivery of the Loan Documents, (ii) performance by the Borrower of the obligations contained in the Loan Documents, and (iii) consummation by the Borrower of all transactions contemplated by the Loan Documents in connection with the issuance of the Bonds. (d) All consents, approvals, authorizations or orders of, notices to, or filings, registrations or declarations with, any court or governmental authority, board, agency, commission or body having jurisdiction which are required on behalf of the Borrower by the Closing Date or for the execution and delivery by the Borrower of this Agreement and the other Loan Documents or the consummation by the Borrower of the transactions contemplated hereby or the reby required by the Closing Date, have been obtained or will be obtained prior to the Closing Date. (e) The Borrower has not taken or omitted to take on or prior to the date hereof any action that would adversely affect the exclusion from gross income for fed eral income tax purposes of the interest on the Bonds. (f) There is no legal action, suit, proceeding, inquiry or investigation at law or in equity (before or by any court, agency, arbitrator, public board or body or other entity or person) pending or to the knowledge of the Borrower, threatened against or affecting the Borrower or the Partners, or, to the knowledge of the Borrower, any basis therefor (i) in any way affecting the 2021/10/12 City Council Post Agenda Page 415 of 620 4 4825-6756-1207/024036-0092 organization and existence of the Borrower, (ii) contesting or materially affecting the validity or enforceability of this Agreement or the other Loan Documents, (iii ) contesting the powers of the Borrower or its authority with respect to the Loan Documents, (iv) contesting the authority of the Partners to act on behalf of the Borrower, (v) wherein an unfavorable decision, ruling or finding would have a material adverse effect on (A) the operations or the financial position or condition of the Borrower, (B) the due performance by the Borrower of the Loan Documents as of the Closing Date, (C) the validity or enforceability of any of the Loan Documents, or (D ) the transactions contemplated hereby or by any Loan Document or (vi ) in any way contesting the exclusion from gross income for federal income tax purposes of the interest on the Bonds. (g) This Agreement is, and, when executed and delivered by the Borrower and the other parties thereto, the Loan Documents will be, the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity. (h) The execution and delivery by the Borrower of this Agreement and the Loan Documents and the consummation by the Borrower of the transactions contemplated hereby and thereby are not prohibited by, do not violate any provision of, and will not result in a breach of or default under (i) the partnership agreement of the Borrower, (ii) any applicable law, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental body or other requirement to which the Borrower is subject, or (iii) any contract, indenture, agreement, mortgage, lease, note, commitment or other obligation or instrument to which the Borrower is a party or by which the Borrower or its properties is bound. 5.2 Each of the representations and warranties set forth in this Section will survive until the Maturity Date or the redemption of the Bonds. 5.3 Any certificate signed by the Borrower or the Partners and delivered to the Purchaser and/or the Issuer shall be deemed a representation and warranty by the Borrower to the Purchaser and/or the Issuer as to the statements of the Borrower made therein. Section 6. Covenants. 6.1 The Issuer hereby makes the following covenants with the Purchaser: (a) Prior to the Closing, the Issuer will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of the Resolution or the Issuer Documents without prior written notice to the Purchaser. (b) Prior to the Closing, the Issuer will not create, assume or guarantee any indebtedness payable from, or pledge or otherwise encumber, the revenues, assets, properties, funds or interests which will be pledged pursuant to the Indenture and the other Issuer Documents. (c) The Issuer will cause the Bonds to be delivered to the address and at the time specified by the Purchaser in conjunction with the Closing. 2021/10/12 City Council Post Agenda Page 416 of 620 5 4825-6756-1207/024036-0092 (d) The Issuer will not take or omit to take any action which will in any way cause the proceeds of the Bonds to be applied in a manner other than as provided in the Indenture or which would cause the interest on the Bonds to be includable in the gross income o f the holders thereof for federal income tax purposes. (e) Prior to the Closing, the Issuer will obtain all governmental consents, approvals, orders or authorizations of any governmental authority or agency that would constitute a condition precedent to the performance by it of obligations under the Resolution, this Agreement, the other Issuer Documents and the Bonds. 6.2 The Borrower hereby makes the following covenants with the Issuer and the Purchaser: (a) The Borrower will not take or omit to take any action within its control, which will in any way cause the proceeds of the Bonds to be applied in a manner other than as provided in the Indenture or which would cause the interest on the Bonds to be includable in the gross income of the holders thereof for federal income tax purposes. (b) Prior to the Closing, the Borrower will obtain all governmental consents, approvals, orders or authorizations of any governmental authority or agency that would constitute a condition precedent to the performance by it of its obligations under the Loan Documents as of the Closing Date. After the Closing, the Borrower will use its best efforts to obtain all governmental consents, approvals, orders or authorizations of any governmental authority or agency that would constitute a condition precedent to the performance by it of its obligations under the Loan Documents. (c) The Borrower shall not be in default under any of the Loan Documents, subject to any notice and cure provisions provided therein. Section 7. Conditions of Closing. 7.1 The Purchaser has entered into this Agreement in reliance upon representations, covenants and agreements of the Issuer and the Borrower contained herein, in reliance upon the representations, covenants and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer and the Borrower of their obligations hereunder, both as of the date hereof and as of the Closing Date . Accordingly, the Purchaser’s obligations under this Agreement to purchase, to accept delivery of and to pay for the Bonds will be subject to the performance by the Issuer and the Borrower of their respective obligations to be performed by them hereunder at or prior to the Closing, and to the accuracy in all material respects of the representations, covenants and agreements of the Issuer and of the Borrower contained herein as of the date hereof and as of the Closing as if made on the Closing Date, and will also be subject to the following additional conditions: (a) The Purchaser shall not have discovered any material error, misstatement or omission in the representations and warranties made by either of the Issuer or the Borrower in this Agreement, which representations and warranties will be deemed to have been made again at and as of the time of the Closing and will then be true in all material respects. 2021/10/12 City Council Post Agenda Page 417 of 620 6 4825-6756-1207/024036-0092 (b) This Agreement, the other Issuer Documents and the Loan Documents each shall have been executed and delivered by each of the parties thereto, shall be in full force and effect on and as of the Closing Date and shall be in form and substance satisfactory to the Purchaser and no event of default shall exist under any such documents, and the Issuer and the Borrower shall have complied with the terms of the Issuer Documents and Loan Documents, respe ctively. 7.2 In addition to the conditions set forth in Section 7.1, the obligations of the Purchaser to consummate at the Closing the transactions contemplated hereby are subject to receipt by the Purchaser of the following items: (a) An opinion of Bond Counsel, dated the Closing Date and addressed to the Purchaser, substantially in the form set forth in Exhibit C; (b) An opinion of counsel (addressed to the Purchaser and the Trustee) or certificate of the Issuer, satisfactory in form and substance to the Purchaser, d ated the Closing Date and covering the points identified in Exhibit D; (c) An opinion or opinions of counsel to the Borrower and the Partners, addressed to the Issuer and the Purchaser dated the Closing Date in form and substance reasonably acceptable to Issuer; (d) A certificate of the Borrower, dated the Closing Date and signed by the Partners, in form and substance satisfactory to the Purchaser and Bond Counsel, respecting certain tax matters as may be reasonably required by Bond Counsel to enable it to give its opinion; (e) An investor letter in form and substance reasonably acceptable to Issuer; (f) An opinion of counsel to the Trustee or Trustee’s certificate addressed to the Purchaser, covering the points identified in Exhibit E; (g) A properly completed and executed IRS Form 8038; (h) A certified copy of the Resolution and an executed original of each of the Issuer Documents and the Loan Documents; and (i) Such additional financing statements, legal opinions, certificates and other documents as the Purchaser or Bond Counsel may reasonably deem necessary to evidence the truth and accuracy as of the Closing Date of the respective representations and warranties herein contained and to evidence compliance by the Issuer and the Borrower with this Agreement and all applicable legal requirements, and the due performance and satisfaction by either of you at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by you. 7.3 If any of the conditions set forth in Sections 7.1 or 7.2 have not been met on the Closing Date, the Purchaser may, at its sole option, terminate this Agreement or proceed to Closing upon waiving any rights under this Agreement with respect to any such condition . If this Agreement is terminated pursuant to this Section, no party will have any rights or obligations to any other party, except as provided in Section 10. 2021/10/12 City Council Post Agenda Page 418 of 620 7 4825-6756-1207/024036-0092 Section 8. Actions and Events at the Closing. The following events will take place at the Closing: (a) The Issuer will deliver the Bonds to the Purchaser or its designee, at the p lace set forth in Item 4 in Exhibit B. The Bonds so delivered will be in the form required by the Indenture, duly executed on behalf of the Issuer and authenticated by the Trustee, and will be fully registered in the names requested by the Purchaser or it s designee. (b) The Borrower will deliver or cause to be delivered to the Purchaser at the place set forth in Item 4 in Exhibit B, or at such other place or places as the parties hereto may mutually agree upon, the materials described in Section 7.2. (c) The Purchaser will be deemed to have delivered to the Trustee, for the account of the Issuer or as Issuer directs, an amount equal to the purchase price of the Bonds as set forth in Item 2 of Exhibit B by wire transfer to the Trustee, in immediately available federal funds. Section 9. Termination of Agreement. The Purchaser may terminate this Agreement, without liability therefor, by notifying you at any time prior to the Closing if: (a) Any legislation is introduced in, or enacted by, the United States Congress, or shall have been reported out of committee or be pending in committee, or any decision is rendered by any court of competent jurisdiction, or any ruling or regulation, temporary regulation, release or announcement shall have been issued or proposed by the Treasury Depar tment of the United States, the Internal Revenue Service, or any other agency of the government of the United States that, in the reasonable judgment of the Purchaser, has the purpose or effect of subjecting interest on the Bonds to inclusion in gross income for purposes of federal income taxation; or (b) Any legislation is introduced in, or enacted by the United States Congress or any action is taken by, or on behalf of, the Securities and Exchange Commission, that, in the opinion of counsel to the Purchaser has the effect of requiring (i) the contemplated purchase of the Bonds, or the Indenture or the Loan Agreement to be registered under the 1933 Act or the Indenture to be qualified under the 1939 Act, or (ii) any governmental consents, approvals, orders or authorizations for the consummation of the transactions contemplated by this Agreement, the Issuer Documents or the Loan Documents which cannot, without undue expense, be obtained prior to the Closing Date. (c) In the judgment of the Purchaser there is a material adverse effect upon the market for the Bonds or to enforce commitments for the purchase of Bonds because (A ) additional material restrictions not in force as of the date hereof shall have been imposed upon the purchase or sale in securities generally by any governmental authority or by any national securities exchange; (B) a general banking moratorium shall have been established by federal, or California authorities; or (C) any outbreak or material escalation of hostilities, or a war involving the Unite d States of America shall have been declared, or any other national or international calamity shall have occurred, or any conflict involving the armed forces of the United States of America shall have escalated to such a magnitude as to materially affect the ability of the Purchaser to purchase or sell the Bonds, or in the reasonable opinion of the Purchaser, impractical to enforce commitments for the purchase of the Bonds; or 2021/10/12 City Council Post Agenda Page 419 of 620 8 4825-6756-1207/024036-0092 (d) Any litigation shall be instituted, pending or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way contesting any authority or security for or the validity of the Bonds, or the existence or powers of the Issuer; or (e) Legislation shall have been introduced in or enacted by the legislature of the State that would, in the reasonable judgment of the Purchaser, materially adversely affect the security for the Bonds; or (f) There shall have occurred any change that, in the reasonable judgment of the Purchaser, makes unreasonable or unreliable any of the assumptions upon which (i) yield on the Bonds for purposes of compliance with the Code, (ii) payment of debt service on the Bonds, or (iii) the basis for the exclusion from gross income for federal or state income tax purposes of interest on the Bonds, is predicated; or (g) The Issuer shall fail to execute and deliver or to obtain one or more filings, consents, approvals, authorizations, registrations or other action requested by the Purchaser to be obtained or taken by the Issuer and such failure is based upon the Issuer ’s conclusion that such action is unduly burdensome and the Purchaser shall reasonably conclude that, as a result of the Issuer ’s failure to so execute and deliver or to obtain what has been requested by the Purchaser, there will be a material adverse effect upon the market for the Bonds or to enforce the commitments for the purchase of Bonds. Section 10. Fees and Expenses; Costs of Issuance. All reasonable costs, fees and expenses incident to the performance of the Issuer ’s, the Purchaser’s and Borrower’s obligations in connection with the issuance and purchase of the Bonds, including the reasonable expenses of counsel, shall be paid by the Borrower to the Trustee by wire transfer of immediately available funds on the Closing Date. Section 11. Indemnification by Borrower. (a) The Borrower agrees to pay, defend, protect, indemnify, save and hold harmless the Issuer, the Purchaser and each affiliate, member, officer, director, official, employee and agent of the Issuer and the Purchaser and each person, if any, who controls any o f the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (referred to herein as an “Indemnified Party” and collectively as the “Indemnified Parties”), against any and all liabilities, losses, damages, costs, expenses (including reasonable attorneys’ fees), causes of action (whether in contract, tort or otherwise), suits, claims, demands and judgments of any kind, character and nature (collectively referred to herein as the “Liabilities”) caused by or directly or indirectly arising from or in any way relating to the Bonds, the Project, the loan of the proceeds of the Bonds, the Loan Agreement, the Indenture, this Agreement or any document related to the Bonds, the Project, the loan of the proceeds of the Bonds (the “Transaction Documents”) or any transaction or agreement, written or oral, pertaining to the foregoing; provided, however, that the Borrower shall not be required to indemnify, save or hold harmless an Indemnified Party for losses caused by the gross negligence or the willful misconduct of the Indemnified Party. (b) The Borrower also agrees to pay, defend, protect, indemnify, save and hold harmless the Purchaser and each affiliate, member, officer, director, official, employee and agent of the Purchaser from and against the Liabilities directly or indirectly arising from or relating to (i) any 2021/10/12 City Council Post Agenda Page 420 of 620 9 4825-6756-1207/024036-0092 errors or omissions of any nature whatsoever contained in any legal proceedings or other official representation or inducement made by the Issuer pertaining to the Bonds and (ii) any fraud or misrepresentations or omissions contained in the proceedings of the Issuer pertaining to the financial condition of the Borrower. (c) The Indemnified Party shall, in the event of any claim, suit, action or proceeding against it with respect to which indemnity may be sought on account of any indemnity agreement by the Borrower contained herein, promptly give written notice thereof to the Borrower . When such notice is given, the Borrower shall be entitled to participate, at its own expense, in the defense of, or if it so elects, to assume the defense of, such claim, suit, action or proceeding, in which event such defense shall be conducted by counsel chosen by the Borrower, provided that each Indemnified Party shall have the right to review and approve or disapprove any compromi se or settlement which approval shall not be unreasonably withheld. If the Borrower shall elect not to assume such defense, it shall assume the payment of all expenses reasonably incurred and related thereto. Notwithstanding the above, each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the investigation and defense thereof, provided that the Borrower shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Party and the Borr ower and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Parties that are different from or additional to those available to the Borrower, (iii ) the Borrower shall not have employed counsel satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower shall authorize the Indemnified Party to employ separate counsel at the exp ense of the Borrower. Each and every Indemnified Party shall have the right to compromise, settle or conclude any claim, action or proceeding against it with the written consent of the Borrower, which consent shall not be unreasonably withheld. The foregoing notwithstanding, in the event that the Borrower shall assume such defense and any Indemnified Party or Parties shall be advised by independent legal counsel that counsel selected by the Borrower is not fully and adequately protecting such party or par ties and representing the interests of such party or parties and the Borrower has been given written notice thereof and a reasonable opportunity to cure or find other counsel acceptable to the Indemnified Parties, any such Indemnified Party or Parties shal l have the right to conduct its own defense against any such claim, suit, action or proceeding in addition to or in lieu of any defense conducted by the Borrower, and the Indemnifying Party shall indemnify and hold harmless such Indemnified Party or Parties against and from any and all suits, claims, damages, liabilities or reasonable expenses whatsoever, including reasonable fees and expenses of counsel selected by such Indemnified Party or Parties incurred by and arising out of or in connection with any such claim, suit, action or proceeding. (d) In order to provide for just and equitable contribution in circumstances in which the indemnity provided for in paragraph (a) or (b) of this Section 11 is for any reason held to be unavailable, the Borrower and the Indemnified Party shall contribute proportionately to the aggregate Liabilities to which the Borrower and the Indemnified Party may be subject, so that the Indemnified Party is responsible for that portion represented by the percentage that the fees paid by the Borrower to the Indemnified Party in connection with the issuance and administration of the Bonds bear to the aggregate offering price of the Bonds, with the Borrower responsible for the balance; provided, however, that in no case shall the Indemnified Party be responsible for any 2021/10/12 City Council Post Agenda Page 421 of 620 10 4825-6756-1207/024036-0092 amount in excess of the fees paid by the Borrower to the Indemnified Party in connection with the issuance and administration of the Bonds. (e) The Indemnified Parties, other than the Issuer and the Purchaser, shall be considered to be third party beneficiaries of this Agreement for purposes of this Section 11. The provisions of this Section 11 will be in addition to all liability which the Borrower may otherwise have and shall survive any termination of this Agreement, the offeri ng and sale of the Bonds and the payment or provisions for payment of the Bonds. No person guilty of fraudulent misrepresentation (within the meaning of Section 10(b) of the Securities Exchange Act of 1934) shall be entitled to contribution from any person who was not guilty of such misrepresentation. (f) The indemnification hereunder shall be in addition to, and shall not limit, any indemnity granted by the Borrower pursuant to the Loan Agreement or any other document. Section 12. Miscellaneous. 12.1 All notices, demands and formal actions hereunder will be writing and mailed, telecopied, electronically mailed or delivered to the following address or such other address as any of the parties shall specify: If to the Purchaser: CIC Opportunities Fund III LLC 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 If to the Issuer: Chula Vista Housing Authority 276 Fourth Avenue Chula Vista, California 91910 Attention: Executive Director Telephone: (619) 691-5263 If to the Borrower: Millenia II CIC, LP 6339 Paseo del Lago Carlsbad, CA 92011 Telephone: (760) 456-6000 Facsimile: (760) 456-6001 Attn: Project Manager c/o Chelsea Investment Corporation 6339 Paseo del Lago Carlsbad, CA 92011 Attn: Project Manager with a copy to: Cox, Castle & Nicholson LLP 50 California Street, Suite 3200 San Francisco, CA 94111 Attention: Ofer Elitzur, Esq. 2021/10/12 City Council Post Agenda Page 422 of 620 11 4825-6756-1207/024036-0092 with a copy to: RJ HOF 71-Millenia CIC L.L.C. c/o Raymond James Tax Credit Funds, Inc. 880 Carillon Parkway St. Petersburg, FL 33716 Attention: Steven J. Kropf, President and to: Bocarsly Emden Cowan Esmail & Arndt 633 W. 5th Street, 64th Floor Los Angeles, California 90071 Attention: Kyle Arndt 12.2 This Agreement will inure to the benefit of and be binding upon the parties hereto and their permitted successors and assigns and will not confer any rights upon any other person. 12.3 This Agreement may not be assigned by the Issuer or the Borrower without the prior written consent of the Purchaser. This Agreement may be assigned by the Purchaser upon written notice of such assignment from the Purchaser to the Issuer and the Borrower . The Purchaser may designate the entity in whose name the Bonds are to be registered at Closing by providing registration information to the Trustee and Bond Counsel on or prior to the Closing Date. 12.4 This Agreement may not be amended without the prior written consent of the Issuer, the Borrower and the Purchaser. 12.5 The representations, covenants and agreements of the Issuer and the Borrower will not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of (a) any investigations made by or on behalf of the Purchaser (or statements as to the results of such investigations) concerning such representations, covenants and agreements and (b) delivery of and payment for the Bonds. 12.6 This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument. 12.7 This Agreement will become effective and binding upon the respective parties hereto upon the execution and delivery hereof by the parties hereto and will be valid and enforceable as of the time of such execution and delivery. 12.8 If any provision of this Agreement is held or deemed to be or is, in fact, inoperative, invalid or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provision of any constitution, statu te, rule of public policy, or any other reason, such circumstances will not have the effect of rendering the provision in question inoperable or unenforceable in any other case or circumstance or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. 12.9 This Agreement will be governed by and construed in accordance with the laws of the State applicable to agreements to be performed wholly therein. 2021/10/12 City Council Post Agenda Page 423 of 620 12 4825-6756-1207/024036-0092 12.10 Except as provided in Section 11, the obligations of the Purchaser and Borrower hereunder shall be without recourse to any shareholder, partner, member, trustee, officer, employee, agent or manager of the Purchaser or Borrower and no shareholder, partner, member, trustee, officer, employee, agent or manager of the Purchaser or Borrower shall be personally liable for the payment of any obligation of the Purchaser or Borrower, as applicable, hereunder. In the event any legal actions or proceedings are brought in respect of such obligations, any judgment against the Purchaser or Borrower shall be enforced only against the assets of the Purchaser or Borrower, as applicable, and not against any property of any trustee or manager of the Purchaser or Borrower. 12.11 The Issuer and the Borrower each acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Agreement is an arm ’s-length commercial transaction among the Issuer, the Borrower, and the Purchaser, (ii) in connection therewith and with the discussions, undertaking and procedures leading up to the consummation of such transaction, the Purchaser is and has been acting solely as a principal and is not acting as the agent, advisor, or fiduciary of the Issuer or the Borrower, (iii) the Purchaser has not assumed an advisory or fiduciary responsibility in favor of the Issuer or the Borrower with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Purchaser has provided other services or is currently providing other services to the Issuer or the Borrower on other matters) and the Purchaser has no obligation to the Issuer or the Borrower with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement and (iv) the Issuer and the Borrower have consulted their own legal, financial and other advisors to the extent they deem appropriate. [Signature pages start on next page] 2021/10/12 City Council Post Agenda Page 424 of 620 S-1 4825-6756-1207/024036-0092 [Counterpart Signature Page to the Columba Apartments Subordinate Bond Purchase Agreement] If the foregoing accurately sets forth our mutual understanding concerning the subject matter hereof, kindly indicate your acceptance by executing this Agreement. CIC OPPORTUNITIES FUND III LLC, a California limited partnership By: ____________________________ Name: ____________________________ Title: ____________________________ [Signatures continue on next page] 2021/10/12 City Council Post Agenda Page 425 of 620 S-2 4825-6756-1207/024036-0092 [Counterpart Signature Page to the Columba Apartments Subordinate Bond Purchase Agreement] CHULA VISTA HOUSING AUTHORITY, as Issuer By: Executive Director [Signatures continue on next page] 2021/10/12 City Council Post Agenda Page 426 of 620 S-3 4825-6756-1207/024036-0092 [Counterpart Signature Page to the Columba Apartments Subordinate Bond Purchase Agreement] MILLENIA II CIC, LP, a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By:________________________________ Robert Laing President and Executive Director By: CIC Columba, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By:___________________________ Cheri Hoffman, President 2021/10/12 City Council Post Agenda Page 427 of 620 A-1 4825-6756-1207/024036-0092 EXHIBIT A GLOSSARY OF TERMS “1933 Act” means the Securities Act of 1933, as amended. “1934 Act” means the Securities Exchange Act of 1934, as amended. “1939 Act” means the Trust Indenture Act of 1939, as amended. “Act” means the provisions of Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code. “Agreement” means this Subordinate Bond Purchase Agreement, as amended from time to time. “Bond Counsel” means Stradling, Yocca Carlson & Rauth, a Professional Corporation. “Bonds” means the Issuer’s Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments) Subordinate 2021 Series A-3. “Borrower” means Millenia II CIC, LP, a California limited partnership. “Closing” means the proceeding on the Closing Date at which the Bonds are delivered to the Purchaser. “Closing Date” means October __, 2021, the date on which the Closing takes place. “Closing Documents” has the meaning ascribed to such term in Section 3 hereof. “Code” means the Internal Revenue Code of 1986, as amended, together with all corresponding and applicable final or temporary regulations and revenue rulings issued or promulgated thereunder. “Constitution” means the Constitution of the State. “Indenture” means that certain Subordinate Indenture of Trust dated as of October 1, 2021 between the Issuer and the Trustee. “Indemnified Parties” means the Issuer, the Purchaser and each affiliate, member, officer, director, official, employee and agent of the Issuer and the Purchaser and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended. “Investor Limited Partner” means RJ HOF 71-Millenia II CIC L.L.C., a Florida limited liability company, its successors or assigns. “Issuer” means the Chula Vista Housing Authority, a public body, corporate and politic, organized and existing under the laws of the State of California. 2021/10/12 City Council Post Agenda Page 428 of 620 A-2 4825-6756-1207/024036-0092 “Issuer Documents” means, collectively, the Subordinate Indenture, the Loan Agreement, this Agreement, and the Subordinate Deed of Trust dated as of October 1, 2021 executed by the Issuer and all other agreements, documents and certificates as may be required to be executed and delivered by the Issuer to carry out, give effect to, and consummate the transactions contemplated by this Agreement or by the other Issuer Documents. “Loan Agreement” means that certain Subordinate Loan Agreement dated as of October 1, 2021 among the Issuer, the Trustee and the Borrower. “Loan Documents” shall mean the Subordinate Loan Documents, as defined in the Indenture. “Note” means that certain Subordinate Multifamily Note from the Borrower relating to the Bonds and secured by the Subordinate Mortgage. “Partners” means all partners, members and other entities that comprise the Borrower and are included on the Borrower’s signature page to this Agreement. “Project” means, collectively, the land and residential rental apartment units, and related fixtures, equipment, furnishings and site improvements known as Columba Apartments, located in Chula Vista, California, including the real estate described in the Subordinate Mortgage. “Purchaser” means CIC Opportunities Fund III LLC, a California limited liability company, or its designee or nominee, together with their respective permitted successors and assigns hereunder. “Regulatory Agreement” means that certain Regulatory Agreement and Declaration of Restrictive Covenants by and among the Issuer, the Trustee and the Borrower. “Resolution” means the resolution or resolutions of the Issuer, authorizing, among other things, the execution and delivery by the Issuer of the Issuer Documents and the Bonds and the performance of its obligations thereunder. “State” means the State of California. “Subordinate Bond Payment Date” shall have the meaning ascribed to it in the Indenture. “Subordinate Mortgage” means that certain Subordinate Deed of Trust (Seller Loan), executed by the Borrower and granting a second lien on the Project for the benefit of the Trustee (by assignment from the Issuer), including any amendments and supplements thereto. “Trustee” means U.S. Bank National Association, or its successors or any other corporation or association resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at any time serving as successor trustee under the Indenture. 2021/10/12 City Council Post Agenda Page 429 of 620 B-1 4825-6756-1207/024036-0092 EXHIBIT B TERMS OF BONDS 1. Title of Bonds: $2,400,000 Chula Vista Housing Authority Multifamily Housing Revenue Bonds (Columba Apartments) Subordinate 2021 Series A-3 2. Purchase Price: 100% of Aggregate Original Principal Amount. 3. Payment Related Terms: (a) Date of the Bonds: October __, 2021 (b) Interest Payment Dates: Subordinate Bond Payment Date, as set forth in the Indenture (d) Aggregate Principal Amount: $2,400,000 purchased upon the Closing Date. (d) Maturity Dates: October __, 2021. (e) Interest Rates: 7.50% per annum. (f) Interest Payments: Interest only payments until the Subordinate Bond Conversion Date. Commencing the first business day after the Subordinate Bond Conversion Date (as such term is defined in the Indenture), principal and interest payments will be made twice per year. (g) Redemption Provisions: (i) Mandatory Redemption: as set forth in the Indenture. (ii) Optional Redemption: as set forth in the Indenture. 4. Logistics of Closing: (a) Time of Closing: 12:00 noon, California time. (b) Date of Closing: October __, 2021 (c) Place of Closing: Stradling Yocca Carlson & Rauth, Newport Beach, California. (d) Delivery of Bonds: as directed by Purchaser, subject to the provisions of Section 3 hereof. 2021/10/12 City Council Post Agenda Page 430 of 620 C-1 4825-6756-1207/024036-0092 EXHIBIT C FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL [Letterhead of Bond Counsel] ________________, 2021 CIC Opportunities Fund III LLC 6339 Paseo Del Lago Carlsbad, CA 92011 $____________________ CHULA VISTA HOUSING AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS (COLUMBA APARTMENTS), SUBORDINATE 2021 SERIES A-3 [After appropriate introductory language, the opinion shall state substantially as follows:] (1) The Subordinate Bond Purchase Agreement dated October 1, 2021 has been duly executed and delivered by, and constitutes the valid and binding agreement of, the Issuer. (2) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. 