Memorandum and Amendment to First Amended Agreement 2013-0353580 _— -- �
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�COR�[tvo itrQur:s'rE.� aY JUN �5, 2013 2:14 PM
ANll WI-IEN RF:CORDGD MAIL "fO: OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernesl J. Dronenbuig,Jr.,COUNTY RECDRDER
7'he Poway I-Iousing.Authority FEES: 52.00 WAYS: Z
13325 Ci>�ic Center l�rive 10 5 7 5 PA�'ES' $
� Poway,-CR 92064
� Attn: ��re�u�iv� viTe�tor �I�����I����u�ll�ll�lu��ll���l��lllull�ull������ulllu�l�u�liu���l���lul��ul
n� NO PEI� fOR RIiCORDING PURSUANT"I'O
O GOVI:RNMI�N'I�CODE SECI'ION 27383
1 �
OPN RA7'ING MEMORANDUM AND AMENDMENT TO FIRST AMENDED AND
RESTATED REGUI:ATORY AGI2EEMENT
ANll DI:CLARATION OF RESTRICTiVE COVENANTS
(Orangc Cardens- 12510 Oak Knull Road)
This Operating Mem�randum and Amendment to First Amended and Restated
Regulatory Agreemcnt .�nd Declarutioa of' Restrictive Covenants (this "Amendment') is
made and cntercd into as of April 4, 20li, by and between tlie Poway Housing Authority, a
public bod��. corporate and politic (the "Authority") and 1'uway Family Housing Partners,
L.1'., a California limited partnersh�ip�(�the "Owner"). �
RI'CI"1'ALS
]. "f'he Authority and t'he Owner entered� into a �First Amended and Restated
Regulatory Agreement and Declaration of Restrictive Covcnants, dated as of August 1, 2011,
and recorded in thc Official Records ol'San Diego County on August 26, 201 1 as Instrument No.
20 1 1-0441 793 (the "Regulatory Agreement"). "Chis Agreement amends Sectio❑ 2.3, Section
�2.3(d) and Section 2.3(e) of the Reg�flatory Agreement.
2. Scction 2.3 of the Re�;ulatory Agreemcnt is hereby deleted in its entirety and
rcplaced wiih thc IolVotiving rc�viscd Seciion 2.3:�
Scction 2.3 Allowable Rent. '
I'he Pariies acknowlcdge that the Development was awardedand is funded in part
with an allocation of Low Incoine�� Housing Taz Credits (`Tax Credits") and in part with
Low and Moderate Income�Ho��s�ng I�unds (°`LMIHI�"), and that the maximum allowable
Rent (bascd on thc applicabie Assumed Household Size) that may be charged for [he
Units is the lowec of (ij Rent determined in accordance with rules established by the
Cali1'orni�i `I`ax C'reciit i\lloc�atibn Committee (``C`I'Ci�C") lor projects receiving ,an
allocation of"�ax Credits ("C'I'CAC Rent"); and (ii) Rent determined in accordance with
I
OGardens Op Memu nnJ Amendment 1 3-22-13 �
I '��,o3
� �, . � � 1�576
rules established.bythe California Department of Housing and Community Development
piusuant to Califomia Health and Safety Code Section 500�3 for projects funded with
LIvIIHF^("HCD RenP'). Therefore, the maximum Rent fora Unit.shall be the applicable
CTGAC�Rent or HCD Rent for the Unit, whichever is lower. The applicable HCD Rent �
shall'be determined as follows:
(a) Extremely Low Income Rent. Subject to Section 2.4(a) below, the Rent
chazged to Residents of the Extremely Low Income Units shall not exceed one-twelfth
(1/12`�) of thirty percent (30%) of thirty percent (30%) of Median Income, adjusted for
Assumed Household Siie.
(b) Very Low Incoine Rent. Su6ject to Section 2.4(b) below, the Rent charged
to Residents of the�Ver.y Low Income Units shall not exceed one-twelfth (1/12'�) of thiRy
percent (30%) of fifty percent (50%) of Median Income, adjusfed for Assumed
Household Size.
(c) Lower Income Rent. Subject to Section 2.4(b) below, the Rent charged to
Residents of the Lower Incoine Units shall not exceed. one-twelfth (1/12'�) of thirty
percent (30%) of sixty percent (60%) of Median Income, adjusted for Assumed
Household Size.
(d) In calculating [he allowable Rent for the Units, the following Assumed
Household Sizes shall be utilized, provided that the Development receives.an allocation
of Low Income Housing Tae Credits, otherwise Assumed Household Size shall be
determined pursuant to the'terms of Health and Safety Code Section 50052.5(h):
Number of Bedrooms Assumed Household Size
One 1.5 •
Two 3
Three 4.5 ,
(e) No later than March 31 of each calendaz year, the Authority shall provide
the Owner with a schedule of permissible maximum Extremely Low Income Rents, Very
Low [ncome Rents and Lower Income Rents for the succeeding year. Under no
circumstances may Owner raise rents above the permissible maximum rents as allowed
under the annual rent schedule provided by Authority.
Except as provided in this Amendment, the Regulatory ?:greement shall remain in full force and
effect; enforceable in accordance with its terms.
2
OGaidens Op�Memo and_Amrndment I 3-22-13
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, 10577
IN WITNESS WHEREOF, the Authority and Owner fiave executed this Agreement by
duly authorized representatives, all on the date first written above.
AUTHORITY:
THE POWAY HOUSING AUTHORITY, a public body
corporate-and politic
By:
Penny &iley, Exe u ive � irector
OWNER: '
POWAY FAMI[,Y HOUSING,PARTNERS, L.P, a
California limifed partnership
By: Poundation for Affordable Housing V, Inc.,
a California nonprofit+public benefit corporation
Its: Managing General Partner
BY� /��� /il. l�.iG1�
Deborrah Willard, President
By: Affirmed Housing Group, Inc., a Delaware
Corporation
Its: Administrative General Partner
[3y: .
es'Silverwood, Presi nt
APPROVED AS TO FORM:
KANE B LMER & BERKMAN
By:
Glenn F.. Wasserman
Autliority.Special Gounsel
. 3
OGardens Op Memo and Ameudmentl 3-22-13
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� 1 � 57$
STATE OF CALIFORNIA )
)
COUNTYOF San O�Q, o )
On '{�P r� ( `{ , 2013 before me, �p � S'_ �.24�' ,
Notary Public, personally appeared PZ_� (L;(�,n
who
proved to me on the basis of satisfactory evidence to be the person(.e� whose name(,s� is/ace
suliscribed to the within instrument and acknowledged to me thatkk�/slie/tbey executed the:same
in his/her/Weir authorized capacity(jasJ, and that.by tyis/her/tqe'tF sig�ature(�J on the instrument
the person(;sj, or the eiitity upon behalP of�vhich tfie person(�s'J acted, esecuted the instrument:
1 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. CARO�s. �EGG
Commission e 1939186
� NoleryPublic-California Z�
. �San�Dlepa County �
,�Q M Comm:Ex lres Apr 2Q�2015.'
S i gnature JCY� (Sea l)
STATE OF CALIFORNIA )
)
COUNTY OF S'�n D"4`)
On PSQ'"+ � 2-'�-�� , 2013 before me, �li�l� �gl(��"�' ����+^^�
Notary Public, personally appeared �awt.�5 S, vt�t"'�
who
proved to me on tfie basis of'satisfactory evidence to be tfie person(+.�) whose name(s) is/a�e�
subscribed to the within instrument and acknowledged to me that he/shefflr_�y executed the same
in his/Herfttiep� authorized capaciryhesj; and that by his/her�tliei� signature(s}on the instrument
the person(s�;orthe entity upon.behalf of which tfie person(sj acted, executed the instrument.
I certify under PGNALTY OF' PERJURY under the laws of'the State of California tHat the
foregoing paragraph is true and correct.
WITNESS my hand and official seal:
� � �I
' .(� � Kelli J..EIIbtt,Crisostomo
Signa[ure !�� 1 �� `J�i� (Seal) = •� . COMM.#1920555 y
W . Notery Pubfio-CeGbmie
W � �SAN��DIEGOCOUHTY� '�
. �My Canm Fxp.JAN 16,2015.
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� 10579
STATE OF CALIEORNIA )
)
CQUNTY OP 0�)
u � �"� p��
On pt�"�� ��j , 2013 beforey�m�e',"��1.(IYYQ>(YL(,'�j f�7t�dM , ,
Nofary Public, personally appeared �u.r,,nVYQ;(� /�— �nfi tl
who
pioved to me on the basis of satisfactory evidence to be the person(� whose name(sr} is/�re
subscribed to the within instrument xnd ackno�vle.lacd tc .^.�e !tiatkeh-he!he}� esecrted the same
in hi§/fier/tl�eir authorized capacity(+esj, and that by k�is/hedt}�eif signature(sj on the instrument
the person(,�; or the entity upon behalf of which the persor� acted, executed the instrument.
1 certify under PENALTY O� PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WiTNESS my hand and official seal. U RRAINE 8./ NriEV' -
Conmd�7lon I,t902�71
/� Nptuy PuEHe-C�tNOrnle
/�/��� Orenpe'CoumY
��X�`^'��� � Seal M Comm. I�nB 2.
Signature '^' ( )
Lorraine S. Bentley
Commission // 1902471
Orange County
Sxpiration Date Sept. 2, 2014
(949) 443-9101
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EXHIBIT A
PROPGRTY DESCRIPTION
AII that certain real property located in the City of Poway, County of San Diego, State of
Califomia described as follows:
PARCGL I:
1'HAT PORTION OF 'I'HE SOU1'HEAST QUARTER OF THE SOU"PHWEST QUARTER OF
SECTION 14, TOWNSHIP 14 SQUTH, RANGE;2 WEST, SAN BERNARDINO MERIDIAN,
IN THE COUNTY OF SAN DIEGO, STATL OF CALIPORNIA, ACCORDING TO THE
OFFICIAL PLAT THEt^�OP, DESCRiQLD AS rOLi/JWS:
BEGINNING A"I' A POINT WHICH IS 30:00 FEET DISTANT NORTHERLY AT RIGHT
ANGLES FROM THE CENTER LINE OF THE 40 FOOT COUNTY ROAD TO POWAY,
SAID PO1NT OF BEGINNfNG BEARING NORTH 70°02'46" CAST 1005:15 FEET PROIvI
THE POIN'I' OF IP]TERSECTION OF THE SOUTH LINE OF SA[D SECTION 14 W[TH THE
CENTER LINE OF MISSION ROAD 1-A AT STATION 378•+ 70:9 THEI2EON, AS SHOWN
ON MAP THGREOP ON FILE IN THE OFFICE OF COUNTY SURVEYOR OF SAID SAN
D[EGO COUNTY, AND BEING ALSO THE SOUTHWEST CORNER OF LAND
DESCRIBED IN THE DEED FROM R. T. CREMER, ET UX; TO EVE2BTT DANIELSON,
' 6T UX, DATED OC"C013LR 4, 1940, 'RLCORDED OCTOBER 16, 1'940 IN DOOK 1085,
PAGG 127 OF OFFICIAL RECORDS; Rt1NNING THENCE PARALLEL WITH AND 30.00 -
FEET NORTHERLY AT RIGI]T ANGLES FROM TfIG CENT�R LINE O! SAID POWAY
' ROAD SOUTII 83°20'00" WGST, 133.69 FGET; THENCE PARALLLL WITI-] TII� WEST
LIAiE OF SAID DRNIELSON'S LAND,NORTH 00°43'00" EAS"C TO THE SOUTH LINE OF
THE NORTH 162.65 R�ET'(MEASURED°ALONG THE EAST AND WEST LCNES) OP TIIE
LAND DESCI2I$F.1�,IN "I'f1E DEED TO KENNETH C. SNYDCR;GT UX;RECURDED JUN�
IO, .I968 AS DOCUTvIENT T��O. 96618; THFNCE EAST ALONG SAiD SOUTH LINE TO
THE WEST LINE OF 7'HE HEIZEINABOVE REFERRED TO UANIF..LSON'S LAND;
THENCE ALONG SAID WEST' LINE SOUTH 00°43'00"' WEST, 321.97 FEET TO THE
POINT OF BEGINNING.
PARCEL 2:
THAT PORTION OP TIIG SOU"fHEAST QUAR"C�R OP' 7'HE SOUI'H WLS'C QUAR"fER OF
SECTION 14, TOWNSHIP 14 SOUTH,,RANGE 2 WEST, SAN BERNARDINO MERIDIAN;
IN THE COUNTY OF $AN D[EGO, STATE OF'CAI.IFORNIA, ACCORDING 'TO. THE
OFFICIAL PLAT THEREOF,llESCRIBED AS FOLLO WS`.
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. � 1 �� 81
COMMENCING AT A POINT WHICH IS 30.00 FEET DISTANT NORTHCRLY AT RIGH�I`
ANGLES FROM THE CENTER L1NE OF THE 40 POOT COUNTY ROAD 1'O YOWAY,
SAID POINT OF BEGINiVING BEARING NORTH 70°02'46" EAST 1005.15 FEET FROM
THE POINT OF INTERSECTION OF THE SOUTH LINE OE SAID SECTION 14 WI'fH THE
CENTER LINE OF'1vIISSION ROAD.1-A A'1' S'I'A"f]ON 378 + 70.9 THEREON, AS SHOWN
ON'MAP, THEREOF ON FILE IN THE OPPICE OF COWi TY SURVEYOR OF SAID SAN
DIEGO COUNTY, AND BEING ALSO THE SOUTHWES'T COItNER OF LAND
DESCRIBED IN "I'HE DEED FROM R. T. CREMER, ET UX, TO EVERETT DANIELSON,
E'1` UX„ DATED OGTOB_ER 4, 1940, RGCORD�D OC7'OB�R '16, 1940 IN BOOK 1085,
PAGE 127 OF OFFICIAL RECORDS; RUNN[NG THENCE PARALL�L WITH AND 30;00
FEET"NORTHERLY AT RIGHT ANGLES FROM THE CENTER L1NG OF SAID POWAY
ROAD`SOUTIi S3°20'00"' W�ST';, 133:69 FEET TO THE TRUE POIN7' OF' f3EG1NNING;
TIIENCE CONTTNUING;ALONG SAfD PARALLIiL LINE�SOUT[i 83°20'00" WEST; 133.68.
FEE"I"7'O.THE'EAST L[NE`OE LAND AS.DESCRIB�D]N PARCEL 2 OC'THE D��D TO J.
FRANK ZITTELL AND CHr1RLOTTE G. Z[TTELL, RECORDED MARCH 26, 1947, IN
IIOOK 2374, PAGE 80 OF OFFICIAL RECORDS; THENCE ALONG THE EAS7 LINE OF
LAND AS DESCRIBED N SA[D ,PARCEL 2, NORTEI 00°43'00" EAST TO THE
SOUTHWEST CORNER OF'THE NORTH 162.65 FEET(MEASURED ALONG TIiE GAST
AND WGST LiNES) OF THE LAND DESCRIBED IN DEED TO KGNN�TII C. SNYDER,
ET US, RECORDED JUNE 10, 1968 AS DOCUMENT NO. 96618;'THENCE EAST ALONG
TF1E SOUTH LINE OF SAID IVORTH 162.65 FEET TO A LINE WHICH AEARS NORTH
� 00°43'00"'EAST;�PARALLEL WITH THE�WEST L[NE OF $AID DANIELSON'S LANDS,
FROM THE TRUE POINT OF BEGINNING; THENCE SOUTFI -00°43'00" WGST TO THE
TRUE POINT OF BEGINNING:
PARCEL 3:
A NON-EXCLUSIVE EASEMLNT FOR THE INGRESS AND EGRESS OF MOTOR
VT:HICLES AND PEDESTRIANS TO PERMIT THE FREF PLOW OF VEHICULAR AND
PEDESTRIAN INGRESS AND EGRESS PURSUANT TO RECIPROCAL EASEMENT
AGREEMENT RECORDED MAY 25, 2011, AS DOCUMENT NO. 2011-0268977 OF
OFFIC[AL RECORDS, TO; EROIvi, OVER, AND ACROSS TIIOSC PORTIONS OF THE
PROPERTIES DESCRIBED IN DEEDS TO CISSY FISHGR RGCORllLD MAY 13, 1)94, AS
DOCUMENT NO. 1A94-0317060 AND TO POWAY FAMILY HOUSING PARTNERS
R�CORDGD DECEMB�R 22, 2009 AS DOCUMENT NO. 2009-704717, BOTH IN l'HE
OLPICIAL RECOE'.DS IN THE OEFICE OF TH& COLJNTY IiL"CORDFR OF SAN DIF,GO
COUNTY; STATF° OF CALIFORNIA TOG�THGR WITH A PORTION OF PARCEL I
ACCORD[NG TO PARCEL.'MAP'THEREOF.NO. 3710, FILED IN THE COUN"1'Y OF SAN
DIEGO REGORDER'S OEFICE; APRIL 19, ]975, BEING' MORE. PARTICULARLY
DESCR[BED IN.PARCELS A AND B AS ['OLLOWS:
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� 10582
PARCEL A:
A 34:00 FQOT �VIDE:STRIP OF LAND LYING 14.00 FEET'EASTERLY OF, MEASURED
AT RIGHT ANGLES, AND PARALLEL W1TH THE FOLLOWING DESCRIBED LINE AND
20 FOOT WESTERLY OF, MEASURED AT RIGHT ANGLES, AND PARALLEL WITH
THE'FOLLOWING DESCRIBED L[NE:
BEGINNING AT 1'HE SOUTHEAST CORNER OF 7'HE YROPEI2TY DESCRIBED'IN,SAID
FISHER DEED; THENCE ALONG THE EASTERLY LINE OF SAID PROPERTY NORTH
01°52'33" EAST 503.39 FE$T TO A POINT ON TFIE WEST�RLY LINE OF SAID PARCEL
1 OF PARCEL MAP 3710; THENCE ALONG THE NORTHERLY PROLONGATION OF
SAID EASTERLY LINE OF SAID FISHER PROPERTY NORTH O1°52I33" EAST 36.92
°FEET TO THE BEGINNING OF A TANGEN"f 21.00 FOOT RADNS CURVE, CONCAVE
WESTERLY, THENCE. NORTHERLY ALONG SAID CURVE. THROUGH A CENTRAL
ANGLE-OF 28°19'49" AN ARC DiSTANCE OF 10.38 FEET; TI-IENCE NORTH 26°2T16"
W�ST 4.42 EEET, MORE OR LESS, TO A POINT ON A NON-TANGENT 1250.00 FOOT
[tADIUS CURVE; A RADIAL LINE TO SA[D POINT BEARS SOUTH 19°23'18" EAST;
SAID POINT ALSO BLING ON THE SOUTHERLY RIGHT-OF-WAY LINE OF POWAY
ROAD (]00 FEE,T WIDE) AND THE POINT OP TERMINATION AND H�REAFTER
UESGRIBED AS POIN1'"A".
PARCEL B:
_
COMMENCING' AT THE HEREINABOVE DESCRIBED 'PO1NT "A", THENCE
_
SOUTHWESTERLY ALONG SAID SUUTHERLY RIGHT-OF-WAY LINE OF SAID
POWAY':ROAD`THROUGH.A,CENTRAL ANGLE OF 00°55'29" AN_ARC DISTRNCE OF
• 20.17 FEET T0 A PO1NT ON THE WESTE2LY LINE OF THE HBREINABOVE
DESCRIBED EARCEL A -AND THE TRUE POINT OF BEGINNING; THENCE ALONG
SAID WESTERLY LINE SOUTH 26°27'16" EAST 7.07 P'G�T'TO THE'BEGINNING OP A
TANGENT 1.00 FOOT RADIUS CURVE, CONCAVE WESTERLY;'THENCE ALONG SAID
CURVE THROUGH A GENTRAL ANGLE OF 28°19'49" AN ARG DISTANCE OF 0.49
FEET ; THENCE SOUTH O1°52'33" WEST 54.53 FEET; THENCE LEAVING SAID
WESTERLY LINE NORTH 02°08'36" WCST 28.54 FEET; THENCE NORTH O1°52'33"
EAST 18.92 FEET TO TH� BEGINNING OP A TANGENT 7.50 FOOT RADIUS CURVE,
CONCAVE SOU".HWL$'fERL1'; "CHENCE NGR"1'i-IERLY ALONG SAII� CURVE
THROUGi-I A CENTRAL Al�'GLE OF 80°28'23"AN'ARC DISTANCEDF'10:53 F.EET TO A
PONT QF REUERSE GURVATURG WITH,A 7.SO FOOT RADIUS CURVE, CONCAVE
NORTHEASTERLY; A RADIAL LINE TO SAID POINT BEARS NORTH 11°24'10'`,EAST;
THENCE NORTHERLY .ALONG SAID CURVE THROUGH .A CENTRAL ANGLE OF
43°59'S0"AN ARG DISTi\NCE OF 5.76 FEET TO A,POINT ON A NON-TANGENT 1250.00
FOOT RADIUS CURVE, A RAD[AL L[NE TO SAID PO[NT BEARS SOUTH 17°59'47°
EAST, ALSO BEII�TG A POINT ON THE SOUTHERLY RIGHT-OF-WAY LINE OF SAID
POWAY ROAD; THENCE NORTHEASTGRLY ALONG SAID CURVE TFIROUGI-I A
CENTRAL ANGLE OF 00°28'02" AN ARC DIS"fANCE OF 10.20 FEET TO THE "I'RUE
PONT OF'BEGINNING.
_ . , �,
FIRST AMENDED AND RESTATED AGENCY LOAN.AGREEMENT
BY AND BETWEEN
THE POWAY REDEVELOPMENT AGENCY
AND
POWAY FAMILY HOUSING PARTNERS, L.P.
WITH THE CONSENT OF �
FOUNDATION FOR AFFORDABLE HOUSING V, INC.
(Orange.Gardens- 12510 Oak Knoll Road)
OGardens Loan 3-8-1 I
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND EXHIBITS 3
Section1.1Definitions..........................................................................................................4
Section1.2Exhibits. .............................................................................................................9
ARTICLE 2 LOAN PROVISIONS 10
Section2.1 Loan. ..........................................................................................................10 .
Section2.2 Interest........................................................................................................11
Section2.3 Use of Funds. .............................................................................................11
Section2.4 Security. ........................................................................................:............12
Section 2.5 Subordination.............................................................................................12
Section 2.6 Acquisition Component Disbursement Requirements...............................13
Section 2.7 Predevelopment Component Disbursement Requirements. ......................13
Section 2.8 Rehabilitation Component Disbursement Requirements...........................14
Section 2.9 Completion Component Disbursement Requirements................:..............16
Section 2.10 Conversion Component Disbursement Requirements...............................1,7
Section 2.11 Disbursement of Project Cost Savings.......................................................18
Section 2.12 Determinatioi� of Final Conversion Component Disbursement.................19
Section 2.13 Repayment of the Agency Loan. ...............................................................19
Section 2.14 Reports and Accounting of Residual Receipts...........................................22
Section 2.15 Non-Recourse. .......................................:...................................................23
Section 2.16 Assigrunent of Original Agency Note........................................................24
ARTICLE 3 PREDEVELOPMENT CONDITIONS 24
Section 3.1 Predevelopment Conditions.......................................................................24 ,
Section 3.2 Approved Development Budget. ...............................................................25
Section 3.3 Scope of Rehabilitation Work....................................................................25
Section3.4 Relocation Plan..........................................................................................25
Section 3.5 Rehabilitation`Work Plans.........................................................................26
Section 3.6 Applicable Governmental Approvals. .......................................................26
Section 3.7 Tax-Exempt Bond Application..................................................................27
_
Section 3.8 Tax Credit Applications.............................................................................27
Section 3:9 . Tax Credit Investors Bids .................................................................:........28
Section.3.10 Other Approved Financing. .......................................................................28
, Section 3.1] Final Financing P1an..........................:.......................................................30
Section 3.12 Management and Marketing Plan. .............................................................31
Section 3.13 Construction Contract. ...............................................................................32
Section_3:14 Building Permit..........................................................................................33
Section3.1'S Insuiance...................................................................................................33
Section 3.16 Peiformance and Payment Bonds...............................:.............................34
Section 3.17 Resident Services, Plan and Budget........:..................................................34
i
OOardens Loan 3-8-I 1
Section 3.18 Evidence of Availability of Funds. ............................................................35
ARTICLE 4 REHABILITATION OF THE DEVELOPMENT 35
Section 4.1 Permits and Approvals..............................................................................35
� Section 4.2 Approved Scope of Rehabilitation Work...................................................35
Section 43 Commencement of Rehabilitation Work. ..................................................35
Section 4.4 Completion of Rehabilitation Work..........................................................35
Section 4.5 Perforn�ance of Work Pursuant to Plans and Laws; Prevailing
Wa ge s.........................................................................................................3 6
Section 4.6 Equal Opportunity.....................................................................................37
Section 4.7 Progress Reports; Amended Rehabilitation Budget. ................................37
Section 4.8 Construction Responsibilities. ...............:..................................................37
Section 4.9 Mechanics Liens, Stop Notices, and Notices of Completion....................38
Section 4.10 Inspections. ................................................................................................38
Section 4.11 Approved Development Budget; Revisions to Budget..............................39
Section4.12 Developer Fee. ...........................................................................................39
ARTICLE 5 ONGOING OBL[GATIONS 39
Section 5.1 Financial Accountings and Post-Completion Audits.................................39
Section 5.2 Municipal Services Fee..............................................................................40
Section5.3 Information. ....................... .......................................................................40
Section5.4 Records. .....................................................................................................40
Section5.5 Audits................................. .......................................................................40
Section 5.6 Hazardous Materials. .................................................................................40
Section 5.7 Maintenance and Damage..........................................................................43
Section 5.8 Fees and Taxes...........................................................................................43
Section 5.9 Notice of Litigation....................................................................................44
Section 5.10 Operation of Development as Affordable Housing. ..................................44
Section 5.11 Non-Discrimination. ..................................................................................44
Section 5.12 Mandatory Language in All Subsequent Deeds, Leases and
Contracts. ........................... .......................................................................44
Section 5.13 Insurance Requirements.............................................................................46
Section 5.14 Definition of Transfer. ...............................................................................47
Section 5.15 Purpose of Restriction on Transfer. ...........................................................48
Section 5.16 Prohibited Transfers...................................................................................48
Section 5.17 Permitted Transfers Without Prior Agency Approval. ..............................49
Section 5.18 Permitted Transfers With Prior Agency Approval. ...................................49
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE
DEVELOPER 50
Section 6.1 Representations and Warranties.................................................................50
ARTICLE 7 TERMINATION, DEFAULT AND REMEDIES 52
Section 7.1 No Fault Termination.................................................................................52
Section 7.2 Events o£Default. ......................................................................................53
ii
OGardens Loan 3-b-11
Section7,.3 Remedies....................................................................................................55
Section 7.4 Option to Purchase, Enter and Possess. :....................................................56
Section 7.5 Right of.Contest.........................................................................................57
Section 7.6 Remedies Cumulative................................................................................57
Section 7.7 Remedies by Other Entities/Individuals Pursuant to California
Law. ...........................................................................................................57
Section7.8 Survival...................................................................................................:..57
ARTICLE 8 GENERAL PROVISIONS 57
Section 8.1 Relationship of P.arties. ..............................................................................57
Section8.2 No Claims. .................................................................................................58
Section.83 Amendnients. .............................................................................................58
Section 8:4 Entire Understanding of the Parties...........................................................58
Section 8.5 Indemnification..........................................................................................58
Section 8.6 Non-Liabiliry of Agency and City Officials, Employees and
Agents. .......................................................................................................5 8
Section 8.7 No Third P•,arty Beneficiaries. ....................................................................59
Section 8.8 Action by the Agency. ...............................................................................59
Section8.9 Waivers............................................................ .........................................59
Section 8.10 Notices, Demands and Communications...................................................59
Section 8.11 Applicable Law and Venue........................................................................60
Section8.12 Parties Bound.............................................................................................60
Section 8.13 Attorneys' Fees. .........................................................................................61
Section:8.14 Severability. ....................... .......................................................................61
Section 8.15 Force'Majeure. ...........................................................................................61
Section 8.16 Conflict of Interest.....................................................................................61
Section 8.17 Title of Parts and Sections. ........................................................................62
Section 8.18 Multiple Qriginals; Counterpart..............................................................:..62
Section 8.19 Operating Memoranda. ..............................................................................62
Section 8.20 Construction and Interpretation of Agreement..........................................62 �
Section 8.21 Time of.Essence.........................................................................................63
Section 8.22 Compliance with Law................................................................................63
Section8.23 Police Power. .............................................................................................64
Section8.24 Brokers.......................................................................................................64
Section 8.25 Incorporation by Reference........................................................................64
�XHIBITS
EXHIBIT A - LEGAL DESCRIPTION
EXHIBIT B - APPROVED DEVELOPMENT BUDGET
EXHIBIT C - SCHEDUL� OF PERFORM.ANCE
EXHIBIT D - APPROVED SCOPE'OF REHABILITATION WORK
EXHIBIT E - APPROVED REHABILITATION WORK PLANS
EXHIBIT F - FORM OF FIRST AMENDED AND RESTATED PROMISSORY NOTE
EXHIBIT G - FORM OF FIRST AMENDED AND RESTATED DEED OF TRUST
iii
OGardens Loan 3-8-I I
EXHIBIT H - FORM,OF NOTICE OF AFFORDABILITY RESTRICTIONS ON
TRANSFER OE PROPERTY
EXHIBIT I - FORM OF FIRST AIVIENDED AND RESTATED REGULATORY
AGREElVIENT AND DECLARATION OP RESTRICTNE COVENANTS
EXHIBIT J - FORM OF ASSIGNMENT OF PLANS
EXHIBIT K - FORM OF RESIDUAL RECEIPTS REPORT
iv '
OGardens Loan 3-A-11
FIRST AMENDED AND RESTATED AGENCY LOAN AGREEMENT
(Orange Gardens- 12510 Oak Iinoll Road)
This First Amended and Restated Agency Loan Agreement (the "Agreemenf') is entered
into as of March 9, 2011, by and 6etween the Poway.RedeJelopment Agency, a public body
corporate and politic (the "Agency"), and Poway Family Housing Partners, L.P., a California
limited Partnership (the "Developer"), with the consent oF Foundation for Affordable Housing V,
Inc., a California nonprofit public benefit corporation ("Foundation"), with reference to the
following facts, purposes and intentions.
RECITALS
A. These Recitals refer to and utilize certain capitalized terms which-are defined in "
Artide 1 of this Agreement The Parties intend to refer to those definitions in connection with
the use of capitalized terms in these Recitals.
B, Pursuant to the Califomia Community Redevelopn�ent Law (Health and Safety
Code Section 33000 et s�.; the "Redevelopment Law"), the City Council of the City of Poway
adopted the Paguay Redevelopment Plan by Ordinance No. 117 on January I'Z, 1984, as
amended by Ordinance No. 414 on July 14, 1993, as amended,by Ordinance No. 439 on January
13, 1995, as amended by Ordinance No. 593 on January 1, 2004, as amended by Ordinance No.
605 on September 16, 2004, as amended by Ordinance No. 611 on November 25, 2004, as
amended by Ordinance No. 641 on August 17, 2006, and as further amended by Ordinance No.
657 on July 12, 2007 (as amended from time to time, the "Redevelopment Plan"). The
Redevelopment Plan affects and controls the development and use of all real property located
within the Paguay Redevelopment,Project Area within the City of Poway, Califomia,.as more
particularly described and set�forth in the RedevelopmenfPla�i (the'"Project Area"). The Agency .
is responsible for implementing the Redevelopment Plan in the Project Area. The goals for the
Redevelopment Plan include alleviation of blighting conditions.and the stimulation of economic
development and affordable housing',activities in the Project Area and the community.
C. The Agency has esfablished a Low and Moderate Income Housing Fund (the
"Housing Fund") pursuant to Health and Safety Code Section 33334.2.
D. The Agency has established a Housing Special Program Fund (the "HSP Fund")
to, among-.other things, fund.activities that will lead to the creation of afford'able housing for low
and inoderate incoine households in Poway.
E. The Agency made a loan of Housing Fund and HSP Fund monies to the
Foundation pursuant to a Predevelopment and Acquisition Loan Agreement by and among the
Agency, the Foundation, and the Developer dated as of December 22, 2009 (the "Original Loan
Agreement"). Pursuant to the Original Loan Agreement, the Agency agreed to loan One Million
Two Hundred Ninety-Six Thousand Doilars ($1,296,000) (the "Original Loan") to Foundation to
be utilized for acquisitibn and predevelopment costs associated with a fifry-two unit multifamily
1
OGardens Loan 3-5-11
apartment development located at 12510 Oak Knoll Road; Poway, California, Assessor's Parcel
No. 31 Z-540=69, ,(the "Property"). A:legal descript}on of the Property is attached as Exhibit A,
and is incorporated herein by tfiis reference. The Property is improved with a 52-unit
multifamily apartment development.including all common areas, amenities, plans, entiUements,
appurtenances, improvements easements, buildings, and fixtures, if any, associated with the
Property (the "Improvements"). Hereinafter, the Property and the Improvements shall be referred
to as the "Development."
F. Foundation assigned the Original Loan ro the Developer pursuant to an
Assignment and Assumption Agreement between Foundation and the Developer dated
December 22, 2009, and the D'eveloper acquired the Development, utilizing the Original Loan
and proceeds of an acquisition loan from Century Housing Corporation ("Century") in the
amount of Five Million Two Hundred Sixty-Eight Thousand Dollars ($5,268,000) (the"Century
Loan").
G. The Original Loan was secured by an Agency Deed of Trust with Assignment of
' Rents and Security Agreement recorded against the Property as Document No. 2009-0704719
(the "Original Deed of TrusY').
H. The Agency Board has approved an increase to the Original Loan in the•amount
of Seven Million Five Hundred Fifty Tl�ousand Dollars ($7,550,000), to bring the total,loan Yrom
the Agency to Eight Million Eighf Hundred Forty-Six Tl�ousand Dollars ($8;846,000) (the
"Agency Loan"). The Agency and the Developer desire to amend and restate the Original Loan
Agreement in order to increase the.amount of the Agency Loan,to Eight Million Eight Hundred
Forty-Six Thousand Dollars ($8;846,000). As further described in Section 2.1, and pursuant to
the requirements under Sections 2.6, 2.7, 2.8, 2.9 and 2.10, the Agency Loan has been and will
be disbursed in five components: the Acquisition Component consisting of an amount not to
exceed Nine Hundred Eighty-Two Thousand Dollazs ($982,OOQ); the Predevelopment
Component consisting of an amount not to esceed Tlu�ee Hundred Fourteen Thousand Dollars
($314,000); the Rehabilitation Component in an amount not to exceed Four Million Three
Hundred Thirty-Nine Thousand Dollars ($4,339,000); the Completion Component in an,amount
not to exceed Two Million Seven Hundred Eleven Thousand Dollars ($2,711,000); and the
Conversion Component in an amount not to exceed Five Hundred Thousand Dollars ($500,000).
The Agency Loan consists of'appioximafely Six Hundred Fifty Thousand Dollars ($650,000)
from the Agency's HSP Fund (which was utilized to fund predevelopment,and acquisition costs
under the Original Loan .Agreement), and Eight Million One Hundred Ninety-Six Thousand
Dollars ($8,196,000) from the Agency's Housing Fund.
I. Concurrently with execution of this Agreement, the Agency and the Developer
will also execute a First Amended and Restated Regulatory Agreement and an updated Notice of
Affordability Restrictions. The Developer will also execute a First Amend'ed and Restated
Promissory Note and a First Amended and Restated Deed of Trust and Assignment of Rents.
These documents will be recorded at close of escrow on the Bond Loan, at which time the
documents associated with the Original Loan will be cancelled and re-conveyed.
2
OGardens Loan 3-8-I 1
J,. The A'gency and the Cify Council have made the necessary findings to spend
Housing,Fund revenuesoutside of the Project Area; as evidenced, respectively, by Resolutions
No. R-09-12 and Resolution 09-068 adopted on December I, 2009.
K. Through this Agreement and accompanying documents, including the First
Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants (the
"Agency Regulatory AgreeinenY' a form of which is attached hereto as Exhibit I, incorporated
herein by this reference), the Agency is imposing occupancy and affordability restrictions on the
Development in order to utilize the fifry-two (52) units in partial satisfaction of its adequate sites
inventory pursuant to Government Code Section 65583.1(c), as approved on November 24, 2009
by the Califorriia Department of Housing and Community Development allowing the City to
credit the units toward the adequate sites requirement far the planning period for the City's fifth
housing element beginning January 1, 2013, pursuant to housing element law (Article 10.6 of the
` Govemment Code).
