Regulatory Agreement - 2003-0766357® 1 2003-0766357
• Recording requested by • 31 01i 5 DOC G •
First American Title
JUN 27 , 2003 3 : 40 FM
RECORDING REQUESTED BY ) OFFICIAL RECORDS
AND WHEN RECORDED MAIL TO: ) SAN DIEGO COUNTY RECf)RDER'S OFFICE
) GREGORY J. SMITH, COUNTY REORDER
Poway Redevelopment Agency ) FEES: 0.00
13325 Civic Center Drive )
Poway, California
Attention: Redevelopment Director
�CO1 / 4 ) \ •t 20�3�766357
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This document is exempt from the payment of
a recording fee pursuant to Government Code
Section 27383.
REGULATORY AGREEMENT
THIS REGULATORY AGREEMENT (the"Agreement") is entered into as of
June 26, 2003 by and between the POWAY REDEVELOPMENT AGENCY, a public body,
corporate and politic (the "Agency"), and SPECIAL FRIENDS FOUNDATION, a California
nonprofit corporation (the"Owner").
RECITALS
A. The Agency is required by the California Community Redevelopment Law to set
aside and expend funds to increase, improve and preserve the community's supply of low and
moderate income housing available at affordable housing cost to persons and families of low or
moderate income and very-low income households.
4
B. Owner is an experienced operator of a Level 2 group home, as defined by the San
Diego County Regional Center for the Developmentally Disabled (the "Regional Center"). The
group home provides housing for persons with developmental disabilities between the ages of 18 and
59.
C. Owner has purchased a single family house in the City of Poway located at 13411
Sagewood Drive (the "Property"), as particularly described in the Legal Description attached hereto
as Exhibit A, and incorporated herein by reference.
D. The Agency and the Owner have entered into an Affordable Housing Agreement,
dated as of June 24, 2003, whereby the Agency has agreed to provide financial assistance to Owner
in the form of a loan of up to the amount of Two Hundred Ninety-Seven Thousand Five Hundred
Ten Dollars ($297,510) to acquire, improve and operate the Property(the"Agency Loan"), and the
Owner has agreed to acquire, improve and operate the Property with the assistance of the Agency
Loan.
E. The Property will be used for the operation of a Level 2 group home (or an equivalent
level of group home, as provided in Section 1 hereof) which provides housing for persons with
developmental disabilities between the ages of 18 and 59 . Tenancy of the Property will be restricted
at all times after acquisition and during the term of this Agreement to disabled persons who meet the
criteria for entrance into the Owner's program.
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F. The execution and recording of this Agreement is a requirement of the Affordable
1-lousing Agreement. The parties intend that this Agreement will satisfy the Agency's obligations to
provide affordable housing pursuant to the California Community Redevelopment Law.
NOW,THEREFORE, the parties hereto agree as follows:
1. Affordable Group Housing. The Owner shall use and operate the Property only for
the purpose of a Level 2 group home (or an equivalent level of group home, as mutually determined
by the Agency and the Owner, serving persons with substantially the same level of disabilities as a
Group 2 home as of the date of this Agreement, if the Regional Center should change its group home
evaluation criteria) for persons with developmental disabilities between the ages of 18 and 59. Upon
the completion of the Improvements (as defined in the Affordable Housing Agreement), the Owner
agrees to make available, restrict occupancy to, and lease six of the bedrooms within the Property to
Extremely Low Income Households at an Affordable Rent. For purposes of this Agreement,
"Extremely Low Income Households" shall mean those households with incomes that do not exceed
thirty-five percent (35%) of San Diego County median income, adjusted for family size, as
established and amended from time to time by the California Department of Housing and
Community Development ("HUD"). If the income of a resident upon recertification exceeds the
upper limit defined in this Section I, such resident shall not be evicted because such resident fails to
qualify as income-eligible, provided that the resident's income does not exceed fifty percent(50%)of
San Diego County median income for a household size of one.