2021/10/12 City Council Post Agenda Page 431 of 620 D-1 4825-6756-1207/024036-0092 EXHIBIT D POINTS TO BE COVERED IN OPINION OF COUNSEL TO THE ISSUER/CERTIFICATE OF ISSUER [After appropriate introductory language, the opinion or certificate shall state substantially as follows:] (1) The Issuer is a public body, corporate and politic, organized an d existing under the laws of the State of California. (2) The Bond Resolution was duly adopted at a meeting of the governing board of the Issuer, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout. The Bond Resolution is in full force and effect and has not been amended, modified or superseded. (3) The Issuer Documents have been duly executed and delivered by the Issuer and (assuming due authorization, execution and delivery by and validity against the other parties thereto) are valid and binding agreements of the Issuer. (4) To the best of my knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agenc y, public board or body has been served upon the Issuer and is pending or is otherwise known to be threatened in any way affecting the existence of the Issuer, or the titles of the Issuer ’s officials to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the application of the proceeds thereof in accordance with the Indenture, or the collection or application of the Pledged Revenues (as defined in the Indenture) to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Issuer Documents or any action of the Issuer contemplated by any of said documents, or in any way contesting the powers of the Issuer or its authority with respect to the Issuer Documents or any action on the part of the Issuer contemplated by any of said documents, nor to my knowledge is there any basis therefor. 2021/10/12 City Council Post Agenda Page 432 of 620 E-1 4825-6756-1207/024036-0092 EXHIBIT E POINTS TO BE COVERED IN THE OPINION OF TRUSTEE’S COUNSEL/TRUSTEE’S CERTIFICATE [After appropriate introductory language, the opinion/certificate shall state substantiall y as follows:] (1) The Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America with trust powers. (2) The Trustee has all requisite corporate and trust power, authority and legal right and has taken all necessary corporate action to: (i) execute and deliver the Indenture and to accept the trusts created under the Indenture and to perform its obligations thereunder, (ii ) execute and deliver in its capacity as Trustee the Loan Agreement, the Continuing Disclosure Agreement, the Contingency Draw-Down Agreement, Issuer Assignment and the Regulatory Agreement, as such documents are defined in the Indenture, (such documents, collectively, with the Indenture, the, “Trustee Documents”) and perform the duties and obligations of the Trustee thereunder. (3) The Trustee has duly authorized, executed and delivered the Trustee Documents. Assuming the due authorization, execution and delivery thereof by the other parties thereto, the Trustee Documents are the legal, valid and binding agreements of the Trustee, enforceable in accordance with their terms against the Trustee. (4) No authorization, approval, consent, or other order of any governmental agency or regulatory authority having jurisdiction over the Trustee that has not been obtained is required for the authorization, execution and delivery by the Trustee of the Trustee Documents. (5) There is no litigation pending or, to our knowle dge, threatened against the Trustee to restrain the Trustee’s participation in, or in any way contesting or affecting the creation, organization or existence of the Trustee or the power of the Trustee with respect to the transactions contemplated by the Trustee Documents. (6) The execution and delivery of the Trustee Documents by the Trustee, and compliance with the provisions thereof will not contravene the Articles of Association or Bylaws of the Trustee or any law or regulation governing the banking and trust powers of the Trustee or, to our knowledge, any indenture, mortgage, deed of trust, resolution, note agreement or other agreement or instrument to which the Trustee is a party or by which the Trustee is bound. 2021/10/12 City Council Post Agenda Page 433 of 620 PUBLIC DISCLOSURES RELATING TO CONDUIT REVENUE OBLIGATIONS Pursuant to California Government Code Section 5852.1, the borrower (the “Borrower”) identified below has provided the following required information to the Chula Vista Housing Authority (the “Authority”) prior to the Authority’s regular meeting (the “Meeting”) of its Board (the “Board”) at which Meeting the Board will consider the authorization of conduit revenue obligations as identified below. 1.Name of Borrower: Millenia II CIC, L.P., a California limited partnership. 2.Board Meeting Date: October 12, 2021. 3.Name of Bond Issue / Conduit Revenue Obligations: Chula Vista Housing Authority Multifamily Housing Revenue Note (Columba Apartments) 2021 Series A-1 (the “A- 1 Note”) and 2021 Series A-2 (the “A-2 Note” and with the A-1 Note, the “Notes”) and Multifamily Housing Revenue Bonds, 2021 Subordinate Series A-3 (the “A-3 Bonds”). 4._X Private Placement Lender or Note Purchaser, __Underwriter or __Financial Advisor (mark one) engaged by the Borrower from which the Borrower obtained the following required good faith estimates relating to the Notes: (A) The true interest cost of the A-1 Note, the A-2 Note and the A-3 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the new issue of such Notes and Bonds (to the nearest ten-thousandth of one percent): 2.25% for the A-1 Note during construction (variable rate) and 3.78% at permanent; 2.75% for the A-2 Note (variable); and 7.5% for the A-3 Bonds. (Rates estimated as of 9/21/21; fixed interest rate on the A-1 Note to be set closer to C-1 Note closing, estimated on 10/25/21). (B) The finance charges of the Notes and A-3 Bonds, which mean the sum of all fees and charges paid to third parties: collectively, $2,537,504 ($1,103,504 paid upfront, $594,000 paid during the term of the Notes and the A-3 Bonds) and $84,000 paid from A-3 Bond maturity through the end of the 55 year compliance period in the Regulatory Agreement). (C) The amount of proceeds received by the public body for sale of the Notes and Bonds less the finance charges of such Notes and A-3 Bonds described in subparagraph (B) and any reserves or capitalized interest paid or funded with proceeds of such Notes and A-3 Bonds: $69,431,000 (all finance charges to be funded from a source other than the proceeds of the Notes and A-3 Bonds). (D) The total payment amount, which means the sum total of all payments the Borrower will make to pay debt service on the Notes and A-3 Bonds plus the finance charges of the Notes and A-3 Bonds described in subparagraph (B) not paid with the proceeds of the Notes and A-3 Bonds (which total payment amount shall be calculated to the final maturity of the Notes and A-3 Bonds): $97,301,502 (consisting of estimated principal and interest payments of $94,763,998 for the Notes and the A-3 Bonds and estimated finance charges identified in (B)). This document has been made available to the public at the Meeting of the Board Dated: September 22, 2021 Attachment 10 2021/10/12 City Council Post Agenda Page 434 of 620 Presented by: Jose Dorado, Senior Management Analyst 2021/10/12 City Council Post Agenda Page 435 of 620 Project Location 2021/10/12 City Council Post Agenda Page 436 of 620 Project Proposal •5-story stacked flat 200-unit complex •Amenities/Community Space •Computer lab/lounge •Tot Lot •Bocce ball area •Open lawn space •Unit Counts: •56-1 bedroom •86-2 bedrooms •58-3 bedrooms 2021/10/12 City Council Post Agenda Page 437 of 620 •Over 11,000 Units Developed, Acquired and Rehabilitation in California, Arizona, and New Mexico •30 years experience Project Developer 2021/10/12 City Council Post Agenda Page 438 of 620 Benefits of the Project 200 multi-family affordable rental units o 198 affordable units o 2 units for onsite management o affordable at 30% to 60% AMI Consistent with Housing Element and HUD approved Consolidated Plan and Objectives 2021/10/12 City Council Post Agenda Page 439 of 620 Tonight’s approval Final action-Housing Authority adopt the Resolution authorizing the execution and delivery of its Tax-Exempt Multi-family Revenue Notes and Bonds. 2021/10/12 City Council Post Agenda Page 440 of 620 2021/10/12 City Council Post Agenda Page 441 of 620 Proposed Rent Limits 2021/10/12 City Council Post Agenda Page 442 of 620 v . 0 03 P a g e | 1 October 12, 2021 ITEM TITLE Grant Award and Program Implementation: Accept Grants and Implement the Chula Vista Community Shuttle Pilot Project Report Number: 21-0074 Location: No specific geographic location Department: Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Sec tion 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt a resolution to: 1) accept grant funds in the amount of $997,833 and approve mobility project voucher agreement with the California Air Resources Board for the Community Shuttle Program; 2) accept grant funds in an amount not-to-exceed $1,000,000 and approve a grant agreement with Community Congregational Development Corporation for the Community Shuttle Program; 3) approve an agreement with Circuit Transit, Inc. to implement and provide services for the Community Shuttle Program; and 4) appropriate funds for these purposes (4/5 vote required). SUMMARY To support Chula Vista’s efforts of reducing greenhouse gas (GHG) emissions and meeting public transportation needs for all ages, the City of Chula Vista, in conjunction with Circuit Transit Inc., applied for the Clean Mobility Options (CMO) grant in October of 2020. The CMO program is a statewide initiative funded by California Climate Investments and administered by California Air Resource Board’s Program Administrator team to provide funding for zero-emission shared mobility options to under-resourced communities in California. In June 2021, the City was awarded a $997,833 grant through the CMO program to launch the Chula Vista (CV) Community Shuttle Pilot program (Community Shuttle Program) to provide clean transportation to seniors in northwest Chula Vista. In addition, the City received a Community 2021/10/12 City Council Post Agenda Page 443 of 620 P a g e | 2 Resources Contribution grant award not-to-exceed $1,000,000 as supplemental funding from Community Congregational Development Corporation (CCDC) to expand the original Community Shuttle Program service area and add an additional sedan to the Community Shuttle Program. This item accepts funds and approves grant agreements for both grants, approves an agreement with service provider, authorizes the City Manager to execute all agreements necessary to implement the Community Shuttle Program, and appropriates grant funds therefor. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. In addition, notwithstanding the foregoing, the Director of Development Servi ces has also determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION In September 2017, City Council adopted the 2017 Climate Action Plan (CAP) to help address the local threat of climate change by reducing GHG emissions. The CAP encourages the expansion of car‐sharing services in the City and includes strategies to incentivize clean transportation and vehicle charging with the goal to increase citywide alternative commute rates to 9% by 2035. The CAP also has goals for the City to review “last mile” transportation infrastructure (including technology‐based solutions) and propose needed programs or policies to City Council for consideration. The CAP further directs staff to explore opportunities to expand use of alternative fuels and high efficiency/alternative fuel vehicles (AFV) including electric, biodiesel, ethanol, hybrid, hydrogen, and compressed natural gas (CNG) based on appropriateness for vehicle task, fueling infrastructure, petroleum displacement, overall cost, and environmental benefit. To support the Chula Vista’s efforts of reducing GHG emissions while meeting public transportation needs, the Chula Vista and Circuit Transit Inc. applied for the CMO grant in October of 2020. The CMO program is a statewide initiative funded by California Climate Investments and administered by California Air Resource Board’s Program Administrator team to provide funding for zero-emission shared mobility options to under- resourced communities in California. In June 2021, the Chula Vista was awarded a $997,833 grant through the CMO program to launch the Community Shuttle Program to provide clean transportation to seniors in northwest Chula Vista. The goal of the Community Shuttle Program is to improve mobility options for the senior communities, provide connections to public transit and key community services, improve social determinants of health related to transportation accessibility, reduce greenhouse gas emissions, improve air quality, and reduce congestion. The Community Shuttle Program will operate as an on-demand service using a fleet of 5 dedicated all-electric vehicles funded by the CMO grant. Riders can request rides within a geo -fenced 2021/10/12 City Council Post Agenda Page 444 of 620 P a g e | 3 coverage zone through a mobile ride request app available on iOS and Android, by call in or text, by kiosks available at key destinations and public spaces. The City participated in various needs assessment efforts to identify transportation needs for seniors across Chula Vista which helped provide guidance for the Community Shuttle Program. In 2016, the adopted a Healthy Chula Vista Action Plan identifying strategy to promote overall wellness and address public health issues within the community. That same year the City was the 99th jurisdiction in the U.S. to join the Age- Friendly Communities network through the World Health Organization and AARP. Transportation was a key issue addressed in both plans, with a specific interest identified by the community to provide neighborhood- based shuttle services for both daily trips and for access to community events. The 2018 Chula Vista Age-Friendly Action Plan identified several goals related to senior transportation based on feedback received during the development of the plan with residents and stakeholders. These include d goals to increase ridesharing options for seniors in the community and provide shuttles for community events. In collaboration with the City, the San Diego Association of Governments (SANDAG) administered a survey in August - September 2020 to assess the needs of the community and gather information on a proposed Chula Vista Mobility HUB in northwest Chula Vista. The survey was provided in English and Spanish and was distributed by the City and community-based organizations. The 2020 SANDAG Mobility Survey is the most recent and comprehensive effort to reach seniors in the northwest area of Chula Vista in relation to transportation needs and was therefore used for the majority of the needs assessment towards this grant. CV Community Shuttle Pilot Program Launch: The Community Shuttle Program will provide all-electric on-demand door-to-door shuttle services catered to the needs of the local senior community in the northwest part of Chula Vista. The Community Shuttle Program has been designed with the community’s input and participation to provide safe, convenient, affordable, and accessible first/last mile connections. The goals of the program will be to improve mobility options for the senior community, provide connections to public transit and key community services, improve social determinants of health related to transportation accessibility, reduce greenhouse gas emissions, improve air quality, and reduce congestion. The Community Shuttle Program launch will be divided into several phases, allowing the project team to prepare, set up, start operation, learn and improve. This also allows Circuit to make sure that all employees are working to the highest levels possible, consistent with the company’s best practices. Circuit will incorporate regional resources and staff from its nearby operations to the extent possible to the new program to ensure a smooth launch and ongoing operations. The project team expects to launch shuttle service within 100-120 days of contract execution with CARB and operate the service for the remaining duration of the grant term. Launch date Timeline Fall 2021 Planning & Pre-launch: 100 - 120 days after execution of contract  Acquire vehicles and outfit with customizations for service, hiring & recruitment of staff, including drivers, development and launch the App, launching of Marketing & Outreach plan (Circuit will work with City and Community Partner to 2021/10/12 City Council Post Agenda Page 445 of 620 P a g e | 4 develop and execute a marketing and outreach plan to announce launch of new service to the community). Spring 2022 Project Kickoff & Launch. Year 1, Opening Day  Circuit will kick off the Year1 initial service (open only to seniors for free) on the designated launch date and execute its marketing plan announcing the launch of the new pilot, including any launch event or ribbon cutting with the City. Circuit will conduct ride alongs and on-job training with new staff to ensure effectiveness and efficiency of service. Spring 2022 Monitoring & Reporting and Adjusting - Initial Service - Year 1  Circuit will operate the service and maintain vehicles. During this time, Circuit will monitor key metrics and feedback, conduct rider surveys, implement ongoing marketing strategy, engage in ongoing community outreach, sell and execute advertising campaigns, communicate with and submit regular reports to the City team, and make any adjustments to the service as needed/requested*Only available for seniors for free Spring 2023 Service Expansion to General Public - Year 2  Planning for Service Expansion - Circuit will work with the City and Community Partner to plan for service extension to the general public, including rollout timeline. Circuit will collaborate with City and Community Partner/(s) to prepare and implement a marketing and outreach plan for announcing service expansion to existing and potential riders.  Available for general public for a fee, free for seniors 2023 - 2024 Monitoring, Reporting and Adjusting - Expanded Service - Years 2 - 3  Program Monitoring & monthly reporting - Circuit will study developing ridership trends to learn busiest ridership times, request hotspots, etc. Circuit will also conduct rider surveys to learn about rider preferences, needs, and report back to the City with data collected to refine service.  Available for general public for a fee, free for seniors Circuit will provide regular data reports to the City as the Community Shuttle Program launches. In addition, the shuttle service will be reviewed by the project team monthly, quarterly, and on an as needed basis. Hours, vehicles, and/or service territory will be reviewed and may be adjusted as needed according to service data and input from the community. Vehicles will be stored, maintained, and charged at a local facility. CV Community Shuttle Pilot Program Operation: The Community Shuttle Program will be administered by the City and operated by Circuit Transit Inc. (Circuit). Circuit will provide a turn-key service, including employing and training a team of local driver ambassadors, providing and maintaining electric vehicles for service, obtaining appropriate storage and charging facilities with assistance from the City, providing technology for the service, and insuring the service. Circuit will leverage its regional Southern California team and resources to quickly launch new services in Chula Vista. Circuit has 10 years of experience providing last mile transportation services. They 2021/10/12 City Council Post Agenda Page 446 of 620 P a g e | 5 have operated in California since 2013 and in San Diego since 2016. Circuit currently has a contract for neighborhood electric vehicle (NEV) services for Downtown San Diego with the City of San Diego. The Community Shuttle Program will operate as an on-demand service using a fleet of six (6) dedicated all- electric vehicles funded by CMO and CCDC. Riders can request rides within a geo-fenced coverage zone through a mobile ride request app available on iOS and Android, by call in or text, by kiosks available at key destinations and public spaces. Caregivers, senior living community staff, and others can also make requests on behalf of riders. The service will include an ADA accessible vehicle for riders requiring ADA assistance, which can be indicated in the ride request app, the kiosk, or when requesting by phone. For the first year of operation, service will launch as a free transportation service to seniors. The focus of the service territory will be on key destinations for this population, including healthcare, grocery, senior living facilities and senior centers, and other destinations as determined through community feedback. Over this period, the service will be adjusted and honed to the needs of this community. After the first year of operation, service will be opened to the general public for a low fare but remain free for seniors. This will help offset the costs of the service and provide for continuing support for the program. A contactless fare program will be implemented and will accept payment via credit card, debit card, or prepaid card. The service will operate at least 12 hours per day, 5 days a week. The service schedule will be aligned with the needs of the community and adjusted with feedback from the community and City and as data from the service comes in. The Community Shuttle Program service will be provided in the northwest portion of Chula Vista. The target population lives in (11) census tracts as defined by AB1550-designated low-income communities. This includes the following census tracts 6073012502, 6073012501, 6073012600, 6073012401, 6073012402, 6073012700, 6073013000, 6073012302, 6073012303, and 6073012304, which are identified by CalEnviroScreen as having 41,801 residents. The Community Shuttle Program is specifically targeting service for senior residents living in senior living and affordable housing communities at seven mobile home parks, which have a total of 750 spaces and two affordable housing complexes with 228 units and will provide service to additional senior housing facilities and those living in single family homes within the service area,. Service will be designed for these community members but will be open to the general public after the first year for a fare to provide ongoing sustainability, further reduce greenhouse gas emissions, and reduce congestion. Circuit, the City, and community partners, including San Ysidro Health, will work with the community to identify key hot spots within this geofenced zone. Riders will be able to request rides to/from anywhere within a specified geofenced coverage zone, which has been designed to focus on trips to/from healthcare, grocery, senior living facilities and centers, city and community service, retail, social and entertainment, public transportation stops/hubs, and other locations as identified by the community. 2021/10/12 City Council Post Agenda Page 447 of 620 P a g e | 6 The service will be operated as a single coverage area supported by funding from CMO and CCDC with a seamless experience for seniors and riders. Additional Grant Funding – Community Congregational Development Corporation (CCDC) On June 24, 2021, the City received a commitment for an additional up to $1,000,000 Community Resource Contribution (CRC) as supplemental funding from CCDC to expand the original project service area for the Community Shuttle Project and add an additional sedan to the service. The main conditions for the additional up to $1,000,000 pledge from CCDC was to (1) allow seniors to ride free so long as CCDC is funding the program; (2) allow program shuttles to operate seamlessly between the geographic areas funded by the CMO grant and the CCDC grant; and 3) service the greatest number of seniors possible within operating parameters. The City will work with CCDC to fully meet all conditions. 2021/10/12 City Council Post Agenda Page 448 of 620 P a g e | 7 DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT The Chula Vista (CV) Community Shuttle Pilot program is funded through CMO and CCDC grant funding for the first three (3) years, thus there is no new General Fund impact. ONGOING FISCAL IMPACT There are no ongoing fiscal impacts associated with the Chula Vista (CV) Community Shuttle Pilot program. The Chula Vista (CV) Community Shuttle Pilot program is funded through CMO and CCDC grant funding for the first three (3) years and a portion of revenues generated via fares/advertising through the first 3 years, in addition to other funding sources, will be applied to fund year four (4) operations. The service will not operate after year three (3) if funding is not identified and secured. To ensure continuation of the shuttle service, the City will work collaboratively with stakeholders to identify revenue generation opportunities through fares, advertising or other grant opportunities. The City will aid Circuit Transit Inc. with appropriate storage of vehicles and charging facilities. ATTACHMENTS 1. Service Area Map 2. CMO Application 3. CMO Agreement 4. CCDC Application 5. CCDC Agreement 6. Needs Assessment - 2020 SANDAG Mobility Survey 7. 2-Party Agreement with Circuit Transit, Inc. Staff Contact: Dennis Gakunga, Chief Sustainability Officer, Economic Development Department Stacey Kurz, Acting Housing Manager, Development Services Department 2021/10/12 City Council Post Agenda Page 449 of 620 RESOLUTION NO. ________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA: (A) ACCEPTING GRANT FUNDS IN THE AMOUNT OF $997,833 AND APPROVING A MOBILITY PROJECT VOUCHER AGREEMENT WITH THE CALIFORNIA AIR RESOURCES BOARD FOR THE COMMUNITY SHUTTLE PROGRAM; (B) ACCEPTING GRANT FUNDS IN AN AMOUNT NOT-TO-EXCEED $1,000,000 AND APPROVING A GRANT AGREEMENT WITH COMMUNITY CONGREGRATIONAL DEVELOPMENT CORPORATION FOR THE COMMUITY SHUTTLE PROGRAM; (C) APPROVING AN AGREEMENT WITH CIRCUIT TRANSIT INC. TO IMPLEMENT AND PROVIDE SERVICES FOR THE COMMUNITY SHUTTLE PROGRAM; AND (D) APPROPRIATING FUNDS THEREFOR WHEREAS, the Clean Mobility Options (CMO) Voucher Pilot Program is a statewide initiative by the California Air Resources Board (CARB) that provides voucher-based funding for zero-emission carsharing, carpooling/vanpooling, bike sharing/scooter-sharing, innovative transit services, and ride-on-demand services in California’s historically underserved communities; and WHEREAS, the CMO Voucher Pilot Program announced a notice of funding availability to solicit proposals from eligible jurisdictions, with an October 20, 2020 application opening; and WHEREAS, twenty-one California nonprofits, local governments, transit agencies, and Native American tribal governments in under-resourced communities were awarded up to $1 million each to develop and launch zero-emission mobility projects, such as bike-sharing and ride- on-demand services, aimed at overcoming transportation challenges faced by residents in their communities; and WHEREAS, the City, as lead applicant, with its collaborative partner, Circuit Transit Inc. submitted an application for the CV Community Shuttle Pilot program (Community Shuttle Program) to serve senior citizens in Northwest Chula Vista; and WHEREAS, the Community Shuttle Program would provide all-electric, on-demand shuttle services catered to the needs of the local senior community in the Northwest part of Chula Vista; and WHEREAS, the goals of the Community Shuttle Program are to improve mobility options for the senior communities, provide connections to public transit and key community services, improve social determinants of health related to transportation accessibility, reduce greenhouse gas emissions, improve air quality, and reduce congestion; and 2021/10/12 City Council Post Agenda Page 450 of 620 Resolution No. 2021- Page 2 WHEREAS, on June 25, 2021, CMO notified the City of its award of $997,833 over the five-year grant period to implement the Community Shuttle Program (CARB Grant); and WHEREAS, the City will comply with the requirements of the CMO program, will accept the CMO voucher funds, and will allocate the amount of $997,833, including any Community Resource Contributions, committed to the project in the CMO application and as amended by the Program Administrator and awardee; and WHEREAS, the Authorizing Board of the City of Chula Vista is eligible to receive funding through CMO, a statewide initiative funded by California Climate Investments, and administered by California Air Resource Board’s Program Administrator team to provide funding for zero- emission shared mobility options to under-resourced communities in California; and WHEREAS, on June 24, 2021, the City received a commitment for an additional up to $1,000,000 Community Resource Contribution (CRC) from Community Congregational Development Corporation (CCDC) to expand the original Community Shuttle Program service area and to add an additional sedan to the service (CCDC Grant); and WHEREAS, to secure the up to $997,833 in funding from the CARB Grant to implement the Community Shuttle Program, the City needs to enter into a Mobility Project Voucher Agreement with CARB or its program designee; and WHEREAS, to secure the additional up-to $1,000,000 Community Resource Contribution funding from the CCDC Grant to further implement the Community Shuttle Program, the City needs to enter into a grant agreement with CCDC; and WHEREAS, to implement and provide services for the Community Shuttle Program, the City needs to enter into a 2-Party Agreement with the proposed service provider, Circuit Transit Inc. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it: 1. Accepts grant funds in an amount up to $997,833 from the California Air Resources Board, Clean Mobility Options (CMO) program, in accordance with the Clean Mobility Options Voucher Pilot Program (CARB Grant), for the Community Shuttle Program. 2. Approves the Mobility Project Voucher Agreement, between the City and the California Air Resources Board or its program designee, in the form presented, with such minor modifications as may be required or approved by the City Attorney, authorizes the City Manager or designee to execute the same, and directs that a copy of the executed agreement be kept on file with the Office of the City Clerk. 3. Authorizes and directs the City Manager or designee to serve as the “Authorized Officer” and execute documents necessary to obtain the CARB Grant and to execute the approval 2021/10/12 City Council Post Agenda Page 451 of 620 Resolution No. 2021- Page 3 of CMO voucher funds, reiterate CMO program commitment, and compliance with CMO program requirements to the CMO Program Administrator Team. 4. Accepts the Community Resource Contribution grant funds in an amount up to $1,000,000 from Community Congregational Development Corporation (CCDC Grant) for the Community Shuttle Program. 5. Approves a Grant Agreement, between the City and the Community Congregational Development Corporation, in the form presented, with such minor modifications as may be required or approved by the City Attorney, authorizes the City Manager or designee to execute the same, and directs that a copy of the executed agreement be kept on file with the Office of the City Clerk. 6. Authorizes the City Manager or designee to take all necessary actions and execute all necessary documents to accept and obtain grant funds from the CARB Grant or CCDC Grant. 7. Approves a Contractor/Service Provider Services Agreement with Circuit Transit Inc. to Implement and Provide Services for the Community Shuttle Program, between the City and the Circuit Transit Inc., in the form presented, with such minor modifications as may be required or approved by the City Attorney, authorizes the City Manager or designee to execute the same, and directs that a copy of the executed agreement be kept on file with the Office of the City Clerk. 8. Appropriates current and future funds received from the CARB Grant and CCDC Grant for the Community Shuttle Program in a manner consistent with City standards and practices, as determined by the City Manager or designee. Presented by Approved as to form by Dennis Gakunga Glen R. Googins Chief Sustainability Officer City Attorney 2021/10/12 City Council Post Agenda Page 452 of 620 ¾ ¾ ¾ ¾¾ ¾ ¾ ¾ !( ·H ·H G G G G G G G G G G G G G !( !( !( !( !( !( G!( G!( G!( G!( ! ! ! ! ! ! ! ! ! ! !( !( !(!( !(!( !( !( !( !( !( !(!( !( !( !( !( !( ! ! "Á "Á "Á "Á FREDERICKA MANOR Scripps Mercy Hospital Sharp Rees-Stealy 3 7 6 5 4 89 21 10 6 5 4 3 2 1 9 8 765 432 1 18 17 16 15 14 1312 11 102 1 4 3 2 1 8 7 6 54 3 2 1 9 8 7 5 4 3 21 1716 15 14 1312 11 10 SAN DIEGO BAY E ST J ST L ST F ST I ST H ST G ST BAY BLK ST THIRD AVE J ST E H ST FOURTH AVBROADWAYI-5 FREEWAY SI-5 FREEWAY NI - 8 0 5 F RE E WA Y S I-805 FREEWAY NSECOND AVSR-54 FREEWAY E HILLTOP DRFIRST AVSR-54 FREEWAY W MOSS ST OXFORD ST D ST BONITA RD NAPLES ST E NAPLES STFIFTH AVE L ST C ST TELEGRAPH CANYON RD E OXFORD ST NACION AVMELROSE AVMARINA PWPLAZA BONITA RDINDUSTRIAL BLN S E C OND A V OLEANDER AVLAGOON DR TERRA NOVA DRHIGHLAND AVC ST FIFTH AV9 8 7 6 54 3 2 1 13 12 11 108 4 3 1 2 7 6 ·H Hospital G Worship !(State Registered Elder Care Government Facilities ¾Senior Housing "Á Trolley Station !(Bank !(Medical G!(Pharmacy !Service !Shopping CMO Funded Shuttle Service Area AB 1550 Qualifying Area Senior Mobile Homes Major Shopping Area Parks City Limit BANK1 Navy Federal Bank2 Vibra Bank3 Chase Bank4 San Diego County Credit Union5 Union Bank of CA6 Wells Fargo Bank7 US Bank8 First Bank9 CA Bank & Trust10 Wheelhouse Credit Union11 Citibank12 Pacific Commerce13 First National14 Banner15 Pacific Western16 Regency Savings17 Wells Fargo18 Pacific Trust MEDICAL1 St. Paul’s PACE2 Chula Vista Medical Plaza3 SYH PACE4 Family Health Center5 Medical Center6 Scripps Well Being Center Date: 9/8/2021 P:\Projects\DEVELOPMENT_SERVICES\Healthy Chula Vista Initiative\CMO_Grant\CV Community Shuttle service area (Expanded).mxd GOVERNMENT FACILITIES1 Civic Center - Public Service North2 Civic Center - Public Service South3 Post Office Chula Vista4 Visitor Information Center5 Civic Center6 - none -7 South County Regional Center8 Chula Vista Harbor9 Chula Vista Social Security Building10 Chula Vista Community Youth Center11 Norman Park Senior Center12 Memorial Bowl13 Chula Vista Woman's Club14 Parkway Gymnasium15 Department of Motor Vehicles16 Police Station17 Main Library SENIOR HOUSING1 Pacific Point Retirement Living2 Silvercrest Senior Housing3 Seniors on Broadway *4 Town Centre Manor Senior Apts.5 Congregational Tower Senior Apts. *6 Park Fifth Avenue Apts.7 Canterbury Court Senior Apts.8 Oak Terrace Senior Apts. SENIOR MOBILE HOME PARK1 Bison MHP2 Terry's Broadway MHP3 Cabrillo Mobile Lodge4 Chula Vista Mobile Home Park6 Fogerty Brothers Trailer Park7 Sharon's Trailer Park8 Terry's Mobile Home Park WORSHIP1 Community Congregational Church2 Seventh Day Adventist Church3 South Bay United Pentecostal Church4 Pilgrim Evangelical Lutheran Church5 First Baptist Church of Chula Vista6 Chula Vista Church of God7 Filipino & American Bible Baptist Church8 Masonic Temple9 St. Rose of Lima Catholic Church10 First Southern Baptist Church11 Iglesia Palabra Viva12 First Free Will Baptist Church13 Covenant Reformed Church PHARMACY1 CVS Pharmacy2 CVS Pharmacy3 Walgreens4 CVS Pharmacy SERVICE1 Community Through Hope2 South Bay Community Services SHOPPING1 Walmart2 Aldi/Food 4 Less3 Grocery Outlet Bargain Market4 Garden Farms Market5 Sawaya Brothers6 Mi Pueblo Sunny Market7 T&M Seafood8 Sprouts9 Albertsons10 Carnival Supermarket *Grant Eligible Complexes00.5 10.25 Miles CV Community Shuttle Service Area 2021/10/12 City Council Post Agenda Page 453 of 620 MOBILITY PROJECT VOUCHER APPLICATION FOR THE CLEAN MOBILITY VOUCHER PILOT PROGRAM 2021/10/12 City Council Post Agenda Page 454 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 2 Table of Contents MOBILITY PROJECT VOUCHER APPLICATION FOR THE CLEAN MOBILITY VOUCHER PILOT PROGRAM PROJECT TEAM PROFILE 4 PROJECT NARRATIVE 7 COMMUNITY TRANSPORTATION NEEDS ASSESSMENT 16 PROJECT AREA PROFILE 24 PROPOSED BUDGET AND PLAN FOR FINANCIAL SUSTAINABILITY 27 COMMUNITY RESOURCE CONTRIBUTION 29 COMMUNITY OUTREACH PLAN 30 ATTESTATIONS AND SIGNATURE 36 ATTACHMENT 1. Mobility Project Voucher Budget Worksheet ATTACHMENT 2. Infrastructure Site and Needs Profile Worksheet - N/A ATTACHMENT 3. Team Profile Worksheet ATTACHMENT 4. Project Area Map ATTACHMENT 5. Reg. Agreement Congregational Towers ATTACHMENT 6. Circuit Transit Inc. Letter of Commitment ATTACHMENT 7. Circuit Transit Inc. Letter of Support ATTACHMENT 8. San Ysidro Health Letter of Support ATTACHMENT 9. 