Second Amendment to Land Disposition, Development and Loan Agreement 2018-0113457 DOC#
2018-pp0113457
RECORDING REQUEST BY: ) IIIIDIIIIIIIIIII�IIIIIIIIIIIIIIIIII�IIIIIIIIIIIIIIIIIII�IIIIIIIII
Mar 22, 2018 01:42 PM
CITY OF POWAY ) OFFICIAL RECORDS
Ernest J. Dronenburp, Jr.,
WHEN RECORDED MAIL TO: ) SAN DIEGO COUNTY RECORDER
) FEES: $158.00 (SB2 Atkins: $0.00)
CITY CLERK )
CITY OF POWAY ) PAGES: 49
PO BOX 789 )
POWAY CA 92074-0789 )
(This spaco for Recorder's Uso)
SECOND AMENDMENT TO LAND DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT
BETWEEN
POWAY HOUSING AUTHORITY
AND
VILLA DE VIDA POWAY, L.P.
Dated as of February 6, 2018
Land Disposition, Development and Loan Agreement
Dated as of October 4, 2016
Recorded in the Office of the County Recorder on April 10, 2017
As Document #2017-0160027
First Amendment to Land Disposition, Development and Loan Agreement
Dated as of June 20, 2017
Recorded in the Office of the County Recorder on July 10, 2017
As Document #2017-0309816
SECOND AMENDMENT TO LAND DISPOSITION, DEVELOPMENT
AND LOAN AGREEMENT
(Villa De Vida Poway)
This Second Amendment to Land Disposition, Development and Loan Agreement (the "Second
Amendment") is entered into as of January 23, 2018, by and among the Poway Housing
Authority, a public body, corporate and politic (the "Authority"), and Villa de Vida Poway, L.P.,
a California limited partnership (the "Developer") with reference to the following facts:
RECITALS
A. Capitalized terms used in this Second Amendment, but not defined, shall have the meaning
set forth in the Land Disposition, Development and Loan Agreement.
B. The Authority and the Developer entered into that certain Land Disposition, Development
and Loan Agreement dated as of October 4, 2016 (recorded on April 10, 2017 as document
#2017-0160027), as amended by that certain First Amendment to the Land Disposition,
Development and Loan Agreement dated as of June 20, 2017 (recorded on July 10, 2017 as
document #2017-0309816) (the "Original DDA").
C. The Original DDA currently provides that the Authority will make a loan in an amount not to
exceed Three Million Two Hundred Thousand Dollars ($3,200,000) (the "Authority Loan"),
consisting of the Acquisition Component of Two Million Seven Hundred Thousand Dollars
($2,700,000) to be used to pay the purchase price for the acquisition of the Property; the
Construction Component of Four Hundred Fifty Thousand Dollars ($450,000) and
Completion Component of Fifty Thousand Dollars ($50,000) to be used to pay for
construction of the Development.
D. The Parties desire to amend the Original DDA to increase the amount of the Authority Loan
and the Construction Component to reflect an increase subsidy from the Auhtoirty.
Specifically the parties have agreed that the Construction component will be increased from
Four Hundred Fifty Thousand Dollars ($450,000) to Seven Hundred Thousand Dollars
($700,000) and that the amount of the Authority Loan is to be increased from Three Million
Two Hundred Thousand Dollars ($3,200,000) to Three Million Four Hundred Fifty
Thousand Dollars ($3,450,000), to reflect the increase in the Construction Component.
E. The purpose of this Amendment, authorized under Section 10.18 of the Original DDA, is to:
(1) revise the amount of the Authority Loan and Construction Component to address the
increase in the subsidy to be provided by the Authority; (2) allow the Developer additional
opportunities to complete the competitive application process for Low Income Housing Tax
Credits; and (3) to make necessary conforming amendments.
NOW, THEREFORE, the Authority and the Developer, agree as follows:
1552112\2272919.1
ARTICLE 1.
AMENDMENTS TO ORIGINAL DDA
Section 1.1 Amendment to Section 1.l(I). Section 1.1(1) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(cc) "Authority Loan" shall mean the loan in an amount not to exceed Three
Million Four Hundred Fifty Thousand Dollars ($3,450,000) made from the Authority
to the Developer pursuant to the terms of this Agreement."
Section 1.2 Amendment to Section 2.4(a). Section 2.4(a) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(a) The Authority has approved the Financing Proposal attached to this
Amendment as Attachment B, incorporated herein by this reference."
Section 1.3 Amendment to Section 2.5. Section 2.5 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"(a) The Developer intends to utilize Tax Credit Funds to partially finance the
Development, which are subject to a competitive application process implemented by
TCAC. Receipt by the Developer of a Tax Credit Reservation pursuant to this
Section shall be a condition precedent to the Authority's obligation to transfer the
Property. To satisfy the requirements of this Section, the Tax Credit Reservation
shall be for an amount sufficient to meet the requirements of the Financing Plan to be
approved by the Authority pursuant to Section 2.4.
(b) The Developer shall submit a timely and complete application for the Tax
Credit Reservation to TCAC in the 2018 first round of TCAC preliminary
reservations. If the Developer does not receive a Tax Credit Reservation in the 2018
first round, then the Developer shall submit a timely and complete application for the
Tax Credit Reservation to TCAC in the 2018 second round of TCAC preliminary
reservations. If the Developer does not receive a Tax Credit Reservation in the 2018
second round, then the Developer shall submit a timely and complete application for
the Tax Credit Reservation to TCAC in the 2019 first round of TCAC preliminary
reservations. If the Developer does not receive a Tax Credit Reservation in the first
round of the 2019 TCAC application cycle, then the Authority may either: (I)
terminate this Agreement pursuant to Section 8.2; or(2) confer with the Developer in
good faith for a period not to exceed sixty (60) days to determine if the Developer
should submit a further application to TCAC in a subsequent preliminary reservation
round or if a feasible and mutually acceptable alternate arrangement can be made to
finance development of the Improvements. If no agreement is reached by the Parties
within such sixty (60) day period regarding the alternative financing structure for the
construction of the Improvements, this Agreement may be terminated in accordance
with the provisions of Section 8.2. Any agreement that is reached between the parties
2
1552\12\2272919.1
regarding an alternative financing plan for the construction of the Improvements shall
be memorialized in an implementation agreement to this Agreement.
(c) Upon an award of the Tax Credit Reservation from TCAC, the Developer
shall exercise diligent good faith efforts to obtain a funding commitment from the
Investor for the Tax Credit Funds. Such funding commitment shall be in a form
reasonably acceptable to the Authority. Procurement of the Tax Credit Reservation
and an acceptable funding commitment for the Tax Credit Funds is a condition
precedent to the Authority's obligation to convey the Property to the Developer."
Section 1.4 Amendment to Section 4.1. Section 4.1 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Subject to the terms and conditions set forth in the Authority Documents, the Authority
hereby agrees to make a loan to the Developer of up to Three Million Four Hundred Fifty
Thousand Dollars ($3,450,000). The Developer's obligation to pay the Authority Loan
shall be evidenced by the Authority Promissory Note."
Section 1.5 Amendment to Subsection 4.6(a). Section 4.6(a) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(a) The disbursements made pursuant to this Section may not exceed the amount of
the Authority Loan. The Authority shall disburse the Authority Loan into Escrow in
three components: (I) an "Acquisition Component" in the amount of Two Million Seven
Hundred Thousand Dollars ($2,700,000); (2) a "Construction Component" in the amount
of Seven Hundred Thousand Dollars ($700,000); and (3) a "Completion Component" in
the amount of Fifty Thousand Dollars ($50,000). The division of the Authority Loan
between the Acquisition Component, the Construction Component and the Completion
Component may be readjusted by the Authority Executive Director on behalf of the
Authority without the need for formal amendment of this Agreement. The Authority will
disburse the Acquisition Component subject to the conditions precedent set forth in
subsection (b) below, the Construction Component subject to the conditions set forth in
subsection (c) below (but in no event before the Construction Closing), and the
Completion Component at Permanent Closing subject to the conditions precedent set
forth in subsection (d) below."
Section 1.6 Amendment to Exhibit B: Development Schedule. The Development
Schedule attached to the Original DDA as Exhibit B, is hereby replaced with the revised
Development Schedule attached to this Amendment as Attachment E. incorporated herein by this
reference.
Section 1.7 Amendment to Exhibit F: Form of Authority Promissory Note. The Form
of Authority Promissory Note attached to the Original DDA as Exhibit F. is hereby replaced with
the Form of Authority Promissory Note attached to this Amendment as Attachment C.
incorporated herein by this reference.
3
1552\1212272919.1
Section 1.8 Amendment to Exhibit G: Form of Authority Deed of Trust. The Form of
Authority Deed of Trust attached to the Original DDA as Exhibit G, is hereby replaced with the
Form of Authority Deed of Trust attached to this Amendment as Attachment D, incorporated
herein by this reference.