2. Income Certification. Upon the Owner's acquisition of the Property, and annually
thereafter, the Owner shall submit to the Agency a completed income computation and certification
form, in a form to be provided by the Agency. The Owner shall certify that each resident of the
Property meets the income restrictions of Section 1. The Owner shall obtain an income certification
from the resident of the Property which shall certify that the income of the resident is truthfully set
forth in the income certification form. The Owner shall verify the income certification of the resident
in one or more of the following methods:
a. obtain two (2) paycheck stubs from the resident's two (2) most recent pay
periods, if any.
b. obtain a true copy of an income tax return from the resident for the most
recent tax year in which a return was filed, if any.
c. obtain an income verification certification from the employer of the resident,
if any.
d. obtain an income verification certification from the Social Security
Administration and/or the California Department of Social Services if the resident receives assistance
from such agencies.
e. obtain an alternate form of income verification reasonably requested by the
Owner, if none of the above forms of verification is available to the Owner.
3. Affordable Rent. The maximum Monthly Rent chargeable for the residents of the
Property shall be annually determined by the Agency in accordance with the following requirements.
The Monthly Rent payable by each resident of the Property shall not exceed the lesser of(a) the fair
market value for comparable housing in the area, less the monthly allowance for utilities and services
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to be paid by each resident, or(b) thirty percent(30%) of thirty-five percent (35%) of San Diego
County median income, as determined by the State of California, for a household size of one.
For purposes of this Agreement, "Monthly Rent" means the total of monthly
payments for(a) use and occupancy of the Property and land and facilities associated therewith, (b)
any separately charged fees or service charges assessed by the Owner which are required of all
residents, other than security deposits, (c) a reasonable allowance for an adequate level of service of
utilities not included in (a) or(b) above, including garbage collection, sewer, water, electricity, gas
and other heating, cooking and refrigeration fuels, but not including telephone service, and (d)
possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated
therewith by a public or private entity other than Owner. In determining the level of rent payable by
each resident, the Owner shall adopt an allocation of rent and non-rent charges (such as payments for
food and services) which is reasonably acceptable to the Agency. In the event that all utility charges
are paid by the landlord rather than the resident, no utility allowance shall be deducted from the rent.
4. Selection of Residents. The Property shall be leased to residents selected by the
Owner who meet all of the requirements provided herein. The Owner shall adopt a resident selection
system, which shall be approved by the Agency in its reasonable discretion. The resident selection
system shall provide that the Owner will only accept residents referred by the Regional Center or
similar institution that pre-screens individuals to determine the level of disability, and shall only
accept individuals it is licensed to serve.
5. Maintenance. The Owner shall at all times during the term of this Agreement
maintain or cause to be maintained the interior and exterior of the Property in a decent, safe and
sanitary manner, and the standard of maintenance of single family housing units within the City.
During the period of the construction of the Improvements, the Property shall be maintained in
accordance with the standards of single family homes undergoing similar rehabilitation or
remodeling. If at any time Owner fails to maintain the Property in accordance with this Agreement
and such condition is not corrected within five days after written notice from the City or Agency with
respect to graffiti, debris, waste material, and general maintenance, or thirty days after written notice
from the City or Agency with respect to landscaping and building improvements, then the Agency, in
addition to whatever remedy they may have at law or at equity, shall have the right to enter upon the
applicable portion of the Property and perform all acts and work necessary to protect, maintain, and
preserve the Property and landscaped areas on the Property, and to attach a lien upon the Property, or
to assess the Property, in the amount of the expenditures arising from such acts and work of
protection, maintenance, and preservation by the Agency and/or costs of such cure, including a
reasonable administrative charge, which amount shall be promptly paid by Owner to the Agency
upon demand.
6. Management Plan. Prior to the occupancy of the Property the Owner shall submit
for the approval of the Agency a "Management Plan" which sets forth in detail the Owner's program
of services for residents, property management duties, the resident selection process, the procedures
for the collection of rent and other fees, the procedures for admission and dismissal of residents, the
rules and regulations of the Property and manner of enforcement, a standard resident agreement
form, and other matters relevant to the management of the Property. The management of the
Property shall be in compliance with the Management Plan which is approved by the Agency.