2020 SANDAG Needs Assessment Survey Results ATTACHMENT 10. City Council Approval of Kiosk Program ATTACHMENT 11. City of Chula Vista Cover Letter 2021/10/12 City Council Post Agenda Page 455 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 3 MOBILITY PROJECT VOUCHER APPLICATION To apply for a Mobility Project Voucher, please complete this application by answering all required questions in the boxes, provide all relevant documentation and signatures, and submit the application to the Program Administrator in accordance with the eligibility terms and other requirements set forth in the CMO Implementation Manual. Answers to the application questions will be evaluated and determined to meet or not meet the minimum eligibility criteria set forth in the CMO Implementation Manual. Answers are not scored using a points-based system. All fields with numbered questions are required. Questions lettered and in blue font are conditional questions that may be required based on certain previous responses. There is no minimum or maximum word count for individual questions or the application as a whole. All applications must include the following attachments with their application using sample worksheets provided herein. The electronic copies are available on the CMO website at www.cleanmobilityoptions.org. Attachment 1. Mobility Project Voucher Budget Worksheet Attachment 2. Infrastructure Sites and Needs Profile Worksheet Attachment 3. Team Profile Worksheet In order to be evaluated, the entire application must be completed and submitted as one package, including all required attachments; incomplete applications may not be considered. Applications submitted outside of the application submission window will also not be considered. All information and data submitted in this application are the property of CARB and will become a public record under the Public Records Act (California Government Code Section 6254 et seq.) once the applicant has submitted the application. Do not include any personally identifiable information such as project staff home addresses, personal phone numbers, or personal email addresses. The Program Administrator may require additional documentation or clarification if needed. If you need this document in an alternate format or language or to request other assistance with submitting the application, contact CALSTART at 626-744-5670 or by email at info@cleanmobilityoptions.org. If additional space is needed in any section of the application, please attach a separate sheet. 2021/10/12 City Council Post Agenda Page 456 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 4 PROJECT TEAM PROFILE This section collects information about the project team. 1. Lead applicant (“you” or “your”) general contact information: (write in) Organization Name/ Agency Name/ Tribe Name: City of Chula Vista Authorized Representative Name: Dennis Gakunga Project Lead Contact Name and Title: Dennis Gakunga, Chief Sustainability Officer California-Based Affiliate Contact (if different from the Lead Contact Name): Person with Contract Signing Authority (if different from above): Street Address or P.O. Box: 276 Fourth Ave. Organization City/Town: Chula Vista Zip Code:91910 Project Lead Phone: 619-476-5355 Project Lead Email Address:dgakunga@chulavistaca.gov Mailing Address (if different): ☐ I have read and understood the terms and conditions of the Sample Voucher Agreement (can be found in the Implementation Manual for The Clean Mobility Voucher Pilot Program, Appendix C: Mobility Project Voucher Sample Voucher Agreement). I hereby certify under penalty of perjury that all information provided in this application and any attachments are true and correct. Printed Name of Responsible Party: Dennis Gakunga Title: Chief Sustainability Officer Signature of Responsible Party: Date: 10/20/2020 Type text here 2021/10/12 City Council Post Agenda Page 457 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 5 2. Please select your organization’s type: (select one) ☐ Public agency. For example, City, County, Metropolitan Planning Organization, Council of Government, local or regional transit agency, local air quality management district, air pollution control district, public school district. ☐ California Native American Tribe. A Federally Recognized Tribe in California listed on the most recent notice of the Federal Register and other non-federally recognized California tribal governments, including those listed on the California Tribal Consultation List maintained by the California Native American Heritage Commission ☐ Non-profit organization. The non-profit organization have been incorporated for at least one year prior to the time of voucher application submittal and with at least one full-time staff person based in California 3. Please describe your organization’s background and qualifications, such as history of local engagement, key areas of expertise, and your experience working with disadvantaged and low-income communities or tribes. Please identify how this background enables you to efficiently and effectively implement this project. The City of Chula Vista is the second largest City in San Diego County, serving over 271,000 residents. The City has a long history of work to improve the community and a strong commitment to sustainability, improving the quality of life of its residents by guaranteeing clean air, clean water, and clean land. In addition, the City has committed to seniors and livability for all ages through several actions over the past five years. In 2016, the City of Chula adopted a Healthy Chula Vista Action Plan identifying strategies to promote overall wellness and address public health issues within the community. That same year the City was the 99th jurisdiction in the U.S. to join the Age-Friendly Communities network through the World Health Organization and AARP. Transportation was a key issue addressed in both plans, with a specific interest identified by the community to provide neighborhood based shuttle services for both daily trips and for access to community events. Most recently in early 2020, the City adopted an Active Transportation Plan. The City of Chula Vista has been working to improve bike paths and expanding bicycle lanes, has applied and received the SANDAG Go by Bike grant to outreach to the community and educate on safety, and provides a free bicycle valet at all major events. 4. Does your application include a sub-applicant(s)? 2021/10/12 City Council Post Agenda Page 458 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 6 (select one) ☐ Yes ☐ No Note: Sub-applicants are entities other than the lead applicant who enter into a partnership with other eligible organizations to apply for voucher funds. Sub-applicants may include but are not limited to organizations that provide clean mobility services, EVSE and other related infrastructure, community outreach services, and technical assistance. Sub-applicants may be public, private, or non-profit organizations or tribes. A single entity may participate as sub- applicant in multiple applications. Conditional (4a): a. If your application includes sub-applicants, please attach a Team Profile Worksheet (Attachment 3) and write, “attached” in the box below with any comments. Attached Team Profile Worksheet Note: If applicable, you must include a description of the team’s qualifications, such as history of local engagement, key areas of expertise, or concrete examples of applicant representing or advocating in and for their community. 5. What is the name of an organization on your team with at least one year of experience operating mobility services (experienced partner), and what role they play? Provide the name, title, and contact information of the individual, their affiliation/organization: Daniel Kramer, Director of Operations & New Business, Circuit Transit Inc daniel@ridecircuit.com 562-252-6680 (select one) ☐ Self ☐ Sub-applicant ☐ Don’t know yet; will select from the Mobility Provider Directory, or an entity who meets the minimum qualification criteria, and contract within 3 months of the voucher agreement execution date. Note: Each team must include an organization with at least one year of experience operating mobility services. This organization may be the entity operating the proposed service, or it may serve in another capacity such as project technical advisor. If the experienced partner is not included on the project team as lead applicant or sub-applicant at the time of application, the lead applicant must commit to contract with either an entity listed in the Clean Mobility Provider 2021/10/12 City Council Post Agenda Page 459 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 7 Directory or an entity who meets the minimum qualification criteria to be on the Directory but not currently listed, within 3 months of the voucher agreement execution date. All mobility providers listed in the Directory have been screened to ensure they meet the minimum level of experience to satisfy this requirement. Conditional (5a): a. If you have an “experienced partner” or a mobility service provider on your team, please outline their experience operating mobility services for at least one year, including location and type of service. Circuit Transit Inc has 9 years of experience providing neighborhood electric vehicle (NEV) services. They have operated in California since 2013 and in San Diego since 2016. Circuit currently has a contract for NEV services for Downtown San Diego with the City of San Diego. 6. Do all partners included in your application team have full support and approval from decision-makers in their organization (e.g. Board of Directors, City Council, Tribal Council, or other governing body, etc.) to participate in the project as proposed? (select one) ☐ Yes ☐ No Note: Applications may be processed pending final approval from internal decision-makers; however, proof of approval is required prior to signing the voucher agreement. Conditional (6a): a. If any application team members still require approvals to participate in the project, please state which member(s), who has the authority to approve, the process for approval, and anticipated approval timelines. No approvals are needed prior to award. If awarded, the City will enter into a contract with Circuit Transit Inc to operate the CV Community Shuttle. Such approval would occur at the time of fund appropriations. PROJECT NARRATIVE This section collects information about the project proposal. The project should aim to equitably improve communities’ access to clean mobility options that are safe, reliable, convenient, and/or affordable while reducing greenhouse gas emissions and air pollution. The project must be based on identified community transportation and mobility needs. Applicants must describe the activities that were taken to assess community transportation needs in a subsequent section. 2021/10/12 City Council Post Agenda Page 460 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 8 7. Please describe the project proposal. Project Name: CV Community Shuttle Based on the results of the 2020 SANDAG Mobility HUB needs assessment survey findings the CV (Chula Vista) Community Shuttle program will provide all-electric on-demand shuttle services catered to the needs of the local senior community in the northwest part of Chula Vista. The program will be designed with the community’s input and participation to provide safe, convenient, affordable, and accessible first / last mile connections. The goals of the program will be to improve mobility options for the senior communities, provide connections to public transit and key community services, improve social determinants of health related to transportation accessibility, reduce greenhouse gas emissions, improve air quality, and reduce congestion. The Community Shuttle will operate as an on-demand service using a fleet of 4 dedicated all- electric vehicles. Riders can request rides within a geo-fenced coverage zone through a mobile ride request app available on iOS and Android, by call in or text, by kiosks available at key destinations and public spaces, and by waving down a vehicle. Caregivers, senior living community staff, and others can also make requests on behalf of riders. Rides will be free for seniors and available for a low fare to the general public. The service will include an ADA accessible vehicle on standby for riders requiring ADA assistance, which can be indicated in the ride request app, the kiosk, or when requesting by phone. A contactless fare program will be implemented and will accept payment via credit card, debit card, or prepaid card. The service will operate 12 hours per day, 5 days a week. The service schedule will be aligned with the needs of the community and adjusted with feedback from the community and City and as data from the service comes in. For the first year of operation, service will be available as a free transportation service to seniors. The focus of the service territory will be on key destinations for this population, including healthcare, grocery, senior living facilities and senior centers, and other destinations as determined through community feedback. Over this period, the service will be adjusted and honed to the needs of this community. After the first year of operation, service will be opened to the general public for a low fare but remain free for seniors. This will help offset the costs of the service and provide for continuing support for the program. 2021/10/12 City Council Post Agenda Page 461 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 9 The service will be provided in the northwest portion of Chula Vista. The target population lives in census tracts 6073012502, 6073012501 and 6073012600, which are identified by CalEnviroScreen as having 13,371 residents and in two affordable housing complexes located in the larger service area. We are specifically targeting service for senior residents living in senior living and affordable housing communities at six mobile home parks, which have a total of 584 spaces and two affordable housing complexes with 228 units. Service will be designed for these community members but will be open to the general public after the first year for a fare to provide ongoing sustainability, further reduce greenhouse gas emissions, and reduce congestion. Circuit, the City, and community partners, including San Ysidro Health, will work with the community to identify key hot spots within this geofenced zone. Riders will be able to request rides to/from anywhere within a specified geofenced coverage zone, which has been designed to focus on trips to/from healthcare, grocery, senior living facilities and centers, city and community service, retail, social and entertainment, public transportation stops/hubs, and other locations as identified by the community. The service will be reviewed by the project team monthly, quarterly, and on an as needed basis. Hours, vehicles, and/or service territory will be reviewed and may be adjusted as needed according to service data and input from the community. Vehicles will be stored, maintained, and charged at a local facility obtained by Circuit Transit. Vehicles will not require fast charging (Level 2 or 3) infrastructure. They can be charged through Level 1 charging, which includes 110v outlets on dedicated circuits. The City has an existing program for public kiosks that it recently launched with the installation of seven interactive, way-finding kiosks around the City Hall Campus to assist visitors in finding their desired service, information, location or staff member. The kiosks also display legally required agendas and other documents 24/7 with the ability to email the information. The City and Circuit will explore opportunities to integrate its ride request technology into the kiosks. New kiosks will be placed at key locations with feedback from the community, including at senior living communities, in the form of iPad displays. No additional infrastructure is expected to be installed for this program. No additional transportation enhancement is proposed other than the core project model. Data from this service may be used to inform other transportation and urban planning. The CV Community Shuttle will be administered by the City of Chula Vista (City) and operated by Circuit Transit Inc. (Circuit). Circuit will provide a turn-key service, including employing and 2021/10/12 City Council Post Agenda Page 462 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 10 training a team of local driver ambassadors, providing and maintaining electric vehicles for service, obtaining appropriate storage and charging facilities, providing technology for the service, and ensuring the service. Circuit will leverage its regional Southern California team and resources to quickly launch new services in Chula Vista. The City will work with community partners such as San Ysidro Health and additionally Community Through Hope, South Bay Community Services, SoCAN and others to provide outreach and marketing services and engage with the community for feedback and input to continually improve the service. Circuit will provide regular data reports to the City. Note: The response must address all of the following: ● Project name ● Define project goals and main objectives. ● What types of mobility services or technologies will be employed? ● If you seek funding for expanding an existing mobility service, describe how your proposal will result in increasing ridership or use of an existing mobility service. ● Who are the intended users/riders? ● Is there any additional transportation enhancement beside the core project model? Explain. ● Where will service(s) be provided? ● What types of trips or destinations will be served? ● What equipment or infrastructure will be deployed? ● How will each team member contribute to various elements of the project? 2021/10/12 City Council Post Agenda Page 463 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 11 (select at least one and all that apply) _____ Carsharing _____ Bike or Scooter-sharing _____ Carpooling _____ Vanpooling __X__ Innovative transit services _____ Other ride on-demand services 8. What are the core project model(s) included in your project? (If applicable, enter percentage amount of voucher funds allocated to each model): Note: Projects support by CMO voucher funds must be based on one or more core project models listed here. Please see Section E. Project Eligibility in the CMO Implementation Manual for definitions and eligibility criteria. 9. Which of the following categories of infrastructure does your proposal include? (select all that apply) ☐ Level 2 Electric Vehicle Supply Equipment (EVSE) ☐ DC Fast Charging Equipment ☐ Bicycle and Scooter Infrastructure ☐ Solar Photovoltaic (PV) ☐ Hydrogen Refueling Station ☐ None Conditional (9a): a. For each category listed above (except “none”), please complete and attach the Infrastructure Site and Needs Profile Worksheet (Attachment 2) for all that apply and write in “attached” in the box along with any comments. N/A 10. Does your project include any additional transportation enhancements that are not listed in Section E.3 of the Program Implementation Manual? (select one) ☐ Yes, and I hereby request an approval. ☐ No, our project includes a proposed additional transportation enhancement that is listed in the Implementation Manual. Conditional (10a): a. If yes, please explain the proposed transportation enhancement. 2021/10/12 City Council Post Agenda Page 464 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 12 N/A Note: Additional transportation enhancements are intended to be supplemental and not essential to the core project model. If your enhancement is not approved, the project should still be able to operate effectively. The Program Administrator may require additional information and data to evaluate your request. 11. Please describe the key activities you will conduct for project development and operations, project milestones and the timeline needed to successfully launch the project and operate the service for at least 4 years. The project is divided into several phases, allowing the team to prepare, set up, start operation, learn and improve. This also allows Circuit to make sure that all employees are working to the highest levels possible, consistent with the company’s best practices. Circuit will incorporate regional resources and staff from its nearby operations to the extent possible to the new program to ensure a smooth launch and ongoing operations. Resources, including additional vehicles from nearby markets, can also be brought in as needed to ensure consistent service levels. The project team expects to launch service within 120-180 days of contract execution with CARB and operate the service for the remaining duration of the grant term. Phase 1- Planning and Starting Pre-launch - 120-180 days after execution of contract, Year 1 of grant a. Plan of Action and Contract - The City will finalize the grant terms with CARB. The City will work with Circuit and Community Partner to finalize the Scope of Services, contract details and budget in line with the grant terms and contract. (Milestone 1) Key Partner(s) Involved: City, Circuit, Community Partner b. Hiring - Circuit will recruit and hire local driver ambassadors and conduct necessary background checks and vetting procedures. Circuit will work with the City to identify any local workforce centers to source candidates. (Milestone 2) Key Partner(s) Involved: Circuit, City c. Storing & Charging Location - Circuit will identify and acquire a local base of operations to store and charge vehicles for service. (Milestone 3) Key Partner(s) Involved: Circuit 2021/10/12 City Council Post Agenda Page 465 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 13 d. Vehicles - Circuit will acquire and deliver leased vehicles to Chula Vista and outfit with customizations for service. (Milestone 4) Key Partner(s) Involved: Circuit e. App - Adding location and testing - Circuit will work internally to prepare mobile application for new location and conduct tests to ensure accuracy. (Milestone 5) Key Partner(s) Involved: Circuit f. Training Drivers for Launch - Circuit will schedule staff classroom and practical training ahead of service launch. (Milestone 6) Key Partner(s) Key Staff Involved: Circuit g. Health & Safety - Circuit will prepare service with COVID protocols for health and safety in line with company procedures, industry requirements, and state and local requirements. Outfitting vehicles for service will include partitions between rows of seats to accommodate social distancing. Circuit will plan for appropriate PPE for driver ambassadors and other staff. (Milestone 7) Key Partner(s) Key Staff Involved: Circuit h. Marketing and Outreach plans - Circuit will work with City and Community Partner to develop and execute a marketing and outreach plan to announce launch of new service to the community. Circuit can re-engage existing and past riders of Circuit’s nearby services in San Diego. (Milestone 8) Key Partner(s) Involved: Circuit, City, Community Partner i. Phase 2 - Project Kickoff Launch - Year 1 of grant a. Opening Day - Circuit will launch the Year 1 initial program (open only to seniors) on the designated launch date. (Milestone 9 )Key Partner(s) Involved: Circuit b. Staff On-Job Training - Circuit will conduct ride alongs and continued training with any new staff to ensure effectiveness and efficiency of service. (Milestone 10) Key Partner(s) Involved: Circuit Phase 3 - Monitoring, Reporting and Adjusting - Initial Service 2021/10/12 City Council Post Agenda Page 466 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 14 Year 1 of operation, Year 1 of grant a. Program Monitoring - Circuit will study developing ridership trends to learn busiest ridership times, request hotspots, etc. Circuit will also conduct rider surveys to learn about rider preferences, needs, and behavior. Key Partner(s) Involved: Circuit b. Monthly Reporting - Circuit will report back to the City with data collected to refine service on a monthly basis, as well as any other required periodic reporting such as quarterly maintenance history. Reports can be made available to CARB on a regular or as needed basis. (Milestones 11 - 22) Key Partner(s) Involved: Circuit, City c. Health & Safety - Circuit will regularly conduct advanced cleaning of vehicles and require driver ambassadors, staff, and riders to wear appropriate face coverings. Driver Ambassadors will wear appropriate PPE including masks and gloves. Circuit will work with the City for any needed accommodations for riders and to adjust service as state and local policy adjusts during and after the pandemic. Key Partner(s) Key Staff Involved: Circuit, City d. Service Adjustments - Circuit will collaborate with City and Community Partner to adjust service based on data trends and community feedback. Key Partner(s) Involved: Circuit, City, Community Partner e. Ongoing Community Engagement - City, Community Partner, and Circuit will continue to engage with the community and community organizations within northwest Chula Vista to educate about using the service and receive feedback for service improvement. Key Partner(s) Involved: City, Community Partner, Circuit f. Advertising and Sponsorship - Circuit will sell and execute third-party advertising campaigns with a revenue share to the City to support the service. Circuit and the City will work to identify key program sponsors to further support expansion and/or extension of service, including Business Improvement Districts, local businesses, etc. Key Partner(s) Involved: Circuit, City Phase 4 - Service Expansion to General Public Year 2 of operations, Year 2 of grant a. Planning for Service Expansion - Circuit will work with the City and Community Partner to plan for service extension to the general public, including rollout timeline. We estimate this expansion to happen in Year 2. (Milestone 23) Key Partner(s) Involved: Circuit, City, Community Partner 2021/10/12 City Council Post Agenda Page 467 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 15 b. App - Adjustments and testing - Circuit will work internally to prepare mobile application for opening to the general public, including fare categories, and conduct tests to ensure accuracy (Milestone 24) Key Partner(s) Involved: Circuit c. Marketing & Communication - Circuit will collaborate with City and Community Partner to prepare and implement a marketing and outreach plan for announcing service expansion to existing and potential riders. (Milestone 25) Key Partner(s) Involved: City, Community Partner, Circuit d. Launch of Expanded Service - Circuit will collaborate with City and Community Partner to launch the expanded service. (Milestone 26) Key Partner(s) Involved: City, Community Partner, Circuit Phase 5 - Monitoring, Reporting and Adjusting - Expanded Service Years 2 - 3 of operations, Years 2 - 3 of grant a. Program Monitoring - Circuit will study developing ridership trends to learn busiest ridership times, request hotspots, etc. Circuit will also conduct rider surveys to learn about rider preferences, needs, and behavior. Key Partner(s) Involved: Circuit b. Monthly Reporting - Circuit will report back to the City with data collected to refine service on a monthly basis, as well as any other required periodic reporting such as quarterly maintenance history. Reports can be made available to CARB on a regular or as needed basis. (Milestones 27 - 50) Key Partner(s) Involved: Circuit, City c. Health & Safety - Circuit will regularly conduct advanced cleaning of vehicles and require driver ambassadors, staff, and riders to wear appropriate face coverings. Driver Ambassadors will wear appropriate PPE including masks and gloves. Circuit will work with the City for any needed accommodations for riders and to adjust service as state and local policy adjusts during and after the pandemic. Key Partner(s) Key Staff Involved: Circuit, City d. Service Adjustments - Circuit will collaborate with City and Community Partner to adjust service based on data trends and community feedback. Key Partner(s) Involved: Circuit, City, Community Partner e. Ongoing Community Engagement - City, Community Partner, and Circuit will continue to engage with the community and community organizations within northwest Chula Vista to educate about using the service and receive feedback for service improvement. Key Partner(s) Involved: City, Community Partner, Circuit 2021/10/12 City Council Post Agenda Page 468 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 16 f. Advertising and Sponsorship - Circuit will sell and execute third-party advertising campaigns with a revenue share to the City to support the service. Circuit and the City will work to identify key program sponsors to further support expansion and/or extension of service, including Business Improvement Districts, local businesses, etc. Key Partner(s) Involved: Circuit, City Phase 6 - Year 4 of Operation, End of Grant Term Year 4 of Operations and afterwards a. Final Reporting - The City will work with Circuit and Community Partner to provide any final reporting documents to CARB. Key Partner(s) Involved: City, Circuit, Community Partner b. Operations in Year 4 - The City will work with Circuit and Community Partner to provide service during Year 4 of operations. Key Partner(s) Involved: City, Circuit, Community Partner c. Planning for Service After Grant Term - Circuit will work with the City and Community Partner to plan for service following the grant term and ongoing sustainability. Key Partner(s) Involved: Circuit, City, Community Partner COMMUNITY TRANSPORTATION NEEDS ASSESSMENT This section collects information about the applicant’s activities to understand the transportation needs of residents in the area consistent with the program requirements set forth in the CMO Implementation Manual. Applicants must demonstrate that the proposed project is responsive to transportation needs and community preferences for the transportation solutions identified through meaningful, broad-based engagement. The community transportation needs assessment must be completed by the time of application submission and be a basis for the project idea. Applicants may rely on existing assessments and activities done in past 4 years if they are consistent with the requirements and conditions as defined. The entire project area must be represented in the Community Transportation Needs Assessment. 2021/10/12 City Council Post Agenda Page 469 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 17 12. What data sources and indicators have you used to develop a Transportation Access Data Analysis? Please attach a copy of the resident survey used in your analysis. The 2018 Chula Vista Age-Friendly Action Plan identified several goals related to senior transportation based on feedback received during the development of the plan with residents and stakeholders. These included goals to increase ridesharing options for seniors in the community and provide shuttles for community events. In addition, in year one of the plan implementation a pilot project was conducted to increase senior use of transit through guided field trips to destinations and events in northwest Chula Vista including Harbor Fest, Norman Park Senior Center and the Living Coast Discovery Center. To view the full plan and learn more about the pilot project, please visit https://www.chulavistaca.gov/agefriendly. In May 2020 the City’s first ever Active Transportation Plan was adopted, updating and bringing together the 2010 Pedestrian Master Plan and 2011 Bikeway Master Plan. This integrated mobility plan focused primarily on non-motorized users and introduced recent micro-mobility trends, new to the public roadways in Chula Vista. While the plan outputs mainly focused on bike and pedestrian infrastructure improvements, the outreach process included extensive efforts to reach low-income families and seniors to learn about mobility trends and preferences in our multi-modal system. To learn more about the outreach and see the full plan visit https://www.chulavistaca.gov/departments/engineering/active- transportation-plan. In collaboration with the City, the San Diego Association of Governments (SANDAG) administered a survey in August - September 2020 to assess the needs of the community and gather information on a proposed Chula Vista Mobility HUB in northwest Chula Vista. The survey was provided in English and Spanish and was distributed by the City and community based organizations. This survey provides the most recent and most comprehensive effort to reach seniors in the northwest area of Chula Vista, also the target population of the CV Community Shuttle service area, and is therefore used for the majority of the needs assessment towards this grant. Please see the SANDAG Mobility HUB Survey attached. In addition, SANDAG currently has a second surveying effort underway to reach low-income individuals and families and assess Mobility Needs in collaboration with the Chula Vista Community Collaborative. Although not yet available, the survey will provide greater guidance to the project team on operations for the CV Community Shuttle. Note: The response should list data sources and/or accessibility indicators (a resident survey is required, in addition to a minimum of three data sources or indicators from section b below). Data sources and accessibility indicators include but are not limited to: 2021/10/12 City Council Post Agenda Page 470 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 18 a. Surveys of residents regarding existing travel behavior. Surveys may be administered through in-person interviews, paper or online questionnaires, and options must be provided for residents that do not have access to a computer or the internet. b. Accessibility indicators: i. U.S. EPA Walkability Index ii. Vehicle ownership per household (from Census American Community Survey) iii. Cost of existing transit and average cost per week for fueling car iv. Median household income v. Access to job opportunities (from LEHD-LODE) vi. List any existing shared clean mobility projects in the community (ex. bikeshare, electric shuttle or buses, electric carshare, etc.); existing public transit stops; and/or existing bicycle routes. A complete list of all indicators and how to access them is available on the CMO website at https://www.cleanmobilityoptions.org/project-development-tools/ 13. Based on your Transportation Data Analysis, what are the community’s main travel patterns and transportation gaps? 2021/10/12 City Council Post Agenda Page 471 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 19 From the 2020 SANDAG Mobility HUB survey responses seniors identify safety, reliability and familiarity as the main desired features for transportation services in the community. Many seniors struggle to have basic transportation needs met to access food, make medical appointments, fill prescriptions and interact socially. By providing on demand service in a dedicated project area with a number of these services and amenities, these barriers will be reduced. The SANDAG survey revealed that gaps for seniors in transit information exist and they desire better connections. Transit information is not always provided to the senior community in an easy to understand manner, especially when many do not have access to electronic devices or the required technologic literacy to use internet based services. This project will provide education around the technologies, kiosks for those without direct access, and provide other options such as phone requests. Finally, during the 2018 Age-Friendly efforts, seniors at residential housing communities indicated that while they were engaged at their own housing complexes, they often felt disconnected from the greater community and wanted additional transportation options to attend community events. This CV Community Shuttle would fill that gap in transportation access. Note: The response must provide a summary analysis with key conclusions about travel patterns and transportation gaps (e.g. a Transportation Access Data Analysis) in the community based on the sources above. The purpose of this response is to provide an objective demonstration of needs that can be validated. 