Section 1.9 No Other Changes to the Agreement. Except as expressly modified by
this Second Amendment, all other provisions of the Original DDA remain unmodified and
continue in full force and effect.
Section 1.10 Conflicts with the Agreement. In the event of any conflict between this
Second Amendment and the Original DDA, the provisions of this Second Amendment shall
prevail.
Section 1.11 Effective Date. This Second Amendment shall be effective on the date
first set forth above.
Section 1.12 Successors and Assigns. This Second Amendment shall be binding on and
inure to the benefit of the legal representatives, heirs, successors and assigns of the parties.
Section 1.13 California Law. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of California.
Section 1.14 Counterparts; Multiple Originals. This Second Amendment may be
executed in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
Section 1.15 Recordation. This Second Amendment shall be recorded against the
Developer's interest in the Property described in the attached Exhibit A. at the Close of Escrow.
4
155211212272919.1
IN WITNESS WHEREOF, the Authority and the Developer have executed this
Agreement in triplicate on or as of the date first above written.
DEVELOPER:
VILLA DE VIDA POWAY, L.P., a California Limited
Partnership
By: Mercy Housing Calwest, a California nonprofit public
benefit corporation its manag' g general partner
By: p '
Ed Holder, Vice President
Date: 01/ Yl / `b
By: Villa de Vida, Inc.,a California nonprofit public
benefit corporation, its co-general partner
By:
Edward B. Merchant, Chairman of the Board
Date:
NOTE: Section 3.6 requires the initials of the Developer
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By:
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARI3 & LIPMAN LLP,
Authority Special Counsel
By:
Rafael Yaquian
5
155211212272919.1
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is •
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF Los Angeles )
On February 14, 2018 , before me, Ricardo Hernandez ,Notary Public,
personally appeared Ed Holder , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/arc subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ics), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s)acted, executed the instrument:
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the .
foregoing paragraph is true and correct.
WITNESS my hand and official seal. /
,
Name: Ricardo Hernandez
igt Name: Notary Public
• pc
144 a yt.•11t...
a�.+nnkE w na
•
6
155211212272919.1
IN WITNESS WHEREOF, the Authority and the Developer have executed this
Agreement in triplicate on or as of the date first above written.
DEVELOPER:
•
VILLA DE VIDA POWAY, L.P.,a California Limited
Partnership
By: Mercy Housing Calwest,a California nonprofit public
benefit corporation, its managing general partner
By:
Ed Holder, Vice President
Date:
By: Villa do Vida, Inc., a California nonprofit public
benefit corporation, its co-general partner
By:
Edward B. Merchant,zChairman of the Board
Date: ZJiJ ) ( 2
NOTE: Section 3.6 requires the initials of the Developer
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By:
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority Special Counsel
By:
Rafael Yaquian
5
1552\122272919.1
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
AA /
COUNTY OF SOS 1as n e ec
OnP-47 /3,go,r , before me, 1,•/-4$12,7 Nott? ,Notary Public,
personally appeared g 4 ..2 e , who proved to me on the
basis of satisfactory evidence to be the person8) whose namec4safe subscribed to the within
instrument and acknowledged to me that r3s ey.executed the sante in t1hef/their
authorized capacitySiesJ, and that bydpheatbeir signature) on the instrument the person sj, or
the entity upon behalf of which the person) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
•
Name:
Name: Notary Public
L MINER
ti.., Comnusulon;i 20mtel
i ! -'%;',• Notary Public-Calitornli
f Los Angeles County Ct
Ct
( M Comm.Ezpjin tps Sep 13.268.
18
6
155211212272919.1
IN WITNESS WHEREOF, the Authority and the Developer have executed this
Agreement in triplicate on or as of the date first above written.
DEVELOPER:
VILLA DE VIDA POWAY, L.P., a California Limited
Partnership
By: Mercy Housing Calwest, a California nonprofit public
benefit corporation, its managing general partner
By:
Ed Holder, Vice President
Date:
By: Villa de Vida. Inc., a California nonprofit public
benefit corporation, its co-general partner
•
By:
Edward B. Merchant, Chairman of the Board
Date:
NOTE: Section 3.6 requires the initials of the Developer
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By:
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority Special Counsel
By:
Rafael Yaquian
5
1552\12\2272919.1
California All-Purpose Acknowledgment CIVIL CODE § 1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On February 20, 2018 before me, Carol S. Legg, Notary Public, personally appeared Tina
White, who proved to me on the basis of satisfactory evidence to be the person(s)whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signatures)on the instrument the person(s), or the entity upon behalf of which the persons)
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
..,� CAROLS. LEGG
Commission•2105116
§ ;' Notary Public-California
San Oleg*County �
acX Q 64
_ Mt�Camm.Extras At28_2014 Carol S. Legg, Not Public
OPTIONAL
Title or type of document: Second Amendment to Land Disposition, Development and Loan
Agreement (Villa de Vida Poway)
Document Date: February 6, 2018
Number of Pages: 5
Signers Other Than Named Above: Ed Holder for Mercy Housting and Edward Merchant for
Villa de Vida.
IN WITNESS WHEREOF, the Authority and the Developer have executed this
Agreement in triplicate on or as of the date first above written.
DEVELOPER:
VILLA DE VIDA POWAY, L.P., a California Limited
Partnership
•
By: Mercy Housing Caiwest, a California nonprofit public
benefit corporation, its managing general partner
By:
Ed Holder, Vice President
Date: - •
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its co-general partner
By:
Edward B. Merchant, Chairman of the Board
Date:
NOTE: Section 3.6 requires the initials of the Developer
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By: .
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority 'p tial Counsel •
By: 44 ._.
Rafac'aquian
5
1552\12\2272919.
ATTACHMENT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of San Diego, City of Poway, and is
described as follows:
PARCEL 1:
THAT PORTION OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 23, TOWNSHIP
14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA,ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE NORTH LINE OF SAID SECTION 14 DISTANT ALONG SAID NORTH LINE
NORTH 89° 00' 00' WEST, 3955.50 FEET FROM THE NORTHEAST CORNER OF SAID SECTION 23, BEING A
POINT IN THE CENTER LINE OF HIGHWAY COMMISSION ROUTE 3, DIVISION 2, BEING ALSO A POINT IN THE
EASTERLY LINE OF THE LAND DESCRIBED IN DEED TO THE COUNTY OF SAN DIEGO, RECORDED OCTOBER
13, 1923, IN BOOK 500, PAGE 231 OF DEEDS, RECORDS OF SAN DIEGO COUNTY; THENCE ALONG THE
EASTERLY, SOUTHERLY AND WESTERLY LINE OF SAID LAND AS FOLLOWS: ALONG THE CENTER LINE OF
SAID ROUTE 3, DIVISION 2, SOUTH 00° 40' 00" WEST, 146.07 FEET TO THE SOUTHEAST CORNER; SOUTH
85° 22' 00' WEST, 420.00 FEET TO THE SOUTHWEST CORNER OF SAID LAND AND NORTH 00°40' 00'EAST,
188.00 FEET TO THE NORTHERLY LINE OF SAID SECTION 23; THENCE ALONG SAID NORTHERLY LINE SOUTH
89°00'00'EAST,TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP
14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA,ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTH LINE OF SAID SECTION 14 DISTANT ALONG SAID SOUTH LINE
NORTH 89° 00' 00' WEST, 3955.50 FEET FROM THE SOUTHEAST CORNER OF SAID SECTION 14 TO THE
CENTER LINE OF THE HIGHWAY COMMISSION ROUTE 3, DIVISION 2; THENCE ALONG SAID CENTER LINE
NORTH 00° 40' 00' EAST, 212.30 FEET TO AN INTERSECTION WITH THE CENTER LINE OF THE ROAD TO
MIRAMAR, COUNTY ROAD NO. A-43, ROAD SURVEY 188, ACCORDING TO PLAT THEREOF ON FILE IN THE
OFFICE OF THE COUNTY ENGINEER OF SAN DIEGO COUNTY; THENCE ALONG SAID CENTER LINE LAST
MENTIONED SOUTH 85° 25'00' EAST(ROS 3525) (DEED - SOUTH 85° 22' 00' WEST) 420.00 FEET; THENCE
SOUTH 00°40'00" WEST 171.00 FEET TO THE SOUTH UNE OF SAID SECTION 14; THENCE EASTERLY ALONG
SAID SOUTH LINE TO THE TRUE POINT OF BEGINNING.
Assessor's Parcel Number: 317-152-14-00
A-I
1552\1212272919.1
ATTACHMENT B
FINANCING PROPOSAL
The attached Financing Proposal hereby supersedes the Financing Proposal attached as Exhibit D
of the Original DDA.