L. The Developer intends to provide long-term affordability covenants on the Units
in the Development.
M. The Agency intends to utilize the Development to obtain affordable housing
production credits for the Agency pursuant to Health and Safety.Code Section 33413(b)(2)(A)(ii)
as housing units located outside of the Project Area and available at affordable housing cost to
extremely low income, very low income, and moderate income households. Such units are
required to remain affordable to such households for not less than the Term set forth under this'
Agreement and the Agency Regulatory Agreement. This Agreement and the Agency Regulatory
Agreement are also intended to implement this requirement.
N. As more fully set:forth in Section 3.6 below, this Agreement does not authorize or
guarantee the granting of the Governmenta] Approvals, closing of any additional Agency
rehabilitation loans, or the'entitlements for the rehabilitation of the Development. Such actions
may be authorized and will become possible only upou subsequent discretionary action of the
City or the Agency, as appropriate.
O. The California Enyironmental Quality Act (Public Resources Code Sections
21000 et seq.) ("CEQA"), imposes no conditions on the Agency's consideration and approval of
this Agreement, because the,project undertaken pursuant to this Agreement is the rehabilitation
of existing improvements,,and such projects are exempt from CEQA requirements under class 2
categorical exemption, as further set forth in 14 Califomia Code of Regulations Section 15302.
NOW, THEREFORE, in consideration of the recitals hereof and the mutual promises and
covenants set forth in this Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS AND EXHIBITS
3
OGardens Loan 3-8-11
�Section 1.1 Definitibris.
The following capitalized terms have the�meanirigs set�forth in this Section 1.1 wherever
used in this Agreement, unless otherwise provided:
(a) "Acquisition ComponenP' means a portion of the Agency Loan in an amount not
to exceed Nine Hundred Eighty-Two Thousand Dollars ($982,000), to be used for acquisition
costs.
(b) "Agency" means the Poway Redevelopment Agency.
(c) "Agency Board""means the governing board of the Agency.
(d) "Agency Deed of'TrusP' meaiis the First Amended and Restated Deed of Trust
that will encumber the Development to secure repayment of the Agency Loan. The form of the
Agency Deed of Trust is set forth in the attached Exhibit G.
(e) "Agency Loan" mzans the Agency loan to the Developer in the total principal
amount not to exceed�Eight Million Eight Hundred Porty-Six Thousand Dollars ($8,846,000)..
The Agency Loan is more particularly described in Recital H and Section 2.1.
(� "Agency Loan Documents" means this Agreement together with the Agency
Deed of Trust, Agency Notice of Affordability Restrictions, the Agency Note, the Agency
Regulatory Agreement, the Assignment of Plans and any other document or agreement
evidencing the Agency Loan.
(g) "Agency Note" means the First Amended and Restated Promissory Note that wili
evidence the Developer's obligation,to repay the Agency Loan. The form of the Agency Note is
set forth in the attached Exhibit F.
(h) "Agency Notice of Affordability Restrictions" means the Agency Notice of
Affordability Restrictions on Transfer of Property between the Agency and the Developer to be
recorded against the Property at the Close of Escrow, pursuant to Health and Safety Code
Sections 333343 and/or'33413(c)(5), or successor provision. The form of the Agency Notice of
Affordability Restrictions is set forth in the attached Exhibit H.
(i) "Agency Regulatory Agreemenf' means the First Amended and Restated
Regulatory Agreement and Declaration of Restrictive Covenants between the Agency and the
Developer to be recorded against the Property at the Close of Escrow. The form of the Agency
Regulatory Agreement is seYforth in the attached Exhibit I.
(j) "AgreemenY' means this First Amended and Restated Agency Loan Agreement.
�F
OGardens Loan 3-8-I 1
(k) "Applicabla Govef-nrrmental Approvals" means the City and other governmental
permits and appro'vals aecessary for the Rehabilitation Work and,operation of the Development,
including but not limited to submissions of design deyelopment review documents, detailed ,
exterior renovation plans, overall design and architectural review and any required operating
licenses, but excluding a building permit.
(1) "Approved Development BudgeP' shall mean the proforma development 6udget,
including sources and uses of funds, as approved by the Agency and attached hereto and
incorporated herein as Exhibit B, but which may be amended with the approval of the Agency as
set forth in this Agreement.
(m) "Approved Financing" means the loans or grants.to be secured by the.Developer;
approved by the Agency for the purpose of financing the acquisition and.Rehabilitation Wark, in
addition to the Agency Loan, and documented in the Pinal Financing Plan.
(n) "Approved Rehabilitation Work Plans" means the.plans,and specifications for the
Rehabilitation Work, approved by the Agency and attached hereto as Exhibit E.
(o) "Approved Scope of Rehabilitation Work" means the scope of work for
rehabilitation of the Improvements approved by the Agency arid attached hereto as Exhibit D.
(p) "Assignment of Plans" means the agreement, evidencing the Developer's
assignment of all rights in and to certain plans, specifications and other predevelopment
documents as security for the P.redevelopment Component of the Agency Loan, which
assignment shall also secure the Developer's obligations under this Agreement. The form of the
Assignment of Plans is set forth in the attached Exhibit J.
(q) `Bond Loan" means the loan of tax-exempt bond proceeds that Developer will
receive as construction financing for the Rehabilitation Work.
(r) `Bond Loan Deed of TnisP' means the Deed of Trust against the Property that
will secure the Bond Loan.
(s) "CDLAC" means the California Debt Limit Allocation Committee.
(t) "Century" means Century Housing Corporation.
(u) "Century Loan" means the acquisition loan from Century in the amount of Five
Million Two Hundred Sixty-Eight Thousand Dollars ($5,268,000).
(v) "CEQA" means the California Lnvironmental Quality Act, Public Resources
Code Section 21000 et seq.
(w) "City" means the City of Poway, a municipal corporation.
(x) "City CounciP' means the City Council of the City.
5
OGardens Loan 3-8-I I
(y) "Close of Escrow" sfiall.refer to the date of recordation of the Agency Deed of
Trust pursuant to ttie terms of tliis Agreement.
(z) "Commencement of Rehabilitation Work" means the date of commencement of
the Rehabilitation Work.
(aa) "Completion ComponenY' means a portion of the Agency Loan in, an
amount not to esceed Two Million Seven Hundred Eleven Thousand Dollars ($2,711,000), to be
used to pay down the Bond Loan, subject to the disbursement conditions set forth in Section 2.9
below and further subject to reduction in an amount pursuant to Section 2.11 below.
(bb) "Completion of Rehabilitation Work" means the date the Developer
receives City building department sign-off on completion of the Rehabilitation Work.
(cc) "Construction Bonds" has the meaning set forth in Section 3.16 below.
(dd) "Construction ContracP' has the meaning set forth in Section 3.13 below.
(ee) "Conversion ComponenY' means a portion of the Agency Loan in an
amount not to exceed Five Hundred Thousand Dollars ($500,000), to be used to provide
additional permanent financing to'the Developer, subject to the disbursement conditions set forth
in Section 2.10 below and further subject to reduction in an amount pursuant to Section 2:11'
below.
(ffl "Conversion Date" shall mean the date the Bond Loan is converted from a
construction loan to a permanent loan.
(gg) "DefaulY' means events of default by Developer under this Agreement, as
more specifically described in Section 7.2 below.
(hh) "Developer" means Poway Family Housing Partners, L.P. a California
limited partnership, and its permitted successors and assigns.
(ii) "Development" means the Property and the Improvements (including the
Improvements as rehabilitated in accordance with the Agency Loan Documents).
(jj) "Evidence of Insurance Coverage" has the meaning set forth in Section
3.15 below.
(kk) "Executive Director" means the Executive Director of the Agency or the
Executive.Director's designee.
(ll) "Final Financing Plan" tneans the final plan for financing the
Development as approved by the Agency pursuant to in Section 3.11 below.
6
OGardens Loan 3-S-I 1
(mm) "Financing Broposal" means the Developer's Proposal conceming
financing for th'e,project previously submitted to.the Agency.
(nn) "Force Majeure" means the occunence of one or more of those events
described in Section 8.15, permitting an extension of time for performance of obligations under
this Agreement.
(oo) "Foundation" means the Foundation for Affordable Housing V, Inc., a
California nonprofit public beneflt corporation. Foundation shall serve as the Managing General
Partner of the Developer.
(pp) "Hazardous.Materials"has the meaning set forth in Section 5.6 below.
(qq) "Hazardous Materials Claim" has the meaning set forth in Section 5.6
below.
(rr) "Hazardous Materials Law" has the meaning set forth in Section 5.6 .
below.
(ss) "Improvements" means the approximately 52 unit multifamily housing
development to be rehabilitated on the Property, including all common areas, amenifies, plans,
entitlements, appurtenances, improvements easements, buildings and fixtures associated with the
Property.
(tt) "Management and Marketing Plan" has the meaning set forth in Section
3.12 below.
(uu) "Manager's Unit" means a dwelling unit occupied by a manager of the
Development employed by the Developer or the Developer's operator of the Development.
(vv) "Net Proceeds of Permanent Financing" means the portion of the
Approved Rinancing that is not required to pay the costs of acquisition and rehabilitation of the
Development (including but not limited to the funding of reserves; the payment of Developer Fee �
and repayment of construction financing, but excluding, Rehabilitation Cost Savings). `Net
Proceeds of Pemianent Financing, if any, shall be determined pursuant to the procedure set forth
in Section 2.13(c).
(�vw) "Opeiating Memorandum" has the meaning given in Section 8.19 below.
(xx) "Option" means the Agency Option to purchase the Development upon the
occurrence of certain events as further set forth in Section 7.4 below. .
(yy) "Parties"means the Agency, Foundation and the Developer.
7
OGardens Loan 3-8-]]
(zz) "P,redevelopment ComponenY' means a portion of the Agency Loan in an
amount not to exceed Three Hundred'Fourteen-Thousand Dollars ($314,000), to be used to pay
Predevelopment Costs, subject to disbursement requirements set forth in Section 2.7 below.
(aaa) "Predevelopment Costs" means those "soft costs" paid by the Developer
to third-party proyiders, including without limitation, architectural design costs, payment of fees
to obtain the Applicable Governmental Approvals, and other costs approved by the Agency,
necessary to be incurred in order'to commence the Rehabilitation Work. The Predevelopment
Costs are those set forth in Table 2 to the Approved Development Budget attached to this
Agreement as Exhibit "B". The Predevelopment Costs shall be deemed approved upon the
execution of this Agreement by the Agency's Executive Director or designee. The
Predevelopment Costs shall not include any development fee payable to Foundation, the
Developer or any affiliate of Foundation or the Developer, or any mortgage interest payment
with respect to the Century Loan or any other loan.
(bbb) "Project Cost Savings" means the savings, if any, between the projected
costs of acquisition and rehabilitation of the Development, as set forth in the Approved
Development Budget and the actual costs of acquisition and rehabilitation of the Development
(but excluding Relocation Cost Savings).
(ccc) "Property" means the real property located at 12510 Oak Knoll Rond,
Poway, CA, APN No. 317-540-59, particularly described in Exhibit ,4 attached hereto.
(ddd) "Recorder" means the Office of the San Diego County Recorder.
(eee) `Rehabilitation BudgeY' means a budget showing sources and uses
breakdown of costs of the Rehabilitation Work and related development costs.
(ff� "Rehabilitation ComponenP' means a portion of the Agenc}� Loan in an
amount not to exceed Four Million Three Hundred Thirty-Nine Thousand Dollars ($4,339,000),
to be used to finance the Rehabilitation Work, subject to the disbursement requirements set forth
in Section 2.8 below.
(ggg) "Rehabilitation Work" means the physical construction work to
rehabilitate the Improvements in accordance with the Approved Scope of Reliabilitation Work,
the Applicable Governmental Approvals, and the Approved Rehabilitation Work Plans.
(hhh) "Relocation Cost Savings" means cost savings on relocation expenses
below the amount of Four Hundred Thousand Dollars ($400,000) listed in the Approved
Development 13udget.
(iii) "Relocation Plan" means the relocation plan approved by tlie Agency
pursuant to Sectio� 3.4 below.
8
OGardens l,oan 3-8-11
(jjj) "R'esident,SerJices Budget" means the annual budget for implementation
of the Residerit Services Plan.
(kkk) "Resident Services Plan" means the plan for providing services to
residents of the Development.
(lll) "Schedule of Performance" means the schedule for performance of
various tasks and obligations under this Agreement that is attached as Exhibit C, incorporated
herein by this reference, as such may be modified pursuant to Section 3.1 below.
(mmm) "Scope of Rehabilitation Work" has the meaning set forth in Section 33
below.
(nnn) "Senior Lender" has the meaning set forth in Section 2.5(b) below.
(000) "Senior Loan" has the meaning set forth in Section 2.5 below.
(ppp) "Ta�c-Credit Investor" means the investor limited partner of the Developer
to be determined by the Parties prior to the Close of Escrow.
(qqq) "TCAC"means the California Tax Credit Allocation Committee.
(rrr) "Term" means the term of this Agreement, which commences as of the
date of this Agreement,and, unless terminated earlier pursuant to this Agreement, ends fifty-six
(56) years afrer the date of the Close of Escrow.
(sss) "7'ermination Notice" has the meaning set forth in Section 7.1 below.
(ttt) "Transfer" has the meaning set forth in Section 5.14 below.
(uuu) "Unit" means one of the approximately fifry-two (�2) multifamily
apartment units to be rehabilitated on the Property.
(vw) "50% Completion" means the date on which fifty percent (50%) of the
rehabilitation of the Development have been completed, as certified by the Developer's architect
or construction manager, as applicable.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incoiporated into this
Agreement by this reference:
Erhibit A Legal Description
Exhibit B Approved Development Budget
Exhibit C Schedule of Performance
Exhibit D Approved Scope of Rehabilitation Work
9
OGardens Loan 3-8-11
Exhibit E Approved Rehabilitation Work Plans
Exliibit F Form of.First Amended and Restated'Promissory Note
Erhibit G Form of First Amended and Restated-Deed of Trust
' Exhibit H Form of Notice of Affordability Restrictions on Transfer of Property
Exfiibit I Form of First Amended and Restated Regulatory Agreement and
Declaration of Restrictive Covenants
Gxhibit J Form of Assignment of Plans
Exhibit K Form of Residual Receipts Report
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.
Subject to satisfaction of the conditions set forth in Sections 2.6 through 210 below as
applicable, the Agency shall lend to the Developer the Agency Loan-in the principal sum not to
exceed Eight Million EighYHundred Forty-Six Thousand Dollars ($8,846,000) for the purposes
set for[h in Section 2.3 of this Agreelnent.
For the purposes of this Article 2, the Agency Loan shall be treated in four (4) separate
components:
(a) The "Acquisition CompouenY' shall be a portion of the Agency Loan in an
amount not to exceed Nine Hundred Eighty-Two Thousand Dollars ($982,000). As of the date
of this Agreement, the Agency has already disbursed Nine Hundre8 EighTy-Two Thousand
Dollars ($982,000) of the Acquisition Component pursuant to the,Original Loan Agreemegt.
(b) The "Predevelopment ComponenY' shall be a portion of the Agency Loan in an
amount not to exceed Three Hundred and Fourteen Thousand Dollars ($314,000), or as much
thereof, as may be disbursed to pay Predeyelopment Costs pursuant to the requirements set forth
in Section 2.7 below. Prior to the date of this Agreement, the Agency has disbursed a portion of
the Predevelopment Component pursuant to the terms of the Original Loan Agreement. The
Developer has utilized the proceeds of the Predevelopment Component to pay specified
Predevelopment Costs approved by the Agency. The remainder of the Predevelopment
Component shall continue to be disbursed in accordance with the req�irements of Section 2.7
below. -
(c) The "Rehabilitation ComponenY' shall be a portion of the Agency, Loan in an
amount not to exceed Four Million Three Hundred Thirty-Nine Thousand Dollars ($4,339,000),
or as much thereof, as may. be disbursed to pay Rehabilitation Costs pursuant to the requirements
of Section 2.3 below. A portion of the Rehabilitation Component shall be disbursed to Developer
at the Close of Escrow to be utilized by the Developer to repay the Century Loan.
(d) The "Completion Component" shall be in an amount not to exceed Two Million
Seven Hundred Eleven Thousand Dollars ($2,711,000), or as much thereof, as may be disbursed
10
OGardens Loan 3-8-I I
to pay down the Bond Loan pursuant_to the reguirements of Section 2.9 below, provided that this
amount may be reduced pursuant_to Section_2.11 belo�v.
(e) The "Conversion ComponenY' shall be in an amount of Five Hundred Thousand
Dollars ($500,000) ar the balance of the loan, �vhichever is greater; and is intended fo provide
additional permanent financing to the Developer, provided that this amount may be reduced
pursuant to Section 2.11 below.
Section 2.2 Interest.
(a) Subject to the provisions of Section 2.2(b) below, the outstanding principal
balance of the Agency Loan shall bear simple interest at the rate of three percent (3%) per annum
commencing with the date of first disbursement.
(b) In the event of a Default, interest on the Agency Loan shall begin to accrue, as of
the date of Default and continue until such time as the Agency Loan funds are repaid in full or
the Default is cured, at the default rate of the lesser of ten percent (10%), compounded annually,
or the highest rate pennitted by law.
Section 2.3 Use of Funds.
(a) Acquisition Component. Developer shall use the Acquisition Component of the
Agency Loan to fund the acquisition of the Development.
(b) Predevelopment Component. Developer shall use the Predevelopment
Component of the Agency Loan'to finance Predevelopment Costs as approved by the Agency.
(c) Rehabilitation Compouent. Developer shall use the Rehabilitatiori Component of
the Agency Loan to finance the Rehabilitation Work, as approbed by the Agency, to refinance
the Century Loan, and to the extent feasible, to fimd the Developer Fee in accordance with
Sections 4.12(a) and 4.12(b) below.
(d) Completion Component. Developer shall use the Completion Component to
repay a portion of the Bond Loan, and to the extent feasible to fund the Developer Fee in
accordance with Section 4.12(c) below.
(e)' Conversion Cornponent. Developer shall use the Conversion Component as a
source of'permanent financing for the Development, and to the extent feasible to fund the
Developer Fee in accordance with Section 4.12(d) Uelow.
' (� No Other Uses. The Developer shall not use any proceeds of dhe Agency Loan
for any other purpose without the prior written consent of the.Agency.
I1
OGardens Loan 3-8-I I
Section 2:4 Securi .
(a) Assignment of Plans. The Developer's�obligations under this Agreement shall be
secured by the Assignment of Plans to be executed by the Developer pursuant to Section 2.8(a)
below. The Assignment of Plans shall become effective upon an uncured event of Default of the
Developer as defined in Section Z.2 below, or upon termination of this Agreement pursuant to
Section 7.1 below. The Agency shall not have an,y obligation under,any contracts or agreements
assigned pursuant to the Assignment of Plans until it espressly agrees in writing to be bound by
such contracts or agreements. Upon an event of Defaulf that has not been cured pursuant to°this
Agreement or the termination of this Agreement pursuant to Section 7.1 below, the Agency may
use any of the documents, assigned to the Agency under an Assignment of Plans, for any purpose
for which the Developer could have used them for rehabilitation of the Development.
(b) Deed of Trust. The Agency Loan is secured by the Original Deed of Trust until
such time as the Agency Deed of Trust is recorded as a lien againstlhe Property, at which time
the .Agency Deed of Trust will secure the Agency Loan and the Original Loan Agreement will be
terminated.
Section 2.5 Subordination.
Any subordination of the Agency Deed of 'I�rust to other Approved Financing (in each
case, a"Senior Loan"), shall be subject to satisfaction of all of the following conditions:
(a) All of the proceeds•of the proposed Senior Loan, less any transaction costs, must
be used to provide acquisition, rehabilitation and/or permanent financing for the Development.
(b) The proposed lender (each, a "Senior Lender") must be a state or federally
chartered financial institution,,a noiiprofit corporation or a public eptity that is not affiliated with
the Developer or any of the Developer's.affiliates, other than as a-depositor or a lender.
(c) The Developer must demonstrate to the Agency's reasonable satisfaction that
subordination of the Agency Deed of Trust is necessary to secure adequate acquisition,
construction and/or permanent financing to ensure the viability of the Development, including
the operation of the Development as affordable housing, as required by the Agency Loan
Documents. To satisfy this requirement, the Developer must provide to the Agency, in addition
to any other information reasonably required by the Agency, evidence demonstrating. that the
proposed amount of tl�e Senior Loan is necessary to provide adequate 'acqui'sition, construction, .
construction and/or permanent financing to ensure the viability of the Development, and
adequate financing For the Development would not be available �vithout the proposed
subordination.
(d) The subordination agreement(s) must be structured to minimize the risk that the
Agency Deed of Trust would be extinguished as a result of a foreclosure by the Senior Lender or
other holder of the Senior Loan. To satisfy this requirement, the subordination agreement must
provide the Agency with adequate rights to cure any defaults by the Developer, including: (i)
12
' OGardens Loan 3-3-ll
providing the Agency or its successor with copies of any notices of default at the same time and �
in the same manner as provided to the Developer; and (ii)-.providing the Agency with a cure
period of at least sixty (60) days fo cure any default.
(e) The subordination(s) described in this Section may be effective only during the
original term of the Senior Loan and any extension of its terni approved in writing by the
Agency.
(� No subordination may limit the effect of the Agency Deed of Trust before a
foreclosure, nor require consent of the holder of the Senior Loan to exercise any remedCes by the
Agency under the Agency Loan Documents.
(g) Upon a determination by the Agency Gxecutive Director that the conditions in this
Section have been satisfied, the Agency Executive Director or his/her designee will be
authorized to execute the approved subordination agreement without the necessity of any further
action or approval.
(h) In addition, any agreement to subordinate the Agency Deed of Trust shall comply
with the requirements of Health and Safety Code Section 33334.14.
Section 2.6 Acquisition Gomponent Disbursement Requirements.
As of the date of tfiis Agreement, Nine Hundred Eighty-Two Thousand Dollars
($982,000) of the Agency Loan has been disbursed pursuant to the provisions of'the Original
Loan Agreement.
Section 2.7 Predevelopment Compouent Disbursement Requirements.
(a) As of the date,of this Agreement, a portion of the-Predevelopment Component of
the Agency Loan has been disbursed in accordance with the provisions of the Original Loan
Agreement The Agency shall not be obligated to make any additional disbursements of the
Predevelopment Component for'approved Predevelopment Costs or take any other action under
the.Agency Loan Documents unl'ess the following conditions precedent are satisfied:
(1) There exists no Default nor any act, failure, omission or condition that
would constitute an event of Default under this Agreement;
(2) The Agency has received and approved an updated Financing Proposal;
(3) Agency has received a written draw request from the Developer, including
certification that the condition set forth in Section 2.7(a)(1) continues to be satisfied, and setting
forth the proposed u,ses of funds consistent with Predevelopment Costs previously approved by
the Agency, the amount of funds needed, and, where applicable, a cupy of the bill or invoice
covering the Predevelopment Costs incurred or to be inwrred.
13
OGardens Loa�3-8-11 �
�
(b) Upon .satisfaction of these conditions,, the Agency shall on a monthly basis
disburse the Predev,elopment Component of the Agency Loan (or so much thereof as is required)
for approved' cost items as further described in the Predevelopment Costs of the Approved
Development Budget. Notwithstanding any other provisions of this Agreement, the Agency
shall have no fuRher obligation to disburse any portion of the Agency Loan to the Developer
following: (]) termination of tfiis Agreement; or(2) notification by the Agency to the Developer
of a Default under the terms of this Agreement.
Section 2.8 Rehabilitation Component Disbursement Requirements.
(a) The Rehabilitation Component, of the Agency Loan shall be disbursed in
accordance with the following provisions. The Agency shall nof be obligated to make any
disbursements of the Rehabilitation Component or take any other action under the Agency Loan
Dowments unless the following conditions precedent are satisfied:
(1) The Developer has met the preconditions to disbursement of the
Acquisition Component and the Predevelopment Component of the Agency Loan and the entire
Acquisition Component and Predevelopment Component have been'disbursed to the Developer;
(2) The Developer's general partners have'delivered to the Agency a copy of
corporate authorizing resolutions authorizing execution of the Agency Loan Documents and the
transactions contemplated by this Agreement;
(3) The Bond Loan has closed and the Bond Loan Deed of Trust has been
recorded againstthe Property;
(4) The Developer has esecuted and delivered to tlie Agency, the Agency
Note in an amount not to exceed Eight Million Eight Hundred Forty-Six Thousand Dollars
($8,846,000) evidencing the Developer's obligations under this Agreement, the Agency Deed of
Trust, the Agency Notice of Affordability Restrictions, the Agency Regulatory Agreement, the .
Assignment of Plans; and the Agency Deed of Trust, Agency'Regulatory Agreement, and the
Agency Notice of Affordability Restrictions have been, or �vill be concurrently with the Close of
Escrow, recorded against the Property with the Recorder in a lien position subordinate only to
the Bond Loan Deed of Trust;
(5) There exists no Default nor any act; failure, omission, or condition that
would constitute an event of Default under'this Agreement;
(6) The undisbursed proceeds of the Agency Loan, together with other funds
or firm commitments for funds that the Developer has obtained i'n connection with the
Development, are not less than the amount that the Agency determines is necessary to pay for
rehabilitation of the Dev,elopment and to satisfy all of the covenants containe8 in this Agreement
and the Regulatory Agreement
(7) The Tax Credit Investor has entered the Developer's Partnership pursuant
to an Amended and Restated Partnership Agreement approved by the Agency and has made a
14
OGardens I.nan 3-8-I I
capital contiibution of at least twenty percent (20%) of Three Million Eight Hundred Fifry-One
Thousand Dollars ($3,851,000);'
(8) The Developer.has received all building permits �ecessary to perform the
Rehabilitation Work pursuant to Section 3.14 below (including but not limited to approvals
required from the City's Development Services Department);
(9) The Agency has received and approved the Final Financing Plan pursuant
to Section 3.11 below, including satisfactory documentation that the amowlt of the Rehabilitation
Component �vill not cause Developer to be utilizing less than fifty percent (50%) of the Bond
Loan proceeds for rehabilitation of the Development, as required under the tax-exempt bond
program, and the Agency's Executive Director or the Executive Director's designee has made
the findings required under Section 3.11(� to the extent such findings are necessary;
(]0) The Agency has received and approved the Rehabilitation Work Plans;
(11) The Agency has received and approved a guaranteed maximum price
construction contract that the Developer has entered or proposed to enter for rehabilitation ofthe
Development as required pursuant to Section 3.13 below; �
(12) 'I'he Developer has furnished the Agency with evidence of the ',insurance
coverage meeting the requirements of Section 5.13 below;
(13) A title insurer reasonably acceptable to the Agency is unconditionally and
irrevocably committed to issuing a 2006 ALTA Lender's Policy of ii�surance insuring the
priority of the Regulatory Agreement, Notice of Affordability Restrictions, and Deed of Trust in
the amount of the Agency Loan subject only to such exceptions and exclusions as may be
reasonably acceptable to the Agency, and containing such endorsements as the Agency may
reasonably require
(14) The Agency has received copies of labor and material payment and
performance bonds as required pursuant to Section 3.16 below;
(15) The Agency has received copies of an executed reciprocal easement
agreement necessazy for the maintenance of the Improvements; including but not limited to the
private driveway adjacent to the Development;
(16) The Agency has received and approved the Manageinent and Marketing
Plan pursuant to Section 3.12 below; and
(17) The Agency has received a written draw request from the Developer,
� including certification that the condition set forth in Section 2.8(a)(5) continues to be satisfied,
and setting forth the,proposed uses of funds consistent with the Approved llevelopment Budget,
the amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost
incurred or to be incurred. When a disbursement is requested to pay any contractor in
connection with improvements on the Proper[y, the �vritten request must be accompanied by: (i)
15
OGardens Loan 3-8-I 1
certificatiomby the Developer's architect reasonably�acceptable to the Agency that tfie work for
which disbursement is requested has been completed (although the Agency reserves the right to
inspect the Property and make an iridependent evaluation); and (ii) conditional lien releases
and/or mechanics lien'title insurance endorsements reasonably acceptable to the Agency.
(b) Upon satisfaction of these conditions, the Agency shall on a monthly basis
disburse the Rehabilitation Component of the Agency Loan. Notwithstanding any other
provisions of this Agreement, the Agency shall have no further obligation to disburse any portion
of the Agency Loan to the Developer following: (l) termination of this Agreement; or (2)
notification by the Agency to the Developer of a Default under the temis of this Agreement.
Section 2.9 Completion Component Disbursement Requirements.
(a) The Completion Gomponent of the Loan shall be disbursed in accordance with the
following provisions of this Section 2.9. The Agency shall not be obligated to make any
disbursements of the Completion Component of the Loan unless the following conditions
precedent are satisfied prior to such disbursement of the Loan or �vill be satisfied concurrently
with the Agency's disbursement:
(I) Developer has completed the rehabilitation of the Development and has
received a final certificate of occupancy for all Units, or comparable City sign-off on the
completion of the rehabilitation;
(2) The Agency has received and approved the Resident Services Plan
pursuant to Section 3.17 belo�v;
(3) Developer has completed all tenant relocation pursuant to the Relocation
Plan and applicable law;
(4) The Agency has received and approved an updated Final Financing Plan '
pursuant to Section 3.1 I below and the A'gency's Executive Director or the Executive Director's
designee has made the findings required under Section 311(� to the extent such findings are
necessary;
(5) There exists no Default nor any act, failure; omission, or condition that
would constitute an event of Default under this Agreement;
(6) The title insurer has issued an LP-10 rewrite of the Agency's ALTA
Lender's ,Policy of Insurance insuring the priority of the Deed of Trust in the amount of the
Loan, free of all mechanics liens related to the rehabilitation of flie Development, and subject
. only to such exceptions and exclusions as may be reasonably acceptable to the Agency; and
containing such endorsements as the Agency may reasonably require;
(7) The undisbursed proceeds of the Loan, together with other funds or firm
commitments for funds that the Developer has obtained in connection with the Development, are
not less than the amount that the Agency reasonably determines is necessary to pay for
16
OGardens Lnan 3-8-II
rehabilitation of tl�e Development and to satisfy all of the covenants contained in this Agreement
, and the Regulatory.Agreement;�
(8) The Tax Credit Investor has made capital contributions in the approximate
amount of ninety percent (90%) of Three Million Eight Hundred Fifty-One Thousand Dollars
($3,851,000);
(9) The entire sum of the Bond Loan has been disbursed to the Developer, or
such lesser amount as is needed by the Developer to complete the .Approved Scope of Work
while satisfying.the 50-percent aggregate basis test under Section 42Q�)(4)(B) of the Intemal
Revenue Code; and
(10) The Developer shall have submitted a written request to the Agency for
disbursement of the Completion Component wherein the Developer shall certify to the Agency
that: (A) the entire proceeds of the Bond Loan have been disbursed to Developer or such lesser
amount as is needed by the Developer to complete the Revised Approved Scope of
Rehabilitation while satisfying the 50-percent aggregate basis test under Section 42(h)(4)(B) of
the Internal Revenue Code; and (B) that the Developer has satisfied the 50-percent aggregate
basis test under Section 42(h)(4)(B) of the Intemal Revenue Code,.accompanied by a copy of the
recorded Notice of Completion and a copy of the sign-off from the Department� of Buil'ding
Services. So long,as the Agency finds, to its reasonable satisfaction, that the conditions set forth
herein have been satisfied, the Agency shall fund the Completion Component.
(b) Notwithstanding any other provisions of this Agreement, the Agency shall have
no further obligation to disburse any portion of the Agency Loan to the Developer following: (1)
termination of this Agreement; or (2) notification by the Agency to the Developer of a Default
under the terms of this Agreement.
Section 2.10 Conversion Component Disbursement Requirements.
(a) The Conversion Component of the Loan shall be disbursed in accordance with the
following provisions of this Section 210 and Section 2.11 below. The Agency shall not be
obligated to make any disbursements of the Conversion Component of the Loan unless the
following conditions precedent are satisfied prior to such disbursement of the Loan or will be
satisfied concurrently with the Agency's disbursement:
(1) The Developer has met all the requirements fo� disbursement of the
Completion Component pursuant to Section 29 and the Agency has disbursed thc Completion
Component; .
(2) There exists no Default nor any act, failure, omission, or condition that
would constitute an event of Default under this Agreement;
(3) Developer has converted the Bond Loan from a construction loan to a
permanent loan and paid it down to an approsimate balance of One Million Five Hundred
Twenty-Three Thousand Dollars ($1,523,000);
17
OGardens Loan 3-5-11
(4) The,title insurer has issued an LP-10,rewrite of the Agency's 2006 ALTA
Lender's Policy of Insurance insuring the priority of the Deed of 1'rust in the amount of the
Loan, free of'all mechanics liens relafed to the rehabilitation of the Development, and subject
only to such exceptions and exclusions as may be reasonably acceptable to the Agency, and
containing such endorsements as the Agency may reasonably require;
(5) The undisbursed proceeds of the Loan, together with other funds or firm
commitments for funds that the Developer has obtained in connection with the Development, are
not less than the amount that the Agency determines is necessary to pay for rehabilitation of the
Development and to satisfy all of the covenants contained in this Agreement and the Regulatory
Agreement; and
(6) The Agency l�as received a written draw request from the Developer,
including certification that the conditions set forth in Section 2.7(a) and Section 2.7(b) continue
to be satisfied, and setting fortli the proposed uses of funds consistent with the Approved
Development Budget, the amount of funds needed, and where applicable, a copy of the bill or
invoice covering costs incurred or to be incurred.
(b) Notwithstanding any other provisions of this Agreement, the Agency shall have
no further obligation to disburse any portion of the Agency Loari to the Developer following: (1)
termination of this Agreement; or (2) notification by the Agency to the Developer of a Default
under the terms of this Agreement.
Section 2.11 Disbursement of Project Cost Savings
(a) The Parties agree that if and to the estent the Developer is able to achieve Project
Cost Savings, determined prior or concurrently with the disbursement of the Completion
Component, the Project Cost Savings �vill be allocated in the following manner:
(1) Up to the first Two Hu�dred Thousand Dollars of Project Cost Savings
shall be allocated to the Developer to pay up to Two Hundred Thousand Dollars ($200,000) of
the Developer Fee up to the maximum amount permitted under Section 4.12;
(2) Twenty percent (25%) of the remaining Project Cost Savings shall be
disbursed to the Developer to pay an incentive fee to the Developer's general contractor; and
(3) Seventy-five percent (75%) of the remaining Project Cost Savings shall be
used to reduce the Completion Component.
(b) The reduction in the Completion Component shall be made pursuant fo the
following procedure: Following the completion of the rehabilitation and as a precondition of the
Agency funding the Completion Component, Developer shall submit an accounting of the actual
acquisition and rehabilitation costs incurred and a comparison chart of those costs to the
Approved Rehabilitation Budget, highlighting any cost savings realized by Developer. The
Completion Component shall be adjusted downward in an amount equal to the Project Cost
Savings.
18
OGardens Loan 3-8-I 1
Section 2.12 DeCermination of Final Conversion Com�onent Disbursement
(a) The Parties agree that the Conversion Component may be reduced to reflect:
(1) cost savings on relocation expenses below the amount of Four Hundred
Thousand Dollars ($400,000) listed in the Approved Development Budget ("Relocation Cost
Savings");
(2) increases in investor equity contribution above the Three Miliion Eight
Hundred Fifty-One Thousand Dollars ($3,851,000) of investor tax credit equity as set forth in the
Final Financing Plan (the "Increased Tax Credit Equity"); and
(3) increases in any financing (including loans and grants) above the amounts
shown in the Final Financing Plan (the "Increased Funding Sources").
• (b) The reduction in tlie Conversion Component shall be made pursuant to the
following procedure: Following the completion of the rehabilitation and as a precondition of the
Agency funding the Conversion Component, Developer shall submit,an accounting of: (1) actual
relocation costs incurred plus its best projection of additional relocation costs to be incurred in
the future, and (2) actual total tar credit equity contribution or its best projections of the total tax
credit equity cohtribution, and (3) acWal total grants and loans or its best projections of
additional financing sources. The Conversion Component shall be adjusted downward in an
amount equal to the projected Relocation Cost Savings plus the Increased Tax Credit Equity plus
the Increased Funding Sources..
Section 2.13 Repayment of the A�encv Loan.
