OPA: Grimshaw House - City of Anaheim

J. Special Assessments. Any prepayments by Developer of assessments, special
taxes or other charges levied by any assessment district, community facilities district or landscape
maintenance district having jurisdiction over the Project or any part thereof, less any costs
reimbursed by Buyer to Developer at close of escrow, shall be an allowable Actual Construction
Cost.
K. Insurance Liability. For each Housing Unit within the Project, the Insurance
Liability Actual Construction Cost shall be one percent (1%) of the Base Price for each Housing Unit
(the "Insurance Liability Actual Construction Cost"), and shall not be considered overhead as
described in Subsection 1.E.
L. Trade Rebates. The Actual Construction Costs shall be reduced by the amount
of any trade rebates or reimbursements paid to Developer by contractors or materials suppliers for
goods or services furnished to the Project exclusively, or furnished to the Project and other
development projects of Developer. Where such rebates or reimbursements are allocable to more
development projects than the Project, the Project shall be allocated a fair and reasonable portion of
such rebates or reimbursements.
M. Marketing/Models. All direct costs incurred for sales and merchandising,
advertising, and model expenses (exclusive of the building and site improvements) for the Project.
N. If Developer is a partnership or limited liability company, amounts paid to any
partner or member, whether as a fee for performing services as a general contractor or managing
partner or member, as interest or a return on invested funds, loans or capital contributions, or
otherwise, shall not be an allowable Actual Construction Cost except to the extent set forth in
Paragraph B for Invested Funds, or to the extent, such payment is reimbursement for expenditures
by such partner or member which would otherwise qualify as an allowable Actual Construction Cost
if such partner was the "Developer" hereunder or unless specifically approved in writing by Agency
as an allowable Actual Construction Cost (which approval may be withheld in Agency's sole and
absolute discretion). Notwithstanding the foregoing terms of this Paragraph N, any management or
general contracting fees paid to Developer by the partnership or limited liability company, or any
investment fees paid by Developer to its partners or members for capital invested in the Project are
included as Actual Construction Cost in Paragraph E as allowable Actual Construction Costs subject
to the aggregate limitation of three and one-half percent (31/2%) of the Total Sales Price per
Housing Unit for all costs included within Paragraph E.
2. Financial Records and Statements of Developer. Developer shall keep and maintain,
or cause to be kept and maintained, accurate financial books and records with respect to the
development of the Project, in accordance with generally accepted accounting principles except as
modified by the provisions of the Agreement and this Attachment 12; provided those financial books
and records shall include all supporting documentation relative to sales and cost of sales, and shall
be maintained until Agency has informed Developer that either the Audit (defined below) has been
completed pursuant to Paragraph 3 hereof, or informs Developer that no Audit will be performed.
Attachment No. 12 - Page 5