2021/10/12 City Council Post Agenda Page 472 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 20 14. What types of meaningful, representative, community engagement activities have been conducted to assess the community’s transportation needs? (The response must include at least two types of engagement activities). SANDAG Mobility HUB Survey - In September 2020 the survey concluded to inform a concept of operations for a Mobility HUB to be located at one of two trolley stations in Northwest Chula Vista. Due to COVID-19, distribution of the survey was heavily reliant on an online panel, social media, community partner email lists, postcard distribution at food pantries and key informant telephone interviews through the Project Advisory Group and stakeholders from both the business and CBO community, including: South Bay Community Services, Community Through Hope, AARP, Renewing Life, Norman Park Senior Center, Filipino Community leaders, City Commissions, Seven Mile Casino and other employers in northwest Chula Vista. In addition, social media (Facebook, Instagram, Next Door, Nixle and City Newsletter) was used to solicit participation. Nearly 550 surveys were received, with a representative sample of seniors (60+) accounting for 19% of responses. The 2020 Active Transportation Plan included an extensive outreach process to address pedestrian and bicycle needs, along with essential connectivity issues. The main outreach efforts were conducted in 2019 prior to COVID-19 and enabled the team to interact live at a variety of events. These included two “pop-up” activities in April 2019, to reach community members who may not normally attend a traditional community workshop, in eastern Chula Vista at the Otay Ranch Farmers Market and in western Chula Vista Western at Day of the Child (sponsored by the Chula Vista Community Collaborative). The effort also included an online survey to capture additional comments and had an interactive activity allowing participants to identify the most common routes they travel. Some of the top themes learned during this process included the desire for: calmer and safer traffic conditions; safe and secure public spaces; connected communities; facilities that serve all ages; and new technologies and modes. Note: The response must discuss community engagement activities done through at least two engagements such as workshops, community meetings, house meetings, focus groups, interviews, or other direct interface with residents. The purpose of holding at least two engagement activities is to increase opportunities for stakeholder residents to provide input. For each, include the approximate date, location, and number of attendees or participants, and what measures were taken to ensure that the combination of activities provided residents with an equitable opportunity to participate. 15. What were the main transportation and mobility needs identified by the community engagement activities outlined? Describe in detail. 2021/10/12 City Council Post Agenda Page 473 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 21 In all outreach efforts, seniors consistently identify the following issues as the top priorities/barriers to transportation: 1. Safety - Across all categories, not just transportation, seniors identify the need for safety and the perception of safe places as a key factor to their comfort level to leave their homes. 2. Connectivity - A major obstacle for seniors and disabled is being able to reach a transportation hub location by walking or with the use of a mobility aid device. These first/last mile connections and door to door options are particularly important for an aging population. 3. Cost - Many seniors, veterans, and under-banked households live on a fixed income. Metropolitan Transit System (MTS), the transit provider in Chula Vista and the greater San Diego area recently increased fares for monthly passes to seniors by nearly $10. This presents a large barrier to seniors utilizing transit and needing a first/last mile option that is fare based, often making it financially infeasible to afford a round trip. 4. Reliability - Predictability is important for any transportation option, especially for seniors and disabled persons that are often more time sensitive than others. Seniors expressed that options such as the MTS Access program providing point to point service are often delayed by long windows of time and make it difficult to make appointments. Interviewed stakeholders also indicated seniors have fears of becoming stranded. 5. Familiarity/Customer Service - Knowing the person that is picking you up or having information that they are a trusted source is important for seniors, some of which will select more expensive options or forego trips to avoid the unknown. In addition, seniors often need a little extra help to reach destinations with assistance being able to carry packages or shopping bags. 6. Technology - The technology divide is more evident in seniors and disabled than any other population. Whether it is fear of the unknown and lack of knowledge or the lack of desire to own and use technological devices such as smart phones, in our ever growing world reliant on technology this is a huge barrier for seniors. Note: The response should provide a comprehensive description of the range of transportation needs identified through community engagement, including those not addressed the proposed 2021/10/12 City Council Post Agenda Page 474 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 22 project. Needs describe the problem, obstacle, challenge, or “gap;” rather than the solution itself. Please address in particular: a. What transportation needs have been expressed? b. What were the most commonly expressed transportation needs? c. Which of these needs does your project address? d. If your proposal does not address the most significant needs, why not? 16. How does your proposed project contribute to addressing the needs and preferences for transportation solutions expressed by the community in the needs assessment? The CV Community Shuttle will provide an on-demand shuttle, which was the highest rated transportation option identified by seniors in the SANDAG Mobility HUB survey. It should be noted that the survey did not distinguish features from service, so while the shuttles were identified at 50% as being most important for a mobility HUB, they outranked all other modes including bikes, carshares and scooters. The top concerns of the targeted community, seniors, were safety, which will be addressed in the design of our shuttle program, as follows: 1. Safety - Our team has incorporated various safety concerns voiced by the community about mobility. Our proposed service would provide trips on an on-demand basis, door to door, meaning that riders would not have to wait at a specified stop. Drivers would connect with riders when they arrive and vehicles would be clearly identifiable as part of the service. Circuit’s hiring and training process focuses on safe drivers with excellent customer service skills. All of Circuit’s driver ambassadors are w2 paid, trained, and background checked. Circuit’s vehicles will be regularly cleaned and maintained and in good operating order. Circuit also has advanced health and safety measures in place in line with best practices for COVID19. 2. Connectivity - Our proposed project would close connectivity gaps for those living in the service area by providing on demand services. The transportation provided to the seniors in the area would connect them to a medical office, retail facility, or a transportation hub such as a trolley or bus stop. 3. Cost - The CV Community Shuttle would be provided to seniors in the project area for no charge, reducing a huge gap for first/last mile transportation to transportation HUBs and providing direct access to essential services. The service would be available to the general public starting in Year 2 for a low affordable fare and remain free to seniors. 2021/10/12 City Council Post Agenda Page 475 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 23 4. Reliability - By designing the service around short trips, Circuit is able to provide an efficient service with shorter wait times than a traditional fixed route service. Riders are able to track the progress of the vehicle in the app and are given an estimated time of arrival. Riders and drivers can communicate through the app and by phone to make it easier to find each other at pick-up. Circuit has operated all-electric vehicle services for over 9 years and has the operational and maintenance procedures in place to provide a consistent and reliable service. 5. Familiarity/Customer Service - By utilizing a single vendor, the CV Community Shuttle increases the opportunity for repeat drivers and additional personalized services. Circuit hires locally and trains its driver ambassadors in customer service and ADA services. 6. Technology - Through the use of kiosks and education to community partners, the City and Circuit will work to reduce technological barriers in using the CV Community Shuttle. Note: the response should provide a comprehensive description of the range of preferred transportation solutions identified through community engagement, including those not addressed the proposed project. Please address in particular: a. What preferences for transportation solutions have been expressed? b. What were the most commonly expressed preferences for transportation solutions? c. Which of these solutions does your project provide? d. If your project does not provide the most popular transportation solution, why 17. When were the needs assessment activities described above completed? Initial needs assessments were identified in the Healthy Chula Vista and Age-Friendly Community (AFC) Action Plans between 2016-2018. The 2018 AFC identified several goals around establishing senior shuttle services, particularly in northwest Chula Vista. The September 2020 SANDAG Mobility HUB survey provided greater detail into the first/last mile needs of the community. As mentioned previously, an additional SANDAG Mobility Needs Assessment survey is currently being conducted and results are expected in November- December 2020. Shuttle service has been consistently identified as a preferred transportation mode when seniors are unable to drive themselves. Point to point and on-demand service has been identified as a higher priority over other modes such as walking, biking and other car sharing services. Note: Needs assessments must have been completed within the past four years. However, to 2021/10/12 City Council Post Agenda Page 476 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 24 use the needs assessment expenses as part of the applicant’s Community Resource Contribution, it must have been completed within the past year. 18. Attach the Summary Report of your community transportation needs assessment. Write in “attached” in the box along with any comments. The SANDAG Mobility HUB survey results are attached. Note: The report must provide a summary of the outcomes of the assessment. The application must demonstrate a direct connection between the needs assessment conclusions included in the report and a proposed project model (e.g. target community/audience, scale of project, project model). PROJECT AREA PROFILE This section collects information about physical boundaries of the project in relation to the requirement that project benefit disadvantaged and low-income communities as defined. The project area is the geographic area where end-users reside, where services are based, and where infrastructure to be installed (it does not correspond to destinations or routes). Up to 20 percent of voucher-funded infrastructure and services may be located outside the project area, with documentation of supportive community input reflecting community-identified needs. (select at least one and all that apply) ☐ SB 535 Disadvantaged Communities: Census tracts in the top 25 percent of CalEnviroScreen 3.0 scores. ☐ Affordable housing facility consistent with the CMO requirements. ☐ Tribal lands within AB 1550-designated low-income communities or SB 535 Disadvantaged Communities. For the purposes of this criterion, “tribal lands” includes any property owned by a California Native American tribal authority and is not limited to federally recognized reservations. 19. Which of the following geographies is your Project Area located within? Note: For the purposes of CMO Voucher Pilot Program, the affordable housing facility must meet the following criteria: a. The property must have at least five units. b. The property must be deed-restricted low-income residential housing, where at least 80 percent of property residents have incomes at or below 60 percent of the area median income. Conditional (19a-d): a. If your project area is within an affordable housing facility, please provide the address of the facility or facilities. 2021/10/12 City Council Post Agenda Page 477 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 25 Seniors on Broadway - 845 Broadway, Chula Vista, CA 91911 Congregational Tower Apartments - 288 F St, Chula Vista, CA 91910 b. If your project area is within an affordable housing facility, please explain how each property meets the affordability requirements including, (1) list the total number and breakdown of deed-restricted units; and (2) list the affordability/income mix of each property and how it meets the requirement of at least 80 percent of property residents with incomes at or below 60 percent of the area median income. In addition, please provide a copy of a recorded deed restriction, regulatory agreement or covenant that restricts the property to low-income residential housing as defined in the California Public Utilities Code Section 2852(a)(3)(A)(i) and has at least 10 years remaining on the term of the property’s affordability restrictions. Properties with fewer than 10 years remaining that are willing to extend affordability requirements for a total of 10 years must provide proof of completed extension of affordability restrictions from a state or local agency. Write in “attached” in the box along with any comments. Seniors on Broadway: (1) 42 units, 100% restricted to low income; (2) 5 units restricted to below 30% AMI, 16 units below 45% AMI and 20 units below 50% AMI. Congregational Tower Apartments: (1) 186 units, 98% restricted to low income (2 manager units); (2) 56 units restricted to below 50% AMI and 128 units below 60% AMI. In addition to the restricted affordable housing complexes, many senior housing facilities exist within the northwest area of Chula Vista. Several were once restricted to low income residents, while covenants may have expired, many residents still qualify as low income and most complexes accept Section 8 Vouchers. Mobilehome parks within Chula Vista are also generally accepted as low income housing and the City has maintained rent control for residents within these parks in some form since the 1980s. c. If your project area eligibility is based on location on tribal lands, please provide the name of the reservation, or if not part of a reservation, the address of the tribally owned facility. N/A d. If your project area eligibility is based on location in the CalEnviroScreen 3.0 Disadvantaged Community, please identify the census tract and ranking score in CalEnviroScreen 3.0. 2021/10/12 City Council Post Agenda Page 478 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 26 Census Tract Ranking Score 6073012502 49.43 6073013205 45.50 (Not currently included within the initial project area) 6073012501 42.30 6073012600 39.69 20. Describe the boundaries of the Project Area in only one of the following ways: (a) If Project Area boundaries are the same as census tract boundaries, list the census tracts, (b) provide a map showing the geographic boundaries and attach it to your application, (c) describe the boundaries using street names and cross streets. A detailed map of the project area is attached. The area provides the maximum opportunity to reach seniors and services within a 2 square mile radius for initial service. After year one and beyond, the service area will be expanded as appropriate and feasible. The census tracts eligible per the CalEnviroScreen area (6073012502, 6073012501 and 6073012600) are identified for potential impact to public health but also have some of the lowest income and vulnerable residents within Chula Vista. According to the 2010 census 5,147 households (20% reported female head of household) and the Feaster Charter School servicing this zone for children in grades Pre-K to 8th grade had an enrollment of 1,200 students. Despite efforts at the school to promote nutrition and physical fitness the school retains the highest rate of obesity (25.8%) in the school district and only 15% of students passed their 5th grade CA Physical Fitness Test in 2017. 21. What is the population size of the project area? Please include your source. The total population identified within the project area is approximately 27,728 based on the population numbers included in the EnviroScreen data and extracting 10% from the census tracts population data. 22. Are you submitting application(s) for project area(s) that are located entirely inside unincorporated areas (i.e. no city government represent the area)? Note: This question and its following conditional questions are not applicable for project areas on tribal lands. (select one) ☐ Yes ☐ No Note: If the answer is yes, you may submit up to three applications. Multiple project proposals are allowed only for cases where a lead applicant is applying for projects that are located entirely in unincorporated County jurisdictions and therefore are not represented by city 2021/10/12 City Council Post Agenda Page 479 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 27 governments. If the answer is no, you may only submit one application in the course of each application submission window. Conditional (22a-b): a. If you are submitting more than one application (up to three applications are allowed if the entire project area(s) are located in unincorporated communities), are the project areas located entirely within unincorporated county jurisdiction? N/A b. Please indicate the location(s). The entire service area falls within the incorporated City of Chula Vista. PROPOSED BUDGET AND PLAN FOR FINANCIAL SUSTAINABILITY This section in addition to Attachment 1 collects information about the proposed budget and your plan for financial sustainability. Projects must operate for at least 4 years from the date that operations fully launch (when participants start using the service). This period is referred to as the Project Operation Period. In this section, applicants must describe strategies for maintaining the proposed services at least throughout the project operations period in the required Financial Sustainability Plan in their application. 23. Please indicate the total voucher amount you are requesting in this application. (write in) $ 997,833 24. Please indicate your project type, according to the criteria in Section E.4 of the Implementation Manual (select one): (select one) ☐ New service (maximum award of $1,000,000) ☐ Existing service (maximum award of $600,000) ☐ Combination of New Service and Existing Service (maximum award of $1,000,000) Note: New Service is defined as a mobility service that is not currently operating in any location within the proposed project area. Existing Service is defined as a mobility service that is currently operating in some locations of or the entire proposed project area. See Section E.4 of the CMO Implementation Manual for project examples. 25. Attach a “Mobility Project Voucher Budget Worksheet” (Attachment 1) that quantifies the financial requirements needed to develop and implement the project throughout the 5-year voucher agreement term. Write in “attached” along with any comments. 2021/10/12 City Council Post Agenda Page 480 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 28 Attached Note: Voucher funding may include Vehicles, Charging and Fueling Equipment, Bicycle/scooter infrastructure, Outreach and Marketing Cost, Planning/Capital/Operations/Voucher Administration Costs, and Additional Transportation Enhancements. 26. Describe your strategies for maintaining the proposed service(s) for a minimum of 4-year project operation period. The project team will employ the following key strategies for maintaining the proposed service for a minimum of 4 years: 1. Fare - The shuttle program will charge a low fare of $1-3 to the general public starting in Year 2. This fare will be set and may be adjusted in order to encourage ridership and balance demand with revenue. This fare will be used towards the program for the purposes of extending the service. 2. Advertising - Circuit will sell and execute third party advertising campaigns and offer a revenue share to the City towards extending the service. The City’s revenue share will go towards extending the service. 3. Sponsorship - The City and Circuit will identify and approach key potential sponsors to support the service beyond the grant period. This could include large local employers and businesses such as medical facilities, business improvement districts and economic development organizations, and regional organizations. 4. Other Contributions - The City will evaluate and identify other potential sources of funding from within the City and Community, such as PEG funds for informational kiosks. In addition partnerships to maintain and incentivize on demand services will be explored with local businesses and associations, such as large shopping facilities or attractions like Chula Vista Center Mall or Seven Mile Casino. Future development of the Bayfront in Chula Vista will also require shuttle services between the hotel/convention center and Third Avenue business district. Potential collaboration with the Third Avenue Village Association or Broadway Business District will also be explored. And finally use of Community Benefit dollars will be explored with local hospital systems Scripps and Sharp. 2021/10/12 City Council Post Agenda Page 481 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 29 5. As the opportunity to increase services arises, the City will also look at funding opportunities such as SANDAG’s Mobility Grants and philanthropic organizations such as the Congregation Church, San Diego Foundation and the San Diego Seniors Foundation. Note: This response must explain the relationship between voucher funding that, by definition, will support the project for up to 3 years (i.e. up to 1 year of project planning and 2 years of full operations), and the resources required to fully operate the project for at least 4 years (as outlined in the Mobility Project Voucher Budget Worksheet) consistent with the financial sustainability requirement. 27. Describe your strategies for ensuring vehicles and equipment continue to serve the community if operation discontinues after the 4 year voucher agreement term. The City plans to work with Circuit to provide services to seniors in this community and sustain the program with an expansion of the services to the whole community for a profit. The sustainability of the program will therefore be guaranteed by a percentage of the fee charged by Circuit to residents and tourists and applied to the guaranteed free fare for the seniors. Equipment procured by the City for kiosks, such as iPads, would continue to serve in the City’s existing kiosk program to provide information about available city services. COMMUNITY RESOURCE CONTRIBUTION 28. Describe at least five types of Community Resource Contributions that are being provided to meet the requirements described in Section J.7 of the CMO Implementation Manual. 1. Relationships with CBOs - The City of Chula Vista participates in a variety of boards and commissions throughout the San Diego Region and in Chula Vista that provide services to seniors. In particular the County of San Diego SoCAN (South CountyCounty Action Network) includes membership of service providers in the south bay. Currently the Supervisor for the Norman Park Senior Center sits on their leadership team. In addition, as expressed throughout the application the City works closely with a variety of medical providers and CBOs, including San Ysidro Health, letter of support is attached. 2021/10/12 City Council Post Agenda Page 482 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 30 2. Project related labor prior to funding - the SANDAG Mobility HUB survey effort and Active Transportation Plan provided the basis for the Needs Assessments. Both items are attached or referenced with links in the application. 3. Project related labor during voucher - City staff will provide in-kind services throughout the project providing marketing, community partnerships and time associated with sustainability of the shuttle operations during the voucher period. City staff will also serve as a liaison between the target population and Circuit for educational outreach events and leverage existing programs to promote the CV Community Shuttle. Staff will track time associated with the project through a unique billing code and can provide time sheets during the voucher period. 4. Technology and equipment - The City will leverage this project with other technology efforts such as the City Hall kiosks and expand this program to enable residents to access the Circuit App from locations through northwest Chula Vista. The City of Chula Vista will publicize the program on their website and on social media as appropriate, particularly through neighborhood based platforms such as NextDoor or Nixle. In addition, the City has an existing WebEx membership to facilitate virtual meetings to educate the community on the new services. A copy of the City Council action approving the kiosk program is attached. 5. Project-related materials or assets - Circuit will provide their existing platform for booking rides and provide marketing collateral such as brochures and videos. A link to one of Circuit’s promotional videos can be found at https://www.youtube.com/watch?v=RGZvtW09GdI&feature=youtu.be Note: For a complete list of eligible community resource contributions, please refer to Table 3. Section J.7 in the CMO Implementation Manual. 29. Attach at least one supporting document for each of the five Community Resource Contributions proposed in your previous response. Write in “attached” along with any comments. Documentation has been attached or a link provided as identified above. COMMUNITY OUTREACH PLAN This section collects information about the applicant’s plans to engage with the community and promote the service throughout operations. 2021/10/12 City Council Post Agenda Page 483 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 31 30. Describe, in detail, your plan to engage the community residents through outreach and education to prepare for the launch of the project and throughout the project’s operations. Identify key project stages in which outreach will occur, key partners, their roles for outreach and education, and their knowledge and experience within the community that will enable them to do successful outreach. 2021/10/12 City Council Post Agenda Page 484 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 32 The City will lead the project team in developing a Community Outreach Plan with participation by various community partners and Circuit. The City will utilize the existing Project Advisory Group established by the SANDAG Mobility HUB project to solicit continued participation on a CV Community Shuttle Advisory Group, to include Circuit, San Ysidro Health, local businesses, medical facility representatives, the Commission on Aging, Healthy Chula Vista Advisory Commission, Commission on Safety and other community based organizations to meet regularly to incorporate community outreach and feedback. San Ysidro Health will assist with outreach and bring their knowledge and understanding of the community’s needs. San Ysidro Health has a deep connection with the elderly community in the South Bay region and has the tools to communicate with them as well as the insights to improve and implement the program. Circuit will assist the City with marketing and outreach collateral and participate in educational outreach to educate potential riders about using the service and requesting a ride, including virtual events. Circuit will partner with the City for outreach activities at key events in the community, such as Harbor Fest, Lemon Fest, and Day of the Child. The vehicles will be clearly identifiable as part of this service and drivers will wear uniforms. In addition, direct mailing to advertise the new service and outreach events will be sent to the six mobile home parks within the eligible census tracts and the two affordable housing complexes in the broader project area. Seniors identify safety, reliability and familiarity as important features in any transportation service, therefore the face to face interaction of City staff and Circuit staff with the residents is crucial in gaining their trust in the CV Community Shuttle program. Also hands-on demonstration of the kiosks and ability to see and touch the vehicles will be crucial at outreach events. The local manager and team will be available to assist with outreach. Circuit has a template marketing plan for service that it will adapt with the City and Community Partner for the targeted riders and community. Circuit’s ride request functionality will also be integrated into the City’s existing kiosk program, with information about the service and ability to request a ride. An example of Circuit’s marketing plan is available below: Once launched, the Circuit vehicles / experience will serve as a platform to help generate social media content and help gain recognition from local news outlets for the innovative 2021/10/12 City Council Post Agenda Page 485 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 33 partnership benefiting the community, and environment. Leverage high ridership to encourage both local and national advertisers to wrap Circuit vehicles, which will contribute towards project sustainability. 60 Days Before Launch: Advertiser / Sponsor Outreach Circuit will regionally pitch the launch of the Chula Vista & Circuit program to local businesses and over 2.5k of Circuit’s advertising clients to inform them of Chula Vista advertising opportunities including: wrapped Circuit cars, interior video ads, interior photo booth, branded giveaways/sampling, the ability to drive consumers to store fronts in the coverage area, and promotional fare discounts. Circuit will be pushing the idea of affordable rides and experience-driven story opportunities. Circuit will also conduct outreach with the local community and for local and employer sponsors. Assets That Will Be Used For Advertiser/Sponsor Outreach 1. Email Newsletter(s) for national advertising agencies 2. Flyers & Postcards for local businesses 30 Days Before Launch: Targeted Rider & Media Outreach Circuit to pitch community-driven stories tied to first/last mile commuting, the senior community, affordable public transit, and sustainable living to: employers, organizations, residents and local publications. Optional Asset From Chula Vista and San Ysidro Health Services: Any preferred/specific talking points that Chula Vista and Community Partner wish to highlight that speak to the senior community, Chula Vista, & Circuit partnership Assets That Will Be Used For Rider Outreach 1. Paid Social Media Ads on Facebook & Instagram a. Geo-target residents who live in Circuit’s Chula Vista coverage area to get a general buzz going. b. Ads will explain the service, display coverage area, area hotspots, the Circuit app, etc 2. A Newsletter a. Reach out to Circuit’s Southern California riders, including San Diego riders, highlighting the new service Media Outreach: 2021/10/12 City Council Post Agenda Page 486 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 34 - Union Tribune (Thursday South Bay edition), Star News, El Latino and other print outlets will be used, as well as possible radio advertisement. Month of Launch Circuit will continue media outreach / social media ads throughout the initial launch of the campaign to continue momentum and drive widespread awareness. Circuit can organize a ribbon-cutting event and coordinate press releases to announce the formal launch. Additional Marketing Items 1) More Promotional Flyers/Postcards placed in local businesses and shared with community centers 2) Organic Social Media Posts on both Circuit’s Instagram page, and the City’s Instagram page (if allowed) announcing the service and highlighting area hotspots that will be within Circuit’s coverage area. Cross-posting to Facebook, Twitter, and LinkedIn as appropriate. 3) Photoshoot with local community leaders posted on both Circuit’s and City’s Instagram page (with City’s permission) to encourage more media coverage 4) Optional Assets Cities Have Provided: a. Sandwich boards (or similar item) placed near local transit hubs, public parking lots and area hotspots to promote the service. b. Posters attached/ displayed on street lights c. Adding / highlighting Circuit on Chula Vista’s official website Throughout the Program Circuit will post about Chula Vista on social media and continuously pitch the service to clients via advertising RFPs for the San Diego region, and email. Circuit will also work with the City for any outreach and marketing activities. 