The Agency Loan shall be repaid as follows:
(a) Annual Payments. Subject to the terms of Section 2.13(b) below, commencing on
April 1, following Completion of Rehabilitation of the Development (but in no event later than
April 1, 2012) and on April 1 of each year thereafter for the Term; the Developer shall make
repayments of the Agency Loan in the amount of the Agency's Share of Residual Receipts as
defined below: Payment of the Agency's Share of Residual Receipts shall be credited first
against accrued interest and then against outstanding principal, and shall be accompanied by the
Developer's report oF Residual Receipts (including an independent auditor's report regarding the
auditor's review of Annual Operating Expenses). Each payment shall be accompanied by the
Agency's form of Residual Receipts Report in the form attached hereto as Exhibit K. The
Developer shall provide the Agency with any documentation reasonably requested by the
Agency to substantiate the Developer's determination of Residua] Receipts.
(b) Special Repayment from Net Proceeds of Permanent Financing. One Hundred
percent (100%) of Net Proceeds of Permanent Financing shall be paid to the Agency as a special
repayment of the Agency Loan.
19
OGardens Loan 3-8-1 I
(c); Determination.of Net Aroceeds of Permanent Financing. The amount of the Net
Proceeds of Permanent Financing shall be determined by the Developer and submitted to the
Agency for approval on the date the Developer submits the final cost audit for the Development
to the TCAC. The amount of the Net Proceeds of Permanent Financing shall be calculated using
the actual principal amount of'the permanent loans and/or grants.made to Developer, provided
that Developer provides sufficient evidence that the permanent loan is the maximum principal
amount that Developer could secure for the Development applying reasonable underwriting :
standards. The Developer shall also submit to the Agency any additional documentation
sufficient to verify the amount of the Net Proceeds of Permanent Financing. The Agency shall
reasonably approve or disapprove Developer's determination of the amount of the Net Proceeds
of Permanent Financing in writing within sixty (60) days of the receipt of Developer's cost audit
and supplemental documentation. If Developer's determination is disapproved by the Agency,
Developer shall re-submit documentation to the Agency until the Agency approval is obtained.
The Agency's share of the Net Proceeds of Permanent Financing shall be due the Agency from
the Developer no later than five (5) days following the date 'Developer closes the permanent
financing for the Development. The Agency Executive Director is authorized to 'approve a
reduced Special Repayment from Net Proceeds of Permanent Financing of the Agency Loan
pursuant to this subsection in the,event the Agency Executive Director determines in the Agency
� Executive Director's sole and.absolute discretion that such funds are required to pay project costs
reasonably incurred by Developer and approved by the Agency pursuant to the Financing Plan.
(d) Due in FuIL All principal and.accrued interest on the Agency Loan shall be due
in full on the earliest to occur of: (1) the date of any Transfer not authorized by the Agency, (2)
the date of any Default, or(3) the expiration of the Term.
(e) Right to Prepay. The Developer shall have the right_to prepay the Agency Loan at
any time without premium or penalty. However, this Agreement and the Agency Regulatory
Agreement shall remain in effect for the entire Term regardless of any prepayment.
(fl Special Definitions. The following definitions shal] apply for purposes of this
Section 2.13:
(1) "Agency's Share of Residual Receipts" shall mean fifry percent (50%) of
Residual Receipts.
(2) "Annual Operating Expenses" with respect to a particulaz calendar year
shall mean the following costs reasonably and actually incuned for operatio�� and maintenance of
the Development to tlie exteut that they are consistent' with an annual independent audit
performed by a certified public accountant using generally accepted accounting principles:
(i) property taYes and assessments imposed on the Development;
(ii) debt service currently due on a non-optional basis (excluding debt
service due from residual receipts or surplus cash of the Development) on loans associated with
the Rehabilitation Work and approved by the Agency;
20
OGardens Loan 3-8-I I
(iii) property management fees and reimbursements, not to exceed fees
and reimbursements which are sfandazd in the industry, and pursuant to a.management contract
approved by the Agency;
(iv) premiums for property damage and liability insurance; utility
services not paid for directly by tenants, including water, sewer, and trash collection;
maintenance and repair;
(v) any annual license or certificate of occupancy fees required far
operation of the Development;
(vi) security services;
(vii) advertising and marketing;
(viii) fees for resident services in the annual amount approved by the
Agency in tlie Resident Services Budget;
(ix) cash deposited into reserves for capital replacemenfs of the
Development in an amount to be approved by the Agency as pait of the Final Financing Plan;
(x) cash deposited into an operating reserve in an amount to be
approved by the Agency as part,of the Final Financing Plan and annual operating budgets, but
with the operating reserve capped at.six (6) months of gross rent from the Development (as such
rent may vary from tiine to time);
(xi) asset management fee in the amount of Fifteen "rhousand Dollars
($I5,000) subject to an annual adjustment not to exceed three and one half percent (3.5%);
(xii) for the first fifreen (15) years of the Term, a partnership
management fee in the amount of Five Thousand Dollars ($5,000) subject to an annual
adjustment not to exceed three and orie half percent (3.5%);
(xiii) deferred developer fee in an amount to be approved by the Agency
as part of the Final Financing Plan;
(siv) municipal se�vices fee paid pursuant to Section 5:2 below;
(xv) extraordinary operating costs specifically approved'by the Agency;
and
(xvi) payments of deductibles in connection with casualty insurance
daims not normally paid from reserves, the amount of uninsured losses actually replaced,
repaired or restored, and not normally paid from reserves,
(xvii) reasonable accounting fees and legal fees; and
21
OGardens Loan 3-8-1 I
(xviii) other ordinary and reasonable operating expenses approved by the
Agency and not listed above.
"Annual Operating Expenses" shall not include the following: depreciation,
amortization, depletion or other non-cash expenses or any amount expended from a reserve
account.
(3) "Gross Revenue," with respect to a particular calendar year, shall mean all
revenue, income, receipts, and other consideration actually received from operation and leasing
of the Development. "Gross Revenue" shall include, but not be limited to:
(i) all rents, fees and charges paid by tenants, Section 8 payments or
other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all
cancellation fees, price index adjustments and any other rental adjustments to leases or rental
agreements resulting in actual income;
(ii) the proceeds of business interruption or similar insurance;
(iii) the fair market value of any goods or services provided in
consideration for the leasing or other use of any portion of the Development
(iv) subject to the rights of Senior Lenders, the proceeds of casualty
insurance to the extent not utilized to repair or rebuild the Development (or applied toward the
cost of recovering such proceeds); and
(v) condemnation awards ror a 'taking of part or all of the
Development for a temporary period.
"Gross Revenue" shall nob include tenants' security deposits, loan proceeds, capital
contributions or similar advances.
(4) "Residual Receipts" in a particular calendar year shall mean the amount
by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as defined
above).
Section 2.14 Reports and AccountinQ of Residual Receipts.
(a) Audited Financial Statement. In connection with the annual payments required
pursuant to Section 2.13(a), within one hundred twenty (120) days of the end of the Developer's
fiscal year, the Developer shall,furnish to the Agency an audited sta[ement duly certified by an
independent firm of certified .public accountants approved by the Agency, setting forth in
reasonable detail the computation and amount of Residual Receipts during the preceding
calendar year.
(b) Books and Records. The Developer shall keep and maintain on the Proper[y, or at
its principal place of business, or elsewhere with the Agency's written consent, Full, complete
22
OGardens I.oan 3-8-I 1
and appropriate .books;, records and. accounts relating, to tlie Development, including all such
books, records and accounts necessary or prudent to evidence and substantiate in full detail the
Developer's calculatiori of Residual Receipts. Qooks, records and accounts relating to the
Developer's compliance with the terms, provisions, covenants and conditions of this Agreement
shall be kept and maintained in accordance with generally accepted accounting Qrinciples '
consistently applied, and shall be consistent with requirements of this Agreement which provide
for the calculation of Residual Receipts on a cash basis. All such books,�records, and accounts
shall be open to and available for inspection by the Agency, its auditors or other Agency
authorized representatives at reasonable intervals during normal business hours. Copies of all
tax retums and other reports ihat the Developer may be required to furnish any governmental
agency shall at all reasonable times, and upon twenty-four (24) hours notice, be open for
inspection by the Agency at the place that.the books, records and accounts of the Developer are
kept. The Developer shall preserve records on which any statement of Residual Receipts is
based for a period of not less than five (5) yeazs afrer such statement is rendered, and for any
period during which there is an audit undertaken pursuant to subsection (c) belo�v then pending.
(c) Audits. The receipt by the Agency of any statement pursuant to subsection (a)
above or any payment by the Developer or acceptance by the Agency of any loan repayment for
any period shall not bind the Agency as to the correctness of such statement or such payment.
Within three (3) years after the receipt of any such statement, the Agency or any designated
agent or employee of the Agency at any time shall be entiUed to audit the Residual Receipts'and
all books, records, and accounts pertaining thereto. Such audit shall be conducted during normal
business hours at the principal place of business of the Developer and other places where records
are kept. Immediately after the completion of an audit, the Agency shall deliver a copy of the
results of such audit to the Developer. If it shall be determined as a result of such audit that there
has been a deficiency in a loan repayment to the Agency, then such deficiency shall become
immediately due and payable with interest at the default rate set forth in this Agreement,
' determined as of and accruing from tlte date that said payment should have been made. In
addition, if the Developer's auditor's statement for any Development fiscal year shal] be found to
have understated Residual Receipts by more than five percent (5%) and at least Five Thousand
Dollazs ($5,000), and the Agency is entitled to any additional Agency Loan repayment as a result
of said understatement, then the Developer shall pay, in addition to the interest charges
referenced hereinabove, all of the Agency's reasonable costs and expenses connected with any
audit or review of the Developer's accounts and records.
Section 2.15 Non-Recourse.
Except as provided below, the Developer shall not have any direct or indirect personal
liability for payment of the principal of, or interest on, the Agency Loan. Followina recordation
of the Agency Deed of Trust, the sole recourse of the Agency with respect to the principal of,
and interest on, the Agency Note shall be to the property described in the Agency Deed of Trust;
provided, however, that nothing contained in the foregoing limitation of liability shalL (a) limit
or impair the enforcement against all such security for the Agency Note of all the rights and
remedies of the Agency thereunder; (b) be deemed in any way to impair the right of the Agency
to assert the unpaid principal amount of the Agency Note as demand for money within the
23
OGardens I.oan 3-R-1 I
meaning and intendment of'Section 431.70 ,of the California Code of Civil Procedure or any
successor provision thereto; (c) be deemed in any wayto lirriit the rights of the Agency to obtain
specific performance by the Developer of its covenants under the Agency Loan Documents,
other than the covenants to pay the Agency principal and interest due under the Agency Note.
The foregoing limitation of liability is intended to apply only to the obligation for the repayment
of the principal of, and payment of interest on the Agency Note; nothing contained.herein is
intended to relieve the Developer of its obligation to indemnify the Agency under Sections
4.5(c), 5.6, and 8.5 of this Agreement, or liability for: (i) fraud or willful misrepresentation; (ii)
the failure to pay taxes, assessments or other charges which may create liens on the Property that
are payable or applicable prior to any foreclosure under the Agency Deed of Trust (to the full
extent of such taxes, assessments or other charges); (iii) the fair market value of any personal
property or fixtures removed or disposed of by the Developer other than in accordance �vith the
Agency Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance
policies or a�vards resulting from'condemnation or the exercise of the power of eminent domain
or by reason of damage, loss or'd'estruction to any portion of the Development.
Section_2.16 ASSlgnment of Ori i*�nal A�encv Note. .
(a) Foundation has, in connection with Foundation's intent to fund part of the
acquisition and predevelopment costs for the Development, assigned its rights, duties and
obligations under a promissory note date December 22, 2009 (the "Predevelopment Promissory
Note") to the Developer pursuant to that certain Assignment and Assumption Agreement dated
as of December 22, 2009, as approved by the Agency (the "Assignment and Assumption
AgreemenY').
(b) Pursuant to the terms of the Assignment and Assumption Agreement, Foundation
is released from persona] liability under the Predevelopment Promissory Note and the Original
Loan Agreement, this Agreement and all other Agency Loan Documents, escept as such liability
may arise from Foundation's position as managing general partner of the Developer.
ARTICLE 3
PREDEVELOPMENT CONDITIONS
Section 3.1 Pred'evelo�ment Conditions.
(a) This ARicle 3 sets forth various predevelopment conditions that the Developer
shall seek diligently, and in .good faith to perform and achiev,e prior to the Commencement of
Rehabilitation Work. Satisfaction of these conditions depends on performance by the Developer.
Only the Agency can waive satisfaction of the conditions in this Article 3.
(b) The tasks described below shall be completed no later than the dates set forth in
the Schedule of Performance attached to this Agreement as Exhibit C, subject to Force Majeure.
The Schedule of Performance may be modified by Operating Memoranda eaecuted by the
Developer and by the Executive Director on behalf of the Agency without formal amendment of
this Agreement.
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� OGardens Loan 3-8-11
Section.3.2 Approved.Dedelopment BudQet,
The Approved Dedelopment Budget is attached to.this Agreement as Exhibit B.
Section 3.3 Scope of Rehabilitation Work. �
(a) As of the date of this Agreement, the Developer has submitted and the Agency
has approved a scope of rehabilitation work which describes the basic physical characteristics of
the Rehabilitation Work to be performed with respect to the Development (the "Approved Scope
of Rehabilitation Work") which is attached to the Agreement as Exhibit D.
(b) The Approved Scope of Rehabilitation Work includes an asbestos remediation
plan prepared by a registered asbestos abatement contractor.
(c) The Developer shall submit any material revision to the Approved Scope of
Rehabilitation Work to the Agency for its review and approval, which approval shall be at the
sole and absolute discretion of the Agency. Until a revised Approved Scope of Rehabilitation
Work is approved by the Agency, the previous Approved Scope of Rehabilitation Wo;k shall
govern the financing of the Development.
Section 3.4 Relocation Plan.
(a) If and to the extent that financing, acquisition, and rehabilitation of the
Development results in the permanent or temporary displacement of residentia] tenants,
homeowners, or businesses, then the Developer shall comply witH all applicable local, state, and
federal statutes and regulations, (including without limitation California Govemment Code
Section 7260 et seq., and accompanying regulations) with respect to relocation planning,
advisory assistance, and payment of monetary benefits. The Developer shall be solely
responsible for payment of any relocation benefits to any displaced persons and any other
obligations associated with complying with such relocation laws.
(b) As of the, date of this Agreement, Developer has prepared and the Agency and
City Council have approved a Relocation Plan for the Development. Developer shall strictly
comply with the Relocation Plan approved by the Agency and City Council.
(c) The Developer shall defend (with counsel reasonably acceptable to the Agency
and City), the Agency.and City against any claim for damages, compensation, fines, penalties,
relbcation payments or other amounts arising out of the failure or alleged failure of any person or
entity (including the Developer, the City or the Agency) to satisfyrelocation obligations related
to the acquisition and rehabilitation of the Development. This Section 3.4 shall survive the
repayment of the Agency Loan, the reconveyance of the Deed of Trust and the expiration of the
Term.
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OGardens Loan 3-R-1 I
.Section 3.5 Rehabilitation Work Plans.
(a) As of the date of this Agreement, the Agency has approved the plans and
specifications for the rehabilitation of the Development, including all construction
documentation upon which the Developer and the Developer's contractor shall rely in
perfonning the Rehabilitation Work, including, but not necessarily limited to, final architectural
drawings, landscaping plans and specifications, final elevations, building plans and
specifications (also known as "working drawings") (collectively the "Approved Rehabilitation
Work Plans"). The Approved Rehabilitation Work Plans are attached to the Agreement as
Exhibit E. The Agency review is separate from the City review and does not constitute approval
by the City and in no way limits the discretion of the City in reviewing and making decisions
regarding any discretionary or other permits required for the Development.
(b) The Developer has disclosed to the Agency that asbestos exists on the Property.
The Developer represents and warrants to the Agency that the Approved Rehabilitation Work
Plans include any necessazy measures identified in the Scope of Rehabilitation Work for the
containment or removal of asbestos existing on the Property. The Developer also represents and
warrants to the Developer that the Approved Rehabilitation Work Plans, also indentify any
necessary measures identified for remediation of any other hazardous materials located at the
Property or identified in a Phase I or Phase II environmental site assessment.
Section 3.6 �plicable Governmental Approvals.
(a) Within the time set forth in the Schedule of Performance, the Developer shall
apply for the Applicable Governmental Approvals necessary for performance of the
Rehabilitation Work in accordance with the Agency approved Scope of Rehabilitation Work and
in the manner contemplated by the Agency Loan Documents. Only upon delivery of evidence of
application for all Applicable Governmental Approvals to the Agency shall the condition of tl�is
Section 3.6(a) be deemed satisfied. If the Developer fails to deliver such evidence �vithin the
time set forth in the Scliedule of Performance, the Agreement may be terminated by the Agency
pursuant to Section 7.1 or Section 7.2, as applicable, and the Agency shall have the right to
exercise the Option to purchase the Development pursuant to Section'7.4.
(b) The Developer shall thereafter exercise diligent good faith efforts to obtain all
Applicable Governmental Approvals necessary for rehabilitation of the Development and the
operation of the Development within the time set forth in the Schedule of Performance. Only
upom delivery of evidence of receipt of all applicable Governmental Approvals to the Agency
shall the conditiori of this Section 3.6(b) be deemed satisfied. If the Developer fails to deli'ver
such evidence within the time set forth in the Schedule of Performance, the Agreement may be
terminated by the Agency pursuant to Section 7.1 or Section 7.2, as applicable and the Agency
- shall have the right to exercise the Option to purchase the Development pursuant to Section 7.4.
(c) The Developer acknowledges that execution of this Agreement by the Agency
does not constitute approval by the City of any required Applicable Governmental Approvals
and in no way limits the discretion of the City in the pern�it, allocation and approval process.
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OGardens Loan 3-8-I 1
Section 3.7 Tax-Exempt Bond Application.
(a) Within the time set fortti in the Schedule of Performance, the Developer shall
submit a timely and complete application to CDLAC for a preliminary allocation of tan-exempt
bonds, the net proceeds of which are intended to serve as the Bond Loan (as defined below) to
pay costs of the Rehabilitation Work. If the Developer is not successful in obtaining an
allocation of tax-exempt bonds in its frst application, the Developer shall submit a second
application within the time set forth in the Schedule of Performance. Only upon delivery of
evidence of the CDLAC application to the Agency shall this condition of Section 3.7(a) be
deemed satisfied. If the Developer fails to deliver such evidence or the Developer is
unsuccessful at obtaining an allocation of tax-exempt bonds within the time set forth in the
Schedule of Performance, the Agreement may be terminated by the Agency pursuant to Section
7.1 or Section 7.2, as applicable,,and the Agency shall have the right to exercise its Option to
purchase the Development'pursuant to Section 7.4.
(b) Upon award of the preliminary allocation from CDLAC, within the time set forth
in the Schedule of Performance, the Developer shall exercise diligent good faith efforts to obtain
a reputable lender reasonably acceptable to the Agency. The lender will purchase or sell'the tax-
exempt bonds and provide the Bond Loan to pay costs of the Rehabilitation Work using the net
proceeds of the tax-exempt bond in a form reasonably acceptable to the Agency. The Agency
shall review and reasonably approve or disapprove of the submitted lender information within
ten (10) days after submission. If Agency disapproves the lender.or Bond Loan terms, it shall
specify in writing the reasons for such disapproval. The Developer shall thereafrer submit a new
lender and/or Bond Loan ternis for Agency approval within fifteen (15) days of notification of
disapproval. The Agency shall.either'approve or disapprove the new lender and/or'Bond Loan
terms within fifteen (15) days of submission. If the Agency disapproves the lender or Bond
Loan terms, this Agreement may be terminated by the Agency pursuant to Section 7.1 or Section
7.2, as applicable, and the Agency shall have the right to eaercise its Option to purchase the
Development pursuant to Section 7.4. Only upon Agency approval of the lender and Bond Loan
terms shall the conditions of this Section 3.7 (b) be deemed satisfied. �
Section 3.8 Tax Credit Applications.
Within the time set forth in the Schedule of Performance, the Developer shall submit a
timely and complete application to TCAC for a preliminary reservation of 4% tas credits to pay
costsof the Rehabilitation Work. If the Developer is not successful in obtaining a reservation of
tax credits from TCAC in its first application, the Developer shall submit a second application
within the time set forth in the Schedule of Performance. Only upon delivery of evidence of the
TCAC application to the Agency, shall the requirements of this Section 3.8 be deemed satisfied.
dif the Debeloper fails ro deliver such evidence or the Developer is unsuccessful in obtaining an
preliminary reservation within the time set forth in the Schedule of Performance, the Agreement
may be terminated by the Agency pursuant to Section 7.1 or Section 7.2, as applicable, and the
Agency shall have the right to exercise its Option to purchase the Development pursuant to
Section 7.4.
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OGardens Loan 3-3-I I
Section 39 Tax Credit Investors Bids
Upon award of the preliminary reservation from TCAC, within the time set forth in the
Schedule of Performance, the Developer shall exercise diligent good faith efforts to obtain a
funding commitment from a reputable equity investor reasonably acceptable to the Agency.
Developer shall solicit at least three (3) bids from prospective tax credit investors and submit all
bids received for Agency approval. Such funding commitment shall be in a form reasonably
acceptable to tl�e Agency. The Agency shal] review and reasonably approve or disapprove of the
submitted equity information within fifreen (15) days after submission. If Agency disapproves
the equity investor or funding commitment, it shall specify in writing the reasons for such
disapproval. The Developer shall thereafter submit a new equity investor and/or funding
commitinent for Agency approval within fifreen (15) days of notification of disapprovaL The
Agency shall either approve or disapprove the new equity investor and/ar funding commitment
within fifreen (15) days of submission. If the Agency reasonably'disapproves the equify investor
or funding commitment, this Agreement may be terminated by the Agency pursuant to Section
7.1 or Section 7.2, as applicable, and the Agency shall have the right to exercise its Option to
purchase the Development pursuant to Section 7.4. Only upon Agency approval of the equity
investor and funding commitment shall the condition of this Section 3.9 be deemed satisfied.
Section 3.10 Other Approved Financina.
(a) The Developer is required to apply for and utilize, to the extent available„
Affordable Housing Program Funds ("AHP Loan") administered by the Federal Home Loan
Bank, County HOME Loan Funds ("HOME Loan") from the County of San Diego, Multifamily
Housing Program Loan Funds ("MHP Loan") administered by the California Department of
Housing and Community Development, and other sources of permanent financing to partially
finance the Development.
(b) AHP Loan. The Developer shall submit a timely and 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. To satisfy the requirements of
this Section 3.10(b), the Developer shall submit a timely and complete AHP Loan applicatiomfor
Affordable Housing Program's 2011 Round A Application due no later than April 1, 2011
Round A application deadline. If the Developer does not receive 'an AHP Loan in the 2009
Round A Application cycle, then the Developer shall submit a timely and complete application
for the 201'1 Round B Application cycle due no later than October 1, 201-1. If the Developer
does not receive an AHP Loan Commitment in the 2011 Round B Application cycle, then the
Agency may confer with the Developer in good faith for a period not to exceed sixty (60) days to
determine if,the Developer should submit a fiu-ther application for an AHP Loan in a subsequent
applicafion round or if a feasible and mutually acceptable alternate arrangement can be made to
finance the rehabilitation of the Development. Any agreement that is reacfied between the
parties regarding an alternative financing plan for the rehabilitation of the Development shall be
memorialized in an amendment to this Agreement. Submitting a timely and complete
application for an AHP Loan shall be a condition precedent to the Agency's obligation to
disburse the Rehabilitation Component.
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OGardens Loan 3-8-I 1
(c) Coupty HOM� Loan. The Developer shall submit a timely and complete
application for a County HOME Loan which .is, administered through a Notice of Funding
Availability process administered through the County�of San Diego Department of Housing and
Community Development. To satisfy the requirements of this Section 3.10(c) the Developer
shall submit a timely and complete County HOME Loan application pursuant to the Notice of
Funding Availability process administered by the County of San Diego Department of Housing
and Community Development for 2011 HOM� Loan fimds. If the Deyeloper does not receive a
County HOME Loan commifinent.in the 2011 Notice of Funding Availability process, then the
Agency may 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 for a County HOME Loan in a
subsequent Notice of Funding Availability application round or if a feasible and mutually
acceptable altemate arrangement can be made to finance the reha6ilitation of the Development.
Any agreement that is reached between the parties regarding an-.alternative financing plan for the
rehabilitation of the Development shall' be memorialized in an ainendment to this Agreement.
Submitting a timely and complete application for a County HOME Loan shall be a condition
precedent to the Agency's o6ligation to disburse the Rehabilitation'Component.
(d) MHP Loan. The Developer shall submit a timely and complete application for an
MHP Loan which is administered through the California Departrnent of Housing and
Community Development Notice of Funding Availability process administered through the
California Department of Housing,and Community Development. To satisfy the requirements of
this Section 3.10(d) the Developer shall submit a timely and complete MHP Loan application
pursuant to the Notice of Funding Availability process administered by the Oalifornia
Department of Housing and Community Development for 2011 MHP Loan funds. If the
Developer does not receive a MHP Loan commitment in the 2011 Notice of Funding Availability
process, then the Agency may confer with the Developer in good Faith ror a period not to exceed
sixty (60) days'to deterniine if the Developer should submit a furtl�er application for a MHP
Loan in a subsequent Notice of'Funding Availability application rounds or if a feasible and
mutually acceptable alternate arrangement can be made to finance the rehabilitation of the
Development. Any agreemenY that is reached between tl�e parties regarding an alternative
financing plan for the rehabilitation of the Development shall 6e memorialized in an amendment
' to this Agreement. Subtnitting a timely and complete application for a MHP Loan sh�all be a
condition precedent to the Agency's obligation to disburse the Rehabilitation Component.
(e) Other Financing. As set forth in the Schedule of Performance, in addition to the
Tas Credit Funds all other financing necessary to rehabilitate tl�e Development, as required and
approved by the Agency in the Financing Plan, shall be closed by the Developer prior to, or
simultaneously with' the funding of tl�e Rehabilitation Component. The Developer shall also
submit to the Agency evidence reasonably satisfactory to the Agency that any conditions to the
release or expenditure of funds described in the approved Financing Plan as the sources of funds
to pay the costs of reha6ilitating the Development have been met or will be met subject to the
Developer's satisfaction of standard disbursement preconditions required to be satisfied on a
periodic basis, for rehabilitating the Development. Submission by the Developer, and approval
by the Agency, of such evidence of funds availability shall be a condition precedent to the
Agency's obligation to disburse the Rehabilitation Component.
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OGardens Loan 3-8-I I
Section 3:11 Final Financin� Plan.
(a) Within the time set forth in 'the Scfiedule of Performance the Developer shall
submit for Agency approval a"Final Financing Plan" containing the following:
(1) An updated Rehabilitation Budget showing a "sources and uses"
breakdown of the costs of Rehabilitation Work and related development costs based ,on a
Financing Proposal previously approved by the Agei�cy.
(2) An operating proforma for the first thirty (30) years of operation of the
Development including-funding for the provision of resident services. If the Development does
not have a rental subsidy corriinitted, the Final Financing Plan shall demonstrate that the target
population can pay the proposed rents.
(3) Copies of all required funding commitments for performing the
Rehabilitation Work consistent with the Rehabilitation Budget, including approval of the Bond
Loan lender, and a preliminary tax credit reservation and an executed commitment letter from a
tax credit equity investor acceptable to the Agency. The funding for the Rehabilitation Work
shall include, but not be limitedSo, the following: (i) tax-exempt bond proceeds, (ii) four percerit
(4%) tax credits, (iii) AHP Loan funds, from the Federal Home Loan Bank of San Francisco or a
member institution (if available), (iv) County HOME Loan funds from the County of San Diego
(if available), (v) MHP Loan Funds from the Califomia Department of Housing and Community •
Development (if available), and (vi) any other private and public funds that may become
available. The Developer shall submit evidence of its efforts to receive competitive pricing on
the Tax Credits and proof of application for a County HOME Loan, an AHP Loan, a MHP Loan,
and other conventional loans as required under Section 3.8, 3.9 and 3.10 respectively;
(4) Any other information that is reasonably necessary to the Agency in
determining that tfie Developer has the financial capability to pay all costs of completing the
Rehabilitation Work in accordance with the requirements of this Agreement.
(b) The Agency shall .review the Final Financing Plan to determine if, in the
Agency's reasonable judgment, the Developer has the financial capability (taking into account
all committed funds), to pay al] realistically established costs of rehabilitating and operating the
Development. The Agency shall review the Final F'inancing Plan and shall either approve or
disapprove the Final Financing Plan in �vriting within fifreen (15) days of receipt. If'
di'sapproved, the Agency shall give specific reasons in writing for disapproval and the required
revisions to the previously submitted Final Financing Plan. [f the Final Financing Plan is
disapproved, the Developer shall resubmit, a revised Final Financing Plan within fifteen (15)
days of notification of disapproval. The Agency shall either approve or disapprove flie submitted
revised Final Financing Plan within fifteen (15) days of the date such revised Final Financing'
Plan is received by the Agency.
(c) If the Agency disapproves the revised Final Financing Plan, this Agreement may
be terminated by the Agency pursuant to Section 7.1 or Section 7.2, as applicable, and the
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OGardens Loan 3-8-I 1 •
Agency shall'have the rigfit to exercise its Option to purchase the Development pursuant to
Sectiori 7.4. Only upun Agency approval of a Final Financi�g Plan shall the condition of tliis
Section 3:ll be deemed satisfied.
(d) The Developer shall submit any material revision to an approved Final Financing
Plan to the Agency for its review and approval. Any proposed revised Final Financing Plan shall
be considered and approved or disapproved by the Agency in the same manner and according to
the same timeframe set forth above for the initial Final Financing Plan. Until a revised Final
Financing Plan is approved by the Agency, the previously approved Fina] Financing Plan shall
govem the financing of tlie Development.
(e) The Developer acknowledges that execution of this Agreement by the Agency
does not constitute'a commitment by the Agency to provide any additional financial assistance to
the Developer and in no way limits the discretion of the Agency to determine any future
assistance amounts.
(Y) Under Section 33334.3(j) of the Redevelopment Law, Housing Funds may not be
used to the extent that other reasonable means of private or commercial financing of affordable
housing units are available, and, prior to the expenditure of Housing Fund monies to fiind more
than fifty percent of the cost of pro.ducing affordable housing units the Agency may make a
finding that the use of the Housing Funds is necessary because the Developer has been unable to
obtain commercial or private financing despite good faith efforts. At the time"of this Agreement,
it is projected that the Agency Loan may constitute more than fifty percent of the cost of
producing the units in the Development As required under Section 3.10 of this Agreement, the
Developer must continue to apply for commercial, private and public financing commitments
that may reduce the Agency's contribution to below fifry percent of the cost of producing the
units in the Development, and is further required to submit to the Agency substantial evidence of
good faith efforts to obtain such funding commitments to the extent they are available to finance
the units in the Development at the same level of affordability and quantity as prescribed in the
Amended Agency Regulatory Agreement. Prior to disbursing the Agency Loan, the Agency's
Executive Director or the Executive Director's designee, shall make a reasonable determination,
based on substantial evidence, (1) as to whether the Developer's has made sufficient efforts to
- obtain additional financing commitments for the Development, and (2) if applicable, as to
whether the Agency Loan is necessary to finance the rehabilitation of the units in the
Development at the same level of affordability and quantity as prescribed in the Agency
Regulatory Agreement.
Section 3.12 Manageinent and Marketin Pg lan.
(a) Within the time set foRh in the Schedule of Performance, the Developer shall
submit to the Agency for review, a proposed management and marketing plan (the "Management •
and Marketing Plan") for the leasing and operation of the Development.
(b) The Agency shall review the revised Management and Marketing Plan and either
reasonably approve or disapprove the Management and Marketing Plan within fifreen (l�) days
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OGardens Loan 3-8-I 1
after receipt. Any disapproval shall state in writing the specific reasons for the disapproval and
specify in reasonable detail all of the changes the;Agency requesfs be made in order to obtain
approval. The' Developer shall thereafrer su6mit the revised Management and Marketing Plan
within fifreen (15) days of notification of disapproval. The Agency shall either approve or
disapprove the submitted revised Management and Marketing Plan within fifteen (15) days of
the date such revised Management and Marketing Plan is received by the Agency, and ,shall
�approve the revised Management and Marketing Plan if the requested changes have been made.
(c) If the Agency disapproves the revised Managetnent and Marketing Plan, this
Agreement may be terminated by the Agency pursuant to Section 7.1 or Section 7.2; as
applicable, and the Agency shall have the right to exercise its Option to purchase •the
Development pursuant to Section 7.4. Only upon Agency approval of the revised Management
and Marketing Plan shall the condition of this Section 3.12 be deemed satisfied.
Section 3.13 Construction Contract.
(a) Developer shall competitively bid the construction contract for the Rehabilitation
Work, and submit copies of at least three (3) hard bids to the Agency for review and approval
prior to accepting any bid.
(b) Within the time set forih in the Schedule of Performance the Developer, shall
submit for Agency approval, copies of all general contractor construction bids and a construction
contract for the performance of the Rehabilitation Work between the Developer and a reputable,
qualified construction contractor reasonably acceptable to the Agency (the "Construction
ContracY'). The Agency shall review the construction bids and Construction Contract to
determine if it: (1) provides for performance of the Rehabilitation Work in accordance with the
Applicable Government Approvals and the approved Rehabilitation Work Plans; (2) provides for
costs of the Rehabilitation Work within the Rehabilitation Budget approved by the Agency as
part of the approved Final Financing Plan pursuant to Section 3.11; and (3) otherwise complies •
with the terms of the Agency Loan Documents.
(c) The Agency shall either reasonably approve or disapprove the submitted
Construction Contract within ten (10) days from the date the.Agency receives the Construction
Contract. If the proposed Construction Contract is not approved by the Agency, then the Agency
shall notify the Developer in writing of the reasons for disapproval and the required revisions to
, the previously submitted Construction Contract. The Developer shall thereafrer submit a revised �
Construction Contract �vithin ten (10) days of the notification of disapprovaL The Agency shall
either approve or disapprove the submitted revised Construction Contract within ten (10) days of
the date such revised Construction Contract is received by the Agency. The Agency shall
approve an initial or revised Construction Contract if it meets the standards set forth in
subsection (b) this Section 3.13 and is'with a licensed and experienced General Contractor.
(d) The construction contract will provide for a maximum fee to be charged by the
General Contractor and will set forth the process by which the General Contractor, the Developer
and the Agency representative will together review bids from and select each subcontractor for
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OGardens Loan 3-8-1 I
any'subcontracts exceeding,$25,000. The General Contractor will be responsible for requesting
at least three bids for each subcontractor. Together all' parties will select the subcontractor, for
each subcontract exceeding $25,000, to complete the work. Each party will have two business
days to review and respond to the subcontractor bids.
(e) If the Agency reasonably and in good faith disapproves the revised proposed
Construction Contract or any of the subcontractor bid selections, this Agreement may be
terminated by the Agency pursuant to Section 7.1 or Section 7.2, as applicable, and the Agency
shall have.the right to exercise its Option to purchase the Development pursuant to Section 7.4.
Only upon Agency approval of a Constniction Contract shall the condition of this Section 3.13
be deemed satisfied.
Section 3.14 Building Permit.
(a) Within the time set forth in the Schedule of Performance, the Developer shall
apply for a building permit for the Rehabilitation Work. Upon delivery of evidence of
application for such permit to the Agency this condition shall be considered satisfied. If the
Developer fails to deliver such evidence within the time set forth in the Schedule of Performance
the Agreement may be te��rninated by the Agency pursuant to Section 7.1 or Section 7.2, as
applicable, and the Agency shall have the right to exercise its Option to purchase the
Development pursuant to Section 7.4.
(b) The Developer shall exercise diligent good faith efforts to obtain the building
permit for the Rehabilitation Work within the time set forth in the Schedule of Performance.
Upon delivery of evidence of receipt of such permit to the Agency this condition shall be
considered satisfied. If the Developer fails to deliver such evidence within the time set forth in
the Schedule of Performance the Agreement may be terminated by the Agency pursuant to
Section 7.1 or Section 7.2, as applicable, and the Agency shall have the right to exercise its
Option to purchase the Development pursuant to Section 7.4.
Section 3.15 Insurance.