7. Monitoring and Recordkeeping. Representatives of the Agency shall be entitled to
enter the Property, upon at least forty-eight (48) hours notice, to monitor compliance with this
Agreement, to inspect the records of the Property, and to conduct an independent audit or inspection
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of such records. The Owner agrees to cooperate with the Agency in making the Property available
for such inspection or audit. If for any reason the Agency is unable to obtain the Owner's consent to
such an inspection or audit, the Owner understands and agrees that the City or Agency may obtain at
Owner's expense an administrative inspection warrant or other appropriate legal order to obtain
access to and search the Property. Owner agrees to maintain records in businesslike manner, and to
maintain such records for the term of this Agreement.
8. Insurance. The Owner shall take out and maintain or shall cause its contractor to
take out and maintain during the term of the Affordability Period a comprehensive general liability
policy in the amount of not less than One Million Dollars ($1,000,000) combined single limit policy,
and a comprehensive automobile liability policy in the amount of One Million Dollars($1,000,000),
combined single limit, including contractual liability, as shall protect the Owner and the City and
Agency from claims for such damages, and which policy shall be issued by an insurance carrier
reasonably acceptable to the Agency which holds a California license. Such policy or policies shall
be written on an occurrence form. The Owner shall also furnish or cause to be furnished to the •
Agency evidence satisfactory to the Agency that Owner and any contractor with whom it has
contracted for the performance of work on the Property or otherwise pursuant to this Agreement
carries workers' compensation insurance as required by law. The Owner shall furnish a certificate of
insurance countersigned by an authorized agent of the insurance carrier on a form approved by the
Agency setting forth the general provisions of the insurance coverage. This countersigned certificate
shall name the City and Agency and their respective officers, agents, and employees as additionally
insured parties under the policy, and the certificate shall be accompanied by a duly executed
endorsement evidencing such additional insured status. The certificate and endorsement by the
insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and
Agency of any material change, cancellation or termination of the coverage at least thirty(30)days in
advance of the effective date of any such material change, cancellation or termination. Coverage
provided hereunder by the Owner shall be primary insurance and not be contributing with any
insurance maintained by the City or Agency, and the policy shall contain such an endorsement. The
insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City
and Agency. The required certificate shall be furnished by the Owner at the time set forth therefor in
the Schedule of Performance. Owner shall also take out and maintain from the date of the
acquisition of the Property until the end of the Affordability Period a policy of property damage
insurance, with the policy amount in the full replacement value of the Property.
9. Condition of the Property. The following requirements shall apply to the Property:
a. Environmental Condition Prior to Agency Loan Disbursement. Except as
otherwise disclosed in reports obtained by or provided to the Agency, the Owner represents to the
Agency that it is not aware of, to the best of its actual knowledge, and it has not received any notice
or communication from any governmental agency having jurisdiction over the Property, or any
reports or studies, notifying it of the presence of Hazardous Materials or Hazardous Materials
Contamination in, on, or under the Property, or any portion thereof.
b. Indemnification. Owner shall save, protect, pay for, defend, indemnify and
hold harmless the City and Agency and their respective officers;employees, representatives and
agents, from and against any and all liabilities, suits, actions, claims, demands, penalties, damages
(including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses
(including, without limitation, consultants' fees, investigation and laboratory fees, attorneys' fees and
remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities")
which may now or in the future be incurred or suffered by the City or Agency or their officers,
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employees, representatives or agents by reason of, resulting from, in connection with or arising in
any manner whatsoever as a direct or indirect result of the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission or release from the Property of any Hazardous
Materials or Hazardous Materials Contamination, except to the extent caused by the negligence or
wilful misconduct of the City or Agency or their officers, employees, representatives or agents.
c. Release. The Owner hereby waives, releases and discharges forever the City
and Agency and their respective employees, officers, agents and representatives, from all present and
future claims, demands, suits, legal and administrative proceedings and from all liability for
damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way
connected with the Owner's use, maintenance, ownership or operation of the Property, any
Hazardous Materials on the Property, or the existence of Hazardous Materials Contamination in any
state on the Property, however they came to be placed there, except that arising out of the negligence
or misconduct of the City or Agency or their employees, officers, agents or representatives.