B-1
1552\12'2272919.1
TABLE 1
PROJECT DESCRIPTION
VILLA DE VIDA
CITY OF POWAY
I. Location 12341 Oak Knoll Road
II. Site Area 2.05 Acres(Usable)
III. Gross Building Area
Net Residential Area 40,650 SF 66%
Corridors/Stairs/Elevator 8,783 SF 14%
Leasing Offices/Lobby 3,513 SF 6%
Community Dining 3,148 SF 5%
Social/Recreation Area 3,665 SF 6%
Laundry/Trash 648 SF 1%
Storage& Miscellaneous 1 547 SF 2%
Total Gross Building Area 61,954 SF 100%
IV. Construction Type Type V Elevator
Internal Corridors
V. Number of Stories 2 Stories
VI. Unit Mix Number of Units
One Bedroom 51 Units 94% 600 SF
Two Bedroom 3 Units 6% 850 SF
Total/Average 54 Units 100% 614 SF
VII. Density 26 Units/Net Acre
VIII. Affordability Mix
Units @ 30%AMI 7 Units 13%
Units @ 40%AMI 26 Units 48%
Units @ 50%AMI 9 Units 17%
Units @ 60%AMI 11 Units 20%
Manager 1 Units 2%
Total/Average 54 Units 100%
Average Affordability
(excluding Manager unit)
IX. Parking
Type of Parking Surface Parking
Total Parking Spaces 32 Spaces
Parking Ratio 0.59 Spaces/Unit
Prepared by:Keyser Marston Associates,Inc.
Filename:i:Poway_Vllla de Vida v13 DDLA Exhibit D;1/24/2018;Iag
TABLE 2
ESTIMATED DEVELOPMENT COSTS
VILLA DE VIDA
CITY OF POWAY
Totals Per Unit Comments
I. Direct Costs(1)(2)
Off-Site Improvements (3) $11,809 $219 $0 Per SF Site
On-Sites/Landscaping $874,331 $16,191 $10 Per SF Site
Demolition $158,182 $2,929 $2 Per SF Site
Parking $65,975 $1,222 $2,062 Per Space
Shell Construction $12,192,390 $225,785 $197 Per SF GBA
FF&E $518,000 $9,593 Allowance
Contingency $1,372,069 $25,409 9.9% of Directs
Total Direct Costs $15,192,757 $281,347 $245 Per SF GSA
II. Indirect Costs
Architecture& Engineering $719,163 $13,318 4.7% of Directs
Permits& Fees(3) $1,178,965 $21,833 $19 Per SF GBA
Legal&Accounting $120,000 $2,222 0.8% of Directs
Taxes& Insurance $125,889 52,331 0.8% of Directs
Developer Fee $1,756,436 $32,527 11.6% of Directs
Construction Management $145,000 $2,685 1.0% of Directs
Marketing/Lease-Up $145,000 $2,685 1.0% of Directs
Other Costs $0 $0 0.0% of Directs
Contingency $201,232 $3,727 4.8% of Indirects
Total Indirect Costs $4,391,685 $81,328 28.9% of Directs
III. Financing Costs
Loan Fees $202,100 $3,743 1.3% of Directs
Interest During Construction $792,400 $14,674 5.2% of Directs
Title/Recording/Escrow $70,000 $1,296 0.5% of Directs
TCAC/Syndication Fees $196,900 $3,646 1.3% of Directs
Operating Lease-Up/Replacement Reserves $191,750 $3,551 1.3% of Directs
Supportive Services Reserve $2,500,000 $46,2_96 16.5% of Directs
Total Financing Costs 53,953,150 $73,206 26.0% of Directs
IV. Total Costs-Excluding Acquisition $23,537,592 $435,881 $380 Per SF GBA
Or Say(Rounded) $23,537,000
V. Land Acquisition Costs $2,700,000 $50,000 $30 Per SF Site
VI. Total Costs-Including Acquisition $26,237,592 $485,881 $424 Per SF GBA
Or Say(Rounded) $26,238,000
(1) Assumes payment of prevailing wages.
(2) Includes pro rata share of Contractor General Conditions,Contractor Overhead and Profit,and General Contractor Bond and Insurance
(3) Per Developer;not verified by KMA or City.
Prepared by:Keyser Marston Associates,Inc.
Filename:I:Poway_Villa de Vida v13 DDLA Exhibit D;1/24/2018;lag
TABLE 3
NET OPERATING INCOME
VILLA DE VIDA
CITY OF POWAY
p of Total
Units 5/Month(1) Annual
I. Gross Scheduled Income
One Bedroom @ 30%AMI 6 $436 $31,383
One Bedroom @ 40%AMI 25 $642 $192,600
One Bedroom @ 50%AMI 8 $753 $72,300
One Bedroom @ 60%AMI 11 $912 $120,351
One Bedroom Manager Unit 1 $0 $0
Two Bedroom @ 30%AMI 1 $482 $5,786
Two Bedroom @ 40%AMI 1 $766 $9,192
Two Bedroom @ 50%AMI 1 $839 $10,067
Total/Average 54 $682 $441,678
Add:Other Income $5 /Unit/Month $3240
Total Gross Scheduled Income(GSI) $444,918
II. Effective Gross Income(EGI)
(Less)Vacancy 5.0% of GSI (2) ($22,2461
Total Effective Gross Income(EGI) $422,672
III. Operating Expenses
(Less)Operating Expenses $6,052 /Unit/Year ($326,804)
(Less)Tenant Services Coordination $1,759 /Unit/Year ($95,000)
(Less)Transit Passes $108 /Unit/Year ($5,832)
(Less)Property Taxes(3) $46 /Unit/Year ($2,500)
(Less)Replacement Reserves $375 /Unit/Year ($20,250)
(Less)Monitoring Fee $74 /Unit/Year 154,0001
Total Expenses $8,415 /Unit/Year ($454,386)
108% of EGI
IV. Net Operating Income(NO1) ($31,714)
V. Add: Operating Subsidy(41 $492 Unit/Month $312,842
(Less)Vacancy 5.0% of Subsidy 1515,6421
Total $297,945
VI. Adjusted NO1(Rounded) $266,231
(1) Reflects 2017 TCAC rents,net of monthly utility allowance.
(2) Assumes TCAC waiver for 5%vacancy rate is received due to 100%Project Based Vouchers.
(3) Assumes that the Project will receive tax-exempt status.
(4) Reflects operating subsidy from Project-Based Section 8 vouchers.
Prepared by:Keyser Marston Associates,Inc.
Filename:i:Poway_Villa de Vida v13 O0LA Exhibit D;1/24/2018;lag
TABLE 4
ESTIMATED FINANCING DEFICIT
VILLA DE VIDA
CITY OF POWAY
Total Per Unit
I. Sources of Funds
Supportable Permanent Loan $2,863,000 $53,000
Tax Credit Equity Investment 516,824,000 $312,000
Deferred Developer Fee $600,000 $11,000
General Partner Loan $2,500,000 $46,000
Total Sources of Funds $22,787,000 $422,000
II. (Less) Development Costs- Excluding Acquisition ($23,537,000) ($436,0001
III. Residual Land Value ($750,000) ($14,000)
Iv. (Less)Acquisition Costs ($2,700,0001 1550,0001
V. Financing Deficit ($3,450,000) ($64,000)
Prepared by:Keyser Marston Associates,Inc.
Filename:i:Poway_Villa de Vida_v13 DDLA Exhibit D;1/24/2018;Iag
ATTACHMENT C
FORM OF AUTHORITY PROMISSORY NOTE
The attached Form of Promissory Note hereby supersedes the Promissory Note attached as
Exhibit F of the Original DDA.
C-I
1552 U2\2272919.1
PROMISSORY NOTE
(Villa de Vida)
S3,450,000 Poway, California
, 20
FOR VALUE RECEIVED, VILLA DE VIDA POWAY, L.P., a California limited partnership
("Borrower"), promises to pay to THE POWAY HOUSING AUTHORITY, a public body,
corporate and politic ("Holder") the principal sum of Three Million Four Hundred Fitly
Thousand Dollars ($3,450,000) or so much thereof as is disbursed pursuant to the DDLA (as
defined in Section 1 below). All capitalized terms used but not defined in this Note have the
meanings set forth in the DDLA.
1. Borrower's Obligation. This Note evidences the Borrower's obligation to pay the
Holder the principal amount of Three Million Four Hundred Filly Thousand Dollars
($3,450,000) for the funds loaned to Borrower by Holder (the "Loan") to finance land acquisition
costs related to the acquisition and construction of the Development pursuant to that certain
Disposition, Development and Loan Agreement dated as of October 4, 2016, as amended by that
certain First Amendment to the Land Disposition, Development and Loan Agreement dated as of
November 6, 2017, as further amended by that certain Second Amendment to the Land
Disposition, Development and Loan Agreement dated as of February 6, 2018, as such may be
amended from time to time, by and between Borrower and Holder(the "DDLA").