(a) Within the time set forth in the Schedule of Performance the Developer shall
submit to the Agency "Fvidence of Insurance Coverage" meeting the general requirements set
forth in Section 5.13 below. The Agency shall review and reasonably approve or disapprove of
the Evidence of Insurance Coverage not less than ten (10) days after'submission of complete
information in the forn� required by Agency. If Agency disapproves the Evidence of Insurance
coverage, it shall specify in w�riting the reasons for such disapproval. The Developer shall
resubmit the information required within ten (10) days of the notification of disapproval. The
Agency sfiall either approve or disapprove the submitted revised evidence of insurance �vithin
ten (]0) days of the date such revised information is received by the Agency. No work shall be
initiated on the Development prior to receipt of Agency's approval.
(b) If the Agency reasonably and in good faith disapproves the revised insurance
information, this Agreement may be terminated by the Agency pursuant to Section 7.1 or Section
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OGardens Loan 3-8-1 I
7.2 below as applicable, and the Agency shall have tlie right to exercise its Option to purchase
tfie Development pursuant to Section 7.4. Only upon Agency approval of the insurance,coverage
shall the condition of this Section 3.15 be deemed satisfied.
Section 3.16 Performance and Payment Bonds.
(a) Within the time set forth in the Schedule: of Performance, the Developer shall
deliver ro the Agency copies "of labor and material bonds and performance bonds for the
Rehabilitation Work in an amount equal to one hundred percent (100%) oPthe scheduled cost of
the Rehabilitation Work (the "Construction Bonds"). Such bonds shall: (1) be in a fonu
reasonably acceptably to the Agency, (2) be issued by a surety licensed to do business in
California and reasonably acceptable to the Agency, and (3) name the Agency as a co-obligee.
(b) The Agency shall either reasonably approve or disapprove the submitted proposed
Construction Bonds within fi8een (15) days from the date the Agency receives the Construction
Bonds. If the proposed Construction Bonds are not approyed by the Agency, then the Agency
shall notify the Developer in writing of the reasons for disapproval and the requiied revisions to
the previously submitted Construction Bonds. The Developer sfiall thereafter submit revised
proposed Construction Bonds within fifteen (15) days of the notification of disapprovaL The
Agency shall either approve or disapprove the submitted reyised Construction Bonds within
fifteen (15) days of the date such revised Construction Bonds are received by the Agency. The
Agency shall approve the initial or revised Conshuction Bonds if they meet the standards set
forth in subsection (a) of this Section 3.16.
(c) If the Agency reasonably and in good faitli disapproves the revised Construction
Bonds, this Agreement may be,tenninated by the Agency pursuant to Section 7.1 or Section 7.2
below as applicable, and the Agency shall have the right to exercise its Option to purchase the
Development pursuant to Section 7.4. Only upon Agency approva] of the Construction Bonds
shall the condition of this Section 3.16 be deemed satisfied. •
Section 3.17 Resident Services, Plan and Budget.
(a) Within the time set forth in the schedule of Performance, the Developer shall
fumish to the Agency a drafr ResidentServices Plan and Resident Services Budget for'the initial
year of operating following completion of the Rehabilitation work. Upon receipt by the Agency
of.the proposed Resident Services Plan and Resident Services Budget, the Agency shall promptly
rediew the same,and approve or disapprove it within ten (10) working days. If the Resident
Services Plan and/or Resident Services Budget are not approved by the Agency, the Agency
shall set forth in �vriting and notify the Developer of the Agency's reasous for withholding such
approval, which may include a request by the Agency for a change in the nature or scope of
resident services or a change in service provider.
(b) The Developer shall thereafrer submit a revised Resident Services Plan and/or
Resident Services Budget for Agency approval pursuant to the terms of Section 3.7 of the
Amended and Restated Agency Regulatory Agreement.
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OGardcns Loan 3-8-11
Section 3.18 Evidence of Availability of Funds.
Within the time set forth in the'Schedule of Performance, the Developer shall submit to
the Agency evidence reasonably satisfactory to the Agency that any conditions to release or
expend funds described in the approved Final Financing Plan for the purpose of paying the costs
of the Rehabilitation Work have been satisfied or will be satisfied at,the time of Commencement
of Rehabilitation Work set forth in Section 4.3 below. The Agency shall either reasonably
approve or disapprove the submitted inforniation within fifteen (15) days from the date the
Agency receives the information. Only upon approval of such evidence in a form satisfactory to
the Agency shall the condition of this Section 3.18 be deemed satisfied. If the Agency
disapproves the evidence of funding availability, this Agreement may be terminated by the
Agency pursuant to Section 7.1 or Section 7.2 below as applicable, and the Agency shall have
the right to exercise its Option to purchase the Development pursuant to Section 7.4.
ARTICLE 4
REHABILITATION OF THE DEVELOPMENT
Section 4.1 Permits and Approvals.
All permits and approvals necessary for the rehabilitation of the Improvements on the
Property must be received no later than the dates set forth in the Schedule of Perfonnance, or the
Agency, at its option, and with thirty (30) days prior written notice to the Developer and
opportunity to cure, may declare Developer in default hereunder.
Section 4.2 Approved Scope of Rehabilitation Work.
As of the date of this Agreement, the Agency has approved the Approved Scope of Work,
attached hereto as Exhibit D. Prior to commencement of rehabilitation, Developer shall obtain
approval of a Development Review Permit from the City's Development Services Department
and shall implement all improvements required pursuant to those approvals.
Section 4.3 Commencement of Rehabilitation Work.
The Developer shall cause the Commencement of tl�e Rehabilitation Work in a manner
consistent with the approved Rehabilitation Work Ylans and all Applicable Govefnmental
Approvals no later than the date set forth in the Schedule of Performance, subject to Eorce
Maj eure.
Section 4.4 Completion of Rehabilitation Work.
The Developer shall diligently complete the Rehabilitation �Vork in a manner consistent
with the approved Rehabilitation Work Plans and shall cause Completion of Rehabilitation to
occur no later than the date set forth in the Schedule of Performance; subject to Force Majeure.
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OGardens Loan 3-8-I 1
Section 4.-5 Performance of Work Pur§uant to Plans and Laws; Prevailing Waees.
(a) Changes. The Developer shall compl_ete the Rehabilitation Work in conformance
with the Rehabilitation Work Plans approved by the Agency. The Developer shall notify the
Agency in a timely manner of any changes in the work required to be performed under this
Agreement, including any additions, changes, or deletions to the Rehabilitation Work Plans. A
written change order authorized by the Agency must be obtained before any of the following
changes, additions, or deletions in Rehabilitation \vork may be performed: (1) any change in the
Rehabilitation Work the cost of which exceeds T�venty-Five Thousand Dollazs ($25,000); ar (2)
any set of changes in the Rehabilitation Work the cost of which cumulatively exceeds Fifty
Thousand Dollars ($50,000); or (3) any material change in building materials or equipment,
specifications, or the structural or architectural design or appearance of the Development as
provided for in the Rehabilitation Work Plans. Agency consent to any additions, changes, or
deletions to the work (collectively, "Changes") shall not relieve or release the Developer from
any other obligations under this Agreement, or relieve or release the Developer or its surety from
any surety bond. Agency consent to any Changes does not relieve the Developer from any
requirements to receive approval from the City for such Changes. The Agency shall utilize best
efforts to approve or disapprove change orders within five (5) working days of receipt of a
request for approval.
(b) Compliance with Laws. The Developer shall cause all Rehabilitation Work
performed in connection with the Development to be performed in compliance with: (1) all
applicable laws, ordinances, rules and regulations of federal, state, county or municipal
governments or agencies now in force or that may be enacted hereafter, including (without
limitation and to the extent applicable) the prevailing wage provisions of Sections 1770 et seq.,
of the Califomia Labor Code and implementing rules and regulations, and (2) all directions, rules
and regulations of any fire marshal, health officer, building inspector, or other officer of every
govemmental agency now having or hereafrer acquiring,jurisdiction. The work shall proceed
only afrer procurement of each permit, license, or other authorization that may be required by
any govemmental agency having jurisdiction, and the Developer sl�all be responsible to the
Agency for the procurement and maintenance thereof, as may be required of the Developer and
all entities engaged in work on the Development.
(c) State Prevailing Wages. This Agreement has been prepared with the intention
that the Agency assistance under this Agreement meets the exceptions set forth in Labor Code
Section 1720(c)(6)(E) to the general requirement tliat state prevailing wages be paid in
connection with construction work that is paid for in whole or in part out of public funds;
provided, however, that nothing in this Agreement constitutes a representation or warranty by
any party regarding the applicability of the provisions of Labor Code Section 1720 et seq., and
.. the hiring of apprentices pursuant to Labor Code Section Sections 1777.5 et seq., and the
' Developer shall comply with any laws related to construction wages pursuant to Labor Code
Section 1720 et seq., and Labar Code Section Sections 1777.5 et seq., and implementing
regulations of the Department of Industrial Relations (the "DIR"), as required by the Approved
Financing, if and to the extent applicable to the Development. As applicab]e, the Developer shall
pay and shall.cause the contractor and subcontractors to pay prevailing wages in conneciion with
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OGazdens Loan 3-8-I 1
the Rehabilitation Work,-as those wages are'defermined pursuant to Labor Code Sections 1720 et
seq., ro employ apprentices ,as required by Labor Code ,Sections 1777.5 et seq., and the
implementing,regulations oF the Department of Industrial'Relations (the "DIR"). The Developer
shall indemnify, hold harmless,and defend (with counsel reasonably acceptable to the City) the
City against any claim For damages, compensation, fines, penalties or other amounts arising out
of the failure or alleged failure'of any person or entity (including the Developer, its contractor
and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections ..
1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and
implementing regulations of the DIR or to comply with the other applicable provisions of Labor
Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in
connection with the Rehabilitation Work or any other work undertaken or in connection with the
Development. The requirements in this Subsection shall survive the repayment of the Agency
Loan, and the reconveyance of the Agency Deed of Tnxst.
(d) Accessibility Requirements. The Developer shall rehabilitate the Development to
comply with all applicable federal and state disabled persons accessibility requirements
including but not limited to tfie Federal Fair Housing Act, Section.504 of the Construction Act of
1973, Title II and/or Title III of the Americans with Disabilities Act of 1990, and Title 24 of the
Califomia Code of Regulations. ,
Section 4.6 Equal Opportunitv.
During the performance of the Rehabilitation Work there shall be no discrimination on
the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national
origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged
in the construction work.
Section 4.7 Progress Reports; Amended Rehabilitation Bud�et.
Until such time as the Developer has received certificates of occupancy, or a comparable
document issued by the City, for the Development, the Developer shall provide the Agencywith
quarterly progress reports regarding the status of the Rehabilitation Work, including a
certification that the actual rehabilitation costs to date confonn to the Rehabilitation Budget. The
Developer shall submit any required amendments to the Rehabilitation Budget to the Agency for
approval within fifreen (15) days of the date the Developer receives information indicating"that
actual costs of the Development vary or will vary from the costs shown on the latest approved
Rehabilitation' Budget. Written consent of the Agency shall be required to amend the
Rehabilitation Budget.
Seciion 4.8 Construction Responsibilities.
(a) It shall be the responsibility of the Developer to coordinate and schedule the work
to be performed so that Commencement of Rehabilitation Work and Completion of
Rehabilitation Work will take place in accordance with this Agreement.
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OGardens Loan 3-8-11
(b) The_ Developer shall be solely responsible for all aspects of the Developer's
conduct in connection with the Development, including (but not limited to) the quality and
suitability of the Rehabilitation Work, the supervision of construction work, and the
qualifications, financial condition, and performance of all architects, engineers, contractors,
subcontractars, suppliers, 'consultants, and property managers. Any review or inspection
undertaken by the Agency with reference to the Development is solely for the purpose of
determining whether the Deyeloper is properly discharging its obligations to the Agency, and
should not be relied upon by the Developer or by any third par[ies as a warranty or representation
by the Agency as to the quality of the design or rehabilitation of the Development and does not
relieve the Developer, or its consultants, from any applicable requirement to obtain City approval
and/orinspections.
Section 49 Mechanics Liens Stop Notices and Notices of Comoletion.
(a) If any claim of lien is filed against the Property or the Improvements or a stop
notice affecting the Agency Loan is served on the Agency or any other lender or other third party
in connection with the Rehabilitation Work, then the Developer shall, within fifreen (15) days
after such filing or service give notice to the Agency of the claim of lien, and within diirty (30)
days either pay and fully discliarge the lien or stop notice, effect the release of such lien or stop
notice by deliveri�ig to the Agency a surety bond from a surety acceptable to the Agency in
sufficient form and amount, or provide the Agency with other "assurance satisfactory to the
Agency that the claim of lien or stop notice will be paid or discharged.
(b) If the Developer fails to discharge any lien, encumbrance, chazge, or claim in the
manner required in this Section, then in addition to any other right-or remedy, the Agency may
(but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at the
Developer's expense. Altemately, the Agency may require the Developer to immediately
deposit �vith the Agency the amount necessary to satisfy such lien or claim and any costs,
pending resolution thereo£ The Agency may use such deposit to satisfy any ciaim or lien that is
adversely determined against the Developer.
(c) The Developer shall file a valid notice of cessation or notice of completion upon
cessation of rehabilitation of the Development for a continuous period of thirty (30) days or
more, and take all other reasonable steps to farestall the assertion'of claims of lien against the
Property and/or Improvements. The Developer authorizes the Agency, but without any
obligation, to record any notices of completion or cessation of labor, or any other notice that the
Agency deems necessary or desirable to protect its interest in the Development.
Section 4.10 Inspections.
The Developer shall permit and facilitate, and shall require its contractors to permit and
facilitate, observation and inspection at the Development by the Agency and by public
autl�orities during reasonable business hours for the purposes of determining compliance with
this Agreement. Such inspections do not relieve the Developer, or its contractors, from any
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OGardens Loan 3-R-11
applicable requirement to obtain City inspections in connection with the rehabilitation of the
Developmen4.
Section 4.1 I Approved Development Budget Revisions to Budget.
As of the date of this Agreement, the Agency has approved the Approved Development
BudgeY as set forth in Exhibit B. Developer shall submit any required amendments to the
Approved Development Budget to the Agency for approval within fifteen (15) days of the date
Developer receives information indicating that actual costs of the Development vary or will vary
from the costs shown on the Approved Development Budget. Written consent of the Agency
shall be required to amend the Approved Development Budget. Agency shall utilize best efforts
to approve or disapprove requeste.d amendments to the Development Budget within five (5)
working days of receipt of a request for approval.
Section 4.12 Developer Fee.
In no event shall developer fees paid to any entity for development services rendered,
including administrative fees and costs in connection with the Development and deferred
developer fees exceed One Million Four Hundred Thousand Dollars ($1,400,000); of which not
less than Two Hundred Thousand Dollars ($200,000) shall be defened, as further shown in the
Final Financing Plan. The Developer may draw down available funds to pay the Developer Fee
in the following manner: ,
(a) Up to "Chree Hundred Sixty Thousand Dollars ($36Q,000) of the lleveloper Fee
may be paid from available proceeds of the Rehabilitation Component at Close of Escrow.
(b) Up to Tluee Hundred Sixty Thousand Dollazs ($360,000) of the Developer Fee
may be paid from available proceeds of the Rehabilitation Component at 50% Completion.
(c) Three Hundred Sixty Thousand Dollars ($360,000) of the Developer Fee may be
paid froin proceeds of the Completion Component.
(d) Oue Hundred Twenty Thousand Dollars ($120,000) of the Developer Fee may be
paid from proceeds of the Conversion Component.
(e) Two Hundred Thousand Dollars ($200,000) of the Developer Fee shall be
deferred and paid as, an Annual Operating Expense of the Development pursuant to Section
2.13(fl(1); unless paid from Rehabilitation Cost Savings pursuant to Section 2.11(a)(1).
ARTICLE 5
ONGOING OBLIGATIONS
Section 5.1 Financial Accountings and Post-Completion Audits.
' Within the time specified in the Schedule of Performance, the Developer shall provide to
Agency a financial accounting of all sources and uses of funds for the Rehabilitation \�Jork. No
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OGardens Loan 3-8-I 1
later than one hundred fifty (I50) calendar days foll'owing completion of Rehabilitation Work,
the Developer.shall submit�an audited financial report showing the sources and uses of all funds
utilized for the Development, as well'as a copy of form 8609'that the Developer is required to
submit to TCAC.
Section 5.2 Municipal'Services Fee.
No later than April lst.of each calendar year, commencing with April 1, 2012, Developer
shall pay to the City an annual payment of Seven Hundred Thirty-Three Dollars ($733) for each
Unit in the Development, to pay for costs of municipal services that will be provided to
Residents of the Development.
Section 5.3 Information.
The Developer shall provide all information reasonably requested by the Agency in
connection with the Rehabilitation Work and the operation of the Development.
Section 5.4 Records.
(a) The Developer shall maintain complete, accurate, and cunent records pertaining
to the Rehabilitation Work and the operation of the Development for a period of five (5) years
afrer the creation of such records and shall pennit any duly authorized representative oF the
Agency to inspect and copy such records. Such records shall include all invoices, receipts, and
other documents related to expenditures from the Agency Loan funds. Records must be kept
accurate and current.
(b) The Agency shall notify the Developer of any records it deems insufficient. The
Developer shall have fifteen,(1'S) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the Agency in such notice, or if a period longer than fifreen
(15) days is reasonably necessary to correct the deficiency, then the Developer shall begin to
correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably
possible.
Section 5.5 Audits.
The Developer shall make available for examination, at reasonable intervals and during
normal business hours, and upon twenty-four (24) hours notice, to Agency all books, accounts,
reports, files, and,other papers or property with respect to all matters covered by this Agreement,
and shall pemiit Agency to audit, examine, and make excerpts or transcripts from such records.
Agency may make audits of any conditions relating to this Agreement.
Section 5.6 Hazardous Materials.
(a) Upon acquisition of the Development, the Developer shall keep and mainfain the
Development in compliance with, and shall not cause or permit the Development to be in
violation of airy federal, state or local laws, ordinances or regulations relating to industrial
40
OGardens Loan 3-8-I I
hygiene or to the environmental conditions on; under or about the Development including, but
not limited to, soil and ,ground water conditions. The Developer shall not use, generate,
manufacture, store or dispose of on, under, or about the D"evelopment or transport to or from the
Development any flammable explosives, radioactive materials, hazardous wastes, toxic
' substances or relafed materials, including without limitation, any substances defined as or
induded in the definition of"hazardous substances," hazardous wastes," "hazardous materials,"
or "toxic substances" under any applicable federal or state laws or regulations (collectively
refened to hereinafrer as "Hazardous Materials") except such of the.foregoing as may be used in
rehabilitation of the Development or customarily kept and used in and about residential property
of this type.
(b) The Developer shall immediately advise the Agency in writing if at atty time it
receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened against the Developer or the
Development pursuant to any applicable federal, state or local laws, ordinances, or regulations
relating to any Hazardous Materials, ("Hazardous Materials Law"); (2) all claims made or
threatened by any third pariy against the Developer or the Development relating to damage,
contribution, cost recovery compensation, loss or injuty resulting from any Hazardous Materials
(the matters set forth in clauses (1) and (2) above are hereinafrer referred to as "Hazardous
Materials Claims"); and (3) the Dev.eloper's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Development that could cause the Development 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 Development under any Hazardous Materials Law.
(c) The Agency shall_have the right to join and participate in, as a Party if it so elects,
any legal proceediugs or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attomeys' fees in connection therewith paid by the Developer. The
Developer shall indemnify and hold harmless the Agency and the City and their council
members, board members, directors, officers, employees, agents, successors and assigns from
and against any loss, damage, cost, expense or liability direcUy or indirectly arising out of or
attributabie to the use, generation, storage, release, threatened release, discharge; disposal, or
presence of Hazardous Materials on, under, or about the Development (including asbestos)
including without limitation: (]) all foreseeable consequential damages; (2) the costs of any
required or necessary repair, cleanup or detoxification of the Development and [he preparation
and implementation of any closure, remedial or other required plans; and.(3) all reasonable costs
and expenses incurred by the Agency in connection with clauses (1) and (2), including but not
limited to reasonable attorneys' fees. This obligation to inderrinify shall survive termination of
this Agreement.
(d) Without the Agency's prior written consent, which shall not be unreasonably
withheld, the Developer shall not take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Development, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
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OGardens Loan 3-8-I!
wfiich :remedial action, settlement, consent decree or compromise might, in the Agency's
reasonable judgment, impair the value of the Agency's security hereunder; provided, however,
that the Agency's prior consent shall not be necessary in the event that the presence of
Hazardous Materials on, under, or about the Development either poses ar� 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 possible to obtain the Agency's consent before
. taking such action, provided that'in such event the Developer shall notify the Agency as soon as
practicable of any action so taken. The Agency 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) the Developer will or may be subjected to civil or criminal sanctions
or penalties if it fails to take a required action; (3) the Developer establishes to the reasonable
satisfaction of the Agency that there is no reasonable alternative to such remedial action which
would result in less impairment of the Agency's security hereunder; or (4) the action has been
agreed to by the Agency.
(e) The Developer hereby acknowledges and agrees thar (1) this Section is intended
as the Agency's written request for information (and the Developer's response) concerning the
environmental condition of the Development as required by California Code of Civil Procedure
Section 726.5, and (2) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach oF any such representation and warranty) witl�
respect to the environmental condition of the Development is intended by the Parties to be an
"environmental provision" for purposes of Califomia Code of Civil Procedure Section 736.
(� In the event that any portion of the Development 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
Agency's ar the trustee's rights and remedies under the Deed of Trust, the Agency 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 Development, and (2) exercise (i)
the rights and remedies of an unsecured creditor, including reduction of its claim against the
Developer to judgment, and (ii) any other righfs and remedies permitted by law. For purposes of
determining the Agency righf to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Developer shall be deemed to have willfully permitted or
� acquiesced in a release ar threatened release of hazardous materials, within the meaning of
California-Code of Civil Procedure Section 7265(d)(1), if tbe 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 Developinent and the Developer knew or 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 eapenses, including (but not limited to) attomeys' fees,
incurred by the Agency 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 Development is environmentally impaired, plus interest
thereon at the rate specified in the Note until paid, shall be added to the indebtedness secured by
42
OGardens Loan 3-ft-I I
the Deed of Trust and shall be due and payable to the Agency upon its demand made at any time
following the conclusion of such action.
(g) The Developer has disclosed to the Agency that asbestos exists on the Proper[y.
Pursuant to the terms of Section 5.6(c) above, the Developer hereby indemnifies the Agency for
any and all liability resulting from or related to the presence of asbestos on the Property.
Section 5.7 Maintenance and Dama e.
(a) During the course of both rehabilitation and operation of the Development, the
Developer shall maintain the Development in good repair and in a neat, clean and orderly
condition. If there arises a condition in contravention of this requirement, and if the Developer
has not cured such condition within thirty (30) days after receiving a notice from the_Agency of
such a condition, then in addition to any other rigl�ts available to the Agency, the Agency shall
have the right to perform all acts necessary to cure such condition, and to establish or enforce a
lien or other encumbrance against the Property.
(b) Subject to the requirements of senior lenders, and if economically feasible in the
Agency's reasonable judgment afrer consultation �vith the Developer, if any improvement now or
in the future on the Property is damaged or destroyed, then the Developer shall, at its cost and
expense, diligently undertake to repair or restore such improvement consistent with the plansand
specifications approved by the Agency with such changes as have been approved by the Agency.
Such work or repair shall be wmmenced no later than the laler of one hundred twenty (120)
days, or such longer period approved by the Agency in writing, afrer the damage or loss occurs
or thirty (30) days following receipt of the insurance proceeds, and shall be complete within one
(1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be
applied to the cost of such repairs or restoration and, if such insurance proceeds shall be
insufficient for such purpose, then the Developer shall make up the deficiency. If the Developer
does not make repairs, then any insurance proceeds collected for such damage or destruction
shall be distributed as if such proceeds were Residual Receipts (as defined in Section 2.13),
subject to the rights of the senior lenders.
Section 5.8 Fees and Taxes.
(a) The Developer shall be solely responsible for payment of all fees, assessments,
tazes, charges, and levies imposed by any public authority or utility company witl� respect to the
Development to the extent owed by the Developer, and shall pay such charges prior to
delinquency. However, the Developer shall not be required to pay and discharge any such
charge so long as: (1) the legality thereof is being contested diligently and in good faith and by
appiopriate proceedings, and (2) if requested by the Agency, the Developer deposits with the
Agency any funds or other forms of assurance that the Agency in good faith from time to time
determines appropriate to protect the Agency from the consequences of the contest being
unsuccessful.
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OGardens Loan 3-8-I1
(b) The Agency acknowledges that the:Developer intends to apply to the State Board
of Equalization for a welfare exemption from. property ta�es under California Revenue and
Ta�cation Code Section-214 for the Development. 'Nothing in this Agreement shall prohibit the
Developerfrom applying for and obtaining a welfare exemption for the Development.
Section 5.9 Notice of Liti�ation.
The Developer shall promptly notify the Agency in �vriting oi_any litigation related tu the
Development, and any litigation related to the Developer for which the amount claimed or at
issue is in excess of Fifry Thousand Dollars ($50,000), and of any claims or disputes related to
the Development that involve a material risk of litigation.
Section 5.10 O�eration of Development as Affordable Housing.
(a) Promptly following the completion of the Rehabilitation Work, the Developer
shall continuously operate and maintain the Development as multifamily housing rented to low
and moderate-income tenants in conformity with this Agreement and the Agency Regulatory
Agreement recorded against the Property.
(b) The maximum household income of a household occupying a Unit, and the total
charges for rent, utilities, and related services to each household occupying a Unit, shall be
maintained as provided in the Agency Regulatory Agreement.
Section 5.11 Non-Discrimination.
In satisfaction of Health and Safety Code Sections 33435 and 33436, the Developer shall
prohibit, during the rehabilitation and operation of the Development, all discrimination on the
basis of race, color, creed, religion, sex, sexual orientation, marital status, source of income,
national origin or ancestry in the hiring, firing, promoting or demoting of any person engaged in
the construction work, nor shall the Developer or any person claiming under or through the
Developer 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 iri the Development.
Section 512 Mandatorv LanQUa�e in All Subsequent Deeds Leases and Contracts.
All deeds, leases or contracts made or entered into by the Developer, its successors or
assigns, as to any portion of the Development shall contain therein the following language:
(a) In Deeds:
"(1) Grantee herein 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 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
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OGardens Loan 3-8-I I
12955.2 of the Govemment 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.
(2) NotwitHstanding paragraph (1), �vith respect to familial status, paragraph
(1) shall not be construed to apply to housing.for older persons, as defined_in Section 1Z955.9 of
the Govemment Code. With respect to familial status, nothing in paragraph (I) shall be
construed to affect Sections 51.2, 513, 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 Civi] Code
and subdivisions (n), (o), and (p) of Section 12955 of the Govemment Code shall apply to
paragraph (1)."
(b) In Leases:
"(1) Lessee herein covenants by and for itself, its successors and assigns, and
all persons claiming under or through them, that there shall be nu discrimination against or
segregation of, any person ar 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 leasing, subleasing, transferring, use, occupancy, tenure
or enjoyment of the premises herein leased nor shall the lessee or any person c]aiming"under or
through the lessee, 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, sublessees, subtenants, or vendees in the premises herein leased.
(2) Notwithstanding paragraph (1), �vith respect to familial status, paragraph
(1) 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 (I) shall be
construed to affect Sections 51.2, 513, 51.4, 5110, 51.11, and 799.� 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 Govemment Code shall apply to
paragraph (1)."
(c) In Contracts:
"(1) There shall be no discriinination 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 nor
shall the transferee or any person claiming under or through the transferee establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
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OGardens Loan 3-8-11
location, number; use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph
(1) 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 (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, �I.10, Sl.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 Govemment Code shall apply to
paragraph (1)."
Section 5.13 Insurance Requirements.
The Developer shall maintain the following insurance coverage tl�roughout the Term:
(a) Workers' Compensation insurance to the extent required by la�v, including
Employer's Liability coverage, with limits not less than Two Million Dollars ($2,000,000) each
accident.
(b) Commercia] General Liability insurance with limits not less than Two Million
Dollars ($2,000,000) each occurrence, Five Million Dollars ($2,000;000) combined, for Bodily
Injury and Property Damage, including coverage for Contractual Liability, Personal Injury,
Broad Form Property Damage, and Products and Completed Operations.
(c) Comprehensive Automobile Liability insurance with limits not less than T�uo
Million Dollars ($2,000,000) each occurrence combined single limit for 'Bodily Injury and
Property Damage, including coverage for owned, non-owned and hired vehicles, as applicable;
provided, ho�vever, that if the Developer does not own or lease vehicles for purposes of this
Agreement, then no automobile insurance shall be required.
(d) Upon acquisition of the Property, property insurance, including during the course
of construction builder's risk insurance, covering the Development, in form appropriate for the
nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent
(100%) of the replacement value, with deductible, if any, acceptable to the Agency, naming the
Agency as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if
required by applicable federal regulations.
(e) 1'he Developer shall cause any general contractor, demolition contractor, or agent
working on the Development under direct contract with the Developer to maintain insurance of
the types and in at least the minimum amounts described in subsections (a) through (d) above,
and shall require that such insurance shall mcet all of the general requirements of subsections (t),
(g) and (h) below. Subcontractors working on the Development under indirect contract with the
Developer shall be required to maintain the insurance described in subsections (a), (b) and (c)
above, except that the limit for the insurance described in subsection (b) may be One Million
Dollars ($1,000,000). Liability and Comprehensive Automobile Liability insurance to be
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OGardens Loan 3-8-11
maintained by such contractors and agents pursuant to this subsection shall name as additional
insureds the Agency, its boardmembers, officers, agents, and employees, as well as the City.
(� The required insurance shall be provided under ,an occurrence form, and the
Developer shall maintain such coverage continuously throughout the Term. Should any of the
required insurance be provided under a form of coverage that includes an annual aggregate limit
or provides that claims investigation or legal defense costs be included in such annual aggregate
]imit, such annual aggregate limit shall be three times the occurrence limits specified above.
(g) Comprehensive General Liability, Comprehensive Automobile Liability and
Property insurance policies (including builders' risk) shall be endorsed to name as an additional
insured the City; the Agency, and their officers, council members, board members, agents, and
employees.
(h) All policies and bonds shall contain (i) the agreement of the insurer to give the
Agency at least thirty (30) days notice prior to cancellation (including, without limitation, for
nanpayment of premium) or any material change in said policies; (ii) an agreement that such
policies are primary and non confributing with any insurance that may be carried by the Agency;
(iii) a provision that no act or omission of the Developer shall affect or limit the obligation of the
insurance carrier to pay the amount of any loss sustained; and (iv) a waiver by the insurer,oF all
rights of subrogation against the Agency and its authorized parties in connection �vith'any loss or
damage thereby insured against.
(i) If in connection with the use of the Agency Loan funds, death, serious personal
injury, or substantial property damage occurs, the Developer shall immediately notify the
Agency. The Developer shall promptly submit to the Agency a written report, in such form as
may be required by the Agency, of all accidents which occur in connection with this Agreement.
This report shall include the following infonnation: (1) name and address of the injured or
deceased person(s); (2) name and address of the Developer's contractor or subcontractor, if any;
(3) name and address of the Developer's liability insurance carrier; and (4) a detailed description
of the accident and whether any of the Agency's equipment, tools or material were involved.
(j) Upon the Agency's request at any time during the term of this Agreement, the
Developer shall provide certificates of insurance, in form and with insurers reasonable
acceptable to the Agency, evidencing compliance with the requirements of this Section, and shall
proyide complete copies of such insurance policies, including a separate endorsement naming the
Agency as additional insured.
Section 5.14 Definition of Transfer.
For purposes of this Agreement, "Transfer'' shall mean any sale, assignment, or transfer,
whether voluntary or involuntary, of: (a) any rights and/or duties under this Agreement, and/or
(b) any interest in the Development, and(or (c) any interest in the Development, including (but
not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a
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OGardens Loan 3-8-I I
leasehold interest, a security interest, or an interest evidenced by a land contract by which
possession of the Development is transferred and the Developer retains title.
Section 5.15 Purpose of Restriction on Transfer.
This Agreement is entered into solely for the purpose of the Developer's rehabilitation
and operation of the Development in accordance with the terms of this Agreement and the
Regulatory Agreement The qualifications and identity of the Developer are of particular
concern to the Agency, in view of:
(a) The importance of the rehabilitation of the Development to the general welfare of
the community;
(b) The public aids that have been made available by law and by the governinent for
the purpose of making such development possible;
(c) The reliance by the Agency upon the unique qualifications and ability of the
Developer to serve as the catalyst for rehabilitation of the Development and upon the continuing
interest which the Developer �vill have in the Development to assure the quality of the use,
operation, and maintenance deeined critical by the Agency in the rehabilitation of the
Development;
(d) The fact that a change in ownership or control of the owner of the Development,
or of a substantial part thereof, or viy other act ar transaction involving or resulting in a
significant change in ownership or with respect to the identity of the parties in control of the
Developer or the degree thereof, is for practical purposes a transfer or disposition of the
Development; and
(e) The importance to the Agency of the standards of use, operation, and maintenance
of the Development.
It is because of the qualifications and identity of die Developer that the Agency is
entering into this Agreement and that Transfers are permitted only as provided in this
Agreement.
Section 516 Prohibited Transfers.
The limitations on "franslers set forth in this Article Five shall apply throughout the
Agreement Term. Except as espressly permitted in this Agreement, the Developer represents
that it has not made or created, and agrees that it will not make or create or suffer to be made or
created, any Transfer, either voluntarily or by operation of law, witl�out the prior written
approval of the Agency, which consent the Agency may withhold at its sole discretion.
Any Transfer made in contravention of this Section 5.16 shall at the Agency's discretion
be void.and shall be deemed to be a default under this Agreement, whether or not the Developer
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OGardens Loan 3-8-I I '
knew of or participated in such Transfer. The loarr'shall automatically accelerate and be due in
full upon ahy unauthorized Transfer.
Section 5.17 Permitted Transfers Without Prior A en� cy Approval.
The term °Transfer" shall exclude the leasing of any single Unit in the Development to
an occupant in compliance with the Agency Regulatory Agreement. .
Section 5.18 Permitted Transfers With Prior A�encv Approval.
(a) Except as permitted under Section 5.17, any Transfer shall be permitted only
afrer:
(1) the Agency has delivered to the Developer its prior written approval of
such Transfer, which approval may not be unreasonably withheld, and
(2) the transferee has assumed the Developer's obligations under this
Agreement by signing this Agreement or such other reasonable documentation as the Agency
may require.
(b) Following completion of rehabilitation of the Development, the Agency shall not
unreasonably withhold its consent to a proposed Transfer, provided that the Agency reasonably
determines that the proposed transferee is qualified to operate the Development in compliance
with the Agency Regulatory Agreement including meeting the following requirements:
(1) the proposed transferee has at least five (5) years experience operating
multifamily rental housing developments comparable to the Development;
(2) the proposed transferee has no record 'of loan defaults, maintenance
problems, housing or building code violations, or substantiated fair housing complaints at
properties it has owned or operated; and
(3) the proposed transferee has satisfactory credit.
(c) The Agency hereby approves the sale of the limited partnership interests in the
Developer, provided that: (1) the amended partnership agreement of Developer provides for
capital contributions of the general and limited partners in the minimum amount as is necessary
for project feasibility; and (2) all documents associated with the low-income housing tax credit
syndication of the Development are submitted to the Agency for approval prior to esecution,
which approval shall not be unreasonably withheld. In the event that either general partner of the
Developer is removed by,the limited partner of the lleveloper for cause following default under
the Developer's parcnership agreement, the Agency hereby approves the transfer of the general '
partner interest to a 501(c)(3) tax-exempt nonprofit public benefit corporation that is selected by
the limited partner and approved in,advance and in �vriting by the Agency, which approval shall
not be unreasonably withheld.
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OGardens Loan 3-S-I 1
(d) The Agency also hereby approves future Transfers of the limited partner interest
provided that (1) such Transfers do nof affect tlie timing and amount of the limited partner
capital contributions provided for in the amended partnership agreement approved by the
Agency; and (2) in such Transfers, a wholly owned affiliate of the initial limited partner retains a
membership or partnership interest and serves as a managing member or managing general
partner of the successor limited partner. '
(e) The Agency also hereby approves Transfer of the Development from the
Developer to Foundation or a nonprofit affiliate of Foundation, and an assumption of the Loan
by such transferee, provided that(1) the transferee expressly assumes the obligations of the
Developer under the Loan Documents, utilizing a form of assignment and assumption agreement
to be provided by the Agency, and (2) all funds maintained in the reserves of the Development
are transferred to the transferee with the Development and continue to be reserved solely to pay
operating costs or replacement costs of the Development.
ARTICLE 6
REPRESENTATIONS AND WARRANTI�S OF TH� DEVELOPER
Section 6.1 Representations and Warrar�ties.