1) Organic Social Media a) Highlighting advertisers that wrap the cars b) Post photos of riders enjoying the service c) Promote local events that Circuit is involved in etc. 2) Rider Newsletters a) Circuit will keep in touch with riders via newsletters to inform them of any service updates, advertiser giveaways/offers and more b) Rider Newsletters will also let passengers know of advertising opportunities to help spread awareness to local businesses 2021/10/12 City Council Post Agenda Page 487 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 35 3) Advertiser Pitches a) Sales team will pitch Chula Vista to advertisers RFP looking to target the Southern California area b) After getting a better understanding of rider demographics, sales team can leverage these findings and pitch to brands who target similar demographics. Note: The response should consider and discuss target audience, with consideration of promoting users of service / riders, groups in communities to reach, workplaces, destinations, and Multi-Unit Dwellings. See Section J.8 of the CMO Implementation Manual for details. 31. Describe how you will engage with other community stakeholders affected by the project. 2021/10/12 City Council Post Agenda Page 488 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 36 The City also works a variety of community based organizations to provide programming and services to our senior and low-income community. The City will promote the new service through CBOs such as the Chula Vista Community Collaborative, Community Through Hope, South Bay Community Services and work with the County of San Diego’s SoCAN (South County Action Network) group to ensure senior service providers and housing complexes are aware of the CV Community Shuttle. These community partners provide a broad network into the community through the use of community health workers (Promotores) and Resident Leadership graduates who have been trained to work with the City and school districts to address health issues in their communities and empower residents with information and education on important topics. Partnerships with local medical facilities, grocery outlets and other senior serving amenities will be established and opportunities for hosting of kiosks in these locations will be explored. Long-term additional exploration of financial sustainability will be explored with these entities and the future Bayfront convention/hotel, Seven Mile Casino and Third Avenue Village Association to determine if potential sponsorship opportunities exist. Note: The following should be considered and discussed in the response: local businesses, residents, or other stakeholders who may be affected by new construction or other aspects of the project. Please discuss specific events, materials, audiences, and approaches. See Section J.8 of the CMO Implementation Manual for details. ATTESTATIONS AND SIGNATURE 1. I, the authorized officer to represent and sign this application on behalf of my organization/tribe as the Lead Applicant, have read, understand and agree to abide by all of the requirements, terms and conditions in the CMO Implementation Manual; 2. I attest to all of the following: a. Our organization/tribe is not an existing CARB Clean Mobility Options grantee or sub-grantee and requesting funding for expanding the same type of project in the same project area; b. Our team includes at least one team member with the minimum one year of experience operating mobility services or we commit to select a mobility service provider from the Directory or an entity who meets the minimum qualification criteria within 3 months from the voucher agreement execution date; c. If we are applying for voucher funding for infrastructure: 2021/10/12 City Council Post Agenda Page 489 of 620 MOBILITY PROJECT VOUCHER APPLICATIONV.2 37 i. We understand and agree to comply with CEQA requirements set forth in the CMO Program Implementation Manual; ii. We understand the required permits and necessary permissions to operate the project service(s); iii. The infrastructure will be used primarily to support the service of our core project model; d. If we are using a TNC for the core project model, services will always operate by zero-emission vehicles; e. Our team complies with all applicable State and/or federal conflict of interest laws; and f. All information provided in this application and any attachments are true and correct. Signed by the authorized officer: Name: Dennis Gakunga Signature: Title: Chief Sustainability Officer Date: 10/20/2020 Applications may be submitted by email at application@cleanmobilityoptions.org, or by mail to the following address: PLEASE RETURN SIGNED DOCUMENTS TO: Attention: Clean Mobility Options CALSTART 48 South Chester Avenue Pasadena, CA 91106 www.cleanmobilityoptions.org 2021/10/12 City Council Post Agenda Page 490 of 620 MOBILITY PROJECT VOUCHER AGREEMENT FOR Project Lead Organization Name FOR Voucher Pilot Program 2021/10/12 City Council Post Agenda Page 491 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 2 of 17 Table of Contents Project Information: 3 Lead Applicant (Awardee) Information 3 Project Title 4 Project Summary 4 Budget (See Exhibit B) 4 Community Resource Contribution Items (See Exhibit D) 4 Project Milestone Schedule (See Exhibit C) 4 Community Outreach Plan (See Exhibit F) 4 Project Area Information 5 Supporting Public Agency Profile (If Applicable) 5 Motor Vehicle Owner Information (If Applicable) 6 Fleet Operator Information (If Available)* 6 Mobility Project Voucher Agreement Terms and Conditions: For Lead Applicant (Awardee): 7 Mobility Project Voucher Agreement Terms and Conditions: For the Program Administrator (CALSTART, Inc.): 12 Voucher Agreement Billings 14 Audits of Records and Site Visits 15 Termination 16 Authority: Attestation and Signature 17 Exhibits 17 Exhibit A: Notice of Proposed Award Exhibit B: Approved Budget, as amended (as applicable) Exhibit C: Project Milestone Schedule Exhibit D: Community Resource Contributions Exhibit E: Application Modifications and Clarifications Exhibit F: Application Submission and Attachments (Original) Exhibit G: Resolution/Project Approval Exhibit H: Conflict of Interest Declaration Exhibit I: Confidentiality Statement 2021/10/12 City Council Post Agenda Page 492 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 3 of 17 VOUCHER AGREEMENT MOBILITY PROJECT VOUCHER Clean Mobility Options Voucher Pilot Program This Voucher Agreement reserves funds for the proposed plan outlined in Mobility Project Voucher Application #MP20W1A-1 submitted on 10/20/20 at 9:00:xx, as amended by the Program Administrator. Any changes will not be authorized unless signed and approved in writing by the Program Administrator and signed by both parties. VOUCHER NUMBER: MP20W1A-# DATE OF EXECUTION: _______________ ● VOUCHER AGREEMENT TERM: 5 YEARS FROM VOUCHER EXECUTION DATE: ___________________________ ● VOUCHER FUNDING TERM: 3 YEARS FROM VOUCHER EXECUTION DATE: ___________________________ ● TOTAL VOUCHER AMOUNT NOT TO EXCEED: $[insert approved voucher amount] 1) Project Information: 1. Lead Applicant (Awardee) Information Organization Name: [Insert name of Lead Applicant] Parent Organization (if applicable): [Remove if Inapplicable] Organization Type: □ Public Agency □ Tribal Authority □ Nonprofit organization Mailing address: [Insert Organization’s Address] City: State: CA Zip Code: Lead Applicant Primary Contact: [Insert Contact Name and title] Phone: [Insert Primary Contact’s Phone Number] Primary Email: [Insert Primary Contact’s Email Address] 2021/10/12 City Council Post Agenda Page 493 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 4 of 17 2. Project Title: [Insert Project Title] 3. Project Summary: [short summary - Insert from Press Release summary] 4. Budget: Total Budget $x,xxx,xxx See Exhibit B for details. Promise to Repay Approved Costs: This voucher represents a promise to repay for approved costs used to (check all that apply): 1. ___ Lease or take ownership of motor vehicle(s) (GVWR 2,000 lbs or more) 2. ___ Lease or take ownership of bicycles, scooters, or other vehicles (under 2,000 lbs GVWR) 3. ___ Installation of electric vehicle supply equipment (EVSE) 4. ___ Installation of other infrastructure (Explain:_[for example, bike infrastructure, solar infrastructure if applicable (list detail)]_________________) 5. ___ Other (Explain:______________________) 5. Community Resource Contribution Items: See Exhibit D. 6. Project Milestone Schedule: See Exhibit C. 7. Community Outreach Plan: See Exhibit F (Questions 30 and 31 in Application). 2021/10/12 City Council Post Agenda Page 494 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 5 of 17 8. Project Area Information: ● Location (City/Neighborhood): [insert from Press Release description file] ● Project Area Eligibility Basis: [check as applicable and provide details] □ SB 535 Disadvantaged Communities, indicated by Census Tracts: [insert tract numbers] □ Affordable housing facility address: [insert addresses and whether a DAC or LIC] □ Tribal lands within AB 1550-designated low-income communities or SB 535 Disadvantaged Communities, indicated by Census Tracts: [specify which Census Tract applies or if entire reservation is covered), as applicable, specify if AB 1550 or DAC] 2) Supporting Public Agency Profile (If Applicable): Must be completed only if the lead applicant is a nonprofit organization. See Letter of Commitment from Public Agency submitted with application. X Applicable Not Applicable Organization Name:delete table if not applicable] Parent Organization (if applicable): Primary Contact Name: Mailing address: City: State: Zip Code: Phone: Primary Email: 2021/10/12 City Council Post Agenda Page 495 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 6 of 17 3) Motor Vehicle Owner Information (If Applicable): Information about the party that will take ownership of motor vehicle(s) funded by CMO. May be the same or different party than the lead applicant. Must be completed if the project will take ownership of motor vehicles. Does not apply to vehicles that are not being directly purchased with CMO funds. X Applicable Not Applicable Organization Name: [delete table if not applicable] Parent Organization (if applicable): Primary Contact Name: Mailing address: City: State: Zip Code: Phone: Primary Email: Motor Vehicle Type (If known): 4) Fleet Operator Information (If Available)* May be the same or different party than the lead applicant and/or vehicle owner. X Selected Not Yet Selected * Organization Name: [delete table if not yet selected. Keep note] Parent Organization (if applicable): Primary Contact Name: 2021/10/12 City Council Post Agenda Page 496 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 7 of 17 Mailing address: City: State: Zip Code: Phone: Primary Email: * Note: Securement of Mobility Provider with contract is due by first payment request for any vehicle or infrastructure equipment, or within three months from the voucher agreement execution date, whichever is sooner. 5) Mobility Project Voucher Agreement Terms and Conditions: For Lead Applicant (Awardee): As a condition for participating in the State of California, Air Resources Board (CARB) Clean Mobility Options Voucher Pilot Program (CMO), implemented through the CMO Implementation Manual, the Lead Applicant, [Insert Org Name] hereafter referred to as “Awardee,” must comply with the requirements below: General Requirements 1. CMO Program Compliance. Awardee has read, understands and agrees to all provisions, project criteria, and program requirements of the CMO Voucher Pilot Program, which are contained in the CMO Implementation Manual dated September, 10, 2020 (as well as any changes or updates to the CMO Implementation Manual, which can be found at: https://www.cleanmobilityoptions.org/implementation-manual/, and the Application dated October 20, 2020. The CMO Implementation Manual and subsequent amendments and Application described above constitute part of this agreement and are incorporated in full into this Agreement by reference; 2. Exhibits. Exhibits to this Voucher Agreement shall be construed with, and as an integral part of, this Agreement; 3. Order of Precedence. In case of conflict between or among the terms of this Agreement and the document(s) incorporated by reference, the provisions of the following documents shall take precedence in the following order: 1) California Air Resources Board Grant number G17-CMDC-01 terms and conditions, 2) this Agreement and future amendments thereto, 3) Exhibits to this Agreement; 4. Awardee Ensures Partner and Sub-Contractor’s CMO Program Compliance. Awardee agrees to ensure that all partners and subcontractors agree to all provisions of CMO, implemented through the CMO Implementation Manual, and to notify CARB and the Program Administrator immediately if Awardee becomes aware that partners or subcontractors are out of compliance; 5. Awardee must be in compliance and remain in compliance with all applicable federal, state, and local rules and regulations; 2021/10/12 City Council Post Agenda Page 497 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 8 of 17 6. Awardee understands that this CMO voucher is only valid for this specific use as prescribed in the application and this agreement, and that any voucher funds provided based on this voucher agreement will be null and void if the use identified herein changes prior to voucher redemption without approval from the Program Administrator or for noncompliance with applicable CMO Voucher Pilot Program requirements; 7. Community Resource Contributions. Awardee agrees to provide the community resource contributions listed in the voucher agreement to supplement voucher funding with community investments as specified in the application and this voucher agreement; 8. Community Outreach and Education. Awardee agrees to conduct community outreach and education events as specified in the application and this voucher agreement; 9. Awardee understands and agrees to coordinate with other CARB Low Carbon Transportation Investment Projects, including the One-Stop-Shop Pilot Project, and the STEP as specified in the CMO Implementation Manual; 10. Branding and Communications. Awardee agrees to follow instructions outlined in the CMO Awardee General Branding and Communications Toolkit when publicly communicating about the program, including to display both th e Clean Mobility Options Pilot Program logo and the California Climate Investments logo on all outreach and education materials. Awardee agrees to acknowledge the California Climate Investments program as a funding source from the CARB Low Carbon Transportation program whenever projects funded, in whole or in part by this agreement, are publicized in any news media, websites, brochures, publications, audiovisuals, or other types of promotional material. Awardee understands that the acknowledgment must read as follows: “[Insert Project Title] of the Clean Mobility Options Voucher Pilot Program is part of California Climate Investments, a statewide initiative that puts billions of Cap-and-Trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment — particularly in disadvantaged communities.” Guidelines for the usage of the CCI logo can be found at http://www.caclimateinvestments.ca.gov/logo-graphics-request; 11. Outreach Material Approvals. Awardee understands and agrees that all outreach materials, project websites, press releases and press events must receive prior approval from the Program Administrator; 12. Awardee understands and agrees that the Program Administrator may use the Awardee organization name, Awardee partner organization names, and any descriptive language and/or branding and imagery used in the application and/or in the execution of the voucher during CMO program activities and events for use in educational or promotional materials 2021/10/12 City Council Post Agenda Page 498 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 9 of 17 in print, multimedia, or web form. Language, branding, imagery and/or photos and videos will only be used for purposes related to the CMO program. 13. Insurance. Awardee agrees to comply with all insurance requirements specified in the CMO Implementation Manual, which includes ensuring partners insurance compliance. Awardee agrees to submit any required insurance documents within 90 days of voucher execution, including submission of an annual proof of coverage to the Program Administrator during the Voucher Agreement Term. Awardee understands no work shall begin and no payments will be made under this voucher agreement until Awardee and partners insurance is deemed compliant with the program requirements by the Program Administrator; 14. CEQA Compliance and Permitting. Awardee agrees to fulfill any CEQA Compliance and Permitting Requirements specified in the CMO Implementation Manual; Awardee understands no payment will be made under this voucher agreement until full compliance is met for all CEQA requirements as set forth in the CMO Implementation Manual. 15. Data Storage and Security. Awardee agrees to comply with data storage and security requirements specified in the CMO Implementation Manual; 16. Awardee agrees to comply with all requirements outlined in the Voucher Agreement General Provisions specified in the CMO Implementation Manual; 17. CMO Event Participation. Awardee understands and agrees to participate in events, training, and meetings as required by the Program Administrator or CARB; 18. In the event that CALSTART, Inc. is no longer a Program Administrator prior t o the end of voucher agreement term, Awardee agrees to sign the amended voucher agreement with the new Program Administrator selected by CARB. 19. Awardee understands it is prohibited from using voucher funds to aid or support a sectarian or denominational school or any school not under the exclusive control of the officers of the public schools pursuant to California Constitution, article IX, section 8. CALSTART, Inc. and CARB reserve the right to obtain additional information from the Awardee to determine compliance with California Constitution, article XVI, section 5 and article IX, section 8. Failure to provide any requested information may result in denial of voucher funding. Vehicles: Applies to Motor Vehicles, Bicycles, and Scooters (as applicable to voucher) 20. Vehicle Acquisition. Awardee agrees that all vehicles obtained with CMO funds will meet the CMO program’s vehicle eligibility requirements and will comply with CMO voucher redemption requirements as stated in the CMO Implementation Manual; 21. Motor Vehicle Registration. Awardee agrees to register motor vehicles obtained with CMO funds in California with the Department of Motor Vehicles (DMV). Military vehicles are not subject to this requirement; 22. Awardee agrees to allow CARB, Program Administrator, or their designee to verify the vehicle registration with the DMV; 23. Insurance. Awardee agrees to maintain vehicle insurance as required by law and to the minimum requirements specified in the CMO Implementation Manual; 2021/10/12 City Council Post Agenda Page 499 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 10 of 17 24. Controls and Systems. Awardee agrees to never modify the vehicle’s emission control system, engine, or engine software calibrations; 25. Charging. Awardee agrees to ensure plug-in vehicles purchased with a CMO voucher, including plug- in hybrid vehicles and plug-in electric vehicles, will be plugged in regularly as recommended by the vehicle manufacturer to ensure battery durability, efficiency, and reliability for community users; 26. Use. Awardee agrees to use all CMO project vehicles in accordance with the project plan and pursuant to CMO Implementation Manual requirements; 27. Operation. Awardee agrees to own/lease and operate voucher-funded vehicles consistent with the application project design and consistent with CMO Implementation Manual requirements for a minimum four-year of project operation period; 28. Non-CMO Funded Project Vehicles. Awardee agrees that project vehicles that are not funded by CMO but that are used and operated for the CM O project will be used and operated consistent with CMO Implementation Manual requirements during the voucher agreement term; 29. Ownership. Awardee agrees to retain ownership/lease of the vehicle for a minimum 4-year of project operation period, unless given explicit prior written approval to sell the vehicle from CARB or its designee; 30. Records. Awardee agrees to keep written records of the vehicle purchase/lease for a minimum 4-year of project operation period and provide CARB or its designee with these records within 10 calendar days of their request. These records include but are not limited to the vehicle invoice, proof of purchase, DMV records, vehicle payment information and related bank records, and purchaser/lessee fleet information; 31. Emissions Reductions. Awardee agrees that the purchased/leased vehicle and emission reductions it generates shall not be used as emission reductions to comply with an enforcement obligation of any person or entity; 32. Quarterly Usage Survey and Questionnaire. Awardee agrees to complete the quarterly usage survey and questionnaire throughout the 5-year voucher agreement term as requested by CARB; 33. Telematics. Awardee agrees to equip all project vehicles with telematics hardware that allow for recording of usage data, consistent with data collection requirements specified in the CMO Implementation Manual; 34. In the event that installation of telematics hardware found to be infeasible, Awardee agrees to provide an alternative approach to collect necessary location and usage data with prior approval from the Program Administrator; 35. If prior to the end of the 5-year voucher agreement term the Project Lead is unable to continue operating the vehicle in accordance with the project plan, Awardee agrees to notify the Program Administrator immediately; 36. Ownership Transfer. If prior to the end of the 5-year voucher agreement term, Awardee is unable to continue operating the vehicle in accordance with the project plan, agrees to transfer ownership of the vehicle to a different party who will use the vehicle to provide community mobility services. The party and plan must be approved by the Program Administrator with consultation with CARB; 2021/10/12 City Council Post Agenda Page 500 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 11 of 17 Infrastructure 37. Infrastructure Siting. Awardee agrees to ensure that infrastructure obtained with CMO funds is sited in locations(s) as specified by our project plan, as modified by the Program Administrator; 38. Awardee agrees to notify the Program Administrator immediately if the Project Lead is unable to site the infrastructure (obtained with CMO funds) in location(s) previously specified by the project plan, as modified by the Program Administrator. The new proposed location must be approved by the Program Administrator; 39. Infrastructure Permitting and Installation . Awardee agrees to ensure that infrastructure obtained with CMO funds meets infrastructure eligibility requirements listed in the CMO Implementation Manual, and is constructed by a qualified and licensed professional, to obtain and keep records for all required permits. CMO infrastructure installation must follow CEQA Compliance and Permitting Requirements, as listed in CMO Implementation Manual and as stated in General Requirement #14 in this agreement; 40. EVITP Certification Required for Installation of Electric Vehicle Charging Infrastructure and Equipment On Or After January 1, 2022. Awardee agrees to comply with Assembly Bill 841 (Ting, 2020) and Public Utilities Code (PUC) section 740.20, which requires Electric Vehicle Infrastructure Training Program (EVITP) certification for installation of CMO-funded electric vehicle charging infrastructure and equipment for work performed on or after January 1, 2022, as applicable, subject to certain exceptions. All electric vehicle charging infrastructure and equipment funded by the CMO voucher program located on the customer side of the electrical meter shall be installed by a contractor with the appropriate license classification, as determined by the Contractors’ State License Board, and at least one electrician on each crew, at any given time, who holds an EVITP certification. Projects that include installation of a charging port supplying 25 kilowatts or more to a vehicle must have at least 25 percent of the total electricians working on the crew for the project, at any given time, who hold EVITP certification. One member of each crew may be both the contractor and an EVITP certified electrician. The requirements stated above do not apply to any of the following: a. Electric vehicle charging infrastructure installed by employees of an electrical corporation or local publicly owned electric utility. b. Electric vehicle charging infrastructure funded by moneys derived from credits generated from the Low Carbon Fuel Standard Program (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations). c. Single-family home residential electric vehicle chargers that can use an existing 208/240-volt outlet. 41. Property Owner Approvals for Infrastructure Siting. Awardee agrees that if infrastructure obtained with CMO funds is not completely sited on the Project Lead’s owned property and unobtrusive to property not owned by the Project Lead, then Awardee will obtain and keep written approval from the property owner (including public agencies if relevant); 42. Infrastructure Maintenance: Awardee agrees to maintain infrastructure obtained with CMO funds in good repair and in accordance with manufacturer’s recommended use and maintenance through the minimum 4-year project operation period; 2021/10/12 City Council Post Agenda Page 501 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 12 of 17 Planning, Operations, and Maintenance 43. Cost-Reimbursement Program Compliance. Awardee agrees to ensure that all funds that the Awardee seeks reimbursement for are for actual costs incurred that are consistent with the project plan and in compliance with CMO program requirements as listed in the CMO Implementation Manual, including minimum and maximum allowed amounts, and that all reported costs are actual costs that are accurate and verifiable. See Section 7 (Voucher Agreement Billings) of this agreement and CMO Implementation Manual for voucher redemption requirements; 44. Quarterly Reporting. Awardee agrees to collect the project data and report to the Program Administrator on at least a quarterly basis throughout the 5 -year voucher agreement term as specified in the CMO Implementation Manual; 45. FInal Report. Awardee agrees to submit an end-of-project Final Report within 30 days before project completion or voucher agreement end date, whichever is sooner, pursuant to CMO Implementation Manual requirements; 46. Policies and Procedures Document. Awardee agrees to develop policies and procedure document that describes administrative actions for evaluation and processing participants, reservations, vehicle maintenance, and data gathering and reporting; 47. Safety and Accessibility. Awardee agrees to ensure services are delivered consistent with the safety and accessibility requirements specified in the CMO Implementation Manual; 48. Inspection. Awardee agrees to be available for a follow-up inspection by CARB, Program Administrator or their designee, if requested; 49. Awardee has the legal authority to apply for incentive funding for the purchasing entity described in this agreement; 50. Failure to Comply. Awardee agrees that failure to comply with the terms of this agreement may result in repayment to CARB or its designee of voucher funds received; and 51. Enforcement. Awardee understands that the Program Administrator and/or CARB reserves all rights and remedies available under the law to enforce the terms of this agreement. 52. Termination of Agreement. In the case that the Awardee chooses to terminate the voucher agreement prior to voucher agreement term end date, after meeting with the Program Administrator, the Awardee must submit a formal request in writing to the Program Administrator. If there are questions regarding the terms and conditions of this agreement, please contact: CALSTART, Inc. Admin@cleanmobilityoptions.org (626) 744-5670 6) Mobility Project Voucher Agreement Terms and Conditions: For the Program Administrator (CALSTART, Inc.): 1. This voucher agreement signed by CALSTART, Inc. and the voucher awardee (“Awardee”) governs the Project. 2021/10/12 City Council Post Agenda Page 502 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 13 of 17 2. CALSTART, Inc. and CARB have oversight responsibility for the Clean Mobility Options Voucher Pilot Program (CMO). As the administrator of CMO, CALSTART, Inc. acts as CARB’s designee. 3. CARB, as an intended third-party beneficiary, reserves the right to enforce the terms of CMO at any time during this voucher agreement term. 4. CALSTART, Inc. and CARB reserve the right to conduct a site visit(s), evaluation, review, or an audit of this Project over the term of this voucher agreement. 5. CALSTART, Inc., acting as CARB’s designee, is responsible for the followin g: a. Assuring compliance with project eligibility criteria and the minimum requirements for Clean Mobility Options Projects using measures mutually agreed with CARB. b. Reviewing and approving necessary program elements provided by the Awardee, including but not limited to, needs assessment voucher application, voucher eligibility verification, voucher forms, financial documentation, and progress reports. c. Participating in meetings, if necessary, with the Awardee to discuss project refinements and guide project implementation. d. Review and approve all Voucher Payment Request Forms and distribute voucher funds to the Awardee within 30 days of Form approval. e. Providing program oversight and accountability (in conjunction with the Awardee). f. Meeting applicable requirements of statutes, applicable State law, the Fiscal Year (FY) 2017-18, FY 2018-19, and FY 2019-20 Funding Plan for Clean Transportation Incentives, the FY 2017-18 Clean Mobility Voucher Pilot Program Grant Solicitation, the governing Grant Agreement with CARB, and this voucher agreement with the Awardee. g. Ensuring that funds are spent consistent with the Clean Mobility Options Voucher Pilot Implementation Manual (Implementation Manual) and this voucher agreement with the Awardee. h. CALSTART, Inc. or its designee has primary responsibility for conducting project reviews and/or fiscal audits of this project’s administration and implementation. i. In the case of nonperformance, CALSTART, Inc., CARB, or its designee has the authority to recoup Clean Mobility Options Voucher Pilot funds which were received based upon misinformation or fraud, or for which the Awardee or its subcontractors, is in significant or continual non-compliance with the CMO Implementation Manual. CALSTART, Inc. also retains the authority to withhold future payments or prohibit any entity from participating in the Clean Mobility Options Voucher Pilot due to non-compliance with Project requirements. 2021/10/12 City Council Post Agenda Page 503 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 14 of 17 7) Voucher Agreement Billings Payment of voucher agreement invoices will be contingent upon the availabil ity of funds received from the California Air Resources Board (CARB). In the event funds are not available, CALSTART shall have no liability to pay any funds whatsoever to the Awardee or to furnish any other considerations under this agreement. Payments under this Voucher Agreement will be made only for actual verifiable costs incurred. Cost-Reimbursements: Cost reimbursements made under this Voucher Agreement are subject to approval of status reports and verification of any milestones/deliverables and additional supporting and/or compliance documentation required. Invoices will be submitted no less than qua rterly, but no more than monthly in a format consistent with Payment Request (Microsoft Excel file format) that will be furnished. Invoices submitted will clearly summarize total, actual project costs incurred in accordance with project budget and will include sufficient supporting relevant documentation substantiating costs billed. Each invoice must be signed and approved by the Awardee. Capital cost reimbursement requests will require submission of additional supporting documentation and/or compliance documentation along with Reimbursement Form that will be furnished. a. Awardee staff charges will be supported by a listing of each employee to include the name, title, number of hours worked, and hourly rate applied to the labor hours, all supported by time records/timesheets and some means of verifying actual, paid hourly labor rates to include, but not limited to, a paystub or payroll register. b. Subcontractor staff charges will be supported by submitting subcontractor’s invoice to awardee; submission of subcontractor rates and timesheets are not required, c. Travel costs will be itemized on a listing providing information about the date traveled; origin and destination; individuals traveling; and purpose of business travel. All travel costs billed will be supported by itemized receipts and/or invoices with travel amounts reimbursed limited to published maximum per diem amounts per the California Department of Human Resources (CalHR) found at http://www.calhr.ca.gov/employees/pages/travel-reimbursements.aspx. d. All other direct costs will be listed and supported by documentation such as vendor invoices, receipts or other relevant documentation. e. For Awardee only: Applicable non-labor rates used for billing purposes, to include, but not limited to fringe benefit, overhead and G&A rates, will be supported by the methodology in which the rates are derived and applied. An approved cost rate agreement negotiated with a Federal cognizant agency will suffice. f. Ineligible Costs: Food and childcare are NOT eligible reimbursable costs for the CMO program. g. Capital Cost Reimbursements: Capital cost reimbursement requests must meet CMO vehicle and infrastructure eligibility requirements and CMO voucher redemption requirements as listed in the CMO Implementation Manual in order to be eligible for reimbursement. 50% Voucher Reimbursement: Before requesting any payment from the second half of awarded voucher funds, awardees must provide an attestation that the project has secured all needed permits, met required milestones, and the community resource contribution documents are current. 2021/10/12 City Council Post Agenda Page 504 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 15 of 17 Each invoice must provide the CALSTART agreement number, period covered by invoice, and Awardee’s Employer Identification Number and submitted via email to MPVprocessing@cleanmobilityoptions.org or U.S. Postal Service using the following address: Attention: Clean Mobility Options CALSTART, Inc. 48 S Chester Avenue Pasadena, CA 91106 Final Invoice: Upon completion or termination of the Agreement, the Awardee shall submit the final invoice (if any) no later than thirty (30) days after such completion or termination date. The invoice shall be clearly marked as “FINAL” and prepared as indicated above. Payments: 1. Direct Payments: a. Project Lead (Awardee): The Awardee must sign and approve each Invoice submitted to CALSTART, including invoices submitted for third-party capital reimbursement costs. b. Third-Party Direct Payment Assignment (for $10,000 or greater capital cost reimbursements ONLY). Third-party vendors with CMO-funded capital costs totalling $10,000 or greater must be pre-approved by the Awardee and must be registered as an approved CMO vendor (using a CMO Vendor Registration Form) in order to be eligible to receive direct payments. Direct third-party vendor payments are only allowed for capital costs totalling $10,000 or greater; no other cost-reimbursements are eligible for direct third-party payment. 