2. Interest. The Loan will bear simple interest at three percent (3%) per annum;
provided, however, in the event of an uncured Developer Event of Default under the Authority
Documents and the failure of the Borrower to cure the same within the time specified in the
Authority Documents, interest shall accrue following the Developer Event of Default at the
default rate of the lesser of ten percent (10%), compounded annually, or the highest rate
permitted by law.
3. Term and Repayment Requirements. Payments due under this Note are due in
accordance with this Note and as set forth in Section 4.5 of the DDLA. In any event, the unpaid
principal balance is due and payable not later than the expiration of the Term of the DDLA.
Repayment of this Note shall be non-recourse to the Borrower pursuant to Section 4.10 of the
DDLA
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of the Holder except as provided in the DDLA.
5. Security. This Note is secured by the Assignment of Collateral Documents, dated
concurrently with the DDLA (the "Assignment") and the Loan Deed of Trust executed
concurrently herewith.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
1552\I2\1949060.5
United States of America to Holder at the Poway Housing Authority. 13325 Civic Center Drive,
Poway, CA 92064, Attention: Executive Director, or such other place as Holder may from time
to time designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including reconveyance fees and reasonable attorney's fees of Holder,
incurred in connection with the payment of this Note and the release of any security hereof.
(c) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Default.
(a) Upon the occurrence of an uncured Developer Event of Default, the entire
unpaid principal balance, and together with all other sums then payable under this Note, will, at
the option of the Holder, become immediately due and payable upon written notice by the Holder
to the Borrower without further demand.
(b) The Holder's failure to exercise the remedy set forth in subsection 7(a)
above or any other remedy provided by law upon the occurrence of an uncured Developer Event
of Default will not constitute a waiver of the right to exercise any remedy at any subsequent time
in respect to the same or any other uncured Developer Event of Default. The acceptance by
Holder hereof of any payment which is less than the total of all amounts due and payable at the
time of such payment will not constitute a waiver of the right to exercise any of the foregoing
remedies or options at that time or at any subsequent time, or nullify any prior exercise of any
such remedy or option, without the express consent of the Holder, except as and to the extent
otherwise provided by law.
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
2
1552\12\1949060.5
•
9. Miscellaneous Provisions.
(a) All notices to Bolder or Borrower are to be given in the manner and at the
addresses set forth in the DDLA, or to such addresses as Holder or Borrower may therein
designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence. •
(e) The Authority Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
IN WITNESS WHEREOF, this Promissory Note is executed by Borrower as of the day and year
written below and is effective as of the date first written above.
BORROWER
VILLA DE VIDA POWAY, L.P., a California limited
partnership
By: Mercy Housing Caiwest, a California nonprofit public
benefit corporation, its . ana_'n:,_ neral .artner
By: �
Ed Holder, Vice President
Date: �— <l/
• By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its co-general partner
By:
Edward B. Merchant,Chairman of the Board
Date:
3
1552112\1949060.5
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower arc to be given in the manner and at the
addresses set forth in the DDLA, or to such addresses as Holder or Borrower may therein
designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e) The Authority Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the panics.
IN WITNESS WHEREOF, this Promissory Note is executed by Borrower as of the day and year
written below and is effective as of the date first written above.
BORROWER
VILLA DE VIDA POWAY, L.P., a California limited
partnership
By: Mercy Housing Calwest, a California nonprofit public
benefit corporation, its managing general partner
By:
Ed Holder, Vice President
Date:
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its co-general partner
By: �-
Edward B. Merchant,ttairman of the Board
Date: 2 I ►3 I 1 9
3
1562\I2\1949060.5
ATTACHMENT D
FORM OF AUTHORITY DEED OF TRUST
The attached Form of Authority Deed of Trust hereby supersedes the Authority Deed of Trust
attached as Exhibit G of the Original DDA.
D-1
1552\12\2272919.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Attention: Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE
SECTIONS 6103 AND 27383
APN: 317-152-14-00
(Space above this line for Recorder's Use)
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("Deed of Trust") is made as of _, 20_,
by and among Villa de Vida Poway, L.P., a California limited partnership ("Trustor"),
Commonwealth Land Title Company, a California corporation ("Trustee"), and the Poway
Housing Authority, a public body, corporate and politic ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the City of Poway, County of
San Diego, State of California, that is described in the attached Exhibit A, incorporated herein by
this reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
1
155211211949162.5
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said Property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITI-I all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or will be, attached to said building or buildings in any
manner; and •
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
2
155211211949162.5
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (collectively, the
"Secured Obligations"):
A. Payment of just indebtednesses of Trustor to Beneficiary of all sums at any time
owing under, or in connection with, the Authority Promissory Note (defined in Article I below)
until paid or cancelled and any other amounts owing under the Authority Documents. Said
principal and other payments are due and payable as provided in the Authority Promissory Note.
The Authority Promissory Note and all its terms are incorporated herein by reference, and this
conveyance secures any and all extensions thereof, however evidenced;
B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
C. Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Authority Documents (defined in Article I below); and
D. All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation: (1) modifications, extensions or renewals at a different rate of
interest; or (2) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes
(defined in Article I below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE l:
DEFINITIONS
Section 1.1 Definitions. In addition to the terms defined elsewhere in this Deed of
Trust, the following terms have the following meanings in this Deed of Trust:
(a) "Authority Documents" means this Deed of Trust, the Authority
Promissory Note, the Authority Regulatory Agreement, the Disposition and Loan Agreement,
and any other debt, loan or security instruments between Trustor and the Beneficiary relating to
the Property.
(b) "Authority Loan" means the loan made by the Beneficiary to the Trustor
in the amount of up to Three Million Four Hundred Fifty Thousand Dollars ($3,450,000).
(c) "Authority Promissory Note" means that certain promissory note in the
amount of Three Million Four Hundred Fifty Thousand Dollars ($3,450,000) dated as of
, 20_, herewith executed by the Trustor in favor of the Beneficiary, the
payment of which is secured by this Deed of Trust. (A copy of the Authority Promissory Note is
3
1552\12\1949162.5
on file with the Beneficiary and terms and provisions of the Authority Promissory Note are
incorporated herein by reference.)
(d) "Authority Regulatory Agreement" means that certain Regulatory
Agreement and Declaration of Restrictive Covenants that will be recorded in the Official
Records against the Developer's fee interest of the Property upon the Close of Escrow securing
the Authority's interest in the Authority Loan.
(e) "Disposition and Loan Agreement" means that certain Disposition,
Development and Loan Agreement between Trustor and Beneficiary, date as of October 4, 2016,
as amended by that certain First Amendment to the Land Disposition, Development and Loan
Agreement dated as of November 6, 2017, as further amended by that certain Second
Amendment to the Land Disposition, Development and Loan Agreement dated as of February 6,
2018, as such may be amended from time to time, providing for the Beneficiary to make the
Authority Loan.
(f) "Principal" means the aggregate of the amounts required to be paid under
the Authority Promissory Note.
ARTICLE 2:
MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
(a) The Trustor agrees that at all times prior to full payment of the sum owed
and performance of the Secured Obligations under the Authority Promissory Note, the Trustor
will, at the Trustor's own expense, maintain, preserve and keep the Security or cause the Security
to be maintained and preserved in good condition. The Trustor will from time to time make or
cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The
Beneficiary has no responsibility in any of these matters or for the making of improvements or
additions to the Security.
(b) Trustor agrees to pay fully and discharge (or cause to be paid fully and
discharged) all claims for labor done and for material and services furnished in connection with
the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of
a cessation of labor on the work or construction on the Security for a continuous period of thirty
(30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien
against the Security or any part thereof. Trustor irrevocably appoints, designates and authorizes
Beneficiary as its agent (said agency being coupled with an interest) with the authority, but
without any obligation, to file or record any notices of completion or cessation of labor or any
other notice that Beneficiary deems necessary or desirable to protect its interest in and to the
Security or the Authority Documents; provided, however, that Beneficiary exercises its rights as
agent of Trustor only in the event that Trustor fails to take, or fails to diligently continue to take,
those actions as hereinbefore provided.
4
1552\121949162.5
\
(c) Upon demand by Beneficiary, Trustor shall make or cause to be made
such demands or claims as Beneficiary specifies upon laborers, materialmen, subcontractors or
other persons who have furnished or claim to have furnished labor, services or materials in
connection with the Security. Nothing herein contained requires Trustor to pay any claims for
labor, materials or services which Trustor in good faith disputes and is diligently contesting
provided that Trustor shall, within thirty (30) days after the filing of any claim of lien, record in
the Office of the Recorder of the County of San Diego, a surety bond in an amount equal to the
amount of such claim item to protect against a claim of lien, or to provide other form of security
acceptable to the Beneficiary at the Beneficiary's sole and absolute discretion.