The Owner acknowledges that it is aware of and familiar with the provisions of
Section 1542 of the California Civil Code which provides as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
As such relates to this Section 9(c), the Owner hereby waives and relinquishes all
rights and benefits which it may have under Section 1542 of the California Civil Code.
d. Duty to Prevent Hazardous Material Contamination. During the
Rehabilitation and operation of the Property, the Owner shall take all necessary precautions to
prevent the release of any Hazardous Materials into the environment on or under the Property. Such
precautions shall include compliance with all Governmental Requirements with respect to Hazardous
Materials. The Owner shall notify the Agency, and provide to the Agency a copy or copies, of any
notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and
desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications
made pursuant to any Governmental Requirement relating to Hazardous Materials and underground
tanks, and the Owner shall report to the Agency, as soon as possible after each incident, any unusual,
potentially important incidents in the event of a release of any Hazardous Materials into the
environment.
e. Definitions.
For purposes of this Section 9, "Governmental Requirements" shall mean all laws,
ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the
county, the City, or any other political subdivision in which the Property is located, and of any other
political subdivision, agency or instrumentality exercising jurisdiction over the City, the Agency, the
Owner or the Property.
For purposes of this Section 9, "Hazardous Materials" means any substance, material,
or waste which is or becomes, regulated by any local governmental authority, the State of California,
or the United States Government, including, but not limited to, any material or substance which is (i)
defined as a "hazardous waste,""extremely hazardous waste,"or"restricted hazardous waste" under
Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and
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Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a"hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a"hazardous
material,""hazardous substance,"or"hazardous waste" under Section 25501 of the California Health
and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and
Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v)
petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) methyl tertiary butyl ether,
(ix) listed under Article 9 or defined as "hazardous" or"extremely hazardous" pursuant to Article 11
of Title 22 of the California Code of Regulations, Division 4, Chapter 20, (x) designated as
"hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (xi)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery
Act, 42 U.S.C. §§690 I, et seq. (42 U.S.C. §6903) or(xii)defined as "hazardous substances" pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. §§9601, et seq. Notwithstanding the foregoing, "Hazardous Materials" shall not include such
products in quantities as are customarily used in the construction, maintenance, rehabilitation or •
management of residential developments or associated buildings and grounds, or typically used in
residential activities in a manner typical of other comparable residential developments, or substances
commonly ingested by a significant population living within the Property, including without
limitation alcohol, aspirin, tobacco and saccharine.
10. Indemnity. Owner shall, at its expense, defend, indemnify, and hold harmless the
City and Agency and their respective officers, agents, employees and representatives harmless from
any and all losses, liabilities, claims, lawsuits, causes of action,judgments, settlements, court costs,
attorneys' fees, and other legal expenses, costs of evidence of title, costs of evidence of value, and
other damages of whatsoever nature arising out of or in connection with, or relating in any manner to
any act or omission of Owner or its agents, employees, contractors and subcontractors and employees
thereof in connection with or arising from Owner's negligent performance or default of its
obligations under this Agreement, except that arising from the negligence or misconduct of the City
or Agency or their officers, agents, employees or representatives.
11. Compliance With Laws. The Owner shall carry out the acquisition and operation of
the Property in conformity with all applicable laws, including all applicable state labor standards,
City zoning and development standards, building, plumbing, mechanical and electrical codes, and all
other provisions of the City Municipal Code, and all applicable disabled and handicapped access
requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section
12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq.,
and the Unruh Civil Rights Act, Civil Code Section 51, et seq. The Owner shall obtain and maintain
in effect all required licenses and permits for the operation of a Level 2 group home on the Property
for persons with developmental disabilities.