2. Payment will be delayed if CALSTART deems that milestones/deliverables and additional supporting and/or compliance documentation have not been accomplished or sufficiently documented; that milestones/deliverables and additional supporting and/or compliance documentation are not in accordance with specifications; that claimed expenses are not reasonable or insufficiently documented or not valid per the budget; or noncompliance with other terms of this Agreement. 8) Audits of Records and Site Visits All project records, including financial records, are subject to audit. The Awardee shall allow CALSTART, Inc. the California Air Resources Board (CARB, and/or any other agency of the State of California, or any of their duly authorized representatives, reasonable a ccess to and the right of inspection of any and all of the Awardee’s books, documents, papers and records which are directly pertinent to the performance of this Voucher Agreement, for the purpose of making audits, examinations, excerpts and transcriptions during the term of this Voucher Agreement and for a period of three (3) years thereafter, unless the CALSTART notifies Awardee prior to the expiration of such three -year period, that a longer period is necessary. 2021/10/12 City Council Post Agenda Page 505 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 16 of 17 CALSTART, and/or CARB, and/or its designees have the right to make site visits at reasonable times to review project accomplishments and management control systems and to provide technical assistance, if required. The Awardee must provide and must require sub -awardees to provide reasonable facilities and assistance for the safety and convenience of the government representatives in the performance of their duties. All site visits and evaluations must be performed in a manner that does not unduly interfere with or delay the work. 9) Termination The performance of Services under this Agreement may be terminated by CALSTART for cause upon providing Awardee with five (5) calendar days advance notice. Upon receipt of termination notice, Awardee will use reasonable efforts to mitigate its expenses and obli gations. Termination “with cause” may include but is not limited to failure to comply with the terms of this voucher agreement or the CMO Implementation Manual. 2021/10/12 City Council Post Agenda Page 506 of 620 CMO Mobility Project Voucher Agreement [Insert Lead Applicant Name] Page 17 of 17 10) Authority: Attestation and Signature The signator hereto represents and warrants that he or she is authorized and empowered and has the legal capacity to execute this Voucher Agreement and to legally bind AWARDEE both in an operational and financial capacity and that the requirements and obligations under this Voucher Agreement are legally enforceable and binding on AWARDEE. IN WITNESS WHEREOF, the parties have hereunto executed this Voucher Agreement as of the date first written below. [Insert Project Lead Org Name] CALSTART, Inc. [Insert Authorized Signer’s Name] Date Piero Stillitano Date [Insert Authorized Signer’s Title and Org] [Insert Signer’s Contact Email] [Insert Signer’s Phone Number] Chief Financial Officer Awardee understands that this voucher agreement is not fully executed until after the CALSTART representative signs and dates (Execution date). No work done or vehicle and equipment purchased/leased prior to execution date will be funded through this voucher agreement. 11) Exhibits Exhibit A: Notice of Proposed Award Exhibit B: Approved Budget, as amended (as applicable) Exhibit C: Project Milestone Schedule Exhibit D: Community Resource Contributions Exhibit E: Application Modifications and Clarifications Exhibit F: Application Submission and Attachments (Ori ginal) Exhibit G: Resolution/Project Approval Exhibit H: Conflict of Interest Declaration Exhibit I: Confidentiality Statement 2021/10/12 City Council Post Agenda Page 507 of 620 1 Community Congregational Development Corporation Grant Guidelines and Application The Community Congregational Development Corporation (CCDC) is committed to creating opportunities for older adults with limited incomes in San Diego County to fully participate in the life of the community. To support older adults, we invest in housing, related facilities, and programs and services to support older adults’ physical, social, psychological, and spiritual health and well-being. When considering applications, preference is given to organizations and programs serving seniors in Chula Vista and the broader South Bay region. 1. What areas of work do you fund? CCDC is committed to enhancing the quality of life of older adults experiencing economic challenges through investments and grantmaking in the following areas: •Affordable housing and accommodations to support aging in place. •Affordable transportation with a focus on enhancing mobility options and providing “last mile” connections to public transit. •Social and recreational programs that allow seniors to form and maintain connections with friends and other community members, as well as related infrastructure improvements. 2. What type of activities do you fund? CCDC has historically invested in affordable housing developments for seniors and older adults. In the last few years, we have started to fund pilot projects and the expansion of existing programs and services in the areas of transportation and social engagement, as well as housing- and transit-related infrastructure. We are currently seeking applications that align with the strategic priorities outlined in our strategic plan. We may on occasion provide one-time funding to other projects that respond to the emerging needs of seniors in the community. For example, in 2020, CCDC provided emergency grants to organizations working to minimize the negative impact of COVID- 19 on seniors and older adults. 2021/10/12 City Council Post Agenda Page 508 of 620 2 3. What types of organizations are eligible for funding? CCDC accepts proposals from organizations with a 501(c)(3) designation, organizations with a 501(c)(3)-designated fiscal sponsors, or public agencies. To be considered for funding, nonprofit organizations are required to submit a copy of their IRS 501(c)(3) determination and Franchise Tax Board letters. Entities without tax-exempt status may apply for funding for charitable projects provided they have a contractual relationship with a fiscal sponsor. A fiscal sponsor is a tax- exempt organization that agrees to provide fiduciary oversight, financial management, and other administrative services to the program or project in exchange for an administrative fee, typically 5-10% of the program or project budget. Public agencies are required to submit a memo on government agency letterhead signed by an official who can enter contracts to accept and obligate agency funds, along with the names and signatures of individuals authorized to act as a liaison for the agency. 4. What organizations have you funded in the past? In 2020, CCDC provided funding to 14 organizations prior to establishing its strategic plan. Future requests should align with the strategic priorities outlined in our strategic plan. 5. What is the average grant size? CCDC seeks to provide meaningful support to organizations that have proven effective at enhancing the quality of life of seniors while remaining open to new approaches and innovations in program and service delivery. To that end, CCDC seeks proposals in the following suggested ranges: Suggested Annual Funding Levels Guidelines Up to $50,000 Pilot programs and/or start-up organizations $50,000-$249,999 Expansion of existing programs and services by an established organization $250,000-$1 million Capital expenditures or multi-year funding for programs and services Over $1 million Development of affordable housing, programs that provide ongoing support to seniors in maintaining safe and stable housing, and transportation programs and services 2021/10/12 City Council Post Agenda Page 509 of 620 3 6. What don’t you fund? CCDC does not make grants or donations directly to individuals or fund lobbying and political campaigning. We prefer to fund projects in Chula Vista and the South Bay region of San Diego County. 7. What is your grant process? CCDC meets on a regular basis to review proposal submissions. Generally, the Executive Committee will respond to applications within six weeks of receipt. In some cases, the Board may request a site visit prior to making a funding decision. If a site visit is required, you will receive notice by the decision letter date. 8. What information must be submitted along with the proposal narrative? Applicants are asked to submit the following information along with the application for consideration. Proposals that do not include the following documentation may be considered incomplete and review may be postponed until the following period. • Organizational budget or balance sheet or profit/loss statement for the current calendar year. If a public agency, please submit a budget for the department seeking funding. • Detailed budget for the specific project, including other sources of committed, conditional, or potential funding. • A copy of the latest Audited Financial Statement preferred or pertinent pages from latest IRS Form 990. • Determination letters showing current charitable status under Internal Revenue Code Section 501(c)(3) and California Revenue & Taxation Code Section 23701(d). 9. What is required of grantees that receive funding from CCDC? Acceptance If the organization is awarded a grant, the letter of agreement must be signed by an authorized representative and returned to CCDC. 2021/10/12 City Council Post Agenda Page 510 of 620 4 Reporting CCDC requires that grantees commit to using all funds for the purposes and within the timeline described in the application. Grantees are expected to submit a progress and expenditures reports every six months until grant funds are expended. Expenditure reports should include receipts for any goods or services over $5,000. Publicity CCDC requests that grantees include its name and/or logo in all promotional and donor materials (e.g., banners, signage, website, brochures, reports, videos, and press releases) related to the funded program or project. An electronic version of the CCDC logo suitable for reproduction will be included with letters notifying applicants of funding awards. Acknowledgment CCDC welcomes thank you letters and testimonials but prefers not to receive recognition items to ensure that organizations maximize the resources they allocate to achieving program outcomes. 10. Additional Questions If you have any questions regarding the application or selection process, please contact Laurie Orange at 619-233-3273 or alagria@me.com or at inquiries@CCDC4seniors.org. 2021/10/12 City Council Post Agenda Page 511 of 620 5 Community Congregational Development Corporation Grant Application LEAD APPLICANT INFORMATION 1.Lead Organization _________________________________________________ 2.Federal Tax ID/EIN 1 ______________________ 3.Lead Organization Type  Nonprofit with 501(c)(3) designation  Organization with a 501(c)(3)-designated fiscal sponsor  Public agency 4.Lead Organization Street Address __________________________________________________________________________ City _________________________________ State _________ ZIP Code _____________________ 5.CEO/Authorized Signer First Name ____________________________________ 6.CEO/Authorized Signer Last Name ________________________________ 7.CEO/Authorized Signer Phone ______________________________________ 8.CEO/Authorized Signer Email _________________________________ 9.What amount of funding are you requesting? __________________________________________________________________________ 10.Mailing Address for Funding Award Check (if funding request approved): ________________________________________________________________________ City State ________ ZIP Code . _________________________________ ___________________________ 1 If you do not have a Federal Tax ID/EIN, please complete the Fiscal Sponsorship section of the application. City of Chula Vista 956000690 276 Fourth Avenue Chula Vista CA 91910 Maria Kachadoorian 619-691-3636 mkachadoorian@chulavistaca.gov $877,824 (Year 1 - $119,767; Year 2 - $122,243; and Year 3 - $635,814) 276 Fourth Avenue, Attn: Stacey Kurz CA 91910Chula Vista 2021/10/12 City Council Post Agenda Page 512 of 620 6 PROGRAM CONTACT 11.Program Contact First Name ___________________________________ 12.Program Contact Last Name __________________________________ 13.Program Contact Title __________________________________________________________________________ 14.Program Contact Phone _____________________________________ 15.Program Contact Email ___________________________________ FISCAL SPONSORSHIP If your organization fulfills a charitable purpose but does not have a tax-exempt status and is not a public agency, you will need to partner with an organization with a 501(c)(3) designation to serve as your fiscal sponsor (see Question 3 above for definition). 16.Does your organization have a fiscal sponsor? If no, continue to the Program Information section of the application.  Yes  No 17.Is the fiscal sponsor a 501(c)(3)? If no, the program or project is not eligible for funding.  Yes  No 18.Fiscal Sponsor Organization Name _______________________________________ 19.Fiscal Sponsor EIN/Tax ID* ______________________________ 20.Sponsor Organization Street Address ____________________________________________________________________________ City ___________________________________ State ___ ZIP Code _____________________________ Chula Vista Dennis Gakunga Chief Sustainability Officer (619) 476-5355 Dgakunga@chulavistaca.gov n 2021/10/12 City Council Post Agenda Page 513 of 620 7 21.Fiscal Sponsor CEO First Name ___________________________________ 22.Fiscal Sponsor CEO Last Name ______________________________ 23.Fiscal Sponsor CEO Phone _________________________________________ 24.Fiscal Sponsor CEO Email _________________________________ PROGRAM INFORMATION 25.Program/Project Name _____________________________________________________________________________ 26.Program/Project Area  Affordable housing and accommodations to support aging in place  Affordable transportation with a focus on enhancing mobility options and providing “last mile” connections to public transit  Social and recreational activity programs that allow seniors to form and maintain connections with friends and other community members 27.Program/Project Type  Pilot programs and/or start-up organizations  Expansion of existing programs and services by an established organization  Capital expenditures or multi-year funding for programs and services  Development of affordable housing, programs that provide ongoing support to seniors in maintaining safe and stable housing, and transportation programs and services CV Community Shuttle n n 2021/10/12 City Council Post Agenda Page 514 of 620 8 28.What percentage of your program or project clients are older adults/seniors over age 55?  None  Less than 25%  25%-50%  51%-75%  More than 75%  All the organization’s clients are older adults/seniors over age 55  Do not know 29.How many older adults/seniors do you anticipate serving through this grant? _____________________________________________________________________________ 30.How long will the requested funds enable your organization to provide the approved activity or service? __________________________________________________________________________ 31. Describe the characteristics of the older adult and senior population(s) you intend to serve. (max. 150 words) n Services would be open to all seniors living in the service area. Three years The City of Chula Vista is dedicated to providing our senior community with meaningful programming and services to meet the needs throughout our community. Specifically, in Northwest Chula Vista the senior population often struggle to have basic transportation needs met to access food, make medical appointments, fill prescriptions and interact socially. Roughly 20 percent of residents in Northwest Chula Vista lack access to a vehicle (compared to 4.7 citywide) and the Median Household Income is less than $46,300, an indicator of severe disadvantage as defined by the State of California. 2021/10/12 City Council Post Agenda Page 515 of 620 9 32.What geographic areas will the program serve (select all that apply to the program)  Chula Vista  Bonita  Imperial Beach  National City  South San Diego  San Ysidro  Unincorporated County  Other (please describe) _______________________________ 33.Program Description. Describe the program or project for which you are seeking funding, including how it addresses the needs of those older adults and senior populations and aligns with CCDC’s strategic priorities, and how the program or project will be carried out. Please attach a detailed budget narrative for your program or project as an attachment. (max. 500 words) In the Spring of 2021 the City of Chula Vista was awarded a voucher through the Clean Mobility Options (the "CMO") program to initiate a pilot program to service low-income seniors with free on demand, door-to-door shuttle services via neighborhood electric vehicles in partnership with Circuit Transit inc. ("Circuit"), called the "CV Community Shuttle". Due to limitations with CMO funding, the eligible area for the service (the "CMO service area") was limited to the Broadway corridor in northwest Chula Vista and easterly to a portion of Third Avenue and funding covered the first two years of service only, with uncertainty of operations in the third year. Currently the CMO grant covers 5 vehicles (4 sedans and 1 ADA van) that will serve the public within the CMO service area 12 hours a day for 5 days per week for the first two years of the project. The City desires to expand the service to provide free shuttle service to 'all' seniors in the northwest area of Chula Vista, defined as the area of: I-805 freeway to the east, L Street to the south, Bayfront to the west and Chula Vista border to the north (the "CCDC service area" and Attached - CV Community Shuttle Service Area Map). If funded with this additional request to CCDC, the City would be able to expand the service to the CCDC service area with 1 additional ADA van (to total 6 vehicles) for years one and two, and maintain the service for all vehicles into the third year in order to provide additional time to develop a sustainability plan for long-term operations. The CV Community Shuttle would be open to "seniors only" during the first year of service, anticipated to begin in early Fall 2021, allowing time to educate seniors and perfect services. In order to provide long-term sustainability and maintain free service for seniors beyond the life of CMO or CCDC funding, after year one the service would increase ridership by expanding to the general public for a low fare. Additionally, the City and Circuit will work together to acquire paid advertising and other partnerships for long-term viability to maintain the shuttle service free for seniors. Circuit will work with the City to adjust service capacity based on demand, to ensure seniors maintain optimal service and remain the CV Community Shuttle priority customer. Not only will the service provide access to services and amenities but it will also provide a critical regional link to the E Street and H Street Trolley Stations and associated bus service by providing a new first and last mile shuttle service. 2021/10/12 City Council Post Agenda Page 516 of 620 10 34.Organizational Experience and Capacity. Describe the experience and capacity of the lead organization and its individual team members to carry out the program or project. (max. 300 words) The City of Chula Vista adopted an Age-Friendly Action Plan in 2018 which identifies strategies to enhance transportation services and opportunities for seniors to access services and social interactions throughout the City. As the lead agency for the grant the City would be the financial fiduciary and contract with Circuit to provide services. Circuit is an experienced neighborhood electric vehicle shuttle operator, with 9+ years of experience operating NEV programs with a fully electric fleet. Circuit works with innovative cities, private developers and forward-thinking advertising partners to offer electric shuttles that make mobility easier, smarter, safer, more affordable, and fun. Circuit has proven pilot programs that have scaled to longer term programs. Circuit has been operating in Southern California since 2013 and under contract with the City of San Diego on the Free Ride Everywhere Downtown program since 2016. 2021/10/12 City Council Post Agenda Page 517 of 620 11 35. Project Goals. List three goals you seek to accomplish with this grant. Be sure to describe how the goals aligns with the activities described in the program description above. (max. 150 words) 36. Short Term Objectives and Outcomes: State short-term objectives to achieve the proposed goals of the program or project and describe how you are planning to evaluate and report on progress. Include metrics your organization will use to measure and report on the grant's outcomes. Include a timeline for grant-funded activities with benchmarks and milestones. (max. 350 words) This project aims to reduce the disparities faced by the senior community by providing equity in access to essential services (e.g. grocery, medical, banking, transit, and social). The “CV Community Shuttle” will not only provide a “clean” mobility option but will service our most vulnerable in the community, by: ●Reduce reliance on single occupant vehicles; ●Provide access to those without vehicles; and ●Decrease seniors driving beyond their capabilities. In addition, new development along the Bayfront will likely provide opportunity for essential jobs to low-income residents. Many seniors continue to work, seek part-time jobs or volunteer for most of their lives. Shuttle services can provide a key link for these residents to access the Bayfront for both professional and social needs. Since the City has established benchmarks through the CMO voucher, all milestones would be aligned with these efforts and ensure efficient reporting from Circuit and the City to both funders. Within the first year of service the City will work with Circuit, the senior community, community-based organizations and partners within the CV Community Shuttle service area to familiarize organizational staff and the community with the shuttles and refine services as applicable. This first year will focus on building trust within the senior community and a strong customer base. Ridership metrics will include both quantitative and qualitative 2021/10/12 City Council Post Agenda Page 518 of 620 12 37. Long Term Outcomes: How will the proposed program or project result in the health and well-being of seniors and older adults? Describe past experience, research, or case studies that support the proposed strategy. What challenges do you foresee and how do you plan to address them? (max. 350 words) statistics to ensure ridership is not only increasing, but customers are also happy with the service provided. As previously mentioned, after year one the CV Community Shuttle will open for a low fare to all customers within the service area of Northwest Chula Vista. Circuit operates successful shuttle programs throughout the United States. By providing door-to-door on demand access to essential services the physical and mental health and wellness of residents will be improved by providing greater access to preventative care and social interactions. Circuit understands that trust and reliability are critical to the senior community and have committed to providing consistent staff and service to customers. Building trust will be challenging and it will be important for city staff, local organizations and community leaders to be informed of the services and provide word of mouth promotion. In addition Circuit and the City will establish an educational campaign along with key community partners to advertise and familiarize seniors with the new 'clean' transportation option. 2021/10/12 City Council Post Agenda Page 519 of 620 13 PARTNERS AND FUNDERS 38. Is the organization collaborating with other partners on this program or project?  Yes  No 39. Describe the experience of the lead organization and its partners in working together in the last three years to fulfill program or project goals and objectives. (max. 300 words) Circuit is under contract for the CMO voucher program to provide services. While this is the first time the City of Chula Vista has engaged with Circuit, they come highly recommended by cities throughout the country, including the City of San Diego. The contract includes strict operating standards and goals to ensure optimum service is provided. 2021/10/12 City Council Post Agenda Page 520 of 620 14 40. Are you seeking or have you received funding from other sources for the program or project?  Yes  No 41. If you are seeking or have received funding from other sources, please provide the names of those sources, level of funding provided or sought, and whether the funding is committed, conditional, or potential funding. (max. 300 words) As of April 2021, the City has committed funding in the amount of over $900,000 from the Clean Mobility Options Voucher Pilot Program (CMO) funded by California Climate Investments (CCI), a statewide initiative that puts billions of Cap-and-Trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment— particularly in underserved communities. The voucher is a three year program that builds a sustainability requirement into ensuring the services are maintained beyond the life of funding. 2021/10/12 City Council Post Agenda Page 521 of 620 15 ATTACHMENTS 42. Proof of Eligibility  Copies of the organization’s 501(c)(3) determination letter and Franchise Tax Board letter are attached to this application. OR  A memo on government agency letterhead signed by an official who can enter contracts to accept and obligate agency funds is attached to this application and includes the names and signatures of individuals authorized to act as a liaison for the agency. 43. Additional Documents  Organizational budget or balance sheet or profit/loss statement for the current calendar year. If a public agency, please submit a budget for the department seeking funding.  Detailed budget for the specific project, including other sources of committed, conditional, or potential funding.  A copy of the latest Audited Financial Statement preferred or pertinent pages from latest Internal Revenue Service Form 990.  Determination letters showing current charitable status under Internal Revenue Code Section 501(c)(3) and California Revenue & Taxation Code Section 23701(d). 2021/10/12 City Council Post Agenda Page 522 of 620 16 REPRESENTATION ON AUTHORITY By signing this application, I represent and warrant that the information provided in this application is true to the best of my knowledge and that I am duly authorized and have legal capacity to serve as the applicant organization's signature authority. Signature Date Name of Authorized Signer: 6/15/21 2021/10/12 City Council Post Agenda Page 523 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista Page 1 of 10 GRANT AGREEMENT This grant agreement (“Grant Agreement”) is entered into by and between the Community Congregational Development Corporation, a California non-profit corporation, (“CCDC”), and the City of Chula Vista, a California chartered municipal corporation, (“City” or “Grantee”), (individually a “Party”; collectively, the “Parties”). I. RECITALS Whereas, CCDC is a charity established to assist low income seniors, and has put in place a process whereby applicants can apply for grants to assist seniors, including by addressing social isolation and transportation services (the “Grant”); and Whereas, City is a government eligible for Grant funds under the terms of the Grant; and Whereas, City applied for a Grant in the approximate. amount of $ 877,824 to be used to support and expand the project service area for the CV Community Shuttle Pilot Project and to add an additional sedan to the service. The CV Community Shuttle program will provide all-electric on- demand shuttle services catered to the needs of the local senior community in the northwest part of Chula Vista, as more fully explained in the City’s Grant application (the “Project”); and Whereas, Grantor agreed to award the requested Grant to City, with the understanding that Project costs in excess of $1,000,000, if any, will be covered by the City or alternate funding source; and Whereas, the Parties desire to memorialize the terms of the Grant to City in this Agreement. NOW, THEREFORE, the PARTIES agree as follows: II. GENERAL TERMS 1. The purpose of this Grant Agreement is to fund work outlined in the City’s submitted Grant Application, incorporated into, and attached to, this Agreement as Exhibit A, as supplemented by the terms in Exhibit B. 2. This Grant Agreement becomes effective when executed by both Parties, which date shall constitute the “Grant Start Date.” The term of this Grant Agreement shall begin at the Grant Start Date, and the City shall not request Grant Funds for Project costs incurred prior to the Grant Start Date. This Agreement shall last three years, unless otherwise terminated or extended by agreement of the Parties. 3. The signatories certify that they are authorized to act on behalf of the Parties in approving and executing this Grant Agreement. 4. All official communication from City to CCDC shall be directed to: Director/Secretary Laurie Orange, alagria@me.com, 619-233-3273, 276 F Street, Chula Vista, CA 91910, with a copy to Mike Green, 227 3rd Avenue, Chula Vista, CA 91910, or such other person as CCDC may designate. All official communication from CCDC to City shall be directed to its Project Manager 2021/10/12 City Council Post Agenda Page 524 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista Page 2 of 10 at: Dennis Gakunga, Chief Sustainability Officer, dgakunga@chulavistaca.gov 619-476-5355, 276 Fourth Avenue | Chula Vista, CA 91910 or such other person as City may designate. 2021/10/12 City Council Post Agenda Page 525 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 3 III. PROJECT EXECUTION AND SCOPE 1. CCDC hereby grants to City a sum of money (“Grant Funds”) in an amount not-to-exceed $1,000,000, in consideration of and on condition that the sum be expended in carrying out the purposes as set forth in the description of Project in this Grant Agreement and its attachments and under the terms and conditions set forth in this Grant Agreement. 2. The City shall expend Grant Funds only in furtherance of the Project, in accordance with this Grant Agreement and all Exhibits hereto. The total amount of the Grant Funds shall not be increased without a written agreement between the Parties. Any Project costs which exceed the Grant Funds shall be the responsibility of the City or other funding source, not CCDC. 3. City shall at all times ensure that Project complies with all state and local laws. 4. The terms and conditions of this Grant Agreement, its attachments and exhibits constitute and contain the entire Grant Agreement and understanding between the Parties, and may not be contradicted by evidence of any prior or contemporaneous oral agreement. IV. MODIFICATIONS, AMENDMENTS, AND EXTENSIONS 1. No amendment, modification, or variation of the terms of this Grant Agreement shall be valid unless made in writing, agreed to, and signed by both Parties. 2. Any request by the City or CCDC for amendments to this Agreement, or to the Project, shall be in writing stating the amendment request and reason for the request. The Parties shall make requests in a timely manner and the responding Party shall respond to such requests within thirty days of receipt. Minor task modifications and staff adjustments do not require amendment of this Grant Agreement. All change notifications shall be made in writing and include a description of the proposed change and the reasons for the change. Any modification or alteration in the Project must also comply with all current laws and regulations. V. FINANCIAL RECORDS AND REPORTING 1. City shall maintain satisfactory financial accounts, documents, and records for the Project and will make them available to CCDC for auditing at reasonable times. City shall retain such financial accounts, documents, and records for two years after final payment and one year following an audit, whichever is the later date. 2. City shall use applicable Generally Accepted Accounting Principles (GAAP), unless otherwise agreed to by the Parties, and shall maintain adequate supporting documentation in such detail so as to provide an audit trail of receipts, expenditures, and disbursements. 3. Within six months of receiving Grant Funds, and again at Project completion (as defined in section II2 above), the City will submit to CCDC an expenditure report or receipts, evidencing the expenditure of Grant Funds on the Project and in accordance with the terms of the Grant. Commented [1]: Section VI refers to payment. I added term language to show this is a three year grant. 