Section 2.2 Granting of Easements. Trustor may not grant easements, licenses, rights-
of-way or other rights or privileges in the nature of easements with respect to any property or rights
included in the Security except those required or desirable for installation and maintenance of
public utilities, including, without limitation, water, gas, electricity, sewer, telephone, or those
required by law and as approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
(a) Subject to the rights of any approved senior mortgage lender, as part of the
consideration for the indebtedness evidenced by the Authority Promissory Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Authority Documents, Trustor shall collect and receive all rents
and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the
rents and revenues so collected to the Secured Obligations with the balance, so long as no such
breach has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that
this assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Authority Documents, and without the necessity
of Beneficiary entering upon and taking and maintaining full control of the Property in person,
by agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to
possession of all rents and revenues of the Property as specified in this Section as the same
becomes due and payable, including but not limited to rents then due and unpaid, and all such
rents will, immediately upon delivery of such notice, be held by Trustor as trustee for the benefit
of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor
agrees that commencing upon delivery of such written notice of Trustor's breach by Beneficiary
to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to
Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant thereof,
delivered to each tenant personally, by mail or by delivering such demand to each rental unit,
without any liability on the part of said tenant to inquire further as to the existence of a default by
Trustor.
5
1552\1 2 0 949162.5
(b) Subject to the rights of any approved senior mortgage lender, the Trustor
hereby covenants that Trustor has not executed any prior assignment of said rents, that Trustor
has not performed, and will not perform, any acts or has not executed and will not execute, any
instrument which would prevent Beneficiary from exercising its rights under this Section, and
that at the time of execution of this Deed of Trust, there has been no anticipation or prepayment
of any of the rents of the Property for more than two (2) months prior to the due dates of such
rents. Trustor covenants that Trustor will not hereafter collect or accept payment of any rents of
the Property more than two (2) months prior to the due dates of such rents. Trustor further
covenants that Trustor will execute and deliver to Beneficiary such further assignments of rents
and revenues of the Property as Beneficiary may from time to time request.
(c) Upon Trustor's breach of any covenant or agreement of Trustor in the
Authority Documents, after applicable notice and cure periods, Beneficiary may in person, by
agent or by a court-appointed receiver, regardless of the adequacy of Beneficiary's security, enter
upon and take and maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited to, the
execution, cancellation or modification of leases, the collection of all rents and revenues of the
Property, the making of repairs to the Property and the execution or termination of contracts
providing for the management or maintenance of the Property, all on such terms as are deemed
best to protect the security of this Deed of Trust. In the event Beneficiary elects to seek the
appointment of a receiver for the Property upon Trustor's breach of any covenant or agreement of
Trustor in this Deed of Trust, Trustor hereby expressly consents to the appointment of such
receiver. Beneficiary or the receiver will be entitled to receive a reasonable fee for so managing
the Property.
(d) All rents and revenues collected subsequent to delivery of written notice
by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the
Authority Documents after applicable notice and cure periods, are to be applied first to the costs,
if any, of taking control of and managing the Property and collecting the rents, including, but not
limited to, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the
Property, premiums on insurance policies, taxes, assessments and other charges on the Property,
and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the
Property and then to the sums secured by this Deed of Trust. Beneficiary or the receiver is to
have access to the books and records used in the operation and maintenance of the Property and
will be liable to account only for those rents actually received. Beneficiary is not liable to
Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property
by reason of anything done or left undone by Beneficiary under this Section.
(e) If the rents of the Property are not sufficient to meet the costs, if any, of
taking control of and managing the Property and collecting the rents, any funds expended by
Beneficiary for such purposes will become part of the Secured Obligations. Unless Beneficiary
and Trustor agree in writing to other terms of payment, such amounts are payable by the Trustor
to the Beneficiary, upon notice from Beneficiary to Trustor requesting payment thereof and will
bear interest from the date of disbursement at the rate stated in Section 3.3.
(l) If the Beneficiary or the receiver enters upon and takes and maintains
control of the Property, any application of rents as provided herein will not cure or waive any
6
1552121949162.5
\ \
default hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property will terminate at such time as this
Deed of Trust ceases to the Secured Obligations.
ARTICLE 3:
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
(a) Trustor shall pay, or cause to be paid prior to the date of delinquency, all
taxes, assessments, charges and levies imposed by any public authority or utility company that
are or may become a lien affecting the Security or any part thereof; provided, however, that
Trustor is not required to pay and discharge any such tax, assessment, charge or levy so long as:
(I) the legality thereof is promptly and actively contested in good faith and by appropriate
proceedings; and (2) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section. With respect to taxes, special assessments or other similar governmental charges,
Trustor shall pay such amount in full prior to the attachment of any lien thereof on any part of
the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (2) of the first
sentence of this paragraph, the provisions of this Section shall not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
(b) In the event that Trustor fails to pay any of the items required by this
Section to be paid by Trustor, Beneficiary may (but is under no obligation to) pay the same, after
the Beneficiary has notified the Trustor in writing of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the maximum rate permitted by law, will become part of the Secured Obligations secured hereby,
and Trustor agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
(a) Trustor agrees to provide insurance conforming in all respects to that
required under the Authority Documents at all times and until all amounts secured by this Deed
of Trust have been paid and all Secured Obligations hereunder have been fulfilled, and this Deed
of Trust has been reconveyed.
(b) All such insurance policies and coverages are to be maintained at Trustor's
sole cost and expense. Certificates of insurance for all of the above insurance policies, showing
the same to be in full force and effect, are to be delivered to the Beneficiary upon demand
therefor at any time prior to the Trustor's satisfaction of the Secured Obligations.
(c) The Trustor is aware that California Civil Code Section 2955.5(a)
provides as follows: "No lender shall require a borrower, as a condition of receiving or
maintaining a loan secured by real property, to provide hazard insurance coverage against risks
7
155211211949162.5
to the improvements on that real property in an amount exceeding the replacement value of the
improvements on the property."
Section 3.3 Advances. In the event the Trustor fails to maintain the full insurance
coverage required by this Deed of Trust or fails to keep the Security in accordance with the
Authority Documents, the Beneficiary. after at least seven (7) days' prior written notice to Trustor,
may (but is under no obligation to): (a) take out the required policies of insurance and pay the
premiums on the same; and (b) make any repairs or replacements that are necessary and provide for
payment thereof. All amounts so advanced by the Beneficiary will become part of the Secured
Obligations (together with interest as set forth below) and will be secured hereby, which amounts
the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, will bear interest
from the date of the advance at the lesser of ten percent (10%) per annum or the maximum rate
permitted by law.
ARTICLE 4:
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages. All judgments, awards of damages, settlements
and compensation made in connection with or in lieu of: (a) a taking of all or any part of or any
interest in the Property by or under assertion of the power of eminent domain; (b) any damage to or
destruction of the Property or in any part thereof by insured casualty; and (c) any other injury or
damage to all or any part of the Property ( collectively, the "Funds"), are hereby assigned to and are
to be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is
authorized and empowered (but not required) to collect and receive any Funds and is authorized to
apply them in whole or in part to any indebtedness or obligation secured hereby, in such order and
manner as the Beneficiary determines at its sole option. The Beneficiary is entitled to settle and
adjust all claims under insurance policies provided under this Deed of Trust and may deduct and
retain from the proceeds of such insurance the amount of all expenses incurred by it in connection
with any such settlement or adjustment. All or any part of the amounts so collected and recovered
by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose
for its disposition. Application of all or any part of the Funds collected and received by the
Beneficiary or the release thereof will not cure or waive any default under this Deed of Trust. The
rights of the Beneficiary under this Section are subject to the rights of any senior mortgage lender.
The Beneficiary shall release the Funds to Trustor to be used to reconstruct the improvements on
the Property provided that Beneficiary reasonably determines that Trustor (taking into account the
Funds) has sufficient funds to rebuild the improvements in substantially the form that existed prior
to the casualty or condemnation.
ARTICLE 5:
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property. The Trustor shall duly and
punctually perform all terms, covenants, conditions and agreements binding upon it under the
8
1552\12\1949162.5
Authority Documents and any other agreement of any nature whatsoever now or hereafter
involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses. In the event of any
Event of Default hereunder, and if the Beneficiary employs attorneys or incurs other expenses for
the collection of amounts due or the enforcement of performance or observance of an obligation or
agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand
therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable
expenses so incurred by the Beneficiary (including, but not limited to, other professional services
fees and costs). Any such amounts paid by the Beneficiary will be added to the Secured
Obligations, and will bear interest from the date such expenses are incurred at the lesser of ten
percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal. The Trustor shall pay to the Beneficiary the
Principal and any other payments as set forth in the Authority Promissory Note in the amounts and
by the times set out therein.
Section 5.4 Personal Property. To the maximum extent permitted by law, the
personal property subject to this Deed of Trust is deemed to be fixtures and part of the real property
and this Deed of Trust constitutes a fixtures filing under the California Commercial Code. As to
any personal property not deemed or permitted to be fixtures, this Deed of Trust constitutes a
security agreement under the California Commercial Code. The Trustor hereby grants the
Beneficiary a security interest in such items.