12. Taxes and Assessments. The Owner shall pay prior to delinquency all ad valorem
real estate taxes and assessments on the Property, subject to the Owner's right to contest in good faith
any such taxes or to receive an exemption from the payment of such taxes.
13. Non-Discrimination Covenants. Owner covenants by and for itself, its successors
and assigns, and all persons claiming under or through them that there shall be no discrimination
against or segregation of any person or group of persons on account of race, color, religion, sex,
marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Owner itself or any person
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claiming under or through it, establish or permit any such 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. The covenants established in this Section 13
shall, without regard to technical classification and designation, be binding for the benefit and in
favor of the Agency and their successors and assigns, and shall remain in effect in perpetuity.
14. Term of Use and Affordability Requirements. The Property shall be subject to the
requirements of this Agreement from the date of this Agreement until the fifty-fifth (55th)
anniversary of such date. The duration of this requirement shall be known as the "Affordability
Period." Notwithstanding the foregoing, in the event that the Agency Loan is fully repaid before
such date, the Affordability Period shall terminate as of the date the Agency Loan is repaid in full.
15. Events of Default. A failure by either party to perform any action or covenant
required by this Agreement within the time periods provided herein following notice and failure to
cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default
shall give written notice of Default to the other party specifying the Default complained of. Except
as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding
against any other party, and the other party shall not be in Default if such party cures such default
within five (5) days if the claimed Default is a failure to pay amounts due pursuant to the Promissory
Note, or thirty(30) days from receipt of such notice for all other claimed Defaults hereunder.
However, in the event that such Default is other than a failure to pay money and is of such a nature
that it cannot reasonably be cured within thirty(30) days from receipt of such notice, the claimant
shall not institute any proceeding against the other party, and the other party shall not be in Default if
such party immediately upon receipt of such notice, with due diligence, commences to cure, correct
or remedy such failure or delay and completes such cure, correction or remedy with diligence as soon
as reasonably possible thereafter, but in no event later than ninety(90) days after receipt of such
notice of Default.
16. Remedies. The occurrence of any Event of Default shall give the nondefaulting party
the right to proceed with any and all remedies set forth in this Agreement and/or the Affordable
Housing Agreement, including an action for damages, an action or proceeding at law or in equity to
require the defaulting party to perform its obligations and covenants under this Agreement or to
enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and
the right to terminate the Affordable Housing Agreement and this Agreement. In addition, the
occurrence of any Event of Default by Owner will relieve the Agency of any obligation to perform
under the Affordable Housing Agreement and this Agreement, including without limitation to make
or continue the Agency Loan, and the right to cause all indebtedness of the Owner to the Agency
under the Affordable Housing Agreement and the Promissory Note, together with any accrued
interest thereon, to become immediately due and payable.
17. Force Majeure. Subject to the party's compliance with the notice requirements as
set forth below, performance by either party hereunder shall not be deemed to be in default, and all
performance and other dates specified in this Agreement shall be extended, where delays or defaults
are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, assaults, acts of God,
acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of
transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to
secure necessary labor, materials or tools, acts or omissions of the other party, acts or failures to act
of any public or governmental entity(except that the City's or Agency's acts or failure to act shall
not excuse performance of the Agency hereunder), or any other causes beyond the control and
without the fault of the party claiming an extension of time to perform. An extension of the time for
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any such cause shall be for the period of the enforced delay and shall commence to run from the time
of the commencement of the cause, if notice by the party claiming such extension is sent to the other
party within thirty(30) days of the commencement of the cause. Inability to obtain financing for the
acquisition or operation of the Property shall not constitute an event beyond the control of the Owner
for purposes of this Section 17.
18. Attorneys' Fees. In addition to any other remedies provided hereunder or available
pursuant to law, if either party brings an action or proceeding to enforce, protect or establish any
right or remedy hereunder, the prevailing party shall be entitled to recover from the other party its
costs of suit and reasonable attorneys' fees.
19. Remedies Cumulative. No right, power, or remedy given by the terms of this
Agreement is intended to be exclusive of any other right,power, or remedy; and each and every such
right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy
given by the terms of any such instrument, or by any statute or otherwise.