2021/10/12 City Council Post Agenda Page 526 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 4 4. Subcontractor(s) employed by the City and paid with moneys under the terms of this Grant Agreement, shall be responsible for maintaining accounting records in the same manner as required of City. VI. PAYMENT Throughout the term of the Grant Agreement, CCDC shall pay Grant Funds to the City as follows: At the commencement of this Agreement as defined in II2 above, CCDC shall pay City $119,767. At the commencement of the second year of this Agreement, CCDC shall pay City $122, 243. During the third year of this Agreement, CCDC will make quarterly payments based on approved Project costs contained in invoices submitted by the City’s Contractor/Service Provider for the Project in a cumulative amount not to exceed $1,000,000. Upon receipt of a Project invoice from the Contractor/Service Provider, City will review and submit a request for Grant Funds to CCDC. Upon receipt of a request for Grant Funds, CCDC shall make payment to City for approved Grant Funds by no later than thirty (30) days after receipt of City’s request. VII. TERMINATION Either Party shall have the right to terminate this Grant Agreement at any time upon thirty days’ written notice to the other Party. In the case of such termination, CCDC shall only be responsible for paying to City Grant Funds in the amount of costs incurred on the Project up until the date of termination. City shall provide to CCDC an expenditure report or receipts, evidencing such costs incurred. VIII. INDEMNITY AND HOLD HARMLESS To the maximum extent allowed by law, City shall indemnify, hold harmless and defend CCDC, its officers, directors, agents and employees against any and all claims, demands, damages, costs, expenses or liability arising out of the Project or this Grant Agreement, except for liability arising out of the gross negligence or willful misconduct of CCDC, its officers, agents or employees. IX. SEVERABILITY If any provision of this Grant Agreement or the application thereof is held invalid, that invalidity shall not affect other provisions or applications of this Grant Agreement which can be given effect without the invalid provision or application, and to this end, the provisions of this Grant Agreement are severable. X. WAIVER No term or provision hereof will be considered waived by either Party, and no breach excused by either Party, unless such waiver or consent is in writing and signed on behalf of the Party against whom the wa iver is asserted. No consent by either Party to, or waiver of, a breach by either Party, whether expressed or implied, will constitute consent to, waiver of or excuse of any other, different or subsequent breach by either Party. XI. GOVERNING LAW/VENUE Commented [2]: CCDC prefers to make lump sum payments instead of monthly payments. CCDC understands City will not have revenue data in the first two years, and so is fine making the yearly payments requested in the application. For year three CCDC would like to make payments based on actual rather than estimated costs, and would prefer to make payments quarterly if possible. Commented [DG3R2]: We accept this proposal 2021/10/12 City Council Post Agenda Page 527 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 5 This Agreement is governed by, and shall be interpreted in accordance with, the laws of the State of California. Any action arising under or relating to this Grant Agreement shall be brought only in the County of San Diego, State of California. XII. NO AGENCY ACTUAL OR IMPLIED The Parties agrees that neither is acting as the agent of the other, and that their agents, and employees and subcontractors shall act in an independent capacity and are not officers, employees, or agents of the other Party. XIII. NOTICES All notices, demands or requests provided for or permitted to be given pursuant to this Grant Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement at the places of business for each of the designated Parties as indicated in section II.5., above. XIV. ELECTRONIC SIGNATURES MAY BE USED Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Grant Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic Signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time. XV. ADMINISTRATIVE CLAIMS REQUIREMENTS AND PROCEDURES. No suit or arbitration shall be brought arising out of this Grant Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by either party, in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by either party in the implementation of same, are incorporated herein by this reference. Upon request by either party, each shall meet and confer in good faith with either party for the purpose of resolving any dispute over the terms of this Agreement. XVI. PUBLICITY The City agrees to acknowledge CCDC’s sponsorship in all materials (e.g., website, brochures, reports and press releases) developed by or for this Project. Unless an exception is made in writing by a CCDC authorized representative, approved language should read: "This project was made possible by Community Congregational Development Corporation.” This language should be used in conjunction with the approved CCDC logo, a copy of which is attached hereto as Exhibit C. Commented [4]: It appears this is a carry over from the Norman Park contract. That contract had three paragraphs all numbered XIII, and the City was confused as to where requested changes should be made. 2021/10/12 City Council Post Agenda Page 528 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 6 (End of page. Next page is signature page.) 2021/10/12 City Council Post Agenda Page 529 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 7 SIGNATURE PAGE TO GRANT AGREEMENT IN WITNESS WHEREOF, by executing this Grant Agreement where indicated below, City and CCDC agree that they have read and understood all terms and conditions of the Grant Agreement, that they fully agree and consent to be bound by same, and that they are freely entering into this Agreement. COMMUNITY CONGREGATIONAL DEVELOPMENT CORPORATION CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ DAVID HAND MARIA V. KACHADOORIAN PRESIDENT, COMMUNITY CONGREGATIONAL DEVELOPMENT CORPORATION CITY MANAGER DATE:____________________________ DATE: ____________________________ APPROVED AS TO FORM BY:______________________________ Glen R. Googins City Attorney 2021/10/12 City Council Post Agenda Page 530 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 8 EXHIBIT A GRANT APPLICATION [INSERT GRANT APPLICATION] Formatted: Centered, Tab stops: Not at 3.25" 2021/10/12 City Council Post Agenda Page 531 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 9 EXHIBIT B ADDITIONAL GRANT REQUIREMENTS CCDC has approved the CV Community Shuttle grant application and commits to pay up to $1,000,000 in Grant Funds to the City, subject to the terms and conditions in the Agreement and the following terms and conditions:  The CV Community Shuttle will provide service to seniors at no cost during the duration that CCDC is funding the program, which is expected to be three years from commencement of this Agreement, unless otherwise extended or terminated as provided herein. Seniors will be defined under the AARP definition of those 55 and over;  The CV Community Shuttle will provide service throughout the geographic area of Northwest Chula Vista as defined by the CMO grant administrator and City’s agreement with its Contractor/Service Provider, as set forth in the map attached hereto as Exhibit D;  The City will meet all program reporting requirements as outlined in Section V of the Grant Agreement, including providing ridership data and information, as appropriate, and program operation costs on an annual basis over the term of the grant funding;  The City will work with CCDC on marketing and outreach opportunities, as appropriate, and in accordance with Section XVI of the Grant Agreement over the term of the Grant funding;  CCDC acknowledges that City will be required to spend the Grant Funds in accordance with the terms and conditions as outlined in the executed CMO Voucher agreement and the CMO grant program. Commented [5]: Has CMO approved the City’s map? If so let’s append it. If there are changes to the map we can meet and confer as to the areas covered. Commented [DG6R5]: Yes, the map was approved by CMO and has been included in Exhibit D Commented [7]: Right now we cannot agree to this as we have no idea what terms and conditions may be set forth in the Voucher agreement. Is this needed? If so please provide the Voucher agreement for our review. Commented [DG8R7]: Voucher agreement was provided and language is acceptable 2021/10/12 City Council Post Agenda Page 532 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 10 EXHIBIT C 2021/10/12 City Council Post Agenda Page 533 of 620 Community Congregational Development Corporation Grant to the City of Chula Vista 11 EXHIBIT D SHUTTLE PROGRAM PROJECT SERVICE MAP 2021/10/12 City Council Post Agenda Page 534 of 620 11 October 14, 2020 Draft Final Results Chula Vista Community Survey 2021/10/12 City Council Post Agenda Page 535 of 620 22 Survey Purpose and Methodology •Study purpose to gather community feedback on a proposed Western Chula Vista Mobility Hub •Participation of persons who are veterans and/or seniors •Online survey with a data collection target 300-400 of persons who live, work and/or play in Chula Vista •Data collection 07/31/20 –09/30/20 (n=550) •Statistical accuracy is +4.2% at a 95% confidence level 2021/10/12 City Council Post Agenda Page 536 of 620 33 Survey Purpose and Methodology •Survey •English and Spanish •Recruited through online panel •Also distributed through Community Based Organizations and City of Chula Vista •Survey Panel (n=302) •CBO’s and City of Chula Vista Recruitment (n=248) •City of Chula Vista Newsletter •Community Through Hope •Renewing Life •Norman Park Senior Center •AARP Volunteer •Filipino Community Leader •Project Advisory Group 2021/10/12 City Council Post Agenda Page 537 of 620 44 Survey Study Area 2021/10/12 City Council Post Agenda Page 538 of 620 Demographics 2021/10/12 City Council Post Agenda Page 539 of 620 66 Demographics Yes 16% No 84% Disability Yes 11% No 89% Veteran Status < 25 16% 25 -44 41% 45-59 24% 60+ 19% Age Male 41% Female 59% Gender 2021/10/12 City Council Post Agenda Page 540 of 620 77 Demographics 9% 29% 33% 29% 0% 5% 10% 15% 20% 25% 30% 35% < $20K $20K - $49K $50K - $99K $100K+ Income n =480 37% 34% 6% 11%12% 0% 5% 10% 15% 20% 25% 30% 35% 40% HISPANIC WHITE AFRICAN AMERICAN ASIAN OTHER Ethnicity n =536 2021/10/12 City Council Post Agenda Page 541 of 620 88 How would you use a Mobility Hub? 25% 20% 17% 13% 11% 8% 5% 0% 5% 10% 15% 20% 25% 30% How would you use a Mobility Hub? n =550 2021/10/12 City Council Post Agenda Page 542 of 620 Mode Access Which of the following types of transportation would you use to access the Mobility Hub and the surrounding areas? 2021/10/12 City Council Post Agenda Page 543 of 620 1010 •The top three ways people say they would access the Mobility Hub are driving (85%), rideshare (63%), and walking (59%) •Modes that involved “sharing” received the lowest ratings •Bikeshare/Scootershare (35%) •Carshare was rated the lowest (29%) Mobility Hub Access Options -Overall 85% 63% 59% 54% 45% 44% 35% 29% 0%15%30%45%60%75%90% Driving Rideshare Walking Transit Shuttle Biking Bike/Scooter Share Carshare Mode Access Options -Percent Yes n =501 -530 2021/10/12 City Council Post Agenda Page 544 of 620 Survey Results Using a 1 -5 star scale where 5 stars indicates a solution that would MOST encourage you to use transit and the Mobility Hub, while 1 star indicates a solution that would LEAST encourage you to use transit and the Mobility Hub 2021/10/12 City Council Post Agenda Page 545 of 620 1212 Solutions to Encourage Transit/Mobility Hub Use •The top five solutions that would encourage people to use the Mobility Hub are: •Safety/security features (80%) •Transit information (69%) •Better connections-walking (68%) •Transit station amenities (67%) •Streetscape improvements-walking (65%) 80% 69%68%67%65% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Safety Transit Information Better Connections (Walking) Transit Station Amenities Streetscape Improvements (Walking) Solutions to Encourage Use -Top 5 (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 546 of 620 1313 Solutions to Encourage Transit/Mobility Hub Use 80% 69% 68% 67% 65% 64% 61% 56% 55% 54% 54% 52% 52% 50% 49% 46% 45% 41% 38% 36% 33% 0%10%20%30%40%50%60%70%80%90% Safety Transit Information Better Connections (Walking) Transit Station Amenities Streetscape Improvements (Walking) Retail Services Universal Transportation Account Kiosks Better Connections (Biking) Bike Parking Smart Parking Shuttles Support Services On Demand Rideshare Information and Signage (Biking) Package delivery Lockers Charging stations Bike Amenities Carshare Bikeshare Scootershare Solutions to Encourage Use -Overall (4+ Stars) 2021/10/12 City Council Post Agenda Page 547 of 620 1414 Seniors •The top 5 solutions for seniors are: •Safety •Transit information •Transit station amenities •Better connections (walking) •Retail services 84% 62% 59% 58% 57% 53% 50% 50% 49% 47% 40% 36% 36% 34% 32% 25% 24% 19% 16% 11% 9% 0%20%40%60%80%100% Safety Transit Information Transit Station Amenities Better Connections (Walking) Retail Services Streetscape Improvements… Universal Transportation Account Shuttles Kiosks Support Services Smart Parking Bike Parking On Demand Rideshare Better Connections (Biking) Information and Signage (Biking) Charging Stations Package Delivery Lockers Bike Amenities Carshare Bikeshare Scootershare Seniors (60+) (4+ Stars) 2021/10/12 City Council Post Agenda Page 548 of 620 1515 Employed •The top 5 solutions for persons who are employed are: •Safety •Better connections (walking) •Transit information •Transit station amenities •Streetscape improvements (walking) 80% 73% 71% 68% 68% 64% 64% 60% 57% 57% 57% 55% 52% 51% 51% 47% 46% 44% 41% 41% 38% 0%20%40%60%80%100% Safety Better Connections (Walking) Transit Information Transit Station Amenities Streetscape Improvements… Retail Services Universal Transportation Account Better Connections (Biking) Kiosks Smart Parking Bike Parking Shuttles Support Services On Demand Rideshare Information and Signage (Biking) Charging Stations Package Delivery Lockers Bike Amenities Carshare Bikeshare Scootershare Employed (4+ Stars) 2021/10/12 City Council Post Agenda Page 549 of 620 1616 Students •The top 5 solutions for students are: •Safety •Retail services •Streetscape improvements (walking) •Better connections (walking) •Transit station amenities 80% 71% 69% 65% 65% 65% 65% 64% 61% 58% 56% 56% 56% 51% 50% 48% 48% 40% 38% 36% 32% 0%20%40%60%80%100% Safety Retail Services Streetscape Improvements… Better Connections (Walking) Transit Station Amenities Universal Transportation Account Better Connections (Biking) Bike Parking Package Delivery Lockers On Demand Rideshare Transit Information Smart Parking Support Services Information and Signage (Biking) Bike Amenities Kiosks Charging Stations Shuttles Bikeshare Scootershare Carshare Students (4+ Stars) 2021/10/12 City Council Post Agenda Page 550 of 620 1717 Veterans •The top 5 solutions for veterans are: •Safety •Better connections (walking) •Support services •Transit station amenities •Retail services 80% 67% 65% 63% 63% 63% 59% 56% 54% 53% 52% 52% 51% 51% 46% 44% 44% 42% 37% 31% 30% 0%20%40%60%80%100% Safety Better Connections (Walking) Support Services Transit Station Amenities Retail Services Universal Transportation Account Transit Information Streetscape Improvements… Better Connections (Biking) Smart Parking Kiosks Shuttles Bike Parking On Demand Rideshare Bike Amenities Information and Signage (Biking) Bikeshare Charging Stations Package Delivery Lockers Carshare Scootershare Veterans (4+ Stars) 2021/10/12 City Council Post Agenda Page 551 of 620 1818 Persons who are disabled •The top 5 solutions for persons who are disabled are: •Safety •Better connections (walking) •Transit station amenities •Streetscape improvements (walking) •Retail services 75% 65% 65% 64% 60% 59% 59% 58% 52% 52% 50% 49% 49% 49% 45% 45% 40% 36% 33% 25% 22% 0%10%20%30%40%50%60%70%80% Safety Better Connections (Walking) Transit Station Amenities Transit Information Streetscape Improvements… Retail Services Support Services Universal Transportation Account Smart Parking On Demand Rideshare Information and Signage (Biking) Kiosks Bike Parking Shuttles Better Connections (Biking) Package Delivery Lockers Bike Amenities Charging Stations Carshare Bikeshare Scootershare Disabled (4+ Stars) 2021/10/12 City Council Post Agenda Page 552 of 620 1919 Safety: video security cameras, emergency call buttons, on site personnel Overall 80% 80% 80% 80% 75% 80% 80% 84% 81% 80% 78% 81% 0%10%20%30%40%50%60%70%80%90% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderSafety (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 553 of 620 2020 Transit information: real-time transit arrival and route information, interactive trip planning kiosks, and directional signage 71% 56% 64% 60% 74% 70% 62% 70% 73% 69% 70% 0%10%20%30%40%50%60%70%80% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderTransit Information (4+ Stars) n =545 Overall 69% 2021/10/12 City Council Post Agenda Page 554 of 620 2121 Better connections (walking): improved sidewalks, wider sidewalks, new or better crosswalks 73% 65% 58% 64% 77% 66% 58% 69% 71% 66% 72% 0%10%20%30%40%50%60%70%80%90% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderBetter Connections (walking) (4+ Stars) n =545 Overall 68% 2021/10/12 City Council Post Agenda Page 555 of 620 2222 Transit station amenities: benches, shelters, lighting, restrooms, public Wi-Fi hotspots, and USB ports 68% 65% 66% 64% 74% 66% 59% 69% 70% 66% 69% 0%10%20%30%40%50%60%70%80% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderTransit Station Amenities (4+ Stars) n =545 Overall 67% 2021/10/12 City Council Post Agenda Page 556 of 620 2323 Streetscape improvements (walking): landscaping next to sidewalks, improved street lighting, and directional signage Overall 65% 68% 69% 56% 68% 72% 63% 53% 65% 67% 62% 68% 0%10%20%30%40%50%60%70%80% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderStreetscape Improvements (walking) (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 557 of 620 2424 Retail services: space for restaurants, coffee shops, grocery outlets, and other retail Overall 64% 64% 71% 58% 67% 66% 61% 57% 62% 66% 66% 62% 0%10%20%30%40%50%60%70%80% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderRetail Services (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 558 of 620 2525 Universal transportation account: one mobile app used to find and pay for mobility services (e.g., transit, rideshare, bikeshare) 64% 65% 51% 62% 64% 63% 50% 62% 63% 62% 60% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderUniversal Transportation Account (4+ Stars) n =545 Overall 61% 2021/10/12 City Council Post Agenda Page 559 of 620 2626 Kiosks: digital kiosk to plan a transit trip, purchase a transit pass, request a rideshare service, etc. Overall 56% 57% 48% 53% 51% 58% 59% 49% 58% 55% 52% 58% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderKiosks (4+ Stars) (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 560 of 620 2727 Better connections (biking): bicycle facilities such as bike lanes and paths, and bike crossings at intersections Overall 55% 60% 65% 38% 61% 66% 56% 34% 54% 59% 63% 53% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderBetter Connections (Biking) (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 561 of 620 2828 Bike parking: secure bike parking options like bike cages or bike lockers Overall 54% 57% 64% 35% 62% 61% 52% 36% 57% 55% 56% 52% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderBike Parking (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 562 of 620 2929 Smart parking: online parking reservation system, real-time parking availability information Overall 54% 57% 56% 44% 59% 59% 53% 40% 55% 56% 52% 55% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderSmart Parking (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 563 of 620 3030 Shuttles: on-demand shuttle service to and from the transit station and the surrounding community Overall 52% 55% 40% 47% 48% 56% 51% 50% 52% 55% 47% 55% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderShuttles (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 564 of 620 3131 Support services: employment, veteran, and senior services Overall 52% 52% 56% 48% 59% 55% 45% 47% 61% 47% 49% 53% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderSupport Services (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 565 of 620 3232 On demand rideshare: real-time rides accessed via smartphone app (e.g., Uber, Lyft) Overall 50% 51% 58% 43% 53% 54% 54% 36% 50% 52% 47% 54% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderOn Demand Rideshare (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 566 of 620 3333 Information and signage (biking): improved directional signage between the station and key destinations Overall 49% 51% 51% 43% 53% 54% 52% 32% 56% 47% 47% 52% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderInformation & Signage (Biking) (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 567 of 620 3434 Package delivery lockers: secure lockers to receive packages from Amazon, UPS, etc. Overall 46% 46% 61% 37% 66% 51% 40% 24% 53% 43% 44% 46% 0%10%20%30%40%50%60%70% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderPackage Delivery Lockers (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 568 of 620 3535 Charging stations: for electric vehicles Overall 45% 47% 48% 38% 57% 50% 43% 25% 51% 43% 44% 45% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderCharging Stations (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 569 of 620 3636 Bike amenities: bike repair stands and electric bike charging stations Overall 41% 44% 50% 28% 49% 51% 38% 19% 48% 41% 39% 43% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderBike Amenities (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 570 of 620 3737 Carshare: vehicles available for short-term rental that can be accessed at and around transit stations. (e.g., Zipcar) Overall 38% 41% 32% 32% 41% 46% 41% 16% 45% 36% 32% 43% 0%5%10%15%20%25%30%35%40%45%50% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderCarshare (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 571 of 620 3838 Bikeshare: shared fleet of bikes (regular or electric) that can be rented for short trips (e.g., DecoBike) Overall 36% 41% 38% 18% 46% 49% 29% 11% 35% 38% 35% 36% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderBikeshare (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 572 of 620 3939 Scootershare: shared network of motorized scooters that can be rented for short trips Overall 33% 38% 36% 20% 42% 48% 25% 9% 38% 31% 33% 33% 0%10%20%30%40%50%60% EMPLOYED STUDENT NOT EMPLOYED/STUDENT <25 25-44 45-59 60+ <$50K >$50K Male FemaleEmployee/StudentStatusAgeIncomeGenderScootershare (4+ Stars) n =545 2021/10/12 City Council Post Agenda Page 573 of 620 40402021/10/12 City Council Post Agenda Page 574 of 620 1 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 CITY OF CHULA VISTA CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT WITH CIRCUIT TRANSIT INC. TO IMPLEMENT AND PROVIDE SERVICES FOR THE COMMUNITY SHUTTLE PROGRAM This Agreement is entered into effective as of October 20 ____, 2021 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“City”) and Circuit Transit Inc., a Florida Corporation (“Contractor/Service Provider”), (collectively, the “Parties” and, individually, a “Party”) with reference to the following facts: RECITALS WHEREAS, the State of California, Air Resources Board (“CARB”), Clean Mobility Options (CMO) Voucher Pilot Program is a statewide initiative that provides voucher-based funding for zero-emission carsharing, carpooling/vanpooling, bike sharing/scooter-sharing, innovative transit services, and ride-on-demand services in California’s historically underserved communities; and WHEREAS, the City, as the lead applicant, with its collaborative partner, Circuit Transit Inc., applied for CMO funds to create and implement a CV Community Shuttle Pilot program (“Shuttle Program”) to serve senior citizens in Northwest Chula Vista; and WHEREAS, on June 25, 2021, CMO notified the City of its award of $997,833 in CMO funds for a five -year grant period to implement the Shuttle Program; and the City will comply with the requirements of the CMO program; will accept the CMO voucher funds; and will allocate the amount of $997,833, including any Community Resource Contributions, committed to the project in the CMO application and as amended by the Program Administrator and awardee; WHEREAS, the Shuttle Program will provide all-electric on-demand shuttle services catered to the needs of the local senior community in the Northwest part of Chula Vista; and WHEREAS, on June 24, 2021, the City of Chula Vista received a commitment for an additional $1,000,000 Community Resource Contribution (CRC) as supplemental funding from Community Congregational Development Corporation (CCDC) to expand the original project service area for the Shuttle Program and to add an additional sedan to the service; and WHEREAS, Contractor/Service Provider has 10 years of experience providing neighborhood electric vehicle (NEV) services. Contractor/Service Provider has operated in California since 2013 and in San Diego since 2016. Contractor/Service Provider currently has a contract for NEV services in Downtown San Diego with the City of San Diego; and WHEREAS, within 100-120 days of City Council approval of the execution of City’s contract with the California Air Resources Board, the Contractor/Service Provider will begin implementing the Shuttle Program; and WHEREAS the Shuttle Program will be provided at no cost to seniors in the Northwest community twelve (12) hours per day, five (5) days per week; and WHEREAS, the Shuttle Program expenses will be reimbursed by the State of California, Air Resources Board and CCDC, and will result in no direct costs to the City; and 2021/10/12 City Council Post Agenda Page 575 of 620 2 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 WHEREAS, Contractor/Service Provider warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Contractor/Service Provider to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] 2021/10/12 City Council Post Agenda Page 576 of 620 3 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 OBLIGATORY PROVISIONS NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and Contractor/Service Provider hereby agree as follows: 1. SERVICES 1.1 Required Services. Contractor/Service Provider agrees to perform the services, and deliver to City the “Deliverables” (if any) described in the attached Exhibit A, incorporated into the Agreement by this reference within the time frames set forth therein, time being of the essence for this Agreement. The services and/or Deliverables described in Exhibit A shall be referred to herein as the “Required Services.” 1.2 Reductions in Scope of Work. City may independently, or upon request from Contractor/Service Provider, from time to time, reduce the Required Services to be performed by the Contractor/Service Provider under this Agreement. Upon doing so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction. 1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinances governing procurement and purchasing authority, City may request Contractor/Service Provider provide additional services related to the Required Services (“Additional Services”). If so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistent with the rates and terms already provided therein. Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this Agreement. 1.4 Standard of Care. Contractor/Service Provider expressly warrants and agrees that any and all Required Services hereunder shall be performed in accordance with the highest standard of care exercised by members of the profession currently practicing under similar conditions and in similar locations. 1.5 No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Contractor/Service Provider of responsibility for complyin g with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Contractor/Service Provider or its subcontractors. 1.6 Security for Performance. Intentionally Omitted. 1.7 Compliance with Laws. In its performance of the Required Services, Contractor/Service Provider shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal Code. 1.8 Business License. Prior to commencement of work, Contractor/Service Provider shall obtain a business license from City. 1.9 Subcontractors. Prior to commencement of any work, Contractor/Service Provider shall submit for City’s information and approval a list of any and all subcontractors to be used by Contractor/Service Provider 2021/10/12 City Council Post Agenda Page 577 of 620 4 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 in the performance of the Required Services. Contractor/Service Provider agrees to take appropriate measures necessary to ensure that all subcontractors and personnel utilized by the Contractor/Service Provider to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Contractor/Service Provider under this Agreement, Contractor/Service Provider shall ensure that each and every subcontractor carries out the Contractor/Service Provider’s responsibilities as set forth in this Agreement. 1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Date or Contractor/Service Provider’s commencement of the Required Services on October 20, 2021 (“Enter Date”), and shall terminate when the Parties have complied with all their obligations on October 20, 2025 (“End Date”); provided, however, provisions which expressly survive termination shall remain in effect. 2. COMPENSATION 2.1 General. For satisfactory performance of the Required Services, City agrees to compensate Contractor/Service Provider in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2. 2.2 Detailed Invoicing. Contractor/Service Provider agrees to provide City with a detailed invoice for services performed each month, within thirty (30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All charges must be presented in a line item format with each task separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed, the amount invoiced to date, and the remaining amount available under any approved budget. Contractor/Service Provider must obtain prior written authorization from City for any fees or expenses that exceed the estimated budget. 2.3 Payment to Contractor/Service Provider. Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall pay Contractor/Service Provider for the invoice amount within thirty (30) days. Payment shall be made in accordance with the terms and conditions set forth in Exhibit A. 2.4 Retention Policy. Intentionally omitted. 2.5 Reimbursement of Costs. City may reimburse Contractor/Service Provider’s out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services if negotiated in advance and included in Exhibit A. Unless specifically provided in Exhibit A, Contractor/Service Provider shall be responsible for any and all out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services. 2.6 Exclusions. City shall not be responsible for payment to Contractor/Service Provider for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of Contractor/Service Provider, its agents, employees, or subcontractors. 2.7 Payment Not Final Approval. Contractor/Service Provider understands and agrees that payment to the Contractor/Service Provider or reimbursement for any Contractor/Service Provider costs related to the 2021/10/12 City Council Post Agenda Page 578 of 620 5 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 performance of Required Services does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver of any violation by Contractor/Service Provider of the terms of this Agreement. If City determines that Contractor/Service Provider is not entitled to receive any amount of compensation already paid, City will notify Contractor/Service Provider in writing and Contractor/Service Provider shall promptly return such amount. 3. INSURANCE 3.1 Required Insurance. Contractor/Service Provider must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section. 3.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the Required Insurance must be disclosed to and approved by City in advance of the commencement of work. 3.3 Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers’ Compensation Insurance, insurance issued by the State Compensation Fund is also acceptable. 3.4 Subcontractors. Contractor/Service Provider must include all sub-Contractor/Service Providers/sub- contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating separate coverage for those not under its policies. Any separate coverage for sub-Contractor/Service Providers must also comply with the terms of this Agreement. 3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers, and Community Congregational Development Corporation, its employees, agents, and volunteers, must be named as additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified as required in Exhibit B or as may otherwise be specified by City’s Risk Manager. The general liability additional insured coverage must be provided in the form of an endorsement to the Contractor/Service Provider’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude Products/Completed Operations coverage. 3.6 General Liability Coverage to be “Primary.” Contractor/Service Provider’s general liability coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance provided by Contractor/Service Provider and in no way relieves Contractor/Service Provider from its responsibility to provide insurance. 3.7 No Cancellation. No Required Insurance policy may be canceled by either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Contractor/Service Provider must procure and put into effect equivalent coverage(s). 2021/10/12 City Council Post Agenda Page 579 of 620 6 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 3.8 Waiver of Subrogation. Contractor/Service Provider’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurance policy under this Agreement. In addition, Contractor/Service Provider waives any right it may have or may obtain to subrogation for a claim against City. 3.9 Verification of Coverage. Prior to commencement of any work, Contractor/Service Provider shall furnish City with original certificates of insurance and any amendatory endorsements necessary to demonstrate to City that Contractor/Service Provider has obtained the Required Insurance in compliance with the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agen ts, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the right to require, at any time, complete, certified cop ies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims-made form, the following requirements also apply: a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement. b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Contractor/Service Provider must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review. 3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Contractor/Service Provider’s obligations under this Agreement, including Indemnity. 3.12 Additional Coverage. To the extent that insurance coverage provided by Contractor/Service Provider maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained. 2021/10/12 City Council Post Agenda Page 580 of 620 7 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 4. INDEMNIFICATION 4.1. General. To the maximum extent allowed by law, Contractor/Service Provider shall protect, defend, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Contractor/Service Provider, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Contractor/Service Provider, its employees, agents or officers, or any third party. 4.2. Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defined by California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8. 4.3 Costs of Defense and Award. Included in Contractor/Service Provider’s obligations under this Section 4 is Contractor/Service Provider’s obligation to defend, at Contractor/Service Provider’s own cost, expense and risk, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Contractor/Service Provider shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any and all related legal expenses and costs incurred by any of them. 4.4. Contractor/Service Provider’s Obligations Not Limited or Modified. Contractor/Service Provider’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Contractor/Service Provider. Furthermore, Contractor/Service Provider’s obligations under this Section 4 shall in no way limit, modify or excuse any of Contractor/Service Provider’s other obligations or duties under this Agreement. 4.5. Enforcement Costs. Contractor/Service Provider agrees to pay any and all costs City incurs in enforcing Contractor/Service Provider’s obligations under this Section 4. 4.6 Survival. Contractor/Service Provider’s obligations under this Section 4 shall survive the termination of this Agreement. 5. FINANCIAL INTERESTS OF CONTRACTOR/SERVICE PROVIDER. 5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and Contractor/Service Providers performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700). In order to assure compliance with these requirements, Contractor/Service Provider shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference. 