Section 5.5 Financing Statement. The Trustor shall execute and deliver to the
Beneficiary such financing statements pursuant to the appropriate statutes, and any other
documents or instruments as are required to convey to the Beneficiary a valid perfected security
interest in the Security. The Trustor agrees to perform all acts which the Beneficiary may
reasonably request so as to enable the Beneficiary to maintain such valid perfected security interest
in the Security in order to secure the payment of the Authority Promissory Note in accordance with
its terms. The Beneficiary is authorized to file a copy of any such financing statement in any
jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest
established pursuant to this instrument. Trustor shall pay all costs of filing such financing
statements and any extensions, renewals, amendments, and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements, and releases thereof,
as the Beneficiary may reasonably require. Without the prior written consent of the Beneficiary,
Trustor shall not create or suffer to be created pursuant to the California Commercial Code any
other security interest in the Security, including replacements and additions thereto.
Section 5.6 Operation of the Security. The Trustor shall operate the Security (and, in
case of a transfer of a portion of the Security subject to this Deed of Trust, the transferee shall
operate such portion of the Security) in full compliance with the Authority Documents.
Section 5.7 Inspection of the Security. At any and all reasonable times upon forty-
eight (48) hours' prior written notice, the Beneficiary and its duly authorized agents, attorneys,
9
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experts, engineers, accountants and representatives, may inspect the Security without payment of
charges or fees.
Section 5.8 Nondiscrimination.
(a) In satisfaction of California Health and Safety Code Sections 33345 and
33436, the Trustor herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, that there will be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) and (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the Property herein conveyed, nor shall the grantee or any person claiming under or through
the grantee, establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with
the land.
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph
(a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of
the Government Code. With respect to familial status, nothing in paragraph (a) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating
to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code
and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to
paragraph (a).
ARTICLE 6:
HAZARDOUS MATERIALS
(a) Trustor shall keep and maintain the Property in compliance with, and shall
not cause or permit the Property to be in violation of any federal, state or local laws, ordinances
or regulations relating to industrial hygiene or to the environmental conditions on, under, or
about the Property including, but not limited to, soil and ground water conditions. Trustor shall
not use, generate, manufacture, store or dispose of on, under, or about the Property or transport
to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic
substances or related materials, including without limitation, any substances defined as or
included in the definition of "hazardous substances," hazardous wastes," "hazardous materials,"
or "toxic substances" under any applicable federal or state laws or regulations (collectively
referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be
customarily used in construction and operation of the improvements on the Property or as may
be kept and used in and about residential development of this type.
(b) Trustor shall promptly advise Beneficiary in writing if at any time it
receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental
or regulatory actions related to the Property instituted, completed or threatened against Trustor or
the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations
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relating to any Hazardous Materials Law ("Hazardous Materials Law"); (2) all claims made or
threatened by any third party against Trustor or the Property relating to any loss, damage, cost,
expense or liability, contribution, cost recovery compensation, loss or injury directly or indirectly
arising out of or attributable to the use, generation, storage, release, threatened release, discharge,
disposal, or presence of Hazardous Materials on or under the Property (the matters set forth in
clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and
(3) Trustor's discovery of any occurrence or condition on any real property adjoining or in the
vicinity of the Property that could cause the Property or any part thereof to be classified as
"border-zone property" under the provision of California Health and Safety Code, Sections
25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to
any restrictions on the ownership, occupancy, transferability or use of the Property under any
Hazardous Materials Law.
(c) Beneficiary has the right to join and participate in, as a party if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall
indemnify and hold harmless Beneficiary and its council members, supervisors, directors,
officers, employees, and agents (collectively, "Indemnified Parties") from claims arising from
Trustor's breach of its obligations under the first section of this Article 6, including without
limitation claims for: (1) all foreseeable consequential damages; (2) the costs of any required,
reasonable and necessary repair, cleanup or detoxification of the Property and the preparation
and implementation of reasonable and necessary closure, remedial or other required plans all to
the extent required by an environmental regulatory agency asserting jurisdiction under
Hazardous Materials Laws; and (3) all reasonable costs and expenses incurred by Beneficiary in
connection with clauses (1) and (2), including but not limited to reasonable attorneys' fees and
other professional services fees and costs. This indemnification applies whether or not any
government agency has issued a cleanup order. Losses, claims, costs, suits, liability, and
expenses covered by this indemnification provision include, but are not limited to: (i) losses
attributable to diminution in the value of the Property; (ii) loss or restriction of use of rentable
space on the Property; (iii) adverse effect on the marketing of any rental space on the Property;
and (iv) penalties and fines levied by, and remedial or enforcement actions of any kind issued by
any regulatory agency (including but not limited to the costs of any required testing, remediation,
repair, removal, cleanup or detoxification of the Property and surrounding properties). The
forgoing indemnity shall not apply to any claims, losses, damages, liabilities, fines, penalties, or
charges that are caused by the sole negligence or willful misconduct of the Indemnified Parties.
(d) Without Beneficiary's prior written consent, which shall not be
unreasonably withheld, Trustor may not take any remedial action in response to the presence of
any Hazardous Materials on, under, or about the Property, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
which remedial action, settlement, consent decree or compromise might, in Beneficiary's
reasonable judgment, impairs the value of the Beneficiary's security hereunder; provided,
however, that Beneficiary's prior consent shall not be necessary in the event that the presence of
Hazardous Materials on or under the Property either poses an immediate threat to the health,
safety or welfare of any individual or is of such a nature that an immediate remedial response is
necessary and it is not reasonably practicable to obtain Beneficiary's consent before taking such
action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any
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action so taken. Beneficiary agrees not to withhold its consent, where such consent is required
hereunder, if either: (1) a particular remedial action is ordered by a court of competent
jurisdiction; (2) Trustor will or may be subjected to civil or criminal sanctions or penalties if it
fails to take a required action; (3) Trustor establishes to the reasonable satisfaction of Beneficiary
that there is no reasonable alternative to such remedial action which would result in less
impairment of Beneficiary's security hereunder; or (4) the action has been agreed to by
Beneficiary.
(e) The Trustor hereby acknowledges and agrees that: (1) this Article is
intended as the Beneficiary's written request for information (and the Trustor's response)
concerning the environmental condition of the Property as required by California Code of Civil
Procedure Section 726.5; and (2) each representation and warranty in this Deed of Trust or any
of the other Authority Documents (together with any indemnity applicable to a breach of any
such representation and warranty) with respect to the environmental condition of the property is
intended by the Beneficiary and the Trustor to be an "environmental provision" for purposes of
California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
Civil Procedure Section 726.5(e)(I)), then, without otherwise limiting or in any way affecting the
Beneficiary's or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may
elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1)
waive its lien on such environmentally impaired or affected portion of the Property; and (2)
exercise: (i) the rights and remedies of an unsecured creditor, including reduction of its claim
against the Trustor to judgment; and (ii) any other rights and remedies permitted by law. For
purposes of determining the Beneficiary's right to proceed as an unsecured creditor under
California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have
willfully permitted or acquiesced in a release or threatened release of hazardous materials, within
the meaning of California Code of Civil Procedure Section 726.5(d)(I), if the release or
threatened release of hazardous materials was knowingly or negligently caused or contributed to
by any lessee, occupant, or user of any portion of the Property and the Trustor knew or in the
exercise of reasonable diligence should have known of the activity by such lessee, occupant, or
user which caused or contributed to the release or threatened release. All costs and expenses,
including (but not limited to) reasonable attorneys' fees, incurred by the Beneficiary in
connection with any action commenced under this paragraph, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate specified in the
Disposition and Loan Agreement until paid, will be added to the indebtedness secured by this
Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time
following the conclusion of such action.
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\ \
ARTICLE 7:
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The following constitute events of default following
the expiration of any applicable notice and cure periods (each an "Event of Default"): (a) failure to
make any payment to be paid by Trustor under the Authority Documents; (b) failure to observe or
perform any of Trustor's other covenants, agreements or obligations under the Authority
Documents, including, without limitation, the provisions concerning discrimination, subject to
applicable notice and cure periods, if any, included in the Authority Documents; (c) failure to make
any payment, observe or perform any of Trustor's other covenants, agreements, or obligations
under any Secured Obligations; and failure to make any payments or observe or perform any of
Trustor's; or (d) failure to make any payments or observe or perform any of Trustor's other
covenants, agreements or obligations under any other debt instrument or regulatory agreement
secured by the Property, which default is not cured within the time and in the manner provided
therein.