20. Waiver of Terms and Conditions. Any party may, in its sole discretion, waive in
writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or
condition contained herein shall not be construed as a waiver of any subsequent breach of the same
covenant, term, or condition.
21. Non-Liability of City and Agency Officials and Employees. No member, official, '
employee or agent of the City or Agency shall be personally liable to the Owner, or any successor in
interest, in the event of any default or breach by the Agency or for any amount which may become
due to the Owner or its successors, or on any obligations under the terms of this Agreement.
22. Time. Time is of the essence in this Agreement.
23. Notices. Any approval, disapproval, demand, document or other notice ("Notice")
which either party may desire to give to the other party under this Agreement must be in writing and
may be given either by(i) personal service, (ii)delivery by reputable document delivery service such
as Federal Express that provides a receipt showing date and time of delivery, or(iii) mailing in the
United States mail, certified mail, postage prepaid, return receipt requested, addressed to the address
of the party as set forth below, or at any other address as that party may later designate by Notice:
Owner: Special Friends Foundation •
12461 Vaughn Road
Poway, California 92064
Attention: Administrator
Agency: Poway Redevelopment Agency
13325 Civic Center Drive
Poway, California 92064
Attention: Assistant Executive Director
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
24. Representations and Warranties of Owner. Owner hereby represents and warrants
to the Agency as follows:
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a. Organization. Owner is a duly organized, validly existing nonprofit
corporation in good standing under the laws of the State of California and has the power and
authority to own its property and carry on its business as now being conducted. The Owner shall
remain a nonprofit corporation during the term of this Agreement.
b. Authority of Owner. Owner has full power and authority to execute and
deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute
and deliver this Agreement and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement, to acquire and operate the Property, and to
perform and observe the terms and provisions of all of the above.
c. Valid Binding Agreements. This Agreement and all other documents or
instruments which have been executed and delivered pursuant to or in connection with this
Agreement constitute or, if not yet executed oir delivered, will when so executed and delivered
constitute, legal, valid and binding obligations of Owner enforceable against it in accordance with
their respective terms.
d. Pending Proceedings. Owner is not in default under any law or regulation or
under any order of any court, board, commission or agency whatsoever, and there are no claims,
actions, suits or proceedings pending or, to the knowledge of Owner, threatened against or affecting
Owner or the Property, at law or in equity, before or by any court, board, commission or agency
whatsoever which might, if determined adversely to Owner, materially affect Owner's ability to
repay the Agency Loan or impair the security to be given to the Agency pursuant hereto.
e. No Bankruptcy. No attachments, execution proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings
have been filed or are pending or threatened against the Owner, nor are any of such proceedings
contemplated by Owner.
25. Limitation Upon Change in Ownership, Management and Control of the Owner.
a. Prohibition. The identity and qualifications of Owner as an experienced and
successful operator of a Level 2 group home program for persons with developmental disabilities are
of particular concern to the Agency. It is because of this identity and these qualifications that the
Agency has entered into this Agreement with the Owner. No voluntary or involuntary successor in
interest of the Owner shall acquire any rights or powers under this Agreement by assignment or
otherwise, nor shall Owner make any total or partial sale, transfer, conveyance, encumbrance to
secure financing, assignment or lease of the whole or any part of the Property without the prior
written approval of the Agency pursuant to Subparagraph (c) hereof, except as expressly set forth
herein, which approval shall not be unreasonably withheld.
b. Permitted Transfers. Notwithstanding any other provision of this
Agreement to the contrary, Agency approval of an assignment or transfer of this Agreement or
conveyance of the Property or any part thereof pursuant to subparagraph (c) of this Section 25, shall
not be required in connection with any of the following(the "Permitted Transfers"):
(i) Subject to the restrictions of this Agreement, the lease of the Property
to qualified residents.