2021/10/12 City Council Post Agenda Page 581 of 620 8 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 5.2 Disclosures; Prohibited Interests. Independent of whether Contractor/Service Provider is required to file a Form 700, Contractor/Service Provider warrants and represents that it has disclosed to City any economic interests held by Contractor/Service Provider, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Contractor/Service Provider warrants and represents that it has not emplo yed or retained any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, to solicit or secure this Agreement. Further, Contractor/Service Provider warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Contractor/Service Provider further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Contractor/Service Provider or Contractor/Service Provider’s subcontractors. Contractor/Service Provider further agrees to notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability. 6. REMEDIES 6.1 Termination for Cause. If for any reason whatsoever Contractor/Service Provider shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Contractor/Service Provider shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving fifteen (15) days written notice to Contractor/Service Provider. Such notice shall identify the Default and the Agreement termination date. If Contractor/Service Provider notifies City of its intent to cure such Default prior to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City may grant Contractor/S ervice Provider up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Contractor/Service Provider shall immediately share with City any and all “Work Product” (defined in Section 7 below) prepared by Contractor/Service Provider as part of the Required Services. Contractor/Service Provider may be entitled to compensation for work satisfactorily performed prior to Contractor/Service Provider’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default. 6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Contractor/Service Provider of such termination or suspension at least thirty ( 30) days prior to the effective date thereof. Upon receipt of such notice, Contractor/Service Provider shall immediately cease all work under the Agreement and promptly share any and all “Work Product” (defined in Section 7 below) with City. Contractor/Service Provider shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement. 2021/10/12 City Council Post Agenda Page 582 of 620 9 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 6.3 Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this Section, Contractor/Service Provider hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6. 6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Contractor/Service Provider shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 6.5 Governing Law/Venue. This Agreement shall be governed b y and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in San Diego County, State of California. 6.6 Service of Process. Contractor/Service Provider agrees that it is subject to personal jurisdiction in California. If Contractor/Service Provider is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Contractor/Service Provider irrevocabl y consents to service of process on Contractor/Service Provider by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five (5) days after mailing. 7. OWNERSHIP AND USE OF WORK PRODUCT All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance of the Required Services (collectively “Work Product”) shall be jointly owned by the Parties. All Work Product shared with the City will be anonymized. No such Work Product shall be subject to private use, copyrights or patent rights by Contractor/Service Provider in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Contractor/Service Provider, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Contractor/Service Provider shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compi ling, transferring and printing computer files. 8. GENERAL PROVISIONS 8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties. 8.2 Assignment. City would not have entered into this Agreement but for Contractor/Service Provider’s unique qualifications and traits. Contractor/Service Provider shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion. 8.3 Authority. The person(s) executing this Agreement for Contractor/Service Provider warrants and represents that they have the authority to execute same on behalf of Contractor/Service Provider and to bind 2021/10/12 City Council Post Agenda Page 583 of 620 10 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 Contractor/Service Provider to its obligations hereunder without any further action or direction from Contractor/Service Provider or any board, principle or officer thereof. 8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart. 8.5 Entire Agreement. This Agreement together with all exhibits attached her eto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. 8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Contractor/Service Provider agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of sub-contractors/sub-Contractor/Service Providers. 8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the Parties. 8.8 Independent Contractor. Contractor/Service Provider is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall have control over the conduct of Contractor/Service Provider or any of Contractor/Service Provider’s officers, employees, or agents (“Contractor/Service Provider Related Individual s”), except as set forth in this Agreement. No Contractor/Service Provider Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax with respect to any Contractor/Service Provider Related Individuals; instead, Contractor/Service Provider shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Contractor/Service Provider shall not at any time or in any manner represent that it or any o f its Contractor/Service Provider Related Individuals are employees or agents of City. Contractor/Service Provider shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner. 8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally s erved or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement at the places of business for each of the designated Parties as in dicated in Exhibit A, or otherwise provided in writing with copy sent by electronic mail. 8.10 Electronic Signatures. Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic Signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, 2021/10/12 City Council Post Agenda Page 584 of 620 11 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time. (End of page. Next page is signature page.) 2021/10/12 City Council Post Agenda Page 585 of 620 12 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 SIGNATURE PAGE CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Contractor/Service Provider agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the Effective Date. CIRCUIT TRANSIT INC. CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ James Mirras Maria V. Kachadoorian Co-Founder/ COO City Manager APPROVED AS TO FORM BY: ________________________________ Glen R. Googins City Attorney 2021/10/12 City Council Post Agenda Page 586 of 620 13 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT A SCOPE OF WORK AND PAYMENT TERMS 1. Contact People for Contract Administration and Legal Notice A. City Contract Administration: Dennis Gakunga 276 Fourth Ave Chula Vista CA, 91910 619-476-5355 dgakunga@chulavistaca.gov For Legal Notice Copy to: City of Chula Vista City Attorney 276 Fourth Avenue, Chula Vista, CA 91910 619-691-5037 CityAttorney@chulavistaca.gov B. Contractor/Service Provider Contract Administration: CIRCUIT TRANSIT INC. 743 Ninth Avenue San Diego, CA 92101 562-252-6680 daniel@ridecircuit.com For Legal Notice Copy to: Circuit Transit Inc. James Mirras 360 Montauk Highway Wainscott, NY 11975 james@ridecircuit.com 2. Required Services A. General Description: Contractor/Service Provider will provide electric transportation services targeted to seniors fifty-five and older in the Northwest part of the Chula Vista community in accordance with the terms and conditions of this Agreement (the “Shuttle Program”). B. Detailed Description/Responsibilities of Contractor/Service Provider: Based on the findings of the 2020 SANDAG Mobility HUB needs assessment survey as referenced for the CV (Chula Vista) Community Shuttle program, City desires to provide all-electric on-demand shuttle services catered to the needs of the local senior community in the Northwest part of Chula Vista as shown on Exhibit D. The Shuttle Program has been and will be designed with the community’s input and participation to provide safe, convenient, affordable, and accessible first / last mile connections. The goals of the Shuttle Program will be to improve mobility options for the senior communities, provide connections to public transit and key 2021/10/12 City Council Post Agenda Page 587 of 620 14 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 community services, improve social determinants of health related to transportation accessibility, reduce greenhouse gas emissions, improve air quality, and reduce congestion.  Phasing and Deliverables. Contractor/Service Provider will operate and implement the Shuttle Program in accordance with all terms and conditions of this Agreement and provide the following deliverables within the timelines provided below: Start Date Time Period Deliverables Fall 2021 Planning & Pre- launch: 100- 120 days after execution of contract with CARB  Acquire vehicles and outfit with customizations for service  Hiring and recruitment of staff, including drivers  Development and launch of App  Launch of Marketing & Outreach plan (Circuit will work with City and Community Partner to develop and execute a marketing and outreach plan to announce launch of new service to the community) Spring 2022 Year1: Project Kickoff & Launch. Opening Day  Commence Year 1 initial service on the designated launch date  Execute its marketing plan announcing the launch of the new pilot, including any launch event or ribbon cutting with the City.  Conduct ride alongs and on-job training with new staff to ensure effectiveness and efficiency of service. Spring 2022 Year 1: Operations, Monitoring & Reporting and Adjusting - Initial Service - Year 1  Operate four (4) electric sedan vehicles and one (1) ADA van in furtherance of the Shuttle Program to be funded by CMO.  Operate one (1) electric sedan vehicle in furtherance of the Shuttle Program funded by CCDC.  Monitor key metrics and feedback  Conduct rider surveys  Implement ongoing marketing strategy  Engage in ongoing community outreach  Sell and execute advertising campaigns  Communicate with and submit monthly reports to the City team  Make adjustments to the service as needed/requested *Year 1 services only available to seniors for free Spring 2023 Year 2: Operations, Service Expansion to General Public  Operate four (4) electric sedan vehicles and one (1) ADA van in furtherance of the Shuttle Program to be funded by CMO.  Operate one (1) electric sedan vehicle in furtherance of the Shuttle Program funded by CCDC.  Plan and implement for service expansion  Plan and implement service extension to the general public, including rollout timeline.  Collaborate with City and Community Partner/(s) to prepare and implement a marketing and outreach plan for announcing service expansion to existing and potential riders. 1 The term Year as used therein denotes year(s) of operation and not the year(s) of grant funding. 2021/10/12 City Council Post Agenda Page 588 of 620 15 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 *Year 2 services available to general public for a fee, free for seniors Spring 2023 Year 2: Monitoring, Reporting and Adjusting - Expanded Service  Program monitoring & monthly reporting  Prepare study developing ridership trends to learn busiest ridership times, request hotspots, etc.  Conduct rider surveys to learn about rider preferences, needs, and report back to the City with data collected to refine service. *Year 2 services available to general public for a fee, free for seniors Spring 2023 Year 3: Operations  Operate five (5) electric sedan vehicles and one (1) ADA van in furtherance of the Shuttle Program funded by CCDC. *Year 3 services available to general public for a fee, free for seniors Spring 2023 Year 3: Monitoring, Reporting and Adjusting - Expanded Service  Program monitoring & monthly reporting  Prepare study developing ridership trends to learn busiest ridership times, request hotspots, etc.  Conduct rider surveys to learn about rider preferences, needs, and report back to the City with data collected to refine service. Spring 2024 Year 4: Operations, Monitoring, and Reporting To be determined  Access to Service. Contractor/Service Providers will allow riders to request rides for the Shuttle Program within a geo-fenced coverage zone through a mobile ride request app available on iOS and Android, by call in or text, or by kiosks available at key destinations and public spaces. Caregivers, senior living community staff, and others can also make requests on behalf of riders. The Shuttle Program will include an American with Disabilities Act (ADA) accessible vehicle on standby for riders requiring ADA assistance, which can be indicated in the ride request app, the kiosk, or when requesting by phone.  Funding: The Parties acknowledge and agree that the Required Services will be paid by City and City will seek reimbursement from CMO and CCDC (collectively, the “Granting Agencies”) in accordance with Exhibit A, Section 4, below. It is the intent of the Parties to fund the Required Services in accordance with the funding sources and time periods identified below: Period Funding Source Pre-Year 1 CMO will provide funding for all Pre-Year 1 Shuttle Program costs. Year 1  CCDC will provide funding for the operation of one (1) electric sedan vehicle.  CMO will provide funding for all other Shuttle Program costs, including but not limited to four (4) electric sedan vehicles and one (1) ADA van. Year 2  CCDC will provide funding for the operation of one (1) electric sedan vehicle. 2021/10/12 City Council Post Agenda Page 589 of 620 16 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21  CMO will provide funding for all other Shuttle Program costs, including but not limited to four (4) electric sedan vehicles and one (1) ADA van. Year 3 CCDC will provide funding for all Shuttle Program costs, including but not limited to five (5) electric sedan vehicles and one (1) ADA van. Year 4 Not identified. The Parties agree to make reasonable efforts to identify and secure additional funding for future and additional Shuttle Program costs, including but not limited to funding for Year 4 operations, from a variety of sources including but not limited to Fares (as defined below), Adverting Revenue (as defined below), grants, and other sources. If the Parties are able to secure such funding on mutually acceptable terms, the Parties agree to effectuate an amendment to this Agreement. If such funding cannot be identified and secured, the parties agree that operation of the Shuttle Program shall cease after Year 3.  Fares. o Seniors. Contractor/Service Provider will make the Shuttle Program available as a free transportation service to seniors 55 years of age and older. o General Public. Contractor/Service Provider will make the Shuttle Program available to the general public after 12 months from Enter Date. The Shuttle Program will charge general public users a fare of $2.00 per passenger per ride (each a “Fare”; collectively the “Fares”). A contactless fare program will be implemented and will accept payment via credit card, debit card, or prepaid card. Contractor/Service Provider will be responsible to collect and account for any and all Fares. Contractor/Service Provider will provide City with a monthly accounting of any and all Fares generated from the Shuttle Program. The City may require an independent audit of the Fare accounting submitted to verify the accuracy and appropriateness of those submittals. The responsibility of payment of the independent audit will be negotiated in good faith by the Parties. Contractor/Service Provider will apply 60% of the total revenue generated from any and all Fares towards future Required Services in the form of a credit to the City. This credit will be applied in Year 4 to and offset costs of the Shuttle Program and provide for continuing support for the Shuttle Program.  Advertising. Contractor/Service Provider agrees to prepare, sell, and execute advertising campaigns in conjunction with the Shuttle Program. Contractor/Services Provider acknowledges and agrees that City’s written approval will be required to enter into any advertising contracts or receipt of any Advertising Revenue (defined below). Contractor/Service Provider further acknowledges and agrees that any advertising utilized for the Shuttle Program must comply with all City policies for advertising, and all other applicable rules and regulations related to advertising. Contractor/Service Provider will be responsible to collect and account for any and all revenues derived from any advertising campaigns. (“Advertising Revenue”). Contractor/Service Provider agrees that 50% of all Advertising Revenue collected will be applied towards future Required Services in the form of a credit to be provided to City on a monthly basis beginning in Year 4. Contractor/Service Provider will provide City with a monthly accounting of any and all Advertising Revenue credit from the Shuttle Program. The City may require an independent audit of the Advertising Revenue accounting submitted to verify the accuracy and appropriateness of those submittals. The responsibility of payment of the independent audit will be negotiated in good faith by the Parties. 2021/10/12 City Council Post Agenda Page 590 of 620 17 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21  Operating Time. Contractor/Service Provider will operate the Shuttle Program 12 hours per day, 5 days per week. The Shuttle Program schedule will be aligned with the needs of the community and may be adjusted with feedback from the community and City and as data from the service comes in. The expansion of Required Services that may include operating seven (7) days a week will be negotiated and agreed upon by the parties and will be reflected in an amended Scope of Work.  Destinations. The focus of the service territory will be on key destinations for the senior population, including healthcare, grocery, senior living facilities and senior centers, and other destinations as determined through community feedback. Over this period, the service will be adjusted and honed to the needs of this community.  CMO Grant. Contractor/Service Provider acknowledges and agrees that City has obtained a grant from the CARB, Clean Mobility Options Voucher Pilot Program (the “CMO Grant”) as a source of funding for the Required Services. The grant application, grant agreement, and terms and conditions for the CMO Grant are attached hereto as Exhibit E (collectively, the “CMO Grant Materials”). Contractor/Service Provider agrees that it has read and understands the requirements in the CMO Grant Materials. Contractor/Service Provider agrees to comply, and cause the City to comply, with all requirements, terms, and conditions of the CMO Grant, and all related requirements, terms, and conditions to ensure full funding under the CMO Grant. Contractor/Service Provider agrees that its failure to comply, or cause the City the failure to comply, with all requirements, terms, and conditions of the CMO Grant, or any related requirements, terms, and conditions to ensure full funding under the CMO Grant constitutes a material breach of this Agreement.  CCDC Grant. Contractor/Service Provider acknowledges and agrees that City has obtained a grant from the Community Congregational Development Corporation (“CCDC”) as a source of funding for the Required Services (the “CCDC Grant”). The grant application, grant agreement, and terms and conditions for the CCDC grant are attached hereto as Exhibit F (collectively, the “CCDC Grant Materials”). Contractor/Service Provider agrees that it has read and understands the CCDC Grant Materials. Contractor/Service Provider agrees to comply, and cause City to comply, with all requirements, terms, and conditions of the CCDC Grant, and all related requirements, terms, and conditions to ensure full funding under the CCDC Grant. Contractor/Service Provider agrees that its failure to comply, or cause the City the failure to comply, with all requirements, terms, and conditions of the CCDC Grant, or any related requirements, terms, and conditions to ensure full funding under the CCDC Grant constitutes a material breach of this Agreement.  Improvements. Contractor/Service Provider shall be responsible for the construction, maintenance, operation, repair, and replacement of any improvements necessary to operate the Shuttle Program. The Parties acknowledge and agree that it is their intent that necessary construction, maintenance, operation, repair, and replacement of improvements to be subject to reimbursement pursuant to Exhibit A, Section 4 of this Agreement. C. Responsibilities of the City  For the Term of this Agreement, City will provide six (6) parking spaces for electric vehicle storage and eight (8) additional parking spaces to Contractor/Service Provider at no cost to Contractor/Service Provider. The Parties acknowledge and agree that terms for use, including but not limited to location, of the parking spaces have not yet been finalized. Upon finalization of such terms of use, Contractor/Service Provider acknowledges and agrees that City may require Contractor/Service 2021/10/12 City Council Post Agenda Page 591 of 620 18 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 Provider to enter to additional agreements with the City (i.e. right-of-entry agreements, license agreements) or obtain permits (i.e. construction permits) to memorialize such terms of use.  City agrees to reasonably assist Contractor/Service Provider with access to Level 2 charging for the electric vehicles as appropriate. 3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin on October 20, 2021 and expire on October 19, 2026 for completion of all Required Services. 4. Compensation: A. Form of Compensation The projected total costs to implement the Shuttle Program on an annual and monthly basis are identified in the table below. The Parties acknowledge and agree that payment for all Shuttle Program costs will be funded by CMO and CCDC, not the City, through the CMO Grant and the CCDC Grant, respectively, for Years 1 through 3 and any and all Fares and Advertising Revenue credits will be applied as credits during Year 4. Contractor/Service Provider acknowledges and agrees that only sums City is obligated to pay to Contractor/Service Provider for the performance of Required Services under this Agreement are funds approved by the Granting Agencies and actually reimbursed to the City. The maximum amount to be paid to the Contractor/Service Provider for services performed through the Term of the Agreement shall not exceed $1,997,833. B. Invoicing Contractor/Service Provider will provide City with a detailed invoice and breakdown by Granting Agency for Required Services performed each month for Years 1 through 3, within thirty (30) days of the end of the month in which the Required Services were performed. 2021/10/12 City Council Post Agenda Page 592 of 620 19 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 Upon receipt of the invoice, City will review the invoice and pay Contractor/Service Provider for approved amounts, in an amount not-to-exceed sixty thousand dollars ($60,000), within thirty (30) days. City will seek reimbursement from the Granting Agencies after payment of the invoice to Contractor/Service Provider. If City does not receive reimbursement from the Granting Agencies for any amount paid to Contractor/Service provider, such unreimbursed amounts will be offset against Contractor/Service Provider’s future invoices. City will provide Contractor / Service Provider with documentation of such non-reimbursement by the Granting Agencies. 2021/10/12 City Council Post Agenda Page 593 of 620 20 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT B INSURANCE REQUIREMENTS Contractor/Service Provider shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x). Type of Insurance Minimum Amount Form ☒ General Liability: Including products and completed operations, personal and advertising injury $2,000,000 per occurrence for bodily injury, personal injury (including death), and property damage. If Commercial General Liability insurance with a general aggregate limit is used, either the general aggregate limit must apply separately to this Agreement or the general aggregate limit must be twice the required occurrence limit Additional Insured Endorsement or Blanket AI Endorsement for City* Waiver of Recovery Endorsement Insurance Services Office Form CG 00 01 *Must be primary and must not exclude Products/Completed Operations ☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and property damage Insurance Services Office Form CA 00 01 Code 1-Any Auto Code 8-Hired Code 9-Non Owned ☒ Workers’ Compensation Employer’s Liability $1,000,000 each accident $1,000,000 disease policy limit $1,000,000 disease each employee Waiver of Recovery Endorsement Other Negotiated Insurance Terms: NONE 2021/10/12 City Council Post Agenda Page 594 of 620 21 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT C CONTRACTOR/SERVICE PROVIDER CONFLICT OF INTEREST DESIGNATION The Political Reform Act2 and the Chula Vista Conflict of Interest Code3 (“Code”) require designated state and local government officials, including some Contractor/Service Providers, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, Contractor/Service Providers designated to file the Form 700 are also required to comply with certain ethics training requirements.4 ☒ A. Contractor/Service Provider IS a corporation or limited liability company and is therefore EXCLUDED5 from disclosure. ☐ B. Contractor/Service Provider is NOT a corporation or limited liability company and disclosure designation is as follows: APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.) Name Email Address Applicable Designation Enter Name of Each Individual Who Will Be Providing Service Under the Contract – If individuals have different disclosure requirements, duplicate this row and complete separately for each individual Enter email address(es) ☐ A. Full Disclosure ☐ B. Limited Disclosure (select one or more of the categories under which the Contractor shall file): ☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7. Justification: ☐ C. Excluded from Disclosure 1.Required Filers Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form 700. 2.Required Filing Deadlines Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement. 3. Filing Designation The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Contractor/Service Provider will provide. Notwithstanding this designation or anything in the Agreement, the Contractor/Service Provider is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2. 2 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 3 Chula Vista Municipal Code §§2.02.010-2.02.040. 4 Cal. Gov. Code §§53234, et seq. 5 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not incl ude corporation or limited liability company). 2021/10/12 City Council Post Agenda Page 595 of 620 22 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the Contractor’s requirement to comply with the disclosure requirements set forth in the Code. 2021/10/12 City Council Post Agenda Page 596 of 620 23 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT D SHUTTLE PROGRAM PROJECT SERVICE MAP 2021/10/12 City Council Post Agenda Page 597 of 620 24 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT E CMO GRANT APPLICATION, GRANT AGREEMENT, AND OTHER GRANT REQUIREMENTS 2021/10/12 City Council Post Agenda Page 598 of 620 25 City of Chula Vista Agreement No.: 2021-96 Contractor/Service Provider Name: Circuit Transit Inc. Rev. 2/4/21 EXHIBIT F CCDC GRANT APPLICATION, GRANT AGREEMENT, AND OTHER GRANT REQUIREMENTS Completed by: Barbara Locci 2021/10/12 City Council Post Agenda Page 599 of 620 Chula Vista Community Shuttle Program 2021/10/12 City Council Post Agenda Page 600 of 620 Our Vision Cities with Connected, Shared, (eventually autonomous) Electric Vehicles We want fewer... and more ... Single Occupancy Vehicles (SOVs)Traffic Jams Greenhouse Gas Emissions (GHG) Shared Rides, Mass Transit Accessible Options Efficient and Productive Cities Circuit’s goal is to promote mobility and reduce traffic’s harmful impact on the environment. We do this by getting people out of their cars for short trips, encouraging visitors to park once, and making connections to existing mass transit hubs. We work with innovative cities, private developers and forward-thinking advertising partners to offer electric shuttles that make mobility easier, smarter, more affordable, and fun. The solution works, it’s always improving and built to scale. 2021/10/12 City Council Post Agenda Page 601 of 620 Partnering with Cities & Properties Smarter, greener, cheaper than traditional options Combating congestion, connecting with transit, reducing VMTs and GHGs First-mile/last-mile connections 2021/10/12 City Council Post Agenda Page 602 of 620 Clean Mobility Options Voucher Program (CMO) In June of 2021 the City of Chula Vista was awarded $997,833 to launch a Chula Vista Community Shuttle Program through the Clean Mobility Options Voucher Program. The program aims to improve underserved communities’ access to clean mobility options that are safe, reliable, convenient, and affordable, by creating a streamlined application process for communities to apply for funding. The program also seeks to further mobility equity, improve local air quality, increase zero-emission vehicle adoption, reduce vehicle miles traveled, and advance workforce development in clean transportation.2021/10/12 City Council Post Agenda Page 603 of 620 Why Chula Vista? Healthy Chula Vista Action Plan adopted in 2016 to promote overall wellness and address public health issues within the community “Ensure residents can access community assets and support innovative programs to encourage transit use.” “Promote alternative Car and Bike Sharing programs.” Age-Friendly Action Plan adopted in 2018 to allow discussion, analysis and the platform to begin looking at the City’s livability through a ‘lens of age’ “Vision: A city where everyone has access to safe, environmentally friendly and sustainable transportation services that are affordable and provide a full range of mobility options to connect residents to critical services, cultural opportunities and each other.” AGE-FRIENDLY ACTION PLAN Climate Action Plan adopted in 2017 to accomplish the City’s greenhouse gas reduction goals. “Transition 40% of fleet to hybrid or other alternative fuel technology” “Expand bike-sharing, car-sharing and other “last mile” transportation options” 2021/10/12 City Council Post Agenda Page 604 of 620 A Turnkey, Electric & Shared Solution We eliminate inefficiencies, align with user-behavior, and complement existing infrastructure. It’s plug & play - and cheaper. Rider App Electric Vehicles Hiring & Management Systems & Insurance Data Reports Back End Management Tech 2021/10/12 City Council Post Agenda Page 605 of 620 Chula Vista Service Area (1) On the Disadvantaged Communities List for Climate Investments with a score in the top 25 percent of CalEnviroScreen 3.0 scores) (2) Tribal land or tribal property within AB 1550 designated low-income communities, or (3) Serves a deed-restricted affordable housing facility (at least 80 percent of property residents have incomes at or below 60 percent of the area median income) with at least five units and located within an AB 1550 designated low-income community. (4) An AB 1550 low-income community, defined as census tracts that are either at or below 80 percent of the statewide median income 2021/10/12 City Council Post Agenda Page 606 of 620 How It Works Plus... 2021/10/12 City Council Post Agenda Page 607 of 620 Vehicles 5 Hyundai IONIQ Electric ●100% electric ●Driver + 4 passengers ●170 mile range 1 Lightning Electric Transit Van ●100% electric ●Driver + 6 passengers + wheelchair ●140 mile range 2021/10/12 City Council Post Agenda Page 608 of 620 CCDC Involvement Community Congregational Development Corporation (CCDC) commits up to $1 million towards program CCDC grant allows: ●One (1) additional vehicle added to fleet ●Extension of service area to provide access to additional seniors ●Fully funds Year 3 of operation upon expiration of CMO funding 2021/10/12 City Council Post Agenda Page 609 of 620 Program Timeline Phase 1 Planning Phase 2 Project Kickoff Phase 3 Year 2 Phase 4 Year 3 ●Finalize grant terms with CARB ●Finalize Scope of Work and contract between Circuit and the City ●Circuit begins to acquire vehicles, hire staff, build out app location ●Circuit and City begin marketing and outreach ahead of program launch ●Launch service exclusively for seniors 55 and over in Year 1 ●Circuit conducts continued training of staff ●Monitor program for efficiencies and conduct rider surveys for improvements ●Circuit works to sell third party advertising on vehicles ●Ongoing program monitoring and adjustments as needed ●Circuit and City plan for service extension to the general public ●Service opens to general public for a small fare ●Circuit works to sell third party advertising on vehicles ●Program fully funded by CCDC ●Service remains free for seniors and small fare to general public ●Circuit and City works to identify funding sources for additional years, covering difference between operating costs and revenues generated 2021/10/12 City Council Post Agenda Page 610 of 620 Program Costs Year 1 Year 2 Year 3 Year 4 Program Cost $615,910 $624,229 $636,713 TBD CMO Funding $497,679 $503,553 $0 $205,000 CCDC Funding $118,231 $120,676 $636,713 $13,380 Potential Revenue*$45,000*$80,000*$80,000*$80,000* Additional Funding Needed $0 $0 $0 TBD 2021/10/12 City Council Post Agenda Page 611 of 620 Spreading the Word ●Ribbon Cutting Event ●Coordinated Press Release ●Creation of Marketing Materials ●Email Blasts ●Wrapped Electric Vehicles ●Local Business Outreach ●Community Events ●Regular Social Media Posts ●Paid Online and Social Media ●Driver/Ambassador Marketing ●Cross-Promotion Marketing Materials ●Website and App Location Updates Ribbon Cutting Event Local Press Shuttle Intro Video 2021/10/12 City Council Post Agenda Page 612 of 620 Future Funding Opportunities Grant Opportunities Advertising Revenue Fare Revenue Local Partnerships 2021/10/12 City Council Post Agenda Page 613 of 620 THANK YOU Any Questions? daniel@ridecircuit.com 2021/10/12 City Council Post Agenda Page 614 of 620 2021/10/12 City Council Post Agenda Page 615 of 620 2021/10/12 City Council Post Agenda Page 616 of 620 2021/10/12 City Council Post Agenda Page 617 of 620 2021/10/12 City Council Post Agenda Page 618 of 620 2021/10/12 City Council Post Agenda Page 619 of 620 Have fun. Make new friends. 2021/10/12 City Council Post Agenda Page 620 of 620