Foundation and the Developer hereby, respectively represent and �varrant to the Agency
as follows; provided, however; Foundation shall make each such representat'ion and warranty
only as to itself or as to which Foundation has actual l:nowledge:
(a) Organization. .
(1) Foundation is a duly organized, validly existing nonprofit corporation and
is 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.
(2) The Developer is a duly organized, validly existing limited partnership
and is 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.
(b) Authority. The Developer has full power and authority to execute and deliver this
Agreement and to make and accept the borrowings contemplated hereunder, to ezecute and
deliver the Agency Loan Documents and all other documents or instruments executed and
delivered, or to be executed arid delivered, pursuant to this Agreement, and to perform and
observe the terms and provisions of all of the above.
(c) Authority of Persons �secuting Documeuts. This .Agreement and the Agency
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Foundation and the
Developer, respectively, and all actions required under Foundation's and the Developer's,
respectively, organizational documents and applicable governing law for the authorization,
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OGardens Loan 3-8-1 I
execution„delivery and,performancc of this Agreement and the Agency Loan Documents and all
other documents or instruments executed' and deliveied, or to be executed and delivered,
pursuant to this Agreement, have been duly'taken.
(d) Valid Binding Agreements. This Agreement and the Agency Loari Documents
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 or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Foundation and the
Developer, rzspectively, enforceable against Foundation and the Developer, respectively, in
accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the esecution nor delivery of this
Agreement and the Agency Loan Documents or of any other documents or instruments executed
and delivered, or to be executed or delivered, pursuant to this Agreement, nor the pedormance of
any provision, condition, covenant or other term hereof or thereof, will conflict with or result.in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Foundation and the Developer, respectively, or
any provision of the organizational documents of Foundation and the Developer, respectively, or
will conflict with or constitute a br`each of or a default under any agreement to which Foundation
and the Developer, respectively, are a Party, or will result in the creation or imposition of any
lien upon any assets or property of Foundation and the Developer, respectively, other"than liens
established pursuant hereto.
(� Compliance With Laws; Consents and Approvals. The Developer represents and
warrants that the rehabilitation of the Development will comply with all applicable laws,
ordinances, rules and regulations of"federal, state and local governments and agencies and with
all applicable directions, rules and regulations of the fire marshal, health officer, building
inspector and other officers of any such government or agency.
(g) Pending Proceedings. Neither the Developer nor any of Developer's general
partners, respectively, are in default under any law or regulation or under any order of any court,
board, commission or agency'whatsoever, and there are no daims, actions, suits or proceedings
pending or, to the knowled'ge of the Developer, and the Developer's general partners
respectively, threatened against or affecting the Developer, respectively, or the Rroperty, at law
or in eguity, before or by any court, board, commission or agency whatsoever which might;�if
determined adversely to the Developer or its general partners, respectively, materially affect the
Developer's or its general partners, respective ability to repay the Agency Loan or impair the
security to be given to the Agency pursuant hereto.
(h) Title to Land. At the time of recordation of the Agency Deed of Trust, the
Developer will"have good and mazketable'fee title to the Property and there will exist thereon or
with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than liens for current real property taxes and assessments not yet, due and payable, the
Bond Loan Deed of Trust, liens in favor of the Agency or approved in writing by the Agency.
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OGardens Loan 3-8-I 1
, (i) Financial Statements. The financial statements of the. Developer and other
financial data and inforrriation furnished by the, Developer to the Agency fairly present the
information contained therein. As.of the date of tliis Agreement, there has not been any adverse,
material change in the financial condition of the Developer from that shown by such financial
statements and other data and'information.
(j) Sufficient Funds. The Developer holds sufficient funds and/or binding
commitments for sufficient fundsto complete the acquisition of the Development.
(k) Taxes. Foundation and the Developer, respectively and their respectiye
subsidiaries have filed all federal and other material tax returns and reports required to be filed,
and have paid all federal arid othei material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their income or the'Property otherwise due and payable,
except those which are being con'tested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with generally accepted accounting
principles. There is no proposed tax assessment against Foundation or the Deyeloper,
respectively or any of their respective subsidiaries that could, if made, be reasonably espected to
have a material adverse effect upon the Property, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Foundation and the,Developer respectively,
and their respective subsidiaries, taken as a whole, which would be expected to result in a -
material impairment of the ability of the Developer to perform under any Loan"Document to
which it is a Party, or a material adverse effect upon the legality, validity, binding effect or
enforceability against the Developer of any Agency Loan Document.
ARTICLE 7
TERMINATION, DEFAULT AND REMEDIES
Section 7.1 No Fault Termination.
The following events constitute a basis for a Party, otherwise allowed by this Agreement,
to terminate this Agreement without the fault of the other:
(a) The Developer, despite good faith efforts, is unable to obtain Applicable
Goverrunental Approvals (Section 3.6 ) or building permits (Section 314), necessary to allow for
rehabilitation of the Development; or
(b) The Developer, despite good faith efforts, is unable to obtain an allocation of tax-
exempt.bonds for tlie Development in accordance with Section 3.7 above; or
(c) The Developer, despite good faith efforts, is unable to obtain a TCAC allocation
of tax credits for the Development or a tax credit investor commitment, in accordance with
Section 3.8 above; or
(dl The Developer, despite good faith efforts on the part of both-the Agency and the
Developer, i5 unable to obtain the Agency approval of the Developer's submitted Final
Pinancing Plan (Section 3.11); Scope of Rehabilitation Work (Section 3.3); Relocation Plan
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OGardens Loan 3-8-I I
(Section 3.4);.Applicable Governmental Approvals{Section 3.6); an Agency approved lender to
purchase the tax-exempt bonds (Section 3.7(b)); equity investor and/or equity funding
commitment (Section 3.8); Financing Plan (Section 3.11); Management and Marketing Plan
(Section 3.12); Gonstruction Contract (Section 3.13); Construction Bonds (Section 3.1'6); or
evidence of financing prior to start of construction (Section 3.18); or
(e) The Developer, despite good :,faith efforts, is unable to satisfy any other
requirement set forth in Article 3 within the time set forth in the Schedule of Performance.
Upon happening of any of the above-described events, the Agency and the Developer
shall meet and confer in good faith for a period not to exceed thirty (30) days to determine if a
feasible and mutually acceptable altemate arrangement can be made to continue with ttie
Development. If no agreement is reached by the parties within such thirty (30) day period, at the
election of-either Party, this,Agreement may be terminated by five (5) days written notice to the
other Party (the "Termination Notice"). Upon the effective date of the Temiination Notice
neither Party shall have any rights against or liability to the other except for the provisions that
state they survive termination of this Agreement, and the Agency shall have the right to exercise
its Option to purchase the Development pursuant to Section 7.4 belo�v.
Section 7.2 �vents of Default.
Each of the following shall constitute a "DefaulY' by the Developer under this
Agreement:
(a) Pailure to Satisfy Predevelopment Conditions. Failure of the Developer to
diligently and in good faith'cause.satisfaction of any of the conditions set forth in Article 3.
(b) Failure to Make Payment. Failure of the Developer to repay the prii�cipal and any
interest'on the Agency Loan that is due and payable to the Agency pursuant to the Agency Loan
Documents following written notice by the Agency of such failure and fi$een (IS) days
opportunity to cure.
(c) Failure to Commence Rehabilitation Work. Failure of the Developer to
commence and prosecute to completion, the Rehabilitation Work within the time frames set fortli
in the Schedule of Performance.
(d) Pailure to Comply with the Resident Services Plan. Pailure to comply with the
Resident Services Plan approved by the Agency, induding failure to meet stated objective and
outcomes under the Plan.
(e) Failure to Comply with the Management and Marketing Plan. Failure to comply
with the Management and Marketing Plan approved by the Agency.
(� Breach of Covenants. Failure of the Developer to duly perform, comply with, or
observe any of the conditions, terms, or covenants of any of the Agency Loan Documents, and
such failure having continued uncured for thirty (30) days after receipt of written notice thereof
53
OGardens Loan 3-8-I I
from the Agency fo the Developer; provided, however, tfiat if a different period or notice
requirement i's specified under any other section of this Article 7, tfie specific provisions shall
control.
(g) Default Under Other Loans. A default is declared under any Approved Financing
by the lender of such Approved Financing(subject to applicable notice and cure).
(h) Insolvency. A court having jurisdiction shall have made or entered any decree or
order: (I) adjudging die Developer to be bankrupf or insolvent, (2) approving as properly filed a
petitionseeking reorganization'of the Developer or seeking any arrangement for the Developer
under the bankruptcy' law or any other applicable debtor's relief law or statute of the United
States or any state or otl�erjurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee
of the Developer in bankruptcy or insolvency or for any of their properties, (4) directing the
winding up orliquidation of the Developer, if any such decree or order described in clauses (I)
to (4), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days;
. or (5) the Developer shaU.have admitfed in writing its inability to pay its debts as they fall due.or
shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature
described in clauses (1) to (4), inclusive. The occurrence of any of the events of Default in this
paragrapl� shall act to accelerate automatically, without the need for any action by the Agency,
the indebtedness evidenced by the Note.
(i) Assigmnent; Attachment. The Developer shall have assigned its assets for the
benefit of its creditors or suffered a sequestration or attactiment of or execution on any
substantial part of its properiy, unless the property so assigned, sequestered, attached or executed
upon shall have been returned or released within ninety (90) days afrer such event or, if sooner,
prior to sale pursuant to such sequestration, attactunent, or execution. The occurrence of any of
the events of default in-this paragraph shal] act to accelerate automatically, without the need for
any action by the Agency, the inde6tedness evidenced by the Note.
(j) Suspension; Dissolution. The Developer shall have voluntarily suspended its
business or the dissolution of the Developer.
(k) Liens on Property and the Development. There shall be filed any claim of lien
(other than liens approved in writing by the Agency) against the Development, the Property, or
any part thereof„or'any interest or right made appurtenant thereto, or the service of any notice to
withliold proceeds of the Agency Loan and the continued maintenance of said claim ,of lien or
notice to withhold for a period of thirty (30) days without discharge or satisfaction thereof or
provision therefore (including, without limitation, the posting of bonds) satisfactory to the
Agency.
(I) Condemnation. The condeinnation, seizure, or' appropriation of all or the
substantial part of the PropeRy and the Development, except that condemnation by the City or
the Agency shall cause the Agency Loan to accelerate but shall not be a Default.
(m) Unauthorized Transfer. Any Transfer other than as permitted by Section 5.17.
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OGardens Loan 3-5-1 I
(n) Representation. or Warranty Incorrect.. Any representation or warranty of
Foundation and the Dedeloper,.respectively, contained°in this,Agreement, or in any application,
financial statement, certifcate, or report submitted to the Agency in connection with any of the
Agency Loan Documents, proves to have been inconect in any material and adverse respect
when made.
(o) Applicability to General Partner. The occunence of any of the events"set forth i❑ �
subsection (fl, subsection (g), or.subsection (h) in relatio� to the managing general partner or
administrative general paRner of,the Developer which is not resolved by the Developer removing
or replacing the general partner pursuant to Section 5.18(c) above, within sixty (60) days of the
occunence.of any of the events set forth in subsection (�, subsection(g), or subsection (h).
Section 73 Remedies.
The occurrence of any Default hereunder following the expiration of all applicable notice
and cure periods will, either at the option of the Agency or automatically where so specified,
relieve the Agency of any obligation to make or continue the Agency Loan and'shall give the
Agency the right to proceed with any and all remedies set forth in this Agreement and the
Agency Loan Documents, includiug but not limited to the following:
(a) Acceleration of Note., Subject to the provisions of_Sections 2.13, the Agency shall
have the right to cause all indebtedness of the Developer to the Agency under this Agreement
and the Agency Note, together with any accrued interest thereon, to become immediately due
and payable. Developer waives all right to presentment, demand, protest or notice of protest:ror
dishonor. The Agency may proceed to enforce payment of the indebtedness and to exercise any
or all,rights afforded to the Agency as a crec�itor and secured P.arty under the law including the
Uniform Commercial Code;including foreclosure under the Deed of Trust. The Developer shall
be liable to pay the Agency on demand all reasonable expenses. costs and fees (including,
without limitation, reasonable:attorney's fees and expenses) paid or incurred by the Agency in
connection with the collection of the Agency Loan and the preservation, maintenance,
protection, sale, or other disposition of the security given for the Agency Loan.
(b) Assignment Agreement. The Agency may exercise all righfs under the.
Assignment Agreement. The Developer shall promptly deliver fo tha.Agency copies'of all plans,
and specifications forthe Development, all permits and approvals obtained in connection�wifh
tlie Development„and all applications for permits and approvals not yet obtained buY needed in
connection ��th the Development.
(c) Specific Performance. The Agency shall have the right to mandamus or'other
suit, action or proceeding at law or in equity to require the Developer to perform its obligations
�'and covenants under the Agency Loan Documents or to enjoin acts o`r things which may be
unlawful ar in violation of the provisions of the Agency Loan Documents.
(d) Right to Cure at the Developer's Eapense. The Agency shall have the right (but
not the obligation) to cure any monetary default by the Developer under a loan other than the
55
OGardens Loan 3�8-I I
Agency Loan. Tfie Developer agrees to reim6urse tfie.Agency for any funds advanced by the
Agency to cure a monetary default by the Developei upon demand therefore, togetfier with
interest thereon at the lesserof'the maximum rate permitted by la�v or ten percent (10%) per
annum from the date of expenditure until the date of reimbursement.
(e) Right to Assume the Century Loan. The Agency shall have the right (but not the
obligation) to assume the Century Loan.
(� Right to Exercise Option. The Agency shall have the right to exercise the Option
to Purchase the Property pursuant to Section 7.4.
Section 7.4 Option to Purchase, Enter and Possess.
(a) In consideration for the Agency Loan, the Developer hereby grants the Agency
the additional right at the Agency's option, to purchase, enter, and take posses"sion of tfie
Development (the "Option"), if this Agreement is terminated pursuant to Section 7.1 above, or
upon an uncured event of Default of the Developer pursuant to Section 7.2 above. The.Agency's
rights under this Section 7.4 shall terminate and be of no further force and effect once the
Developer has satisfied all predevelopment conditions set forth in Article 3 above, paid off the
Century Loan and closed the Bond Loan pursuant to the requirements of this Agreement.
(b) The Agency, or its assignee, may exercise the Option by delivering a written
notice to the Developer within sixty (60) days of the effective date of the Termination Notice
sent pursuant to Section 71 above, or within sixty (60) days of an uncured event of Default
pursuant to Section 7.2 above (the "Option Exercise Notice"), notifying the Developer that the
Agency, or its:assignee, has elected to exercise the Option. Once the Agency, or its assignee, has
delivered the Option Exercise Notice, the Developer and the Agency shall complete,the purchase
and sale of the Development and close escrow on the purchase and sale of the Development
within thirty (30) days of the delivery of the Option Eaercise Notice.
(c) The purchase price for the Develupment pursuant to the Option shall be: (�1)
forgiveness by the Agency of all outstanding amounts due under the Agency Loan, and (2)
assumption by the Agency of the Developer's obligation ,under the Century Loan. No other
amounts shall be due the Developer upon the Agency's exercise of the Option. Upon the
Agency exercise of the Option, tlie Developer shall execute a grant deed in a form acceptable to
the Agency Cransfeiring the Property to the Agency, free and clear of all ]iens and.encumbrances,
except for the Century Deed of Trust The granting of this Option to the Agency shall not irimpair
or limit'the Agency's ability to exercise any other rights or remedies granted to the Agency in
this Agreement.
e(d) The Agency may assign any or all of its rights under this Section 7.4 to a
nonprofit pu6lic benefit coiporation (an "Agency Option Assignee"). The Agency shall notify
the Developer of such assignment and the name and address of the Agency Option Assignee.
Thereafter, all references in this Section 7.4 shall be deemed to refer to the Agency Option
Assignee.
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OGardens Loan 3-R-I I
Section 7.5 Right of Contest.
The Developer shall have tlie rightto contest'tn good faith any claim, demand, levy, or
assessment the assertion of which would constitute a Default_hereunder. Any such contest,shall
be prosecuted diligently and in a manner unprejudicial to the Agency or the rights of the Agency
hereunder.
Section 7.6 Remedies Gumulative.
No right, power, or remedy given to the Agency by the terms oP this Agreementor the
Agency Loan Documents 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 ta the Agency by the terms of any such instrument, or by any
statute or otherwise against the' Developer and any other person. Neither the failure nor any
delay on the part of the Agepcy to exercise any such rights and remedies shall operate as a
waiver thereof, nor shall any single or partial exercise by the Agency of any such right or remedy
preclude any other or further exercise of such right or remedy, or any other right or remedy.
Section 7.7 Remedies bv Other Entities/Individuals'Pursuant to California Law.
Pursuant to Health and Safety Code Section 33334.3(�(7) a default under the Agency
Regulatory Agreement, including the rental of a Unit to a household not eligible under the
Regulatory Agreement, may be enforceable by the City, a residents' association, a resident of
another affordable unit, a former resident of a Unit, a person on an affordable housing waiting
list, and others who are listed in State law.
Section 7.8 Survibal.
Upon termination of this Agreement under this Article 7, those provisions of this
Agreement that recite that they survive termination of this Agreement shall remain in effect and
be binding upon the parties notwithstanding such tennination.
ARTICLE 8
GENERAL.PROVISIONS
Section 8.1 Relationship of Parties.
Notfiing contained in this Agreement shall be interpreted or understood by any of the
parties, or by any third persons, as creating the relationsliip of employer and employee, principal
and agent, limited or general partnership, or joint venture between the Agency, the Developer or
the Developer"s agents, employees or contractors, and the Developer shall at all times be deemed
an independent contractor and shall be wholly responsible for the manner in which it or its
agents, or both, perform the services required of it by the terms of this Agreement. The
Developer has and retains the right to exercise full control of employment, direction,
compensation, and discharge of all persons assisting in the perforniance of services under the
Agreement. [n regards to the rehabilitation of the Development, the Developer shall be solely
57
OGardens l.oan 3-8-I I
responsible for all matters relating to payment of its emplbyees, including compliance with
Social Security, withholding:and all other laws and regulations governing such matters, and shall
include requirements in each contract that contractors shall be solely responsible for similar
matters relating to their employees. The Developer agrees to be solely responsible for its own
acts and those of its agents and employees.
Section 82 No Claims.
Nothing contained in this Agreement shall create orjustify any claitn against the Agency,
by any person the Developer or its general partners may have employed or with whom the
Developer may have contracted relative to the purchase of,materials, supplies or equipment, or
the fumishing or tHe performance of any work or setvices with respect to the rehabilitation of the
Development, and the Developer shall include similar requirements in any contracts entered into
for the rehabilitation of the Development.
Section 83 Amendments.
No alteration or variation•of the terms of this Agreement shall be valid unless made in
writing by the PaRies and approved b'y the Agency Boazd.
Section 8.4 Entire Understandine of the Parties.
This Agreement and the Agency Loan Documents constitute the entire understanding and
agreement of the PaRies with respect to the Agency Loan.
Section 8.5 Indemnification.
Except as directly caused by the Agency's gross negligence or willful misconduct, the
Developer agrees to indemnify, protect, hold hannless and defend (by counsel reasonably
satisfactory to the Agency) the Agency, the City and their respective board members, council
members, officers and employees, from all suits, actions, claims, causes of action, costs,
demands, judgments and liens arising out of: (l) the Developer's performance or non-
performance of its obligations under this Agreement; (2) the Developer's ownership of the
Property; (3) the development, marketing, rental and operation_ of the Development, or (4), or
any documents executed by the Developer in connection with the Development. The provisions
of this Section 8.5 shall survive termination of this Agreement.
Section 8.6 Non-Liability of Aeency and City Officials, Emplovees and AQents.
No member, official, employee or agent of the Agency or the City shall be personally
liable to the Developer, 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 Developer or its successor or on any
obligation under the terms oF this Agreement.
58
OGardens Loan 3-8-I I
Section 8.7' No THird Partv Beneficiaries.
Except..asrp"rovided in Health and Safety Code Section 33334.3(�(7j, there shall be no
third party beneficiaries to this Agreement.
Section 8.8 Action bv the AQ�y. ,
(a) Except as may be otherwise specifically provided'herein, whenever any approval,
notice, direction, consent, request, extension of time, waiver of condition, termination, or other
action by the.Agency is required or permitted under this Agreement, such action may be given,
made, or taken by the Executive Director without fiirther approval by the Agency Board, and any
such action shall'be in writing. The amount of the Agency Loan may not be increased without
approval of the Agency Board.
(b) Any consents or approvals required under this Agreement shall not be
unreasonably withheld or made, except where it is specifically provided that a sole discretion
standard applies. The Executive'Director is also hereby authori•r_ed to approve, on behalf of tRe
Agency, reque§ts by the Developer for reasonable extensions of time deadlines set forth.in this
Agreement. The Agency shall not unreasonably delay in reviewing and approving or
disapproving any proposal by the Developer made in connection with this Agreement.
Section 8.9 Waivers.
Any �vaiver by the Agency. of any obligation or condition in this Agreement must be in
writing. No waiver will be implied from any delay or failure by the Agency to take action on
any breach or default of the Developei or to pursue any remedy allowed under this Agreement or
applicable law. Any extension of time granted to the Developer to perform any obligation under
this Agreement shall not operate as a waiver or release from any of its obligations under this
Agreement. Consent by the Agency to any act or omission by the Developer shall not be
construed to be a consent to any other or subsequent act or omission or to waive the requirement
for the Agency's written consenCto future waivers.
Section 8.10 Notices, Demands and Communications.
Formal notices, demands, and communications between the Agency and the Developer
shall 'be�sufficiently given if and shall not be deemed given unless dispatched by registered or
certified mail„postage prepaid, return receipt requested, or delivered by express delivery'service,
return receipt requested, or delivered personally, to the principal office of the Agency and the
Developer as follo�vs:
Agency: . .
Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
59
OGardens I.oan 3-8-I I
Developer:
Poway Family-Housing Partners, L.P.
30950 Rancho Uiejo Road, Suite 100
San Juan Capistrano, CA 92675
Attention: Managing General Partner
With a Copy to Affirmed:
Affirmed Housing Group, Inc.
13250 Evening Greek Drive North, Suite 160
San Diego, CA 92128
Attention: President
With a Copy to Foundation:
Foundation for Affordable Housing V, Inc.
30950 Rancho Vizjo Road, Suite 100
San Juan Capistrano, CA 92675
Attention: Executive Director
With a Copy to:
Incorvaia& Associates
44� Marine View Avenue, Suite 295
Del Mar, CA 92014
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected-Party may-from time to time designate by mail as provided,iri this
Section. Receipt shall be.deemed to have occurred on the date'shown on a wri4ten receipt for
delivery or refusal of delivery. Copies of notices sent to the Developer shall also be sent to any
limited partner of the Developer who requests such notices in writing and provides its address to
the Agency.
Section 8.11 Applicable Law and Venue.
This Agreement shall be, governed by Califomia law. Any action brought claiming a
breacfi of this Agreement or interpreting this Agreement shall be brougfit and venued in San
Diego County, California.
Section 8.12 Parties Bound.
Except as otherwise lirriited herein, the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties and their heirs, executors, administrators, legal
60
OGardens Loan 3-8-11
representatives; successors and assigns. This Agreement is intended to run with the land and
shall bind the Developer and its successors and assigns.in the Property and the Improvements for
the entire Term, and the benefit hereof shall inure to the=benefit of the Agency and its successors
and assigns.
Section 8.13 Attorneys' Fees.
If any lawsuit is commenced to enfarce any of the terms of this Agreement, the prevailing
Party will have the right to�recover its reasonable attorneys' fees and costs of suit from the other
Party.
Section 8.14 Severability.
If any term of this Agreement is held by a court of competent j�u�isdiction to be invalid,
void or unenforceable; the remainder of the provisions shall continue in full force and effect
unless the rights and obligations of the parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 8.15 Force Maieure.
In addition to specific provisions of this Agreement, performance by any Party shall not
be deemed to be in default where delays or defaults are due to war, insunection, strikes, lock-
outs or other labor disturbances, one or more acts of a public enemy, war, riot, sabotage,
blockade, embargo, floods, earthquakes, fires, quazantine restrictions, freight embargoes, lack of
transportation, court order, delays or failures of performance by any govemmental authority or
utility company (other than the acts or failure to act of the Agency and so long as the Party
seeking the extension has adequately complied with the applicable processing requirements of
such governmental authority or utility company), delays resulting from changes in any applicable
laws, rules, regulations, ordinances or codes, or a change in the interpretation.thereof by any
goveming body with jurisdiction, or any other cause (other than lack of funds of the Developer
or the Developer's inability to finance the rehabilitation of the Development) beyond the
reasonable control or without the fault of the Party claiming an extension of time to perform or
an inability of performance. An extension of time for_any cause will be deemed granted if notice
by the Party claiming such extension is sent to the other within ten (10) days from the
commencement of the cause and the Party granting the extension agrees to the extension in
writing. In no,event shall the Agency be required to agree to cumulative delays in excess ofone
hundred eiglity (180) days.
Section 8.16 Conflict of Interest.
(a) Except for approved eligible ,administrative or persoruiel costs, uo person
described in Section 8.16(b) below, �i�ho exercises or has exercised any functions or
responsibilities with respect to the activities funded pursuant to this Agreement or who is in a
position to participate in a decision-making process or gain inside information with regard to
such activities, may obtain a personal or financial interest or benefit from the activity, or have an
61
OGardcns Loan 3-8-1 I
interest in any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have family or business,ties, during,
or at any time after, such person's tenure. The Developer shall exercise due diligence to ensure
that the prohibition in this Section 8.16(a) is followed.
(b) The conflict of interest provisions of Section 8.16(a) above, apply to any person
who is ari employee, agent, consultant, officer, or any immediate family member of such person,
or any elected or appointed official of the Agency, or any person related within the third (3cd)
degree of such person.
Section 8.17 Title of Parts"and Sections.
Any titles of the sections or subsections of dtis Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of the Agreement's provisions.
Section 8.18 Multiple Ori inals; Counterpart.
This Agreement may be executed in ntultiple originals, each of which is deemed to be an
original, and may be signed'in counterparts.
Section 8.19 Operatine Memoranda.
(a) The Parties acknowledge that the provisions of this Agreement require a close
degree of cooperation, and that new infonnation and future events may demonstrate that changes
aze appropriate with respect to the details of performance of the parties under this Agreement.
The parties desire, therefore, to retain a certain degree of flexibility with respect to the defails of
performance of those items covered in general terms under this AgreemenL [f and when, from
time to time during the tenn of this Agreement, the parties find that refinements or adjustnients
regarding details of performance are necessarp or appropriate, they may effectuate such
refinements or adjustments through a memorandum (individually, an "Operating Memorandum",
and collectively, "Operating Memoranda") approved by the parties,which, afrer execution, shall
be attached to this Agreement as addenda and become a part hereof. This Agreement describes
some, but not all, of the circumstances in which the preparation and execution of Operating
Memoranda may be appropriate.
(b) Operating Memoranda may be executed on the Agency's behalf by its Executive
Airector, or the Executive Director's designee. Operating Memoranda shall not require prior
notice or hearing, and shall not.constitute an amendment to this Agreenient. Any substantive or
significant.modifications to the terms and conditions of performance under this Agreement shall
be processed as an amendment of tliis Agreement in accordance with Section 83; and must be
approved by the Agency Board.
Section 8,20 Construction and Interpretation of Agreement
(a) The language in all parts of this Agreement shall in all cases be construed simply,
as a whole and in accordance with its fair meaning and not strictly for or against any Party. The
62
OGardens Loan 3-8-I 1
parties hereto acknowledge and agree that this Agreement has been prepared jointly by the •
paazties and has been the subject of arm's lerigth and careful negotiation over a considerable
period of time, that each Party has been given the opportunity to independently review this
Agreement with legal counsel, and that each Party has the requisite experience and sophistication
to understand, interpret, and agree to the particular language of the provisions hereof.
Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this
Agreement, this Agreement shall not be interpreted or construed against the Party preparing it,
and instead other rules of interpretation and construction shall be utilized.
(b) If any term or pravision of this Agreement, the deletion of which would not
adversely affect the receipt of any material benefit by any Party hereunder, shall be held by a
court of competent jurisdiction to ,be invalid or unenforceable, the remainder of this Agreement
shall not be affected there6y and each other term and provision of this Agreement shall 6e valid
and enforceable to the fullest extent permjtted by ]aw. It is the intention of the parties hereto that
in lieu of each clause or provision of this Agreement that is illegal, invalid, or unenforceable,
there be added as a part of this Agreement an enforceable clause or provision as similar in
terms to such illegal, invalid', or unenforceable clause or provision as may be possible.
(c) References in this instrument to this "AgreemenY' mean, refer to and include this
instrument as well as atry riders, eshibits, addenda and attachments hereto (which are hereby
incorparated herein by this reference) or other documents expressly incorporated by reference in
this instrument. Any referencas to any covenant, condition, obligation, andJor undertaking
"herein," "hereunder," or "pursuant hereto" (or language of like import) shall mean, refer to, and
include the covenants, obligations, and undertakings existing pursuant to this instrument and any
riders, exhibits, addenda, and attachments or other documents affixed to or expressly.
incorporated by reference in this instrument.
(d). As used in this Agreement, and as the context may require, the singular includes
tl�e plural and vice versa, and the masculine gender includes the feminine and vice versa.
(e) Except as otherwise provided in this Agreement, the term "Day" shall mean a
calendar day.
Section 8.21 Time of Essence.
Time is of the essence with respect to the performance of each of the covenants and
agreements contained in this Agreement
Section 8.22 Compliance with Law.
Developer agrees to comply with all the requirements now in force, or which may
hereafrer be in force, of all municipal, county, state and federal authorities, pertaining to the
development and use of the Property and the Development, as well as operations conducted
thereon.
63
OGardens Loan 3-8-I 1
Section 8.23 Police Power.
Nothing contained herein shall be deemed to limit; restrict, amend or modify, nor to
constitute a waiver or release of, any ordinances, notices, orders, rules, regulations or
requirements (riow or hereafrer enacted or adopted and/or as amended from time to time) of the
City, its departments, commissions, agencies and boards and the officers thereof and/ar the
Agency, including, without limitation, any redevelopment plan or general plan or any zoning -•
ordinances, or any of City's or Agency's duties, obligations, rights or remedies thereunder or
pursuant thereto or the general police powers, rights, privileges and discretion of City'or Agency
in ihe furtherance of tkie public health, welfare and safety of the inhabitants thereof including
without limitation, the right under'law to make and implement independent judgments,.decisions
and/or acts with respect to planning, development and/or redevelopment matters (including,
without limitation, approval or disapproval of plans andJor issuance or withholding of building
permits) whether or not consistent with the provisions of this Agreement, any Exhibits attached
hereto or any other documents:contemplated hereby (collectively, "City and Agency Rules and
Po�vers"). In the event of any conflict, inconsistency or contradiction between any terms,
conditions or provisions of this Agreement, Eshibits or such other documents, on the one hand,
and any such City and Agency Rules and Powers, on the other hand, the latter shall prevail,and
govern in each case. This Section shall be interpreted for the benefitof City and Agency.
Section 8.24 $rokers:
Agency and Developer each represents that it has not engageci any broker, agent or finder
in connection with this transaction. Developer agrees to defend,,indemnify and hold Agency and
all Agency representatives harmless from and agai�st any losses and liabilities with respect to
such commissions based upon the alleged acts of Developer. Agency agrees to defend,
indemnify and hold Developer harmless from and against losses and liabilities with respect to
such commissions based upon the alleged acts of Agency.
Section 8.25 Incorporation by Reference.
Each of the attachments and exhibits appended to this Agreement is hereby incorporated
in this Agreement by this reference as though fully set forth herein.
[Remainder of Page Left Intentionally Blanl:]
64
OGardzns Loan 3-8-i1
WHEREFORE', this Agreement has been ;entered into by the undersigned as of the date
first above written.
DEVELOPER:
POWAY FAMILY HOUSING PARTN�RS, L.P„ a
California limited partnership
By: Poundation for Affordable Housing V, Inc ,
a Califomia nonprofit public benefit corporation,
its Managing General Partner
By:
Deborrah Willard, President
By: Affirmed Housing Group, Inc., a Delaware
Corporation, its Administrative General Partner
By: � -�
ames ilverwood, President
AGENCY:
POWAY REDEV�LOPMENT AGENCY, a public body
corporate and politic
%��'\
�By� � �?�'�-��._ *���
�-Pe,�my'Riley, F,si cutiue Director
��/0///
APPROVED AS TO FORM:
KANE,BALLMER & BERKMAN
Agency ecial ' unsel
By:
�j�t.-., iMr��
lenn F. Wasserman
65
OGardens Loan 3-8-I!
WHEREFORE, this Agreement has been entered into by the 6ndersigned as of the date
first above written.
DEVELOPER:
POWAY FAMILY HOUSING PARTNERS, L.P., a
California limited partnership
By: Foundation for Affordable Housing V, Inc:,,
a California nonprofit public benefit,coiporation,
its Managing General Pariner
By: /�`��� G�l�/�LIGC.✓
Deborrah Willard,President
By: Affirmed Housing Gcoup, Inc., a Delaware
Corporation, its Adminislrarive General Parmer
By:
James Silverwood,President
AGENCY:
POWAY REDEVELOPMENT AGENCY, a public body
corporate and potitic
By:
Penny Riley, Executiye Director
APPROVED AS:TO-FORM:
KANE, BALLMER& BERKM;4N
Agency Special Counsel
By:
Glenn F. Wasserman
65
OGardcns Loan 3-8-I I
CONSENT OF FOLTNDATION: Foundation, hereby grants its consent to the Agency
and Developer's execution of the Amended and Restated Agency Loan Agreement.
Foundation was a party to the Original Loan Agreemerit dated as of December 22, 2009,
but subsequently transferred all of its rights, duties, and obligations under the Original
Loan Agreement to the Developer pursuant to the terms of the Assignment and
Assumption Agreement"dated as of December 22, 2009. As stated in Section 2.16 above,
Foundation has been released from personal liability under the Predevelopment
Promissory Note, the Original Loan Agreement, this Agreement and all other Agency
Loan Documents, except as such liability may arise from Foundation's position as
managing general partner of the Developer. Execution of this Agreement shall not
impose any additional liability on Foundation, except as such liability may arise from
Foundation's position as managing general partner of the Developer.
FOUNDATION:
Foundation for Affordabl'e Housing V, Inc., a
California nonprofit public benefit corporation
By: � a�.—�
Deborrah Willard, President
66
OGardcna Loan 3-8-I1
�
A
EXHIBIT"A"
LEGAL DESCRIPTION
PARCEL I:
THAT,PORTION OP THE SOUTHEA ST QUARTER OF THE SOUTH WEST QUARTER OF SECTION
14,TOWNSHIP 14 SOU'CH,RAN�62 WEST,SAN BERi�ARDMO MERIDIAN,IN THE COUNTY OF
SAN DIEGO, STATE OF CALIFORNV+, ACCORDMG TO THE OFFICIAL PLAT Ti-�[iEOF,
DESCRIBED AS FOLLOWS:
BEGINNING AT A PO1NT Wfi1CH IS 30.00 FEE'C DISTANT NORTHERLY AT RIGHT ANGLES
FROM THE CENTER LINE OF THE 40 FOOT COUNTY ROAD TO POWAY, SAID POINT OF
BEG]NNIlVG BEARINa NORTH 70°02'46" EAST 1005.15 FEET FROM THE POIIJT OF
iNTERSECTION OF THE SOUTH LINE OF SAID SECTION 14�WITH THE'CENTER L1NE'OF
MISSION ROAD 1-A AT STATION 378+70.9 THEREON,AS SHO WN ON MA.P THEREOF ON FII,E
R�TH E OFFI CE OF COUNTY�SURVEYOR OF SAiD S'AN D1EG0 COUNTY,AND BEA'G AL50'I'HE
SOUTHWEST CORNER OF LAND DESCRIHED 1N THE DEED FROM R.T.CREMER,ET UX,TO
EVERETT DANIELSON, $T UX,DATED OCTOBER 4, 1940, RECORDED OCTOBER 16, 1940 IN
BOOK 1085,PAGE 127 OF�OFFiCIAL RECORDS;RUNMNG THENCE PAFiALLEL WITHAND 30.00
FEET NORT}�RLY AT RIGHT ANGLES FROIvf THE CENTER LiNE OF SAID POWAY ROAD
SOUTH 83°20'00" WEST, 133.69 FEET; '(7�ff.NCE PARALLEL WITH THE WEST LINE OF SAID �
DAMELSON'S LAND,NORTH 00°43'00"EAST TO THE SOUTH LINE OF Tf�NORTH 162.65 FEET
(MEASUREDALONGTHEEASTANDWESTLINES)OFTHELANDDESCRIBEDINTHEDEEDTO ,
KENiJETH C,SNYDER,ET UR,RECORDED JUNE 10, 1968 AS DOCUMENT NO.96618;THENCE �
EAST ALONG SAID SOUTH LINE TO 7'F�WEST LINE OF TI�HEREINABOVE REFERRED TO �
DAMELSON'SLAND;THENCEALON�SAIDWESTLINESOUTH00°43'00"WEST,321.97FEETTO !