Section 7.2 Acceleration of Maturity. If an Event of Default has occurred and is
continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of
Default and all unpaid Secured Obligations are immediately due and payable, upon written notice
by the Beneficiary to the Trustor (or automatically where so specified in the Authority Documents),
and no omission on the part of the Beneficiary to exercise such option when entitled to do so may
be construed as a waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession. If an Event of
Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Property and take possession thereof(or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts that it deems necessary
or desirable to preserve the value or marketability of the Property, or part thereof or interest
therein, increase the income therefrom or protect the security thereof. The entering upon and
taking possession of the Security shall not cure or waive any Event of Default or Notice of Sale
(as defined in Section 7.3(c) below) hereunder or invalidate any act done in response to such
Event of Default or pursuant to such Notice of Sale and, notwithstanding the continuance in
possession of the Security, Beneficiary will be entitled to exercise every right provided for in this
Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise
the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
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("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of the County of San Diego, California; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
(a) Should the Beneficiary elect to foreclose by exercise of the power of sale
herein contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit
with Trustee the Authority Promissory Note which is secured hereby (and the deposit of which
will be deemed to constitute evidence that the unpaid Principal amount of the Secured
Obligations are immediately due and payable), and such receipts and evidence of any
expenditures made that are additionally secured hereby as Trustee may require.
(b) Upon receipt of such Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as then required by
law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Sale having been
given as required by law, sell the Security, at the time and place of sale fixed by it in said Notice
of Sale, whether as a whole or in separate lots or parcels or items as Trustee deems expedient and
in such order as it may determine unless specified otherwise by the Trustor according to
California Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful
money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed or any matters
of facts will be conclusive proof of the truthfulness thereof. Any person, including, without
limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(c) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (1) the unpaid Principal amount of the Authority Promissory Note; (2) all
other Secured Obligations owed to Beneficiary under the Authority Documents; (3) all other
sums then secured hereby; and (4) the remainder, if any, to Trustor.
(d) Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver. If an Event of Default occurs and is continuing, Beneficiary, as
a matter of right and without further notice to Trustor or anyone claiming under the Security, and
without regard to the then value of the Security or the interest of Trustor therein, may apply to any
court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and
Trustor hereby irrevocably consents to such appointment and waives further notice of any
application thereof. Any such receiver or receivers will have all the usual powers and duties of
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receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as
provided herein, and will continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right,
power or remedy, but each and every such right, power and remedy will be cumulative and
concurrent and will be in addition to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default will exhaust or impair any such right, power or
remedy, and may not be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder will not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, will not constitute a waiver by the Beneficiary of
its right hereunder or impair any rights, power or remedies consequent on any Event of Default
by the Trustor.
(b) If the Beneficiary: (I) grants forbearance or an extension of time for the
payment or performance of any Secured Obligations; (2) takes other or additional security or the
payment of any sums secured hereby; (3) waives or does not exercise any right granted in the
Authority Documents; (4) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Authority
Documents; (5) consents to the granting of any easement or other right affecting the Security; or
(6) makes or consents to any agreement subordinating the lien hereof, any such act or omission
will not release, discharge, modify, change or affect the original liability under this Deed of
Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any
part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released);
nor will any such act or omission preclude the Beneficiary from exercising any right, power or
privilege herein granted or intended to be granted in any Event of Default then made or of any
subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or
instruments executed by the Beneficiary will the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security. The Beneficiary has the power to: (a)
institute and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of
this Deed of Trust; (b) preserve or protect its interest (as described in this Deed of Trust) in the
Security; and (c) restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the
15
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enforcement for compliance with such enactment, rule or order would impair the Security
thereunder or be prejudicial to the interest of the Beneficiary.
Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings
affecting the Trustor, its creditors or its property, the Trustee and/or the Beneficiary, to the extent
permitted by law, will be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings
and for any additional amount that becomes due and payable by the Trustor hereunder after such
date.
Section 7.10 Waiver. The Trustor waives presentment, demand for payment, notice of
dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges,
and diligence in taking any action to collect any Secured Obligations, including but not limited to
sums owing under the Authority Promissory Note, or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
ARTICLE 8:
MISCELLANEOUS
Section 8.1 Amendments. This Deed of Trust cannot be waived, changed, discharged
or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee. Upon written request of Beneficiary stating
that all Secured Obligations have been paid or forgiven, and all obligations under the Authority
Documents have been performed, and upon surrender of this Deed of Trust to Trustee for
cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall
fully reconvey the Security to Trustor, or to the person or persons legally entitled thereto.
Section 8.3 Notices.
(a) If at any time after the execution of this Deed of Trust it becomes
necessary or convenient for one of the parties hereto to serve any notice, demand or
communication upon the other party; such notice, demand or communication must be in writing
and is to be served personally, by reputable overnight delivery service (which provides a delivery
receipt) or by depositing the same in the registered United States mail, return receipt requested,
postage prepaid and, (1) if intended for Beneficiary is to be addressed to:
Authority:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Executive Director
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1552\12\1949162.5
and (2) if intended for Trustor shall be addressed to:
Villa de Vida, L.P.
c/o Villa de Vida
10620 Treena Street, Suite 230
San Diego, CA 92131
Attn: Executive Director
Mercy Housing California
1500 South Grand Avenue, Suite 100
Los Angeles, CA 90015
Ann: Vice President
Any notice, demand or communication will be deemed given, received, made or communicated
on the date personal delivery is effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. A copy
of any notice sent to the Beneficiary must also be sent to the Office of the City Clerk at the above
address. Either party may change its address at any time by giving written notice of such change
to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (10) days
prior to the date such change is desired to be effective. Trustor's limited partner shall have all the
notice and cure rights set forth in the Disposition and Loan Agreement.
Section 8.4 Successors and Joint Trustors. Where an obligation created herein is
binding upon Trustor, the obligation also applies to and binds any transferee or successors in
interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the
Trustor and a transferee, such obligation will be deemed to be a joint and several obligation of the
Trustor and such transferee. Where more than one entity or person is signing as Trustor, all
obligations of Trustor will be deemed to be a joint and several obligation of each and every entity
and person signing as Trustor.
Section 8.5 Captions. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions. Every provision of this Deed of Trust is
intended to be severable. In the event any term or provision hereof is declared to be illegal or
invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality
or invalidity will not affect the balance of the terms and provisions hereof, which terms and
provisions will remain binding and enforceable. If the lien of this Deed of Trust is invalid or
unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of
the Security, the unsecured or partially secured portion of the debt, and all payments made on the
debt, whether voluntary or under foreclosure or other enforcement action or procedure, will be
considered to have been first paid or applied to the full payment of that portion of the debt that is
not secured or partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law. This Deed of Trust is to be governed by and construed in
accordance with the laws of the State of California.
17
1552112 U949162.5
Section 8.8 Gender and Number. In this Deed of Trust the singular includes the plural
and the masculine includes the feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage. Any reference in this Deed of Trust to a
mortgage also refers to a deed of trust and any reference to a deed of trust also refers to a mortgage.
Section 8.10 Actions. Trustor agrees to appear in and defend any action or proceeding
purporting to affect the Security.
Section 8.11 Substitution of Trustee. Beneficiary may from time to time substitute a
successor or successors to any Trustee named herein or acting hereunder to execute this Trust.
Upon such appointment, and without conveyance to the successor trustee, the latter will be vested
with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder.
Each such appointment and substitution is to be made by written instrument executed by
Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly
recorded in the proper office of the county or counties in which the Property is situated,'will be
conclusive proof of proper appointment of the successor trustee.
Section 8.12 Statute of Limitations. The pleading of any statute of limitations as a
defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent
permissible by law.