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• ®31024 '
(ii) Assignment for financing purposes, subject to such financing being
considered and approved by the Agency pursuant to Section 102 and 103 of the Affordable Housing
Agreement. In the event of such an assignment, Owner nevertheless agrees that at least ten (10) days
prior to such assignment or transfer it shall give written notice to Agency of such assignment or
transfer.
c. Agency Consideration of Requested Transfer. The Agency agrees to
consider, in its sole and absolute discretion, a request made pursuant to this Section 25, provided (a)
the Owner delivers written notice to the Agency requesting such approval, and (b) the proposed
assignee or transferee possesses sufficient operational experience and capability, has nonprofit status
and all necessary governmental licenses and permits, and possesses sufficient net worth and
resources, to operate a Level 2 group home on the Property, in the Agency's judgment, and (c) the
assignee or transferee assumes the obligations of the Owner under this Agreement in a form which is
reasonably acceptable to the Agency. Such notice shall be accompanied by evidence regarding the
proposed assignee's or purchaser's qualifications and experience, its nonprofit status and licenses,
and its financial commitments and resources sufficient to enable the Agency to evaluate the proposed
assignee or purchaser pursuant to the criteria set forth in this Section 25(c) and other criteria as
determined by the Agency. The Agency shall approve or disapprove the request within thirty(30)
days of its receipt of the Owner's notice and all information and materials required herein.
d. Successors and Assigns. This Agreement shall run with the land, and all of
the terms, covenants and conditions of this Agreement shall be binding upon the Owner and the
permitted successors and assigns of the Owner. Whenever the term "Owner" is used in this
Agreement, such term shall include any other permitted successors and assigns as herein provided.
26. No Third Parties Benefited. This Agreement is made and entered into for the sole
protection and benefit of the Agency, its successors and assigns, and Owner, its permitted successors
and assigns, and no other person or persons shall have any right of action hereon.
27. Partial Invalidity. If any provision of this Agreement shall be declared invalid„
illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof
. shall not in any way be affected or impaired.
28. Governing Law. This Agreement and other instruments given pursuant hereto shall
be construed in accordance with and be governed by the laws of the State of California. Any
references herein to particular statutes or regulations shall be deemed to refer to successor statutes or
regulations, or amendments thereto.
29. Amendment. This Agreement may not be changed orally, but only by agreement in
writing signed by Owner and the Agency.
30. Approvals. Where an approval or submission is required under this Agreement, such
approval or submission shall be valid for purposes of this Agreement only if made in writing. Where
this Agreement requires an approval or consent of the Agency, such approval may be given on behalf
of the Agency by the Agency Executive Director or his or her designee. The Agency Executive
Director or his or her designee is hereby authorized to take such actions as may be necessary or
appropriate to implement this Agreement, including without limitation the execution of such
documents or agreements as may be contemplated by this Agreement, revisions to the Schedule of
Performance, and amendments which do not substantially change the uses or restrictions hereunder,
or substantially add to the costs of the Agency hereunder.
10
Doc5OC1977906 v 1122345.0038
• ® 31025
31. Conflicts with Governmental Requirements. In the event that any of the
provisions of this Agreement conflict with the requirements of other governmental agencies with
jurisdiction over the operation of the group home on the Property, or which fund the costs thereof,
the Agency agrees to reasonably consider amending this Agreement as necessary to resolve such
conflict.
32. Operating Budget. Owner shall annually submit to Agency, prior to the
commencement of the Owner's fiscal year, an operating budget for the Property(the "Operating
Budget"). The Owner shall operate the Property substantially in accordance with the Operating
Budget for the applicable year. Owner shall also submit to the Agency, within six months after the
end of each fiscal year of the Owner, a statement of the actual operating expenses for the Property
during the previous fiscal year.
33. Audit and Rights of Access. Within six months after the end of each fiscal year of
the Owner, Owner shall submit to Agency a copy of the annual audit of the Owner submitted to
Owner by independent public accountants, including the comment letter submitted by such
accountants to management in connection with the annual audit. For purposes of assuring
compliance with this Agreement, representatives of Agency shall have the right of access to the
Property, without charges or fees, during normal business hours, upon forty-eight hours advance
notice, to inspect the records of the Property, and to conduct an independent audit or inspection of
such records. Agency representatives shall, except in emergency situations, notify the Owner prior to
exercising its rights pursuant to this Section 33. Owner agrees to maintain records in businesslike
manner, and to maintain such records for the term of this Agreement.