THE POINT OF BEGINNTNG. '
PARCEL 2:
THAT PORTION OF THE SOUTHEAST QUARTER OF TF�SOUTH WEST QUARTER OF SECTION �
14,TO WNSHIP 14 SOUTH,RA,NGE 2 WEST,SAN BERNARDINO MERIDIAN,TN THE COUN7Y OF
SAN DIEGO, STATE�OF CALIFORNIA, ACWRDING TO TF� OFFICIAL PLAT TF-IEREOF,
DESCRIBED AS FOLLOWS: � , ' .
COMIo]ENCING AT A POINT WHICH IS 30.00 FEET DISTANT NORTHERLY AT RIGHT ANGLES
FROM THE CENTER LINE OF THE 40 FOOT COUNTY ROAD TO POWAY,.SAID POiNT OF
BEGINNiNG BEARING NORTH 70°02'46" EAST 1005,15 FEET FROM THE POINT OF .
INTERSECTION OF'THE SOUTH LINE OF SAID SGCTTON 14 WITH Tf��CENTER LiNE OF ,
MISSION ROAD I-A AT STAT[ON 378+70.9 THEREON,AS SHOWN�ON IG1AP THEREOF ON FILE
INTHEOFFICEOFCOUNTYSURVEYOROFSAiD5ANDIEGOCOUNTY,ANDBEINGAL50TF� �
SOUTHWEST CORNER OF LAND DESCRIBED RJ THE DEED FROM R.T.CREMER,ET UX,TO
EVERE1T DANIELSON, ET UX,DATED OCTOBER 4, 1940, RECORDED OCTOBER 16, 1940'TN .
HOOK 1085,PAGE 127 OF OFFICIA L RECORDS;RUNNMG TI-�NCE PARALLEL W[TH AND 30.00
FEET NORTHERLY AT AiGHT ANGLES FROM TF� CENTER LTNE OF SAID POWAY ROAD
SOU'1'H 83°20'00" WEST, 133.69 FEET TO THE, TRUE POiNT OF BEGINNIN�; THENCE
CONTMUMG ALONG SAID PARALLEL LINE SOUTH 83°20'00"WEST, 133.68 FEET
ioi i�os:e.e
EXNIBIT"A" '� �
TO THE EAST LINE OF LAND AS DESCRIBED IN PARCEL 2 OF THE DEED TO J.FRANK ZITTELL ;
AND CHARLOTTE G. ZITTELL, RECORDED MARCH 26, 19A7, IN BOOK 2374, PAGE BO OF ! .
OFFICIAL RECORDS; THENCE ALONG THE EAST LiNE OF LAND AS DESCRIBED IN SAID
� PARCEL 2,NORTH 00°43'00"EAST TO THE SOUTHWEST CORNER OF THE NORTH j
162.65 FEET(NIEASURED ALONG 17�EAST AND WEST LMES)OF THE LAND DESCRIBED IN �� �
DEED TO KENNETH C.SNYDSR,ST US,RECORDED NNE 10, 1968 AS�DOCUMENT N0..96618;
THENCE EAST ALON4 THE SOUTH LINE OF SAID NORTH 162,65 FfiET TO A LINE WHICH �
BEARS�NORTH 00°43'00" EAST, PARALLEL W(TH THE WEST LiNE OF SAiD DAAIIELSON'S �
LANDS,FROIVITHETRUEPOINTOFDEGTNNING;TE�NCES0UTH00°43'00"WESTT07'HE7RUE �
. POINT OF BEGiNN�NG. .
� PARCEL 3: ,
ANEASENIENTFORINGRESSANDEGRESSANDFORALLUTIUTYPURPOSESAND[NCIDENTS �
THERETO OVER,11NDGR;ALONG'AND ACROSS THE WEST 20.00 FEET OF THAT PORTION OF
THE SOUTHEA5T QUARTER OF THE SOUTHWEST QUARTER OF SECTION 14,TOWNSHIP 14
� SOUTH, RANGE 2 WEST, SAN.SERNARDMO MERIDIAN, ]N THE COUNTY OF SAN DIEGO, ; .
STATE OF CALIFORNIA, ACCORDING TO THE OFFiC1AL PLAT THEREOF, DESCRIBED AS
FOLL04VS: ;
BEGIIJiJING A7' A POINT WHICH I5 30.00 FEET DISTAN7' NORTHERLY A�T RIGHT ANGLES �
FROM THE CENTER LfNE OF THE 40 FOOT COUNTY ROAD TO POWAY, SAID POINT OF .
BEGINNINC7 BEARIIJG NORTH 70°02'46" EAST I005.15 FEET FROM THE POINT OF .
INTERSECTtON OF T7[E SOUTH LINE OF SAID SECTION 14 WITH THE CENTER LINE OF .
MISSION ROAD 1•A A7'STATION 378+70.9 7'}�REON,AS SHO WN ON MAP THEREOF ON FILE
[NTHEOFFICEOFCOUNTY�SURVEYOROFSAIDSANffiEGOCOUNTY,ANDBEINGALSOTf� '
SOUTHWPST CORNER OP LAND DESCRIBED RJ THE DEED FROM R.T.CREMER,ET UX,TO .
EVERETT DANIELSON,ET UX,DATED OCTOBER 4, 1940, RECORDED OCTOBER 76, 1940 IN .
BOOK 1085,PAGE 127 OF OFFiCIAL RECORDS;RLlNNING THENCE PARALLEL WITHAND 30.OD
FEET NORTHERLY AT RIGHT ANGLES FROM THE CENTER LINE OF SAID.POWAY ROAD
SOUTH 83°20'00"WEST 267 J7 FEET TO THE EAST LINE OF LAND AS DESCRIBED IN PARCEL 2 �
OF DEED TO 1.FRANK ZITTELL AND CHARL07TE a.ZITTELL,RECORDED MARCH 26,1947,IN
BOOK 2374,PAGE 60 OF�OFFICIAL RECORDS;THENCE ALON6 THE EA51'LINE OF LAND AS '
DESCRIBED IN SAID PARCEL 2,NORTH 00°43'DO" EAST TO THE SOUTH LTNE OF LAND AS
DESCRBEDTNPARCELIOF.SAIDDEEDTOTF�ZITTELLS;THENCEALONGTHESOUTHLTNE �
OFLANDASDESCRIBEDINSAIDPARCELI,EASTERLYTOTHEIVESTLINEOFDANIELSON'S �
LANDHEREII�'AHOVEREFERREDTO;TI-�NCEALONGTtIEWESTLINEOFSAIDDANIELSON'S .
LAND SOUTH 00°43'DO"WEST 483.72 FEET TO THE POINT OF BEGiNMNG. �
. PARCEL 4: .
AN HASEIviSNT FOA INGRESS AND EGRESS AND FOR ALL UTTLITY PURPOSES AND INCIDENTS
THERETO OVER,UNDER,ALONG AND ACROSS A STRIP OF LAND 3�.00 FEET IN WiDTH LYRJa '
Wi'1'I-IIN TE� SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECT[ON 14, i
' TOWNSHIPI4SOUTH;RANGE2WEST,SANBERNARDINOMERIDIAN,IIJTHECOUNTYOPSAN �
i
� DIEGD, STATE OF CALIFORNtA,ACCORDINO TO THE OFFICIA[.PLAT THEREOF,THE WEST
� LIIJE OF SAID STRIP BEINa DESCRIBED AS FOLLOWS: '
imnor_s e
EXNIBIT"A"
BEGINNING AT A PO1NT WHiCH IS 30.00 FEET DISTANT NORTHERLY�AT RIGHT ANGLES
FROM,THE CENTER-LINE OF THE 40 FOOT COUN'fY ROAD TO POWAY, SAID POINT OF
BEGINNiNG BEARING NORTH 70°02'46" EAST 1005.15 FEET FROM THE POINT OF
MTERSECT[ON OF THE SOUTH LRJE OF SAID SEC'CION 14 WITH THE CENTBR LINE OF '
MiSSION ROAD l-A AT STATION 378+70.9 THEREON,AS SHOWN ON MAP THEREOF ON
FILE M TF1E OFFICE OF COUNTY SIAtVEYOR OF SAID SAN DIEGO COUNTY,AND BEMG AL50 �
THE SOUTHWEST CORNER OF LAND DESCRIBED IN THE DEED FROM R.T.CREMER,ET UX, .
TO EVERETTDAN[ELSON,ET UX,DATED OCTOBER 4,1940,RECORDED OCTOBBA l6, 1940IN �
' BOOKl085,PAGE1270FOFFICIAtRECORDS;RUNNINGTHENCEPARAI.LELWITHAND30.00 �
iEET NORTI-IERLY AT RIGHT ANGLES.FROM THE CENTER LINE OF SAID POWAY ROAD �
SOUTH 83°20'00" WEST 277.46 FEET;THENCE NORTH 00°A3'00' EAST,505.00 FEET,MORE OR :
LESS, TO THE SOUTH LiNE OF LAND DESCRIHED 1N PARCEL 1 IN THE DEED TO l. FRANK ,
ZITTELL,ETUX,RECORDEDMARCH26,1947,INBOOK2374,PAGE800FOFFICIALRECORDS, .
BEINGTHE7RUEPOINTOFBEGINNING;Tf�NCECOMTINUINGNORTH00°4i00"EASTTOT(-IE '
SOUTHCiNEOFTHATCERTATNEASENIENTFORPUBLICROADPURPOSESDESCRIBEDMTt� '
DEED OF THE COUNTY OF SAN D1EG0 RECORDED MAY 2, 1963 AS DOCUMENT NO. 76105
OFFICIAL RECORDS.
SA ID STRIP TO TERM MATE OV THE NORTH IN THE SOUTH LINE OF SA[D PUBLIC ROAD AND
ON THE SOUTH IN THE SOUTH LINE OF SAID PARCEL i OF ZITTELCS LAND.
'
101170536 B
EXHIBIT"A"
B
EXHIBIT B
APPROVED DEVELOPMENT BUDGET
EXHIBIT B
APPROVED DEVELOPI�fENT BUDGET
PRO FCJRMA ANALYSIS
Orange Gardens Apartments
City of Poway
Keyser Marston Associates, Inc.
November 9, 2010
B-1
TABLE 1
PR4JEGT,DESCRIPTION
ORAtdGE GARDENS APARTMENTS
CITY 6F POWAY �
3. �ite Area €&,?49 SF
1.99 Aaes
II. Gross Buildinp Area
41et Residzntiai.kre1 40,?40 SF
�on�iunity8uiiding 1��94 SF �
Total C.ra�s 6�rilding Area(G8A} 41,740 SF
111. Number of Stories 2 Staries
1V. Construction Type Ty�`J
V, Unit Muc t�verage
hFurtk�er c�Units Unit Size
Cne 6edroam L Urnts 595 SF
RvoBedroom ?6 Unrt� $�S SF
Ttvez 6edroon* 4 Li�RC 1.100 SF
hunti�arot Unite 52 Vnits 774 5F
VI, Density Zb Ui�its�'.4cve
VII. Affordability hfix
UnRs(�?.d'.6 csf AMI 3 Ui3its 6°b
Unfts�4U4>af Aldl B Urds 75°�
Urtfts{Hr SC°h af Alvtl 15 UnRs 29°,6
Un@s t,'t�,.E4'h of Ai�tl 'S Unds 48°6 �
M[snager 1 Untt 24b
To�sVA.verage 52 Unrts 100%
Averege FJfardabihry Se"45 of Ah,11
(excl.h4anager un@)
VIII. ParkinQ
PaA.ing-ftesidential 30 �poces
Paiking Ratio LS SFace�JUnit
F.zp>zd by.Y.eyser ldaMan Assctia[es,Irc
Fle^.arce:�:tr'w�ay_.^.rar�a C-.ar�ens?pa^nen;s_v2;I�t�,"_'011:r?s 'aB'i
B-2
TpBLE 2
DEVElOPM4EPdT C05TS
dRANGE GARDENS APARTMtEHTS
CRY QF POWAY
.. ���:wl . .�c�ii�"r'n�=�d::t�._��#�
"�.�.";:id��:;�u�<:"�,NPVembec201Q� ,;�,�:�.:«;r,�
Totals Per Unit Comments
i. DirectCosts�tl) —
0t7-°,�te'In�ravementa�!_� 5225,216 54,331 $3 PerSF Site
On�te�'LarMscnping 5:��1_844 $F3,�5 ,B.PerSF�Site
Demol+tion 53' SO 50 Per SF¢iie
Partcing SC SQ Inciuded belw:
R,ehabiiitation S3,�48h.849 567,456 'S34 Per S�F GBt� -
Solarl�-V 51&3,912 33,248 S� PerSF GBk
FF&E �,45,ODa 5665 A�rnvAnce
Cantingency 5300.060 55.763 6.5% af LSrzcis
Tota!0'sred Co�G. SC,517,8?2 554,574 5�118 Per 3F G6A
11. Indirect Costs
i,rshitecture 8 Engineer.ng� i3^_u��D 5£,337 67%of 6irecs
Permits&Fe�?) �SSt.ODQ 5531 5i Per SF�6k
L�a18R,ccourrting 534,060 51,515 t.i°l��of6irests
Taxes&Insuronce 5104,OOL} 3�,C0�7 2.i fi, of G;rzcts
Cev�;opetFee S1,GOrJ,060 3?6,923 28.v96ofQ��cts
Mar&etingfLease-Up $35,000 SE73 Aliwrance
Continggncy 5100.000 St 923 5455 oflnd�rects
Tatai Indireci CosCS 52,1035D0 $40,e5� 4?8°,5 of Directs
IIi. Financing Costs
Laan Fe� 532A.000 SG,?31 6.5°3 MDirzcts
iritesest Curing Constructicn 5314,06Q 56,433 6:4°� of Pi!rects
tr,terenE Curing Lease-LJp 54 �0 0�%ot Cirects
TRIelRzcordirig/Escra'v; SZA.ODO 5452 0 5°h af Drrecis
TC.�C Fees S70,OOD 51,346 t.i% of Directs
Qperakirig Lease-Up+R�er,�s 575.6W 51.•"d2 I�°5 of Girzcta
• Totat FinanGng Custs 5307,WD Si5,514 16.4°h of O�recu
� IV. Tofal Costs-Excl. Ac uisRion 37 828,372 5156 546 $iB8 Per SF GBA'
V. Acquisition Costs
Land,^-.cqubitic� � S1,91�,OD0 $34,EOd 521 Par.SFSite
Existingln�roo•ercmnts 54,�40,060 $6_�,395 351 PerSFSite
Easement,*, � SQ S4 �50 Per SP Site
� RePOCation;2� SSOO.00Q �,7692 SS�PzrSFSie _
Totat�AcquisstionCasg SE,fi50_ODO $127,&95 5T7PerSFSiSe
Vl. Total Costs-InG.Acqmsition $14,478,372 5278,430 5347 Per SF GBA
Or�Say(Rounded) 414,478,000
(11 Lbez n6t az5wv pay-ren[af A�'e'J3'ing�sages.
(�S Estiirute;rvx�.enfied by RhSA cr Cey. ,
tfoce: l:efrs apaeariny in fwfd and iralics rtHec�FLidA chargra m[7er�e.�nper p�(ama.
P:epared by.Kevser hiarstcn Asscaa�s.Inc. � _
Fikvame::::'ow�Cr�r�eGaraensRqa^,nen r$:1�d�'?01s.rks '3E�`-'
B-3
TABLE 3
NET,flPERATtP1G NJCOME
ORAtdGE GARDENS APARTI44EtdTS
CI'fY OF,POWAY
�'°�:�:e::�;:��;��Ndveinber,2014; "��af�;„a�°;
Average #of Total
I. Gross Scheduled Income Unit Siza Units Month Annual �
One 6edroom �3�J`ro A6tl 595 SF 2 5416 55,5F3d
Oae Bedroom �40%Atdl 595 SF 2 5554� $f3,�3ci
�Ckre Bedroom �f.50%AMI 595 SF 7 5711 $59,724
Cne Bedroom �60%?f�tl 595 SF �1 S?58 57�4°�,?58
Twu Bedroom f�t 3t7e�Ah1I 875 SF t 5497 55,5&d
Tnro 6edroom �i 46%kt✓I 873 SF 5 5£74 $40,44�
Tvm Bedrnom �50%AM1SI 875 SF 6 5815 $Sg,752
Tvro Bedrmm ��64'%AMI 87�SF t4 SSBd $16�,fvtd
Ttaee Bactroom f�4t7i6 AF,41 1,100 SF 1 5777 59,324
TMee 8edroorte �i 50°k At�tl 1,900�F 2 S�AS 521,720
Three 6edrooni M11an�ger 1,100.SF 1 S�J 50 �
To�"tfi.veraqe 774 SF 5? 5793 SdSE,'.A3
Add: Oiher income S 14 lUniVManth SS 532
TotaE Gr�s Scheduleti Inc�ne{GSI} 55�7,:L3�]
iL EKactiv�e Grcus Income{EGIJ �
(Less}'Vacanc/ 5.055 of GSI S'�! _5.267)
Tctat Eftective Gross income i,EGI) 348�,Q73
lII. Operuting Expenses �
(Le�.s}Operetlng Ex�+enses 5�3.394 fUnitMear (g22S,'qp)
(Less}c�rvices+Amerutie� 396? ,21niU1'ear (3`�J,90t})
(Less)FropeRy TaxeslAsees:rnents 5185 ,R1niVYe3r, {59,&29)
(Less)A4unicipol SerJices Fee S?33 fUniUYeor (S�E,11&j
!Less)Eassment Qrivcaay Maintenance S?� tUnitNear (S?,771 i
(Less)ReplacemeM Reszrves 5300 fUrntlYear {SSS,fAOi
!iess)Hond lesuar Fee � lUniWear lss.G7a)
Tct�E EXpenses Sa,743 NnivYear f5�:�3,fi15)
' 73°h of EGI �
IV. Net Operating tneome(NOI) 5731,457
Or Say(Rounded) 5531,000
P.zpa�ed by-Y eyser I.fancn Asscaak�a hc.
Fil�ame..':'owzV_CranseGarcen=_Ppa^.rierf,�_u9:1�'C�20t;-rxs �ai'.
B-4
TABLE 4
FItdAMGIdG DEFIGIT
ORAN6E GARDEFlS'APARTMENTS' �
GTY OF POWAY
.�^.,�qp?X�:u�°
°wi�.:°;t�tuvvei'nliec>2010:�;�„�'?.;
I. Sources W Funds
Supperlable Cz6t tiJ 51,523.00�
h7arkeY lralua of Tax Credits r?� 53,353.QL�6
Qefzrzed 6eveloper Fee;3) 5200.00.'f
�eve!oper Equity Contrihution S+J
PJei Income Guring Pradevat�ment Pericd 3S S.SP3
Total Saurces of Funtic 55,50a 5D3
IL (Less}Development Costs 7S7.A28.00k?i
III. Residuai Vatue {52,218,5D0J
IY. �Lcss�AcquisifiunCasts ?SE.6�O.DD�1 .
V, Finnncing Deficit (58,868,560)
Per ABordabfe[lnit E5974,000)
tfore: lzms appearing in 6ald and itatics re9xt i45fA cJaanges m fTeveSoperpro(ortna.
P.-epsed 6y.Yeyser 6farfcn Asscoa�s:i^.c.
File:aire:e:Puxay�ra^&e CvNens A�rt.�nts vB;S;6'_�t�,rks ��-0
B-5
TABLE 4{C4Ni.'�.)
FItdA1dCING DEFIqT
ORANGE GARDENS APARTMENTS
CiTY OF POWAY
- �..�._„
:,„'-�;:';!�toveriiber 201a;'�sg:a;
{t) Svpoor,ab�eDei}t
7otaF NOI 5131.4g7
IlifEf@St�tE 6.QG%
7ertn(n y�ears) • °�7
iJebt Coveraga Ratio 1.37
.�nnualDebtService � S1{19,549
�uppod2�le DeL^t 51,523,U00
{2) Low Income Housma Tnx CrMits fF�eraU �
Estimate af Elioible'6a�is:
7otal Czve;apn:�nt Casta 514,478.3T2 .
{Less}lireiigik�le Casts t52R38.4G;1
Eligi�le�asis SY2,035.972
Acq�siffon 8asis 5:,�440,u00
Reha�iliiauon 8a�ac 7 5$ . 94 G72
Totat 55�,935,572 �
Tcvc Credit Proceeds:
tvlaMnwm Eiigilile 6a�is SiZ,039.5?� .
Acquisit�n Ha�i3lkpplicabie Factor 7009fi :.;,4�t0.OQ�
Impacterl8onus Factor(Rehatilitation 8asis) 130°6 .8;9 9E�
7otai�aliTied 0asis S 1-,319,964
7ex Credit RaSe 3'?2% SA89,E55
7ota!Tax Credds� 19 5:,59b W8
Linbted Fc�rtnef Share 100% 5;,696,548
Prenent hk�trket:�alue� 82 0°6 53,859,Op0
{3) Estitt�te W Defetred Develooer QverheetS Fee
Eligible 8asis SS?,039,972
(Csss}Dev�ztopzr Fee {51.400AG�1
UnatljusSed�Eligil�le Ensis 51s,639,97�
7otr3t�eve#oGer Ovarhead Fee 132°k 81,4�O,GDO
Developer G�erhead Fee 51,40C1.C�UD
Tota Qzferrzd Cevdop`r Overh°ad Fee 14.'s% 52�O.QL�'i
P.npared by.KeyserMarzmn Azscaares.lr.c.
Fi1E ar.e:::P:1rva•f,P-avay_Orange Curdens ApaiVrents_vfi�d�;OS I.t4s 'aP-'`-�
B-6
C
Exxisrr c
SCHEDULE OF PERFORMANCE
EXHIBIT C �
SCHEDULE OF PERFORMANCE
This Schedule of Performance summarizes the schedule for various activities under the
Agency Loan Agreement to which this exhibit is attached. The description of items in this
Schedule of Performance 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 Schedule of Performance 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 8.15 of the Agreement.
Whenever this Schedule of Performance 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 Agency or other applicable governmental entity within the time set
forth herein. Prior to the time set forth for each particular sulimission, the Developer shall
consult with Agency staff informally"as necessary concerning such submission in order to assure
that such submission will be complefe and in a proper form within the time for submission set
forth herein.
As provided in Section 3.1 of this Agreement, this Schedule of Performance may be
modified by Operating Memoranda executed in accordance with Section 8.19 of this Agreement:
ACTION DATE
1. Close of Escrow. The Developer shall Completed.
close escrow on the Purchase Agreement.
[Recital F]
2. Submission—Income Report. The Completed.
Developer shall prepare and submit the
Income Report for.Agency approval.
[§3.4.]
3. Submission— Sco�e of Rehabilitation Completed.
Work: The Developer shall prepare and
submit the Scope of Rehabilitation Work,
including exterior renovation plans for
Agency.approval, including measures for
asbestos remediation. [§3.3]
4. Approval— Scope of Rehabilitation Completed.
Work. The-Agency:shall approve or
disapprove the Scope of Rehabilitation
Work. [§33]
1
Ogardens SOP 3-8-I I
ACTION DATE
Aporoval —Relocation'Plan. The Agency
5� shalLapprove or disapprove the Completed.
Relocation Plan: [§3.4]
Relocation plan also subject to City
Council review.
6. Submission—Management and Completed:
Marketin� Plan. The Developer shall
prepare and submit the Management and
Marketing Plan for Agency approval.
[§312]
7. Approval—Manapement and MarketinQ Approval prior-to disbursement of the
Plan. The Agency shall approve or Rehabilitatiori Component of the
disapprove the Management and Agency Loan.
Marheting Plan. [§3.12]
8. Submission—Final Financing Rlan. The As of the date of this Agreement and as'
Developer shall prepare°and"submit the needed priar to the disbursement of the
Final Financing Plan for Agency � specified components of the Agency
approyal: [§3.11] Loan, including within 30 days after
receipt of tax credit allocation from
TCAC.
9. Approval— Final Financing Plan. The Within 15 days after_receipt of the Pinal
Agency shall approve or disapprove the Financing Plan.
Final Financing Plan.
10. Application—Applicable Governmental, Completed.
Apnrovals. The Developer shall apply
for the Applicab(e Governmental
Approvals, including.Development
Review Permit and shall provide
evidence of the same to the Agency.
[§3.6]
11. Receipt—Applicable Governmental Completed.
Approvals. The Developer shall obtain
the Applicable Governmental Approvals
and shall provide evidence of the same to
the Agency. [§3.6]
12. Approval— Rehabilitation �Vork Plans. Completed.
The Agency shall a prove or disa prove
2
Ogardens SOP 3-8-I I '
ACTION DATE
the Rehabilitation Work Plans. [§3.5]
13. Application.— Building Permit The By May 1, 2011.
Developer shall apply for a building
permit and shall provide evidence of the
same to the Agency. [§3.14]
14. Receipt—Building Permit. The Not later than 30 days prior to
Developer shall obtain the building Commencement of Rehabilitation.
permit and shall provide evidence of the
same to the Agency. [§3.14]
15. Application—Tax-Exempt Bonds. The By March 23, 2011.
Developer shall apply to CDLAC for
allocation of Tax-Ezempt Bonds. [§3.7]
16. Application—Ta� Credits (First By April 1, 2011.
Application). The Developershall
submit an application to TCAGfor a •
preliminary reservation of 4% tax credits.
[§3.8]
17. Apnlication—Tax-Exempt Bonds Next CDLAC;round following
(Second,Application). The'Devel'oper unsuccessful'�application.
shall submit a second application to
CDLAC'for an allocation of tax-exempt
bonds if lhe first application is
unsuccessful. [§3.7]
18. Application—Tax Credit (Second Next TCACround following
Application). The Developer shall unsuccessful application.
submit a second applicatiori,to TCAC for
a preliminazy reservation of 4%tax
credits if the first application is
unsuccessful. [§3.8]
19. Tax Credit Investor-Bids Submission. Not later than April 15, 2011. '
The Developer shall submit to Agency at
least three bids from prospective tax
credit equity investors. [§3.9]
20. Tax Credit Investor Bids ApprovaL Not later than I S days after submission.
Agency shall review and approve or
disapprove bids. [§3.9]
3
� Ogardens SOP 3-8-I I
ACTION DATE
21. Submission— Construction Contract. The" Not later than 30;days prior to �
Developer shall submit the Construction commencement of construction.
Contract for Agency approval. [§3.13
22. Approdal—Construction Contract The_ Within 10 days after receipt by the
Agency shall approve or disapprove the Agency of the Construction Contract.
construclion contract [§3.13 Opportunity is_provided in §3.13 for
resubmission and further review of a
disapproved Construction Contract
23. Submission—Insurance. The Developer Not later than l 0 days prior to
shall submit evidence of insurance Commencement of Rehabilitation. •
coverage for Agency approvaL [§3.15]
24. Apvroval—Evidence of,Insurance Within 10 d'ays afrer receipt by the
Covera�e. The Agency sfiall approve or Agency. Oppoi-tunity is provided.in
disapprove the Evidence of Insurance §3.15 for resubmissions and further
Coverage. [§3.15] review,of disapproved Evidence of
Insurance Coverage.
25. Submission—Construction Bonds. The Not later than.10 days prior to
Developer shall submit the Construction Commencemenhof Rehabilitation.
Bonds for Agency approval. [§3.16]
26. Approval — Construction Bonds. The Within 15 days after receipt by the
Agency shall approye or disapprove the Agency. OpportuniYy is provided,in
Construction Bonds. [§3.16] §3.16 for resubmissions and further
review of disapproved Construction
Bonds.
27. Submission—Resident.Services Plan & Not later than 60 days prior to the
BudQet. Developer shall furnish to the Completion Component Disbursement.,
Agency draft Resident Services Plan. [§2.9]
[§3.17�
28. Approval—Resident:Services Plan & Not later than 10 days afier submission
Budget. Agency shall review and by Developer.
approve or disapprove the Resident
Services Plan. [§3.17]
29. Submission—Evidence of Funds Not later than 18 days prior to
Availa6ility. The Developer shall submit commencement of construction.
the specified evidence of funds
availability. [§3.18]
4
Ogardens SOP 3-8-I 1
ACTION DATE
30. Aoproval —Evidence of Funds. The Within 10 days after receipt by the
Agency shall approve or disapprove the Agency.
evidence offunds. [§3.18]
31. Commencement of Rehabilitation Work. Not later than January 18, 2012.
The Developer shall commence
rehabilitation of the Development. [§43]
32. .-Relocation. The Developer shall By September 30, 2011.'
substantially complete Relocation.
33. Completion of Rehabilitation. The May 31, 2012.
Developer shall complete rehabilitation
of the Development [§4.4]
34. Submission— Quarterly Progress�Reports. March 1, 2011; June 1, 2011;
The Developer sfiall submit'Quarterly September 1, 2011, December 1, 201 l;
Progress Reports. [§4.7] March 1, 2012; June 1, 2012; September
I, 2012; and December 1, 2012.
35. Submission—Financial Accounting. The No later than 90 calendar days following
Developer shall submit a financial Completion of Rehabilitation Work.
accounting of all sources and uses to the
Agency. [§5.1]
36. Submission—Cost Certification. The No later than 150 calendar days
Developer shall submit the form 8609 to following Completion of Rehabilitation
TCAC with a copy to the Agency. [§5.1] Work.
37. Loan Repavment. Subject to the terms of Subject to the terms of Section 2.13.
Section 2.13.
5
Ogardens SOP 3-8-1 I
D
EXHIBIT D
APPROVED SCOPE OF REHAE3ILITATION WORK
EXHIBIT D �
APPROVED SCOPE OF REHABILITATION WORK
• Developer must perform all construction needed to complete the proposed plans
including the interior remodel of the units as described and approved by the City Council
in Development Review Application DR 10-05.
• Unit interiors will have al].new flooring, counters, cabinets, appliances and fixtures. The
walls will be retextured and painted, HVAC will be converted to forced air, the popcorn
ceilings will be removed and staircases will be repaired.
• Exterior stucco will be replaced as needed.
• Landscaping will be replaced with drought tolerant landscaping.
• Building exteriors will be upgraded with windows, doors and roof treatments to reflect
the attached renderings.
• Developer will construct or rehabilitate improvements including curb, gutter, sidewalk,
lighting, landscaping and paving of the private driveway accessing the site.
• Developer will construct a new community building as well,as a large tot lot with a shade
structure.
OGardens Scope 3-S-I1
0
�
�
6
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EXHIBIT E
APPROVED REHABIL[TATION WORK PLANS
EXHIBIT E
APPROVED,REHABILITATION WORK PLANS
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ORANGE GARDENS APARTMENTS
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E-3
F
EXHIBTT F
PORM OF FIRST AMENDED AND RESTATED NOTE
EXHIBIT F
FORM'OF FIRST AMENDED AND RESTATED PROMISSORY NOTE
FIRST AMENDED AND RESTATED PROMISSORY NOTE
(Orange Gardens- 12510 Oak Knoll Road)
$8,846,000 Poway, California , 20_
FOR VALU� RECEIV.ED, Poway Family Housing Partners, L.P-., a California limited
partnership ("Borrower"), promises.to pay to the Poway Redevelopment Agency, a public body
corporate and politic (the "Agency"), the principal sum of up to �ight Million Eight Hundred
Forty-Six Thousand Dollars ($8,846,000), or so much as is disbursed to Borrower, plus interest
thereon pursuant to Section B., below.
A. Bonower's Obligation. This promissory note (the "Note") evidences the
Borrower's obligation to pay the Agency the principal amount of up to Eight Million Eight
Hundred Forty-Six Thousand Dollars:($8;846,000), far the funds.loaned to the Bonower by the
Agency'to finance the acqui"sition and refia6ilitation of the Development pursuant to that certain
First Amended and Restated Agency Loan Agreement, between the Borrower and the Agency,
dated , 2011 (the "Loan.Agreement"). All capitalized terms not otherwise defined in
this Note shall have the meanings set forth in the Loan Agreement.
B. Interest.
(1) Interest, Rate. Subject to the provisions of subsection B.(2) below, the,
outstanding principal balance of the Loan shall bear simple interest.at the annual rate of three
percent (3%),per annum commencing with the date of first disbursement.
(2) Default Rate. In the event of a Default, interest on the Loan shall begin to
accrue, as of the date of Default and.continuing until such time as the Loan funds are repaid in
full or the.Default is cured, at the.,default rate of the lesser of ten percent (10%), compounded
annually; or the highest rate permitted by law.
C. Term and Repavment Requirements.
(1) The term of the Loan shall commence with the date of this Note and shall
expire fifry-six (56)'years after the date of this Note.
(2) Annual Payments. Subject to the terms of subsection C.(3) below,
commencing on April 1, following Completion of Rehabilitation of the Development (but in no
event later than April 1, 2012) and on April 1 of each year thereafrer for the Term, the Borrower
shall make repayments of the Agency Loan in the amount of the Agency's Share of Residual
1
OGardens Notz 3-5-11
Receipts as defined below. Payment of the Agency's Share of Residual Receipts shall be
credited frst againsti accrued interest and then against outstanding principal, and shall be
accompanied bythe Borrower's report of Residual ReceipYs (iricluding an indeperident auditor's
report,regarding the,auditor's review of Annual Ope'rating �zpenses). Each payment shall be
accompanied by the,Agency's form of Residual Receipts Report in the form attached,to the Loan
Agreement as Exhibit K. The Bonower shall provide the Agency with any documentation
reasonably requested by the Agency to substantiate the Borrower's determination of Residual
Receipts.
' (3) Special Repayment from Net Proceeds of Permanent Financing.. One
Hundred_percent(]00%) of Net Proceeds of Permanent Financing shall be paid to the Agency as
a special repayment of the Agency Loan.
(4) Determination of Net Proceeds of Permanent Financing. The amount of
the Net Proceeds of Permanent'Finaricing shall be determined by the Bonower and submitted to
the Agency for approval on the date the Borrower submits the final cost audit for the
Development to the TCAC. The amount of the Net Proceeds of Permanent Financing shall be
calculated using the actual principal amount of the permanent loans and/or grants made to
Borrower, provided tl�at Borrower provides sufficient evidence that the permanent loan is the
masimum principal amount that Borrower could secure for the Development applying
reasonable underwriting standards. The Bonower shall also submit to the Agency any additional
documentation sufficient to verify tlie amount of the Net Proceeds of Permanent Financing. The
Agency shall reasonably approve or disapprove Borrower's determination of the amount of the
Net Proceeds of Permanent Financing in writing within sixfy (60) days of the receipt pf
Borrower's cost audit and supplemental documentation. If Borrower's determination is
disapproved by the Agency, Borrower shall re-submit documentation to the Agency uritil the
Agency approval is obfained., Tfie Agency's share of the Net Proceeds of Permanent Financing '
shall be due the Agency from' the Borrower no later than five (5) days following the date
Borrower closes the permanent financing for the Development. The Agency Executive Director
is authorized to approve a reduced Special Repayment from Net Proceeds of Permanept
Financing of the Agency Loan pursuant to this subsection in the event the Agency Executive
Director determines in the Agency,Executi've Director's sole and absolute discretion that such
funds are required to pay project costs reasonably incurred by Borrower-and approved by the
Agency pursuant to the Financing Plan.
(5). Due in Full. All principal and accrued interest on the Agency Loan sl�all
be due in full' on the earliest to occur of: (a) the date of any Transfer not authorized by die
Agency,'(b) the date of any Default, or (c) the expiration of the Term.
(6) Right to Prepay.. The Borrower shall have the right to prepay the Agency
� Loan at airy time witHout premium or penalty. However, this Agreement and the Agency
Regulatory Agreement shall remain in effect for the entire Term regardless of any prepayment.
(7) Special Definitions. The following definitions shall apply for purposes of
this Note:
2
OGardcns Note 3-S-I I
(a) "Agency's Share of Residual Receipts" shall mean fifty percent
(SO%) of Residual Receipts.
