Agmt 2006 Mercy Housing California XXXIII (4)

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5.3.8 Performance and Surety Bonds. Prior to the commencement of rehabilitation of any portion of the Improvements, Tenant shall cause Tenant's contractor to purchase the following and provide copies thereof to Landlord: (A) in form reasonably satisfactory to Landlord and issued by a corporate surety reasonably acceptable to Landlord both a performance bond in an amount of not less than 100% of the cost of construction, naming Landlord and City as additional insureds and a payment bond in an amount of not less than 100% of the costs for labor and materials, naming Landlord and City as additional insureds; or (B) a letter of credit in an amount not less than 10% of the cost of construction, the form and substance of which shall be subject to Landlord's approval; or (C) such other form of assurance of completion the form and substance of which shall be subject to Landlord approval. ARTICLE VI USE OF THE PROPERTY 6.1 Permitted Uses. Tenant may use the Property for the rehabilitation and operation of a 68-unit multi-family residential rental project, and related ancillary facilities consistent and compatible with a multi-family residential rental project, and for no other purposes without the prior written consent of Landlord. 6.2 Reserved. 6.3 Affordability Requirements. Subject to Tenant's option to extend as set forth in Section 3.1.4 hereof, for a term of 55 years commencing upon the issuance of a final certificate of occupancy for the Project, no fewer than sixty-seven (67) of the dwelling units in the Project shall be both rent-restricted and occupied (or if vacant, available for occupancy) by eligible households of very low- and extremely low-income pursuant to and in accordance with the terms and conditions set forth in the Regulatory Agreement. As more particularly set forth in the Regulatory Agreement, no fewer than seven (7) of the studio units in the Project shall be available at affordable rents to households whose income is no greater than 30% of Area Median Income (as defined in the Regulatory Agreement), and no fewer than sixty (60) additional units in the Project shall be available at affordable rents to households whose income is no greater than 50% of Area Median Income. Tenant shall comply with the terms and conditions set forth in the Regulatory Agreement. 6.3.1 Reporting Requirements. 6.3.1.1 Tenant Certification. Tenant shall obtain from each household prior to initial occupancy of each dwelling unit in the Project and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as reasonably required by Landlord: The identity of each member of the household; and (a) (b) Total household income. 833368-4 10