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17 <br /> Promissory Note, forgivable at the end of 40 years. This Deed of Trust and Promissory <br /> Note shall constitute a lien on the Property, second only to the Declaration of Restrictive <br /> Covenants described in paragraph 4 of this Agreement, with the County as the secured <br /> party/beneficiary. The County agrees to subordinate its Deed of Trust lien on the <br /> Property to a lien securing private construction financing acquired by RSI in order to <br /> complete the project. <br /> d. The period of affordability will be 99 years and will be secured by a Declaration <br /> of Restrictive Covenants that will incorporate a right of first refusal that may be exercised <br /> by RSI and/or Orange County. <br /> e. An annual rental operations budget must be submitted to the County each year at <br /> least sixty days prior to the July 1 beginning date for the fiscal year. Further, not more <br /> than 90 days after the end of each fiscal year, RSU must furnish to the County an annual <br /> accounting of income and expenses for each dwelling unit. Reasonable rent increases will <br /> be acceptable for future budgets and reports. <br /> f. RSI is responsible for verifying the income of tenants and maintaining eligibility <br /> data. RSI shall maintain tenant files as part of its Books and Records as required and for <br /> the period of time required by Section 5c. of this Agreement. RSI must provide the <br /> County an initial occupancy report verifying the income eligibility of all tenants at the <br /> time of initial lease-up. Each year thereafter, on or before July 31, RSI must furnish the <br /> County with an annual report on the project certifying that all tenants earn less than 30% <br /> of the area median income by family size, as determined by the U.S. Department of <br /> Housing and Urban Development and as amended from time to time. <br /> 2. Progress Payments. The County shall make progress payments, when requested by RSI, <br /> as the work progresses. Payments shall be based upon work completed and approved <br /> County. Progress payment requests shall be based on actual costs incurred by RSI <br /> identified in the Budget as described in attached Exhibit B. Payment requests shall be <br /> accompanied by copies of documentation for actual expenses. Request amounts shall be <br /> verified by the County for satisfactory completion prior to payment. <br /> 3. Time for Commencement and Completion. Actual construction must begin within <br /> three (3) years of the original application date of May 29, 2001. RSI will responsible for <br /> providing status reports to the County quarterly detailing the project activities until <br /> project completion. In addition, RSI agrees to furnish to the County a copy of its annual <br /> audit, performed by a certified public accountant within 90 days of the end of each fiscal <br /> year until the Project is complete. <br /> The project completion date is the closing date of the purchase by a qualified buyer of the <br /> last of the fourteen units to be constructed for first time homebuyers. In the event that <br /> RSI is unable to proceed with any aspect of the project in a timely manner, and County <br /> and RSI determine that reasonable extension(s) for completion will not remedy the <br /> situation, then the Termination of Agreement provisions of this Agreement (Section 6.a.) <br /> shall pertain. RSI may, at its option, submit a written request for a delay of completion <br /> 17 <br />