(b) "Annual Operating Expenses" with respect to a particular"calendar'
year shall mean the following costs reasonably and actually incurred for operation and
maintenance of the Devel'opment to the extent that they �are consistent with an annual
independent audit performed by a certified public accountant using generally accepted
accounting principles:
(i) properiy taxes and assessments imposed on the
Development;
(ii) debt service currently due on a non-optional basis
(excluding debt service due from residual receipts or surplus cash of the Development) on loans
associafed with ihe Rehabilitation Work and approved by the Agency;
(iii) property management fees and reimbursements, not to
exceed fees and reimbursements which are standard in the industry, and pursuant to a
management contract approved by the Agency;
(iv) premiums for property damage and liability insurance;
utility services not paid for directly by tenants, including water, sewer, and trash collection;
maintenance and repair;
(v) any annual license or certificate of occupancy fees required
for operation of the Developinent;
• (vi) security services;
(vii) advertising and marketing;
(viii) fees for resident services in the,annual amount approved by
the Agency in the Resident Services Budget;
(ix) cash deposited into reserves for capital replacements of the
Development in an amount to be approved by the Agency aspart of the Final Financing Plan;
(x) cash deposited into an operating reserve in an amount to be
approved.by the Agency as part of the Final Financing Plan and annual operating budgets, but
with the operating reserve capped at six (6) months of gross rent from the Development (as such
rent may vary from time to time);
(xi) asset management fee in the amount of Fifteen Thousand
Dollars ($15,000) subject to an annual adjustment not to exceed three and one half percent
(3.5%);
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OGazdens Note 3-8-1 V
(zii) for the first fifteen (I5.) years of the Term, a partnership
management fee� in the amount of Five Thousand Dollars ($5,000) subject to an annual
adjustment not to exceed three.and one half percent(3.5%);
' (xiii) deferred Borrower fee in an amount to be approved by the
Agency as part.of the Final Financing Plan;
(siv) municipal services fee paid pursuant to Section 5.2 below;
(xv) extraordinary operating costs specifically approved by the
Agency; and
(xvi) payments of deductibles in connection with casualty.
insurance claims not normally paid from reserves, the amount of uninsured losses actually
replaced, repaired.or restored, and not normally paid from reserves,
(xvii) reasonable accounting fees and legal fees; and
(xviii) other ordinary and reasonable operating expenses approved
by the Agency and not listed above.
"Annual Operating Expenses" shall not include the following: depreciation, amortization,
depletion or other non-cash expenses or any amount expended from a reserve account.
(c) "Gross Revenue," with respect to a particular calendar year, shall
mean all revenue, income, receipts, and other consideration actually received from operation and
leasing of the Development. "Gross Revenue" sha11 include, but not be limited to:
(i) all rents, fees and charges paid by tenants, Section 8
payments or other rental subsidy payn�ents received for the dwelling units, deposits forfeited by
tenants, all cancellation fees, price indea adjustments and any other rental adjustments to leases
or rental agreements resulting Tn actual income;
(ii) the proceeds of business interruption.or similar insurance;
(iii) the fair market value of any goods or services provided in
consideration for the leasing or other use of any portion of the Development
• (iv) subject to the rights of Senior Lenders, the proceeds of
casualty insurance to the extent not utilized to repair or rebuild the Development (or applied
toward the cost of recovering such proceeds); and
(v) condemnation awards for a taking of part or all of the
Development for a teinporary period.
4
OGardens Note 3-8-I 1
"Gross_Revenue" shall not include tenants' security deposits, loan proceeds,capital contributions
orsimilaz advances.
(d); "Residual Receipts" in a particular caleridar year shall .mean the
amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as
defined above).
(e) Reports and Accounting of Residual_Receipts.
(i) Audited Financial Statement. In connection with the,
annual payments required pursuant to subsection C. (2) of this Note, within one hundred twenty
(120) days of tfie end of the.Borrower's fiscal year; the Borrower shall furnish to the Agency an
audited statement duly certified by an independent firm of certified;public accountants appioved
by the Agency, setting forth in reasonable detail the computation and amount of Residual
Receipts during the preceding calenda;year.
(ii) Books,and Records. The Borrower shall keep and maintain
on the Property, or at its principal place of business, or elsewhera with the Agency's written
consent, full, complete and appropriate books, records and accounts relating to the Development„
including all.such books, records and accounts necessary or prudent to evidence and substantiate
in full detail the Borrower's calcnlation of Residual Receipts. Books, records and accounts
relating to the Borrower's compliance with the terms, provisions, covenants and conditions of
this Agreement shall be kept and maintained in accordance with generally accepted accounting
principles consistently applied, and shall' be consistent with requirements of this Agreement
which provide for the calculation of Residual Receipts on a cash basis. All such.books, records,
and accounts shall be open to arid available for inspection by the Agency, its auditors or other_
Agency authorized representatives at reasonable intervals during normal business hours. Copies
of all tax returns and other reports that the Borrower may be required to furnish ariy
governmental agency shall at all reasonable times, and upon twenty-four (24) liours notice, be
open for inspection by the Agency at the place that the books, records and accounts of the
Bonower are kept. The Borrower shall preserve records on which any statement of Residual
Receipts is based for a period of not less than five (5) years after such statement is rendered, and
for any period during which there is an audit undertaken pursuant to subsection (c) below then
pending.
(iii) Audits. The receipt by the Agency of any statement
pursuant'to subsection (e)(i) above or any payment by the Borrower or acceptance by the Agency
of any loan repayment for any period shall not bind the Agency as to the correctness of such
statement or•such payment. Within three (3) years after the receipt of any such statement, the
Agency or any designated agent or employee of the Agency at any time shall be entitled to audit
the Residual,Receipts and all books, records, and accounts pertaining thereto. Such audit shall
be conducted during pormal business hours at the principal place of business of the Borrower
and other places wfiere records are kept. Immediately after the completion of an audit, the
Agency shall deliver a copy of the results of such audit to the Borrower. If it shall be determined
as a result of such audit that there has been a deficiency in a loan repayment to the Agency, then
5
OGardens Note 3-8-I I
such deficiency shall become immediately due and payable with interest at the default rate set
forth in this Agreement, determined as of and accruing�.from tke date that said payment,should
have been made. In addition, if the Bonower's audifoi's staterrient for any Development fiscal
year,shall be found to have understated-Residual Receipts liy more than five percent (5%) and at
least Five Tfiousand Dollazs ($5,000), and the Agency is entitled to any additional Agency Loan.
repayment as a result of said understatement, then the Borrower shall pay, in addition to the
interest charges referenced hereinabove, all of the Agency's reasonable costs and expenses.
connected with any audit or review of the Borrower's accounts and records.
(� Non-Recourse.
Except as provided below, the Borrower shall not have,any direct or indirect personal
liability for payment of the principal of, or interest on, the Agency Loan. .Following recordation
of the Agency Deed of TrusT, the sole recourse of the Agency with respect to the p"rincipal of,
and interest on, this Note shall be to the 'property described in the Agency Deed of Trust;
provided, however, that nothing contained in the foregoing limitation of liability shall: (i) limit or
impairthe enforcement against all such,security for this Note of all the rights and remedies of the
Agency thereunder; (ii) be ,deemed in any way to impair the right of the Agency to assert the
unpaid principal amount of this Note as demand for money within the meaning and intendment
of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto;
(iii) be deemed in any way to limit the rights of the Agency to obtain specif c performance by the
Borrower of its covenants under the Agency Loan Documents, other than the covenants to pay
the Agency principal and interest due under this Note. The foregoing limitation.of liability is,
intended to apply only to the obligation for the repayment of the principal of, and payment of
interest on this Note; nothing contained herein is intended to relieve the Borrower of its
o6ligation to indemnify the Agency under Sections 4.5(c), 5.6, and 8.5 of the Loan.Agreement,
or liability for; (l) fraud or �villful misrepresentation; (2) the failure to pay ta�ces, assesstnents or
other charges which may create liens on the Property that are payable or applicable prior to any
foreclosure under the Agency Deed of Trust (to the full extent of such taxes, assessments or
other cHarges); (3) the fair market value of any personal property or fixtures removed or disposed
of by the Borrower other than in accordance with the Agency Deed of Trust; and (4) the
misappropriation of any proceeds under any insurance policies or' awards resulting, ,from
condemnation or the exercise of the power of eminent domain or by reason of damage,.loss or
destruction to any portion of the Development.
D. No Assumption. This Note shall not be assumable by the successors and assigns
of Borrower without the prior written consent of lhe Agency as provided in Article 5 of the Loan
Agreement.
E. Securitv. This Note is secured by the Deed of Trust covering the Property and the
Assignment of P(ans from Bonower to Agency, dated the date of this Note. �
F. Terms o_ f�nt.
6
OGardens Nole 3-8-11
(1) All payments due under this Note shall be paid in currency of the United
States of America, which at the time of payment is"lawful for the payment of public and private
debts.
(2) A'll payments on this Note shall be paid to Agency at Poway
Redevelopment Agency, 13325 Civic Center Drive, Poway, CA 92064 Attention: Executive
Director or to such other place as the Agency may from time to time designate in writing.
(3) All payments on this Note shall be without expense to the Agency, and the'
Borrower agrees to pay all costs and expenses, including re-conveyance fees and reasonable
attorney's fees of the Agency, incurred in connection with the payment of this Note and the
release of any security hereof.
(4) Notwithstanding any other provision of this Note, or any 'instrument
securing the obligations of the Borrower under this Note, if, for any reason whatsoever, the
payment of any sums by the Borrower pursuant to the ternis of this Note would result in the
payment of interest which would exceed the amount that the Agency may legally charge under
the laws of the,State of California;then the amount by which payments exceed the lawful interest
rate shall automatically be deducted from the principal balance owing on this Note,.so that in no
event shall the Borrower be obligated under the terms of this Note to pay any interest which
would exceed the lawful rate.
G. Default.
(1) Any of the following shall constifute an Event of Default undei this Note:
(i) Any failure to pay, in full, any payment.required under this Note
when due following written notice by Agency of such failure and thirty (30) days opportunity to
cure;
(ii) Any failure in the performance by the Borrower of any term,
condition, provision or covenant set forth in this Note subject to the notice and cure period set
forth in Section 71 of the Loan Agreement; and
(iii) The occurrence of any Event of Default under the Loan
Agreement, the Agency Deed of Trust, or the Agency Regulatory Agreement, or other
instrument securing the obligations of the Borrower under this Note or under any other
promissory notes hereafter issued by the Borrower to the Agency pursuant to the Loan
Agreement or the Agency Deed of Trust, subject to notice and cure periods, if any, set forth
therein.
(2) Upon the occurrence of such an Event of Default, the entire unpaid �'
principa] balance,, together with all interest thereon, and together with all other sums then
payable unde'r thisNote and the Agency Deed of Trust shall at the option of the Agency become
immediately due and payable upon written notice by the Agency to the Borrower without further
demand.
7
OGardens Note 3-8-t I
(3) The failure to exercise the remedy ,as set forth in Section 7.2(b) of the
Loan Agreement:or,any otherremedy provided by law upon the occurrence of one or more:oFthe
foregoing events of default shall not constitute a waiver of'the right to exercise any remedy at
any subsequent'time in ,respect to the same or any other default. The acceptance by Agency
hereof of.any payment which is less than the total of all amounts due•and payable at the:time of
such payment shall no4 constitute,a waiver of the right to exercise any of the faregoing 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 Agency, except as and to the extent
otherwise provided by law.
H. Waivers.
(1) The Borrower hereby waives diligence, presentment, protest and demand,
and notice of protest, notice of demand, and notice of dishonor of this Note. The Bonower
expressly agrees that this Note or any payment hereunder may be extended from time to time,
and that the Agency may accept further,security or release any security for this Note, all without
in any way affecting the liability of.the.Bonower.
(2) No extension of time for payment of this Note or any �nstallment hereof
made by agreement by the Agency with any person now or hereafter liable for payment of this
Note shall operate to release, discharge, modify, change or affect the original liability of the
Borrower under this Note, either in whole or in part.
(3) The obligations•of the Borrower under this Note shall be absolute and the
Borrower waives any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
I. Miscellaneous Provisions.
(1) All notices'to the Agency or the Borrower shall be given in the manner
and at the addresses set forth in the Loan Agreement, or to such addresses as the Agency and the
Borrower may hereinafter designate.
(2) The Borrower promises to pay all costs 'and expenses, including
reasonable attorney's fees, incurred by the Agency in the enforcement of the provision of this
Note, regardless of whether suit is filed to seek enforcement.
(3) This Note may not be changed orally, but only by an agreement`in'writing
signed by the party against whom enforcement of any waiver, change, modification or discharge
is sought.
� (4) This Note shalli be governed by and construed in accordance with'the laws
of the State of California.
(5) The times for the performance of any obligations hereunder shall be
strictly construed, time being of the essence.
8
OGardens Note 3-8-I I
(6) This document, together with the Agency Loan Documents (as defined in
the Loan Agreement), contains the.entire agreement between the parties as to the Loan. It may
not be modified except upon written consent of the parties.
J. Amended and Restated Promissorv Note.
The Foundatibn for Affordable Housing V, Inc., Bonower's predecessor in interest to the
Loan, executed a Promissory Note to the Agency dated Deceinber 22, 2009 in the principal
amount of One Ivlillion Two Hundred Ninety Six Thousand Dollars ($1,296,000) (the ``Original
Note"). This Note amends and restates the Original Note in its entirety, and upon execution of
this Note by the Borrower, the Original Note shall be cancelled and returned to the maker.
BORRO WER:
POWAY FAMILY HOUSING PARTNERS, L.P., a
California limited partnership
By; Foundation for Affordable Housing V, Inc.,
a California nonprofit public benefit corporation, its
Managing General Partner
By:
Deborrah Willard, President
By: Affirmed Housing Group, Inc., a Delaware
Corporation, its Administrative
General Partner �
By:
James Silverwood, President
9
OGardens Note 3-8-1 I
G
EXHIBIT G
FORM OF FIRST AA�ENDED AND RESTATED DEED OF TRUST
EXHIBIT G'
FORM OF FIRST AMENDED AND'RESTATED DEED OF TRUST
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
NO FEE FOR RECORDING PURSUANT TO
GOVERNMENT CODE SECTION 27383
FIRST AI4IENDED AND RESTATED DEED OF TRUST WITH ASSIGNMENT OP RENTS -
AND._SECURITY AGREEMENT
(Orange Gaidens— 12510 Oak Knoll.Road)
THIS FIRST AMENDED AND RESTATED DEED OF TRUST WITH ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT ("Deed of TrusY') is made as of , 20 ,
by and among Poway Family Housing Partners, L.P., a Califomia limited parfnership
- ("Trustor"), Chicago Title Company, a California corporation ("Trustee"), and the Poway'
Redevelopment Agency, 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 Or
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
Trusfor 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 ineans 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
OGardens DOT 3-8-I I
TOGETHER WITH all building materials and equipment now or hereafrer delivered ro
said property and intended to be installed therein;
TOGETH�R WITH all right, title and interest of Trustor, now owned or hereafrer
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
❑ature, 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 propeRy, including
withouf 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 WITH all of Trustor's interest in all articles of personal property or fixtures
now ar hereafrer 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 shall be attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtu;es, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment (except laundry equipment owned by third parties),
machinery, furniture and furnishings, signs and other personal property now or hereafter
appropriated for use on the Property, whether stored on the Property orelsewhere, and used or to
be used in connection wiffi the Property; all rents, issues and profits, and all inventory, accounts, •
accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents,
notes drafrs, letters of credit, insurance policies, insurance and condemnation awards and
proceeds, trade uames,.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
OGardcns DOT 3-R-11
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the
"Secured Obligations"):
(a) Payment to Beneficiary of all sums at any time owing under or in connection with
the Agency Note (defined in Article 1 below) until paid or cancelled and any other amounts
owing under the.Agency Loan Documents. Said principal and other payments shall be due and
payable as provided in the Agency Note or other Agency Loan Documents, as applicable. The
Agency Note and all its terms are incorporated herein by reference, and this conveyance shall
secure any and all extensions thereof, however evidenced; and
(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; and
(c) Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Agency Loan Documents (defined in Section 1.2 below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
Section 1.1 The term "Loan Agreement" means that certain First Amended and
Restated Agency Loan Agreement, between Trustor and Beneficiary and Poway Housing
Partners, L.P, a Califomia limited partnership, of even date herewith, providing for the
Beneficiary to loan to the Trustor Eight Million �ight Hundred Forty-Six Thousand Dollars -
($8,846,000) for the acquisition and development of the Property.
Section 1.2 The term "Agency Loan Documents" means this Deed of Trust, the
Agency Note, the Loan Agreement, the Agency Regulatory Agreement, Notice of Restriction on
Transfer of Property, the Assignment of Plans, and any other debt, loan or security instruments
between Trustor and the Beneficiary relating to the Property.
Section 1.3 The term "Agency Note" means the promissory note in the principal
amount of Eight.Million Eight Hundred Forty-Six Thousand Dollars ($8,846,000) of even date
• herewith executed by Trustor, the payment of which is secured by this Deed of Trust. (A copy of
the Agency Note is on file with the Beneficiary and terms and provisions of the Agency Note are
incorporated herein by reference.).
Section 1.4 The term "Principal" means the amount required to be paid under the
Agency Note.
3
OGardens DOT 3-8-I 1
Section 1.5 The term "Notice of Affordability Restrictions" means the Notice of
Affordability Restrictions on Transfer of Property between the Trustor and the Beneficiary to be
recorded against the Property.
Section 1.6 The term "Regulatory AgreemenY' means the Amended and Restated
Regulatory Agreement and Declaration of Restrictive Covenants of even date herewith by and
between the Beneficiary and the Trustor.
Section 1.7 The term "Senior Lenders" means lenders making loans under the
Approved Financing as defined in Section I.] of the Loan Agreement.
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 and performance of the
Secured Obligations, 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 shall have 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 thiRy
(30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien
against the Security oF any part thereo£ 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 compietion 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 Loan Documents; provided, however, that Beneficiary shall exercise.its rights as
agent of Trustor only in the event that Trustor shall fail to take, or shall fail to diligently continue
to take, those actions as hereinbefore provided.
(c) Upon demand by Beneficiary, Trustor shall make or cause to be made such
demands or claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or
other persons w�ho have furnished or claim to have furnished labor, services or materials in
connection with the Security. Nothing herein contained shall require 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 San Diego County, a surety bond in an amount 1 and 1/2 times the
amount of such claim item to protect against a daim of lien.
4
OGardens DOT 3-8-I I
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 site access, installation and
maintenance of public utilities including, without limitation, water, gas, electricity, sewer, cable,
telephone and telegraph, or those required by law, and as approved, in writing, by Beneficiary.
Section 23 Assignment of Rents.
(a) As part of the consideration for the indebtedness evidenced by the Agency 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 viRue 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 resident 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 Loan 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 occuned, 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 Loan,
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 2.3 as the same becomes due and payable, including but not limited to rents then due and
unpaid, and all such rents shall 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 shall contain 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 resident 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 resident therefor, delivered to each resident personally, by mail or by
delivering such demand to each rental unit, without any liability on the part of said resident to
inquire further as to the existence of a default by Trustor.
(b) Trustor hereby covenvrts that, except to senior mortgage lenders, 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 instruinent which would prevent
� Beneficiary from exercising its rights under this Section 2.3, 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
PropeRy for more than two (2) months prior to the due dates of such rents. Trustor covenants
that Trustor will not hereafrer 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 covenant that Trustor will
5
OGardens DO'f 3-8-11
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 Loan
Documents, 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 induding, 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 aze 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 shali 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
Loan Documents shall be applied first to the costs, if any, of taking control of and managing the
Property and collecting the rents, including, but not limited tq 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 PropeRy, 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 shall have access to the books and records used in the
operation and maintenance of the Property and shall be liable to account only for those rents - �
actually received. Beneficiazy shall not be 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 23.
(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 shall become part of the Secured Obligations secured by this Deed
of Trust pursuant to Section 33 hereo£ Unless Beneficiary and Trustor agree in writing to other
terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor
requesting payment thereof and shall bear interest from the date.of disbursement at the rate stated
in Section 3.3.
Any entering upon and taking and maintaining of control of the Property by B'eneficiary
or the-receiver and any application of rents as provided herein shall not cure or �vaive any default
hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
F• provided herein. This assignment of rents of the Property shall terminate at such time as this
Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
6
OGardens DOT 3-8-I I
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
(a) Trustor shall pay, or cause to be paid, at IeasCfifreen (15) days prior to the date of
delinquency, all taxes, assessments, chazges and levies imposed by any public authority or utility
company which are or may become a lien affecting the Security or any pari thereof; provided,
however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge
or levy so long as (1) the legality thereof shall be 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 3.1. 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
therefor 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 pazagraph, the provisions of this Section 3.1 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 ta�ces, assessments, charges and levies.
(b) In the event that Trustor shall fail to pay any of the foregoing items required by
this Section 3.1 to be paid by Trustor, Beneficiary may (but shall be uuder no obligation to) pay
the same, after the Beneficiary has notified the Trustor 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, shall 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 Loan Documents during the course of construction and following completion, and at
all times until all amounts secured by this Deed of Trust have been paid and all Secured
Obligations secured hereunder fulfilled, and this Deed of Trust reconveyed.
(b) All such insurance policies and coverages shall 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, shall be delivered to the Beneficiary upon demand therefor at
any timc prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances. ]n the event the Trusror shall fail to maintain the full insurance
coverage required,by this Deed of Trust or shall fail to keep the Security in accordance with the
Loan Documents, the Beneficiary, after at least seven (7) days prior notice to Beneficiary, may
(but shall be under no obligation to) take out the required policies of insurance and pay the
premiums on the same or may make such repairs or replacements as are necessary and provide
for payment thereof; and all amounts so advanced therefor by the Beneficiary shail become part
of the Secured Obligations (together with interest as set forth below) and shall be secured hereby,
which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid,
7
OGardens DOT 3-8-I 1
shall bear interest from the date of the advance at the:lesser of ten percent (10%) per annum or
the maximum rate permitted by law.
ARTIGLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 A�vards and Damages. Subject to the rights of senior lenders, all
judgments, awards of damages, settlements and compensation made in connection with or in lieu
of (a) taking of all or any part of or any interest in the Property by or under assertion of ihe
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
_ ("Funds") are hereby assigned to and shall 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 upon any indebtedness or
obligation secured hereby, in such order and manner as the Beneficiary shall determine at its sole
option. ,The Beneficiary shall be 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 aniount of all expenses incurred by it in connection with any such settlemenl or
adjustment. All or any pari 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
including repair or restaration in accordance with Section 5.7(b) of the Loan Agreement.
Application of all or any part of the Funds collected and received by the Beneficiary or the
release thereof shall not cure or waive any default under this Deed of Trust. The rights of the
Beneficiary under this Section 4.1 are subject to the rights of any senior mortgage lender.
ARTICLE 5
AGRGEMEN"fS AFFECTING THE PROPERTY; FURTHER ASSURANCES;
PAYM�NT 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
Loan Documents and any other agreement of any nature whatsoever now or hereafrer involving
or affecting the 3ecurity or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses: In the event of any
Event of Default (as defined below) hereunder, and if the Beneficiary should employ attorneys or
incur 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; and any such
amounts paid by the Beneficiary shall be added to the Secured Obligations, and;shall bear
interest from the date such expenses are incurred at the lesser of ten percent (10%) per annum or
the maximum ra[e permitted by law.
8
OGardens DOT 3-8-11
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 Agency 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 shall be deemed to be fixtures and part of the real.property
and this Deed of Trust shall constitute a fixtures filing under the Califomia Commercial Code.
As to any personal property not deemed or permitted to be fixtures; this Deed of Trust shall
constitute a security agreement under the Califomia Commercial Code.
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 Beneficiazy to maintain such valid perfected security
interest in the Security in order to secure the payment of the Agency Note in accordance with its
terms. The Beneficiary is authorized to file a copy of any sucfi 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.
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 Loan Documents.
' Section 5.7 tnspection of the Security. At any and all reasonable times upon seventy-
two (72) hours' notice, the Beneficiary and its duly authorized agents, attorneys, experts,
engineers, accountants and representatives, shall have the right, without payment of charges or
fees, to inspect the Security.
Section 5.8 Nondiscrimination.
(a) The Trustor herein covenants by and for itself, its heirs, executors, administrators,
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 any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases aYe defined in
Sections 12926, 12926.1, subdivision (m) and pazagraph (1) of subdivision (p) of Section12955,
and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or
herself, or any persou claiming under or through him or her, 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, sublessees, subtenants, or vendees in the premises herein
leased.
(b) Notwithstanding the preceding paragraph, with respect to familia] status, the
preceding paragraph shall not be construed to apply to housing for older persons, as defined in
9
OGardens DOT 3-8-I 1
Section 12955.9 of the Government Code. With respect to familial status, nothing in the
preceding paragraph shall be construed to affect Sections 51.2, 513, 51.4, 51.10, 51.11, and
799.5 of the Givil 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
Govemment Code shall apply to the preceding paragraph. The foregoing covenants shall run
with the land and survive the termination of this Agreement.
ARTICLE 6
HAZARDOUS WASTE
Section 6.1 Hazardous Waste.
(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 ar transport to or
from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic
substances ar related materials, including without limitation, any substances defined as or
included in the definition of"Hazardous substances," hazardous wastes," "hazardous materials;'
or "toxic subsfances" under any applicable federal or state laws or regulations (collectively
referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be
customazily kept and used in and about multifamily residential property.
(b) Trustor shall immediately 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 instituted, completed ar Ihreatened against Trustor ar the Property pursuan[ to
any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); (2) all claims made or ttireatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any I-Iazardous Materials (the matters set forth in clauses (1) and (2)
above hereinafrer referred to a "Hazardous Materials Claims"); and (3) Trustor's discovery of
any occunence or condition on any real propeRy 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 Califomia 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 airy Hazardous Materials Law.
(c) Beneficiary shall have the right to join and participate in, as a paRy if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attomeys' fees in connection therewith paid by Trustor. Trustor shall ,-
indemnify and hold harmless Beneficiary and its board members, supervisors, directors, officers,
employees, agents, successors and assigns from and against any loss, damage, cost, expense or
liability directly or indirectly arising out of or attributable to the use, generation, storage, release,
threatened release, discharge, disposal, or presence of Hazazdous Materials on, under, or about
10
OGardens DOT 3-8-11
, the Property including without limitation: (1) all'foreseea6le consequential damages; (2) the
costs of any required or necessary repair, cleanup or detoxification of the Property and the
preparation and iinplementation of any closure, remedia[ or other required plans; and (3) all
reasonable costs and expenses incuned by Beneficiary in connection with clauses (1) and (2),
including but not limited to reasonable attorneys' fees.
(d) Without Beneficiary's prior written consent, which shall not be unreasonably
withheld, Trustor shall not take any remedial action in response to the presence of any Hazardous
Materials on, under or about the Properly, 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,
impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiazy's
prior consent shall not be necessary in the event that the presence of Hazardous Materials on,
under, or about 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 possible to obtain Beneficiazy's consent before taking such action, provided that
in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken
(e) Beneficiary agrees not to withhold its consent, where such consent is required
heieunder, 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. '
(� The Tnistor hereby acknowledges and agrees that (1) this Article is intended as
the Beneficiary's written request for information (and the Trustor's response) conceming 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
Loan Documents (together �vith any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the propecty is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes oF Califomia Code
of Civil Procedure Section 736.
(g) In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in Califomia 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)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trdstee'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 r
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) 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
il
OGardens DOT 3-5-1 I
Procedure Section 726.5(a), the Trustor shall 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)(l), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by ar�y lessee,
occupant, or user of any portion of the Properiy and the Trustor knew or 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) 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.�(b) to
detemiine the degree to which the Property is environmentally impaired, pius interest thereon.at
the rate specified in the Agency Note until paid, shall be added to the indebtedness secured by
this Deed of Trust and shall be due and payable to the Beneficiary upon its demand made at any
time following the conclusion of such action.
ARTICLE 7
EVENTS OF DEPAULT AND REMEDIES
Section 7.i Events of Default. The following shall constitute events of default
("Events of Default") following the expiration of any applicable notice and cure periods: (1)
failure to make any payment to be paid by Trustor under the Loan Documents; (2) failure to
observe or perform any of Trustor's other covenants, agreements or obligations under the Loan
Documents, including, without limitation, the provisions concerning discrimination; or (3)
failure to make any payment or perform any of Trustor's other covenants, agreements, or
obligations under any other debt instruments or regulatory agreement secured by the Property,
• which default shall not be cured within the times and in the manner provided therein. •
Section 7.2 Acceleration of Maturity. If an Gvent of Default shall have occurred and
be continuing, then at the option of the Beneficiary; the amount of any payment related to the
Event of Default and the unpaid Secured Obligation shall iirunediately become due and payable,
upon written notice by the Beneficiary to the Trustor (or automatically where so specified in the
Loan Documents), and no omission on the part of the Beneficiary to exercise such option when
entitled to do so shall 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 shall have occuned and be continuing, the Beneficiary may:
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
Security and take possession thereof(or any part thereo� and of any of the Security, in its own
name or in the name of Trustee, and do any acts which it deems necessary or desirable to
preserve the value or marketability of the Property, or part thereof or intcrest 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 below)
hereunder or invalidate any act done in response to such Default or pursuant to such Notice of
Sale and, notwithstanding the continuance in possession of the Security, Beneficiary shall be
12
OGardens DOT 3-S-I 1
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;
Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or
specifically enforce any of the covenants hereof;
Deliver to Trus[ee a written declazation 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 ("Notice of
Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official
Records of San Diego County; or
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 hereafrer
evidencing, creating or securing all or any portion of the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall give. notice to tlie Trustee (the "Notice of Sale") and shall
deposit with Trustee this Deed of Trust which is secured hereby (and ihe deposit of which shall
be deemed to constitute evidence that.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.
Upon receipT of such Notice of Sale from the Beneficiary, Trustee shall cause to be
recorded, pnblished 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 b}� it in said Notice of Sale,
whether as a whole or in separate lots or parcels or items as Trustee shall deem 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 shall be conclusive proof oF the truthfulness thereof. Any person, including, without
limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby
covenants to warrant and defend the title of such purchaser or purchasers.
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 Agency Note; (2) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (3) all other sums then secured
hereby; and (4) the remainder, if any, to Trustor.
13
OGardens DOT 3-8-11
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 thereafrer, 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 shall have occurred and be 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, shall have the right to apply to any court having jurisdiction to appoint a receiver or
receivers of the Security (or a part thereo�, and Trustor hereby irrevocably consents to such
appointment and waives further notice of any application therefore. Any such receiver or
receivers shall have all the usual powers and duties of receivers in like or similar cases, and all
the powers and duties of Beneficiary in case of entry as provided herein, and�shall 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 esclusive of any other right,
power or remedy, but each and every such right, power and remedy shal] be cumulative and
concurrent and shall 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.
No delay or omission of the Beneficiary to exercise any right, power or remedy accruing
upon any Event of Default shall exhaust or impair any such right, power or remedy, or shall 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 ofren as may be deemed expeditious by the Beneficiary. Beneficiary's express or
implied consent to a breach by Trustor, or a waiver of any obligation of the Trustor hereunder
shall 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, shall 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.
If the Beneficiary (1) grants forbearance or an extension of time for the payment or
performance of any Secured Obligation, (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 Loan
Documents, (4) releases any paR of the Security from the lien of this Deed of Trust, or otherwise
changes any of the terms, covenants, conditions or agreements in the Loan Documents, (5)
consents to the granting of any easement or other right affecting the Security, or (6) makes or
14
OGardens DOT 3-8-I I
consents to any agreement subordinating the lien hereof, any such act or omission shall 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 shall any
such act or omission preclude the Beneficiazy 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 shall the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security. The Beneficiazy shall have 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
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 Trus[ee 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 Beneficiary, to the extent
permitted by law, shall be entitl'ed 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 which may become due and payable by the Trustor hereunder
afrer such date. •
Section 710 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 wllect any Secured Obligations 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 Agency
Loan Documents have been performed in full upon expiration of the term of the Regulatory
Agreement, 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 reconvey the Security to
Trustor, or to the person or persons legally entitled thereto.
� 15
OGardens UOT 3-8-I I
Section 8.3 Notices.
(a) If at any time after the execution of this Deed of Trust it shall become 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 shall be in writing and shall be served
personally or by depositing the same in the registered United States mail, retum receipt
requested, postage prepaid and (1) if intended for Beneficiary shall be addressed to:
The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
and (2) if intended for Trustor shall be addressed to: �
Poway Family Housing Partners, L.P.
c/o Foundation for Affordable Housing V, Inc.
30950 Rancho Viejo Road, Suite ]00
San Juan Capistrano, CA 92675
Attn: Executive Director
With a copy to Affirmed:
Affirmed Housing Group, Inc.
13250 Evening Creek Drive North, Suite 160 •
San Diego, CA 92128
Attention: President
(b) Any notice, demand or communication shall be deemed given, receivcd, 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 Agency 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
fierein,,at least ten (10) days prior to the date such change is desired to be effective.
Section 8.4 Successors and Joint Trustors. Where an obligation created herein is
binding upon Trustor, the obligation shal] also apply to and bind 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 shall be deemed to be a joint and several obligation of
the Trustor and such transferee. Where Trustor is more than ope entity or person, all obligations
of Trustor shall be deemed to be a joint and several obligation of each and every entity and
person comprising Trustor.
16
OGardens DOT 3-6-11
Section 8.5 Captions. The captions or headings at the beginning of each Section
hereof are far 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 declazed to be illegal or
invalid for any reason whatsoever by a court or other body of competent jurisdiction, such
illegality or invalidity shall not affect the balance of the terms and provisions hereof, which
terms and provisions shall 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, shall be considered to have been first paid or applied to the full payment of that
portion of the debt which is not secured or partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law. This Deed of Trust shall be govemed by and construed
in accordance with the laws of the State of California.
Section 8.8 Gender and Number. In this Deed of Trust the singular shall include the
plural and the masculine shall include 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 shall also refer to a deed of trust and any reference to a deed of trust shall also refer to
a mortgage.
Section 8.10 Actions. Trustor agrees to appear in and defend any action or proceeding
purporiing 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 shall be
vested with all title, powers, and duties conferred upon any Trustee herein named or acting
hereunder. Each such appointment and substitution shall be made by written instrument
executed by Beneficiazy, 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 P.roperty is
situated, shall 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 when4this Deed of
Trust, duly executed and acknowledged, is made public record as provided by law. Cxcept as
otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale
17
OGardens DOT 3-S-I 1
under this Deed of Trust or of any action of proceeding in°which Trustor, Beneficiary, or Trustee
shall be a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions. Notwithstanding anything, to the contrary
contained herein or in any documents secured by this Deed of Trust or contained in any
subordination agreement, the Beneficiary acknowledges and agrees that in the event of a
foreclosure or deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to the
Property encumbered by this Deed of Trust, the following rule contained in 26 U.S.C. Section
42(h)(6)(E)(ii), as amended, shall apply:
(a) 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 TaY Credit
Allocation Committee, (i) none of the tenants occupying those units at the time of Foreclosure
may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
Section 8.15 Amended and Restated Deed of Trust. Trustor executed the Agency Deed
of Trust with Assignment of Rents and Security Agreement, dated as of December 22, 2009 and
recorded in the Official Records of the Office of the Recorder of the,County of San Diego as
Document No. 2009-0704719 (the "Original Deed of TrusY'). This Deed of Trust amends and
restates the Original Deed of Trust in its entirety, and upon execution and recordation of this
Deed of Trust by the Trustor the Original Deed of Trust shall be cancelled and reconveyed.
[Signature Page Follows]
r
18
OGardens DOT 3-8-1 I
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of ,
20
TRUSTOR:
POWAY FAMILY HOUSING PARTNERS, L.P, a
California limited partnership
By: Foundation for Affordable Housing V, Inc.,
a California nonprofit public benefit corporation
Its: Managing General Partner
By:
Deborrah Willard, President
By: Affirmed Housing Group, Inc., a Delaware
Corporation
Its: Administrative General Partner
By:
James Silverwood, President
19
OGardens DO"I3-8-I1
STAT� OF CALIFORNIA )
) •
COUNTY OF' )
On , 20 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 withim instrument.and acknowledged to me that he/sl�e/they executed.the same
in his/her/their authorized capacity(ies), and that by his/herhheir signature(s) on the'instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrumenf.