Section 8.13 Acceptance by Trustee. Trustee accepts this Trust when this Deed of
Trust, duly executed and acknowledged, is made public record as provided by law. Except as
otherwise provided by law the Trustee is not obligated to notify any party hereto of a pending sale
under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee is
to be a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
(a) Notwithstanding anything to the contrary contained herein or in any
documents secured by this Deed of Trust or contained in any subordination agreement, and to the
extent applicable, the Beneficiary acknowledges and agrees that in the event of a foreclosure or
deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to the Security encumbered
by this Deed of Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as
amended, applies:
(b) For a period of three (3) years from the date of Foreclosure, with respect
to any unit that had been regulated by the Regulatory Agreement with the California Tax Credit
Allocation Committee: (a) none of the tenants occupying those units at the time of Foreclosure
may be evicted or their tenancy terminated (other than for good cause); (b) nor may any rent be
increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
[Signature Page Follows]
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
VILLA DE VIDA POWAY, L.P.. a California
limited partnership
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its managing general
partner
By:
Ed Holder, Vice President
Date:
By: Villa de Vida, Inc., a California nonprofit
public benefit corporation, its co-general partner
By:
Edward B. Merchant, Chairman of
the Board
Date:
BENEFICIARY:
POWAY HOUSING AUTHORITY, a public body,
corporate and politic
By:
Tina White, Executive Director
APPROVED AS TO FORM:
Rafael Yayuian, Authority Special Counsel
Deed of Trust
Signature Page
1552\1211949162.5
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF )
On , before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name:
Name: Notary Public
1552112\1949162.5
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF )
On , before me. , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name:
Name: Notary Public
155212\1 949162.5
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the County of San Diego, City of Poway, State of California,
and is described as follows:
PARCEL 1:
THAT PORTION OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 23, TOWNSHIP
14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA,ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE NORTH LINE OF SAID SECTION 14 DISTANT ALONG SAID NORTH LINE
NORTH 89° 00' 00' WEST, 3955.50 FEET FROM THE NORTHEAST CORNER OF SAID SECTION 23, BEING A
POINT IN THE CENTER LINE OF HIGHWAY COMMISSION ROUTE 3, DIVISION 2, BEING ALSO A POINT IN THE
EASTERLY LINE OF THE LAND DESCRIBED IN DEED TO THE COUNTY OF SAN DIEGO, RECORDED OCTOBER
13, 1923, IN BOOK 500, PAGE 231 OF DEEDS, RECORDS OF SAN DIEGO COUNTY; THENCE ALONG THE
EASTERLY, SOUTHERLY AND WESTERLY LINE OF SAID LAND AS FOLLOWS: ALONG THE CENTER LINE OF
SAID ROUTE 3, DIVISION 2, SOUTH 00° 40' 00- WEST, 146.07 FEET TO THE SOUTHEAST CORNER; SOUTH
85° 22' 00'WEST,420.00 FEET TO THE SOUTHWEST CORNER OF SAID LAND AND NORTH 00°40' 00'EAST,
188.00 FEET TO THE NORTHERLY LINE OF SAID SECTION 23; THENCE ALONG SAID NORTHERLY LINE SOUTH
89°00'00'EAST,TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP
14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA,ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTH LINE OF SAID SECTION 14 DISTANT ALONG SAID SOUTH LINE
NORTH 89° 00' 00' WEST, 3955.50 FEET FROM THE SOUTHEAST CORNER OF SAID SECTION 14 TO THE
CENTER LINE OF THE HIGHWAY COMMISSION ROUTE 3, DIVISION 2; THENCE ALONG SAID CENTER LINE
NORTH 00° 40' 00' EAST, 212.30 FEET TO AN INTERSECTION WITH THE CENTER LINE OF THE ROAD TO
MIRAMAR, COUNTY ROAD NO. A-43, ROAD SURVEY 188, ACCORDING TO PLAT THEREOF ON FILE IN THE
OFFICE OF THE COUNTY ENGINEER OF SAN DIEGO COUNTY; THENCE ALONG SAID CENTER LINE LAST
MENTIONED SOUTH 85° 25'00"EAST(ROS 3525) (DEED- SOUTH 85° 22'00'WEST)420.00 FEET; THENCE
SOUTH 00°40'00'WEST 171.00 FEET TO THE SOUTH LINE OF SAID SECTION 14; THENCE EASTERLY ALONG
SAID SOUTH LINE TO THE TRUE POINT OF BEGINNING.
Assessor's Parcel Number: 317-152-14-00
A-I
1552\12\1949162.5
ATTACHMENT E
DEVELOPMENT SCHEDULE
The attached Development Schedule hereby supersedes the Development Schedule attached as
Exhibit B of the Original DDA.
This Development Schedule summarizes the schedule for various activities under the Disposition
and Development Agreement to which this exhibit is attached. The description of items in this
Development Schedule is meant to be descriptive only, and shall not be deemed to modify in any
way the provisions of the Agreement to which such items relate. Section references herein to the
Agreement are intended merely as an aid in relating this Development Schedule to other
provisions of the Agreement and shall not be deemed to have any substantive effect. Times for
performance are subject to Force Majeure, as further provided in Section 10.3 of the Agreement.
Whenever this Development Schedule requires the submission of plans or other
documents at a specific time, such plans or other documents, as submitted, shall be complete and
adequate for review by the Authority or other applicable governmental entity within the time set
forth herein. Prior to the time set forth for each particular submission, the Developer shall
consult with Authority and City staff informally as necessary concerning such submission in
order to assure that such submission will be complete and in a proper form within the time for
submission set forth herein.
Obligation Section Schedule
Community Outreach Meeting ERNA September 2016
Developer shall submit to the Authority 2.3(a)(I) Not later than November 1,2016. (Deemed
Concept Drawings. completed)
Parties shall have negotiated mutually 2.13 Not later than sixty(60)days from the Effective Date
acceptable Tenant Selection Plan (December 5,2016)(Deemed completed)
Developer shall submit to the Authority 2.3(a)(2) Not later than February 15,2017. (Deemed
Schematic Design Drawings. completed)
Developer shall submit applications 2.2(a) Not later than November 1,2016 for all entitlement
governmental approvals for the applications and no later than 120 days prior to the
Improvements. Close of Escrow for all building plan and site
improvements. (Deemed completed)
Developer shall submit to the Authority 2.3(a)(2) Not later than sixty(60)days prior to the Close of
Final Construction Drawings. Escrow and in no event later than December 31.2020.
Developer shall submit a first round 2.5(b) February 28,2018 or such other date set forth by
application for a Tax Credit Reservation. TCAC for the first competitive application fund round.
Developer shall submit three(3) 2.9(a) Not later than March 1,2018.
proposals from prospective contractors.
Developer shall submit a timely and 2.6(c) Not later than June I,2016. (Deemed completed)
complete application for a County
HOME Loan which is administered
through a Notice of Funding Availability
process administered throueh the
E-1
1552\1212272919.1
Obligation Section Schedule
County of San Diego Department of
Housing and Community Development.
Developer shall submit a timely and 2.6(d) Not later than October 31, 2016.(Deemed completed)
complete application for a County
Project Based Vouchers which is
administered through a Notice of
Funding Availability process
administered through the County of San
Diego Department of Housing and
Community Development.
Developer shall submit a timely and 2.6(b) At Developer's discretion pursuant to Section 2.6(b).
complete application for the AHP Loan
which is subject to a competitive
application process implemented by the
Federal Home Loan Bank of San
Francisco and its member institutions.
Developer shall submit any updates to 2.4(b) Promptly,ass necessary to reflect material
the Financing Proposal. amendments to the initial Financing Proposal and the
later approved Financing Plan, including but not
limited to any material amendments or modifications
to the development budget(including the
unavailability of any sources of financing identified in
Sections 2.5 and 2.6.
Developer shall receive all necessary 3.4 Not later than 5 days prior to Closing for all building
governmental approvals for the and infrastructure permits, but in no case later than
Improvements. March I,2021.
Developer shall submit the proposed 2.9(a) Not later than thirty(30)days prior to the Close of
Construction Contracts for the Escrow.
Improvements for Authority approval.
Authority shall promptly review and 2.9(b) Within ten (10)days following the Authority's receipt
approve Construction Contract. of the complete Construction Contract.
Developer will grant to the Authority, 4.11 On the Effective Date and as necessary upon
pursuant to the Assignment Agreement, Developer's execution of additional Collateral
a valid,second priority continuing Documents.
security interest in Collateral Documents
Close of Escrow(recording of the 3.4 No later than 180 days following an award of 9%tax
Memorandum of DDLA,the Authority credits, but in no event later than March 1, 2021.
Deed of Trust, the Authority Regulatory
Agreement, and the Notice of
Affordability Restrictions in the Official
Records).
Developer shall furnish to the Authority 2.11 On or before the Close of Escrow.
evidence of the insurance coverage
meeting the requirements of Section
6.10
2
1552\12\2272919.1
Obligation Section Schedule
Developer shall obtain one(I)labor and 2.10 On or before the Close of Escrow.
material bond and one(I)performance
bond for construction of the
Improvements meeting the requirements
of Section 2.10 for Authority approval.
Commence Construction 5.3 Within ten(10)days of the Close of Escrow, but in no
event later than March 30,2021.
Developer shall submit to the Authority 6.9 Not later than six(6)months after commencement of
and initial proposed Resident Services construction of Improvements.
Plan and Resident Services Budget
Developer shall submit to the Authority 2.8(a) Not later than six (6)months after commencement of
an initial proposed Management Plan. construction of Improvements.
Authority shall approve or disapprove 2.8(b),6.8 Within fifteen(15)calendar days following the
the Management Plan in writing. Authority's receipt of the complete Management Plan
and in no event later than no later than six(6)months
after commencement of construction of the
Development.
Complete Construction 5.4 No later than 18 months following commencement of
construction, but in no case later than September 30.
2022.
Developer shall provide to Authority a 5.16 No later than ninety(90)days following completion of
draft financial accounting of all sources construction of the Development and issuance of the
and uses of funds for the Development Certificate of Completion
Developer shall submit to the Authority No later than one hundred fifty(150)days following
a copy of the Development's cost completion of construction
certification report prepared by the
Developer's accountant
3
1552\12\2272919.1