34. Effect of Foreclosure. In the event of the sale of the Property pursuant to
foreclosure instituted with respect to the First Mortgage Loan (as defined in the Affordable Housing
Agreement), this Agreement shall terminate and be of no further force or effect.
35. Mutual Cooperation. Agency and Owner agree to assist each other in good faith
concerning any term or condition of this Agreement and shall supply to one another such
informational reports and grant such approvals as from time to time either may reasonably require in
order to undertake its respective obligations hereunder. Upon the request of the Owner, the Agency
and the Owner shall meet and confer in good faith to discuss changes in this Agreement which the
Owner believes to be necessary to promote residential stability and avoid displacement of existing
residents, provided that the acceptance and approval of such changes shall be at the sole and absolute
• discretion of the Agency
11
D005OCl977906v I\22345.0038
® • 31026
IN WITNESS WHEREOF, the parties hereto have executed this Regulatory Agreement as
of the date set forth above.
OWNER:
SPECIAL FRIENDS FOUNDATION, a California
nonprofit corporation
By: ditgicettce
i .eIts:
AGENCY: -
POWAY REDEV LO' i ENT AGENCY, a public
body, corporate • d p j
By: S,
llf;
Assist . ecutive Director
ATTEST:
c, 2j l_
Agelcy Secretary
APPROVED AS TO FORM:
Stradling Yocca Carlson & Rauth
Agency Special Counsel
12
DOCS0C\977906v 1\22345.0038
•
• ® 31027
•
IN WITNESS WHEREOF, the parties hereto have executed this Regulatory Agreement as
of the date set forth above.
OWNER:
SPECIAL FRIENDS FO .ar ATION, a California
nonprofit corps sftion /
<. /
By: _ �
Its:
Ar
AGENCY: /
POWAY REDEVELOPMENT AGENCY, a public
body, corporate and politic
By:
Executive Director
ATTEST:
gB JI. aM,l.t
Age cy Secretary
APPROVED • S TO FORM:
4. 4
Strad!! g YoccI arlson & Rauth
Agen•, Special Counsel
I2
D00500977906 v 1\22345.0038
• • 31028
EXHIBIT "A"
LEGAL DESCRIPTION
That real property located in the City of Poway, County of San Diego, State of California,
described as follows:
Lots 210 of Green Valley Estates Unit No. 11, in the City of Poway, County of San Diego, State
of California, according to Map thereof No. 4586, filed in the office of the County Recorder of
San Diego County, July 13, 1960.
APN: 275-333-09
DOCSOC\9569460\22345,0038
•
® ® 31029
STATE OF CALIFORNIA )
` p )ss.
COUNTY O
,\C» R �1 ) \ `
On J\� 7� ��� , before me,1 ��V \N. Notary Public,
(Print Name of Notary Public)
personally appeared VQ,, ,(T\ ---. 13 ,-\\''S\ (\
❑ personally known to me
-or-
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
,ptarsAn(r1,or thaes$iy'upon behalf of which the person(s)acted, executed the instrument.
iWITNMCHfltEPAULINEHErTERGOTT f[
/°W. Commission n 1298219
ESS my hand and official seal.
ir Ki
r.4...1
Notary Public - California
\\*AHA-Ci\JC-k..\\I
o
TSF:441 Son Diego County t
Signature Of Notary 1 IS
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
❑ Individual
❑ Corporate Officer
Title(s) Title Or Type Of Document
❑ Partner(s) 0 Limited
0 General
❑ Attorney-In-Fact
❑ Trustee(s)
❑ Guardian/Conservator Number Of Pages
❑ Other:
Signer is representing:
Name Of Person(s)Or Entity(ies)
Date Of Documents
Signer(s)Other Than Named Above
Exhibit A
DOCS00977906v 1\22345.0038