I certify under PENALTY OF P.ERNRY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
EXHIBIT A
Legal Description
The land is situated in the City of Poway, County of San Diego, State of California, and is
described as follows:
H
EXHIBIT H
FORM OF NO'CICE OF AP'FORDAB[LITY RGSTRICTIONS �
ON T[L4NSFER OF PROPERTY
EXHIBIT H
FORM OF AGENCY NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OFPROPERTY
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(Orange Gardens- 12510 Oak Knoll Road)
NOTICE IS HEREBY GIVEN, that the Poway Redevelopment Agency, a public body,
corporate and politic (the "Agency"), to carry out ceriain obligations under the Community �
Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.),
and the Redevelopment Plan for the Paguay Redevelopment Project, has required Poway Famil'y
Housing Partners, L.P., a Califomia limited partnership (the "Owner") to enter into certain
affordability covenants and restrictions entitled, First Amended and Restated Regulatory
Agreement and Declaration of Restrictive Covenants (the "Restrictions"), with reference to a
housing development (the "DevelopmenY') situated on that certain real property (the "Property"),
located at 12510 Oak Knoll Road, San Diego Counry, Assessor's Parcel No. 317-540-69, and
further described in Exhibit A incorporated herein by reference.
The affordability covenants and restrictions contained in the Restrictions include without
limitation and as further described in the Restrictions:
1. Three (3) Units, including two (2) one-bedroom Units and one (1) two-bedroom Units in
the Development are restricted for occupancy by extremely-low income households, at
rents affordable to extremely-low income households; and
2. Twenty-Three (23) Units, including nine (9) one-bedroom Units, Eleven (11) two-
bedroom units and three (3) three-bedroom units, in the Development are restricted for
occupancy by very-low income households, at rents affordable to very-low income
households; and
3. Twenty-five (25), including eleven (11) one-bedroom units and fourteen (14) two-
bedroom units, in the Development are restricted for occupancy by lower income
households, at rents affordable to lower income households; and
1
OGardcns Notice of Affordability 3-8-1 I
4. Additional requirements concerning operation, management, and maintenance of the
Development are also imposed by the Restrictions.
In the event of any conflict between this Notice of Affordability Restrictions on Transfer of
Property (the "Notice") and the Restrictions, the terms of the Restrictions shall prevail.
The Restrictions have been recorded concurrently herewith, and shall remain in effect for
fifry-six (56) years from the date of recordation of this Notice.
This Notice is being recorded and filed by the Agency in compliance with Health and
Safety Code Sections 33334.3(fl(3) and (4) and/or Section 33413(c)(5), as amended effective
this date, and shall be indexed against the Agency and the Owner.
This Notice amends, restates, and replaces the original Notice of Affordability
Restrictions on Transfer of Property, dated as of December 22, 2009 and recorded in the Offce
of the San Diego County Recorder as Document No. 2009-0704720, in its entirety. Upon the
execution and recordation of this Notice, the original Notice of Affordability Restrictions on
Transfer of Property shall be terminated and removed as a lien against the Property.
[Remainder of Page Lefr Intentionally Blank.]
2
� OGardenSNoticeo(AfTordability3-8-II '
IN WITNESS WHEREOF, the paRies have entered into this Notice of Affordability
Restrictions on TransYer of Property.on or as of , 20_.
OWNER:
POWAY FAMILY HOUSING PARTNERS, L.P., a
Califomia limited partnership
By: Foundation for Affordable Housing V, Inc.,
a Califomia nonprofit public benefit corporation
Its: Managing General Partner
By:
Deborrah Willazd, President
By: Affirmed Housing Group, Inc., a Delaware
Corporation
Its: Administrative General Partner
By:
James Silverwood, President
AGGNCY:
THE POWAY REDEVELOPMENT AGENCY, a public
body, corporate and politic
By:
Penny Riley, Executive Director
3
OGardens Notiu ofA(fordabiliq�3-8-1 I
STATE OF CALIFORNIA )
)
COUNTY OF SAN DIEGO )
On , 20 before me, ,
Notaz,y 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.
WIT'NESS my hand and official seal.
Signature (Seal)
STATE OF CALIFORNIA )
)
COUNTY OF SAN DIEGO )
On , 20_ 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/aze
subscribed to the within instrument and acknowledged to me that he/shelthey executed the same
in his/hedtheir 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 PERJLJRY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
EXHIBIT.A
Legal Description
The land is situated in the State of Califomia, County of San Diego, City of Poway, and is
described as follows:
i
EXHIBIT I
FORM O� FIRST AMENDED AND RESTATED REGULATORY AGREEMENT AND
DECLARATION OP RESTRIC7'NE
COVF,NANTS
GXHIBIT I
FORM OF FIRST AM�NDED AND RESTATED REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTNE COVENANTS
RECORDING REQUESTED BY
AND WHEN R�CORDED MAIL TO:
The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
NO FEE FOR RECORDING PURSUANT TO
GOVERNMENT CODE SECTION 27383
FIRST AMENDED AND RESTATED REGULATORY AGREEMENT
� AND DECLARATION OF RESTRICT[VE COVENANTS
(Orange Gardens- 12510 Oak Knoll Road)
This First Amended and Restated Regulatory Agreement and Declaration of ResVictive
Covenants (the "Agreement") is made. and entered into as oF , 2011, 'by and
between the Poway Redevelopment Agency, a public body, corporate and politic (the "Agency")
and Poway Family Housing Partners, L.P., a Califomia limited partnership (the "Owner").
RECITALS
I. The Agency has entered into a First Amended and Restated Agency Loan
Agreement with Owner, under which the Agency wiil loan funds (the "Loan") to Owner which
will be used, together �vith funds obtained from other sources, for the predevelopment,
acquisition and rehabilitation costs of fifry-two (52) residential units (the "Development")
located on the real property in the City of Poway, County of San Diego, more particularly
described in Exhibit A attached hereto and incorporated herein (the "Property").
2. The Agency and the Owner entered into a Regulatory Agreement and Declaration
of Restrictive Covenants, dated December 22, 2009, and recorded in the Official Records of San
Diego County on December 22, 2009, as Instrument No. 2009-0704721 (the "Original �
Regulatory AgreemenP'). This Agreement amends restates and replaces the original Regulatory
Agreement in its entirety.
3. The funds loaned to Owner pursuant to the Agency Loan Agreement consist of
Agency Redevelopment Low and Moderate Income Housing Funds and Agency Housing Special
Program funds. Pursuant to Health and Safety Code Section 333343, the Agency must restrict
1
OGardens Reg and Dec 3-8-1 I
developments assisted with funds from the Agency's Low and Moderate Income Housing Fund,
so that the developments remain affordable to low and moderate income households for the
longest feasible time. This Agreement is intended to implement this requirement.
4. The Agency and the City Council have made the necessary findings to spend
Agency Redevelopment Low and Moderate Income Housing Funds,outside of the Paguay
Project Area, as evidenced by Agency Resolution No. R-09-12 and City Council Resolution No.
09-068 adopted concurrently on December 1, 2009. Expenditure of monies deposited in the
Housing Fund to fund the acquisition and related costs will serve the purposes of Health and
Safety Code Section 33334.2, as well as the goals and objectives of the Redevelopment Plan for
the Project Area, by improving and increasing the community's supply of affordable housing.
5. The Agency has agreed to loan funds to Owner on the condition that the
Development be maintained and operated in accordance with Health and Safety Code Sections
33334.2 et seq., 33413(a) and 33413.(b)(2)(A)(ii) and in accordance with additional restrictions
conceming affordability, operation, and maintenance of the Development, as specified in this
Agreement.
6. Through this Agreement and accompanying documents the Agency is imposing
occupancy and affordability restrictions on the Development in order to utilize the fifiy-two (52)
units in pariial satisfaction of its adequate sites inventory pursuant to Government Code Section,
65583.1(c). The City received prior approval, on November 24, 2009, from the California
Department of Housing and Community Development to credit the units towazd the adequate
sites requirement pursuant to the Housing Element Law(Article 10.6 of the Govermnent Code).
7. Owner intends to impose occupancy and affordability restrictions on the
Development in order to meet low and moderate income housing production requirements
applicable to the Project Area pursuant to Health and Safety Code Section 33413(b)(2)(A)(ii).
8. In consideration of receipt of the Loan at an interest rate substantially below the
market rate, Owner has further agreed to observe all the terms and conditions set forth below.
9. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the Agency and Owner wish to enter into this
Agreement.
THEREFORE, the Agency and Owner hereby agree as follows:
ARTICL� 1 �
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the following terms shall have
the respective meanings assigned to them in this Article 1.
(a) "Actual Household Size" shall mean the actual number of persons in the
applicable household.
2
, OGardens Reg and Dec 3-8-I 1
(b) "Adjusted Income" shall mean the total anticipated annual income oF all persons
in a household, as calculated in accordance with 25.Galifomia Code of Regulafions Section 6914
or pursuant to a successor State housing program that utilizes a reasonably similar method of
calculation of adjusted income. In the event that no such program exists, the Agency shall
provide the Owner with a reasonably similar method of calculation of adjusted income as
provided in said Section 6914. .
(c) "Agency" shall mean the Poway Redevelopment Agency, a public body,
corporate and politic.
(d) "Agency Deed of TrusY' shall mean the Amended and Restated Deed of Trust in
favor of the Agency on the Property which secures repayment of the Loan and performance of
this Agreement.
(e) "Agency Loan" shall mean all funds loaned to Owner pursuant to the Agency
Loan Agreement.
(� "Agency Loan AgreemenP' shall mean the Amended and Restated Agency Loan
Agreement entered into by and between the Agency and Owner, dated of even date herewith.
(g) "Agency Promissory Note" shall mean the Amended and Restated Promissory
Note from Owner to the Agency evidencing all or any part of the Agency Loan.
(h) "Agreement" shall mean this Pirst Amended and Restated Regulatory Agreement
and Declaration of Restrictive Covenants.
(i) "Assumed Household Size" shall have the meaning set forth in Section 2.3(d).
The definition is utilized to calculate affordable rent and is not intended to be a limit on the
number of persons occupying a unit.
(j) "City" shall mean the City of Poway, a municipal corporation.
(k) "DevelopmenY' shall mean the Property and the fifty-two (52) units to be
rehabilitated on the Property, as well as all landscaping, roads and parking spaces existing
thereon, as the same inay from time to time exist.
(1) "Existing Residents" shall mean the fifry-two (52) households that occupy the
units on the date of Owner's acquisition.
(m) "Extremely Low Income Household" shall mean a household with an Adjusted
Income that does not exceed the qualifying limits for extremely low income households, adjusted
for Actual Household Size, as established and amended from time to time pursuant to Section 8
of the United States Housing Act of 1937, and as published by the State of California
Department of Housing and Community Development.
3
OGardens Reg anA Dec 3-8-I 1
(n) "Extremely Low Income Rent" shall mean the rent permitted to be charged for an
Extremely Low Income Unit pursuant to Section 23(a) below.
(o) "Extremely Low Income Unit" shall mean the'Units, which, pursuant to Section
2.3(a) below, aze required to be occupied by Lower Income Households.
(p) "Foundation" shall mean Foundation for Affordable Housing V, Inc, a California
nonprofit public benefit corporation. Foundation shall serve as the Borrower's Managing
General Partner. �
(q) "Income Report" has the meaning set forth in Section 2.1.
(r) "Lower Income Household" shall mean a household with an Adjusted Income
that does not e�ceed the qualifying limits for lower income households, adjusted for Actual
Household Size, as established and amended from time to time pursuant to Section 8 of the
United States Housing Act of 1937, and as published by the State of Califomia Department of
Housing and Community Development.
(s) "Lower Income RenY' shall mean the rent permitted to be charged for a Lower
Income Unit pursuant to Section 2.3(c) below.
(t) "Lower Income Units" shall mean the Units, which, pursuant to Section 2.2(c)
below, are required to be occupied by Lower Income Households.
(u) "Median Income" shall mean the median gross yearly income adjusted for.Actual
Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as
applicable, in the County of San Diego, Califomia,'as published from time to time by the State of
California Department of Housing and Community Development. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
months, the Agency shall provide the Owner with other income determinations which are
reasonably similar with respect to methods of calculation to those pre��iously published by the
State of California Department of Housing and Community Development.
(v) "Owner" shall mean Poway Family Housing Par[ners, L.P., a California limited
partnership, and its successors and assigns to the Development.
(w) "Property" shall mean the real property described in Exhibit A attached hereto
and incorporated herein.
(x) "Rent" shall mean the total of monthly payments by the residents of a Unit (other
than the manager's Unit) for the following: use and occupancy of the Unit and land and
associated facilities, including parking; any separately charged fees or service charges assessed
by Owner which are required of all residents, other than security deposits; the cost of an
adequate level of service for utilities paid by the resident, including garbage collection, sewer,
water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or
4
OGardens Reg and Dec 3-8-I I
telephone service; any other interest, taxes, fees or charges for use of the land or associated
facilities and assessed by a public or private entity other than Owner, and paid by the Resident.
(y) "ResidenY' shall mean a household occupying a Unit.
(z) "Term" shall mean the term of this Agreement, which shall commence on the date
of this Agreement and shall expire on the fifty-sixth (56th) anniversazy of the date of recordation
oFthis Agreement.
(aa) "Units" shall mean,the fifty-two (52) renta] units to be rehabilitated'by the Owner
on the Property, excluding the Manager's Unit as defined in Section L 1 of the Agency Loan
Agreement).
(bb) "Very Low Income Household" shall mean a household with an Adjusted Income
that does not exceed the qualifying limits for very low income households, adjusted for Actual
Household Size, as established and amended from time to time pursuant to Section 8 of the
United States Housing Act of 1937, and as published by the State of Califomia Department of
Housing and Community Development.
(cc) "Very Low Income Rent" shall mean the rent permitted to be charged for a Very
Low Income Unit pursuant to Section 2.3(b) below.
(dd) "Very Low Income Units" shall mean the Units, which, pursuant to Section 2.2(b)
below, are required to be occupied by Very Low Income Households.
AR"I'[CLE 2
AFFORDABILITY COVENANTS
Section 2.1 Initial Assessment of Resident [ncomes and Rents. Promptly followiag
Owner's acquisition of the Property, Owner diligently rooh reasonable steps to obtain income
and rent certifications from all Existing Residents of the Development, and Owner verified
resident incomes in compliance with the requirements of Section 3.1 below. As of the date of
this Agreement, the Owner has provided the Agency with a written report of resident incomes
and rents within sixty (60) days of acquisition of the DevelopmenC(the "Income Report"). In the
event that the Owner is unable to obtain income and rent certification from an Existing Resident,
the Owner shall include in the Income Report the name and available contact information for
such Existing Resident, and the Owner shall document in the Income Report the reasonable steps
the Owner performed in attempting to obtain the income and rent certification from the Existing
Resident. The Income Report shall be accompanied by Owner's proposal regarding designation
of Units as Extremely Low Income Units, Very Low Income Units or Lower Income Units. In
designating Units, Owner shall use the following allocation procedures:
(a) To the greatest extent feasible, the Units of Existing Residents who qualify as
Extremely Low Income Households shall be designated as Extremely Low Income Units, the
Units of Existing Residents who qualify as Very Low [ncome Households shall be designated as
5
OGardens Reg and Dec 3-8-1 I
Very Low Income Units and the Units of Existing Residents who qualify as Lower Income
Households shall be designated as Lower Income Units.
(b) If there are more than ten (10) Existing Resident households who qualify as
Extremely Low Income Households, the Units occupied by the households with the lowest
incomes shall be designated as Extremely Low Income Units, with the remaining Units that are
occupied by �xtremely Low Income Households designated as Very Low Income Units.
(c) W'ith respect to �xisting Residents only, except to the extent rent decreases or
increases are required by the te_rms of the Bond Regulatory Agreement, Owner shall not
implement rent decreases or increases until the Agency has approved the Unit income
designations proposed by the Owner. The Agency agrees to approve or disapprove of the Unit
income designations proposed by the Owner not later than thirty (30) days following submittal
by the Owner. Prior to Agency approval oF Unit income designations, Owner also shall not
terminate tenancies except for serious and repeated lease violations or for Residents that received
relocation benefits, and no tenancies shall be terminated for overcrowding or violation of
occupancy restrictions. Overerowded households shall not be evicted, solely because of
overcrowding.
Section 2.2 Occupancy Requirements.
(a) Extremely Low Income Units. Three (3) Units, including two (2) one-bedroom
Units and one (1) two-bedroom Unit shall be rented to and occupied by or, if vacant, available
for occupancy by Extremely Low Income Households
(b) Very Low Income Units. Twenty-Three (23) Units, including nine (9) one- �
bedroom Units, eleven (11) two-bedroom Units, and three (3) three-bedroom Units shall be
rented to and occupied by or, if vacant, available for occupancy by Very Low Income
Households.
(c) Lower Income Units. Twenty-five (25) Units, including eleven (11) one-bedroom
Units and fourteen (]4) two-bedroom Units shall be rented to and occupied by or, if vacant,
available for occupancy by Lower Income Households.
(d) Manager's Unit. One (1) three-bedroom unit shall be available for designation as
the'manager's unit.
(e) Existing Residents. Owner may at its option terminate tenancies of Existing
Residents that do not meet the household income requirements of this Agreement; provided
however, such over income Existing Residents shall receive ninety (90) days written notice of
termination and shall be eligible for relocation assistance pursuant to the relocation plan
approved by the City pursuant to Section 3.4 of the Ag'ency Loan Agreement.
Section 23 Allowable Rent.
6
OGardens Reg and Dec 3-8-11
(a) Estremely Low Income Rent. Subject t_o Section 2.4(a) below, the Rent charged
to Residents of the Extremely Low Income Units shall not exceed one-twelfth (1/12th) of thirty
percent (30%) of thirty percent (30%) of Median Income, adjusted for Assumed Household Size.
(b) Very Low Income Rent. Subject to Section 2.4(b) below, the Rent charged to
Residents of the Very Low Income Units shall not exceed one-rivelfth (1/12th) of thirty percent
(30%) of fifty percent (50%) of Median Income, adjusted for Assumed Household Size.
(c) Lower Income Rent. Subject to Section 2.4(b) below, the Rent charged to
Residents of the Lower Income Units shall not exceed one-twelfrh (1/12th) of thirty percent
(30%) of sixty percent (60%) of Median Income, adjusted for Assumed Household Size.
(d) In calculating the allowable Rent for the Units, the following Assumed Household
Sizes shall be utilized, provided that the Development receives an allocation of Low Income
Housing Taac Credits, otherwise Assumed Household Size shall be determined pursuant to the
terms of Health and Safety Code Section 50052.5(h):
Number of Bedrooms Assumed Household Size
One 2
Two 3
Three 5
(e) No later than November 1 of each calendar year, the Agency shall provide the
Owner with a schedule of permissible maximum Extremely Low Income Rents, Very Low
Income Rents and Lower Income Rents far the succeeding year. Under no circumstance may
Owner raise rents above the permissible inaximum rents as allowed under the annua] rent
schedule provided by the Agency.
Section 2.4 Increased Income of Residents.
(a) Extremely Low Income Household to Very Low or Lower Income Household. If,
upon recertification of a Resid'enYs income, the Owner determines that a former Extremely Low
Income Household's Adjusted Income has increased and exceeds the qualifying income for an
Extremely Low Income Household set forth in Section 1.1 above, but does not exceed the
qualifying limit for,a Very Low Income Household or Lower Income Household as set forth in
Sections 1.1(bb) or l.l(r) respectively, then, upon expiration of the Resident's lease:
(1) Such Resident's Unit may be considered a Very Lo�v Income Unit or
Lower Income Unit, as applicable;
(2) Such Resident's Rent may be increased to a Very Low Income Rent or a
Lower Income Rent, as applicable, upon sixty (60) days written notice to the Resident; and
(3) The Owner shall rent the next available Unit to an Extremely Low Income
Household at an Extremely Low Income Rent.
7
OGardens Reg and Dec 3-8-1 I ' �
(b) Very Low Income Household to Lower Income Household. If, upon
recertification of a ResidenYs income, the Owner determines that a former Very Low Inc,ome
Household's Adjusted Income has increased and exceeds the qualifyirig income for a Very Low
Income Household set forth in Section l.labove, but does not exceed the qualifying limit for a
Lower Income Household as set forth in Section l.l above, then, upon expiration of the
Resident's lease:
(1) Such ResidenYs Unit may be considered a Lower [ncome Unit;
(2) Such Resident's Rent may be increased to a Lower Income Rent, upon
sixty (60) days written notice to the Resident; and
� (3) The Owner shall rent the next available Unit to a Very Low Income
Household at a Very Low Income Rent.
(c) Non-Qualifying Household. If, upon recertification of a Resident's income, the
Owner determines that a former Extremely Low Income Household, Very Low Income
Household or Lower lncome Household Adjusted Income has increased and exceeds the
qualifying income for Lower Income Households set forth in Section 1.1 (above one hundred
twenty percent (120%) of area median income) then upon expiration of the Resident's Lease:
(1) Owner shall send such resident a written notice of termination of tenancy '
informing Resident that Resident must vacate the unit. Owner shall allow Resident at least one
hundred twenty (120) days from the date the Resident's lease terminates and move out. Such ,
period may be extended for family circumstances at Owner's discretion and upon approval by
the Agency; and
(2) The Owner shall rent the next available Unit to an Extremely Low Income
Household, Very Low Income Household�or a Lower Income Household, as applicable, at Rent
not exceeding the maximum Rent specified in Section 2.3(a), 2.3(b) or 2.3(c), as applicable, to
comply with the requirements of Section 2.2 and Section 23 above.
(d) Termination of Occupancy. Except if the character of a Unit as an Extremely
Low Income Unit, Very Low Income Unit or Lower Income Unit has been redetermined
pursuant to this Section 2.4 due to the increased income of a Resident, upon termination of
occupancy of a Unit by a Resident, such Unit shall be deemed to be continuously occupied by a
household of the same income level (e.g., Estremely Low Income Household, Very Low Income
Household or.Lower Income Household as the initial income level of the vacating Resident, until
such Unit is reoccupied, at which time the income character of the Unit (e.g., Extremely Low
Income Unit, Very Low Income Unit or Lower Income Unit) shall be redetermined. If the
character of the Unit as an Extremely Low Income Unit, Very Low Income Unit or a Lower
Income Unit has been redetermined pursuant to this Section 2.4, upon tennination of occupancy
of a Unit by a Resident, such Unit shall be deemed to be continuously occupied by a household
of the same income level (e.g., Extremely Low Income Household, Very Low Income
Household or Lower Income Household) as the income level of the vacating Resident, until such
8
OGardens Reg and Dec 3-8-1 I
Unit is reoccupied, at which time the income character of the Unit (e.g., Extremely Low Income
Unit, Very Low Income Unit or Lower Income Unit) shall be redetermined.
Section 2.5 Resident Selection.
(a) Before leasing any vacant Units in the Development, the Owner must provide the
Agency for its review and approval the Owner's written marketing and resident selection plan.
(b) The Owner shall not discriminate against any applicants for tenancy on the basis
of source of income or rent payment (for example, without limitation, Temporary Assistance for
Needy Families (1'ANF) or Section 8), and Owner shall consider a prospective Resident's
previous rent history of at least one (1) year, or such other time period the Owner deems
reasonable, as evidence of the prospective Resident's ability to pay the applicable Rent The .
ability to pay shall be demonstrated if the prospective Resident can document that the
prospective Resident's gross income is at least two (2) times the prospective rent. The Owner, in
the reasonable exercise of its discretion, may waive the requirement that the prospective
Resident's gross income equal at least two (2) times the prospective rent, and admit prospective
Residents with lower gross incomes.
Section 2.6 Lease Provisions. Owner shall include in leases for all Units provisions
which authorize Owner to immediately terminate the tenancy of any household one or more of
whose members misrepresented any fact material to the household's qualification, as an
Extremely Low Income Household; Very Low Income Household or Lower [ncome Household,
as applicable. Each lease or rental agreement shal► also provide that the household is subject to
annual certification in accordance with Section 3.1 below, and that, if the household's income
inereases above the applicable limits for an Extremely Low Income Household, Very Lo�v
Income Household or Lower Income Household, as applicable, such household's Rent may be
subject to increase, and if the household's income increases above one hundred twenty percen[
(120%) oi'Median Income, the household's tenancy may be terminated.
Section 2.7 Condominium Conversion. The Owner shall not convert Development
units to condominium or cooperative ownership or sell condominium or cooperative conversion
rights to the Property during the Term of this Agreement.
ARTICLE 3 �
INCOME CERTIFICATION AND REPORTING
Section 3.1 Income Certification. With respect to new Residents, the O�vner will
obtain, and complete,.as a condition to initial occupancy and with respect ttl new Residents and
Existing Residents, maintain on file annually thereafter, income certifications from each
Resident renting any of the Units. The Owner shall make a good faith effort to verify that the
income provided by an applicant or occupying household in an income certification is accurate
by taking two or more of the following steps as a pari of the verification process: (1) obtain a
minimum of the three (3) most current pay stubs for all adults age eighteen (18) or older; (2)
obtain an income tax return for the most recent tax year, (3) conduct a credit agency or similar
9
OGardens Reg and Dec 3-8-1 I
search; (4) obtain the three (3) most current savings and checking account bank statements;(5)
obtain an income verification form from the applicant's;cunent employer; (6) obtain an income
verification form from the Social Security Administration and/or the Califomia Department of .
Social Services if the applicant receives assistance from either of such agencies; or (7) if the
applicant is unemployed and has no such tax retum, obtain another form of independent.
verification. Copies of_Resident income certifications shall be available to the Agency upon
request.
Section 3.2 Annual ReportSo Agency. Owner shall submit to the Agency: (a) nol later
than the forty-fifth (45th) day after the close of each calendar year, or such other date as may be
requested by the Agency, a statistical report, including income and rent data for all Units, an
assessment of compliance with the Resident Services Plan (including an assessment of the
Resident Services Plan outcomes), an assessment of compliance with the approved Management
Plan, an evaluation of the Management Agent, and (b) within fifteen (15) days after receipt of a
written request, any other information or completed forms requested by the Agency.
Section 33 Ad'ditional Information. Owner shall provide any additional infonnation
reasonably requesied by the Agency. The Agency shall have the right to examine and make
copies of all books, records or otherdocuments of Owner which pertain to the Development.
� � Section 3.4 Records. Owner shall keep and maintain on the Property, or elsewhere
with the Agency's written consent, complete, accurate and current records periaining to the
Development, and shall permit any duly authorized representative of the Agency to inspect
records, including records pertaining to income and household size of Residents, Rent charged
Residents and affirmative marketing requirements. All Resident lists, applications and waiting
lists relating to the Development shall at all times be kept separate and identifiable from any.
other business of the Owner and shall be maintained as required,by the Agency, in a reasonable
condition for proper audit and subject to examination during business hours by representatives of
the Agency. The Owner shall retain copies of all materials obtained or produced with respect to
occupancy of the Units for a period of at least five (5) years.
Section 3.5 Annual Operating Budget. The Owner, at least sixty (60) days prior to the
end of each of the Owners fiscal year, shall furnish the Agency an Annual Operating Budget.
Upon receipt by the Agency of the proposed Annual Operating Budget, the Agency shall
promptly review the same and approve or disapprove it within ten (10) working days. If the
Annual Operating Budget is not approved by the Agency, the Agency shall set forth in writing
and notify the Owner of the Agency s reasons for withholding such approvaL The Owner shall �
thereafrer submit a revised Armual Operating Budget for Agency approval, which appTOVaI shall
be granted or denied within ten (10) working days in accordance with the procedures set forth
above.
Section 3.6 Approval of Use of Reserve Funds. Owner agrees to crea[e and maintain
the reserves required by the Approved Financing (as defined in the Agency Loan Agreement)
and the reserves in the amounts approved by the Agency as part of the Financing Plan submitted
by the Developer pursuant to Section 3.11 of the Agency Loan Agreement. Prior to the use of
10
OGardens Reg and Dec 3-R-I I
funds from the reserves, Owner must submit a written request to withdraw funds from the
reserve account. The written request shall specify the amount requested and.state how the funds
will be used. The Agency shall approve such request wittiin thirty (30) days of receipt of the
� written request for use of reserves; such request shall not be unreasonably withheld. [f the
Agency fails to approde a request within the thiRy (30) days, such request shall be deemed
approved.
Section 3.7 Resident Services Plan and Resident Services Budget.
(a) ' THe Agency shall approve as part of the Pinancing Plan submitted by the
Developer pursuant to Section 3.11 of the Agency Loan Agreement a resident services budget to
enable Owner to hire a resident service coordinator and resident services provider (the "Resident
Services BudgeY'). Not less than sixty (60) days prior to the end of Owner's fiscal year, Owner
shall furnish to the Agency a draft Resident Services Plan and Resident Services Budget. Upon
receipt by the Agency of the proposed Resident Services Plan and Resident Services Budget, the
Agency shall promptly review the same and approve or disapprove it within ten (10) working
days. If the Resident Services Plan and/or Resident Services Budget are not approved by the
Agency, the Agency shall set forth in writing and notify the Owner of the Agency's reasons for
withholding such approval, which may include a request by the Agency for a change in the
nature�or scope of resident services.or a change in service provider. The Owner shall thereafter
submit a revised Resident Services Plan and/or Resident Services Budget for Agency approval,
which approval shall be granted or denied within ten (10) working days in accordance with
procedures set forth above.
(b) Prior to the disbursement of the Completion Component as defined in Section .
2.1(d) of the Agency Loan Agreement, Owner shall hire and employ an on-site resident service
coordinator and contract with a resident services provider capable of implementing the approved
Resident Services Plan. Owner shall submit for the Agency's approval the identity of any.
proposed resident services coordinator and resident services provider. The Owner shall also
submit such additiona] information about the background and experience of the proposed
resident services coordinator and resident services provider as is reasonably necessary for the
Agency to determine whether the proposed resident services coordinator and resident services
provider meets the standard for a qualified resident services coordinator and resident services
' p'rovider. If the proposed resident services coordinator and resident services provider, as
applicable, meets the standard for a qualified resident services coordinator and resident services
provider, the Agency shall approve the proposed resident services coordinator and resident
services provider by notifying the Owner in writing. If the proposed resident services
coordinator or resident services provider, as applicable, is disapproved by the Agency, the
Agency shall state with reasonable specificity the basis for disapproval.
(c) If, as a result of a periodic review, the Agency determines, in its reasonable
judgment, that the Residents of the Development are not receiving material services and/or there
is a failure to achieve outcomes identified in the approved Resident Services Plan, the Agency
shall deliver notice.to Owner of its intention to, in addition to any other remedies available to the
Agency hereunder, require the Owner to: (1) replace the resident service coordinator or resident
11
OGardens Reg and Dec 3-S-I I
services provider; or (2) eliminate the resident services line item as an Annual Operating
Expense under Section 2.13(�(1) of the Agency Loan Agreement; or (3) meet in good faith to
consider methods for improving the resident services being offered to Residents af the
Development; (4) deliver notice ro Owner requiring Owner to cause the replacement of the
resident services coordinator or resident services provider with a resident services coordina_tor or
resident services_provider selected by the Agency.
(d) If, afrer the above procedure, the Agency requires in writing the replacement of
the resident services coordinator or the.resident services provider, Owner shall promptly dismiss
the then resident services coordinator or resident services provider, as applicable,, and shall
appoint as the resident services coordinator or resident services provider, as applicable, a person
or entity capable of ineeting the standards for a resident services coordinator or resident services
provider, as applicable, under the Resident Services Plan and approved by the Agency at the
Agency's reasonable discretion.
(e) Any contract for the resident services coordinator or resident services provider, as
applicable, for the Development entered into by Owner shall provide that the contract can be
terminated as set forth above. Failure to remove the resident services•coordinator or the resident
services provider, as applicable, in accordance with the provisions of this Section 3J shall
constitute default under tfiis Agreement, and the Agency may enforce this provision t(uough
legal proceedings as specified in Section 6.4 below.
Section 3.8 On-site Inspection. The Agency shall have the right to perform an on-site
inspection of the Development at least one (1) time per year upon forty-eight hours (48) prior
. notice. The Owner agrees to cooperate in such inspection... ._ -
ARTICLE 4
OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use. The Development shall be operated only for residential
_ use as permanent multifamily rental'housing.
Section 4.2 Taxes and' Assessments. Owner shall pay all real and personal propeRy
taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit,
withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such
manner as to prevent any penalty from accruing, or any line or charge from attaching to the
Property; provided, however, that Owner shall have the right to contest in good faith, any such
taxes, assessments, or charges. In the event Owner exercises its right to contest any tax,
assessment, or charge against it, Owner, on final determination of the proceeding or contest, shall
immediately pay or discharge any dECision or judgment rendered against it, together with all
costs, charges and interest. . ,_
Section 43 Municipal Services Pee. No later than April 1 st of each calendar year,
commencing with April 1, 2012, Borrower shall pay to the City an annual payment of Seven
12
OGazdens Reg and Dec 3-B-I 1 .
Hundred Thirty-Three Dollars far each Unit in the Development, to pay for costs of municipal
services that will be provided to Residents of th"e Development.
Section 4.4 Nondiscrimination.
(a) All of the Units shall be available for occupancy on a continuous basis to
members of the general public who are:income eligible. Developer shall not give preference to
any particular class or group of persons inxenting the Units, except to the extent that the Units
are required to be leased to Extremely Low Income Households, V.ery Low Income Households,
ar Lower Income Households, or pursuant to Section 4.6 below.
(b) There shall be no discrimination against or segregation of any person or group'of
persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of su6division (p) of Section 12955, and Section 12955.2 of the Government Code,
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee,himself or herself, or any person claiming under or throngh him
or'her, establish or permit apy such practice or practices of discrimination or segregation with
reference to the selection; location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased.
(c) Notwithstanding the preceding paragraph, with respect to familial status, the
preceding paragraph 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 the
, preceding paragraph shall be construed to affect Sections 51.2,.51 3, 51.4, 'S1.10, 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 the preceding paragraph.
(d) The provisions of thi's Section 4.4 shall run with the land and survive termination
of this Agreement.
Section 4.5 Section 8 Certificate Holders. The Owner will accept as residents, on the
same basis as all other prospective residents, persons who are recipients of federal certificates or
vouchers for rent subsidies pursuant to the existing housing program under Section 8 of the
United States Housing Act, or its successor. The Owner shall not apply selection criteria to
Section 8 certificate or voucher holders that are more burdensome than criteria applied to all
other prospective residents, nor shall the Owner apply or permit the application of management
policies or,lease pr,oyisions with respect to the Development which have the effect of precluding
occupancy of units by such prospective Residents.
Section 4.6 Preference to City and Agency Displacees. Owner shall give a preference `
in the rental of any Units to eligible households displaced by activity of the Agency or the City,
as prodided in Health and Safety Code Section 33411.3. The preferences stated in this Section
4.6,apply to the rentals of Units throughout the Term.
13
OGardens Beg and Dec 3-8-11
ARTICLE 5
PROPERTY MANAGEMENT•AND NfAINTENANCE
Section 5.1 Management Responsibilitie"s. The Owner is responsible for all
management functions with respect to the Development, including without limitation the •
selectiom of residents, certification and recertification of household size and income, evictions,
collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs,
replacement of capital items, and security. The Agency shall have no responsibility over
management of th'e Development The Owner shall retain a professional property management
company, approved by the Agency in its reasonable discretion, to perform its management duties
hereunder. A resident manager sHall also be required. Prior to the commencement of
rehabilitati'on of the Devel'opment Owner shall submit a proposed management plan to °the
Agency for approval by the Agency: The Agency shall approve or disapprove (with written
explanation for disapproval) of the.proposed management plan by notifying the Owner in writing
within sixty (60) days of the date o€submission to the Agency.
Section 5.2 Management Agent; Periodic Reports. The Development shall at all times
be madaged by an experienced management agent reasonably acceptable to the Agency, with
demonstrated ability to operate residential facilities like the Development in a manner that will
provide decent, safe, and sanitary housing (as approved, the "Management AgenP'). As of the
date of this Agreement, Solari Enterprises is approved as the Management Agent. The Owner
shall submit for the Agency's,approval the identity of any proposed Management Agent and on-
site resident manager. The Owner shall also submit such additional information a6out. the
background, experience and financial conditiom of any proposed Management Agent and on-site
resident manager as is reasonably necessary for the Agency to determine whether tfie proposed
Management Agent or on-site resident manager meets the standard for.a qualified Management
Agent or on-site resident manager'set forth above. If the proposed_Management Agent or on,site
resident manager meets the standazd for a qualified Management Agent or on-site resident
manager set forth above, the Agency shall approve the proposed Management Agetit or on-site
resident manager by notifying the Owner in writing. Unless the proposed PJlanagement Agent or
on=site resident manager is disapproved by the Agency within thirty (30) days, which
disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed
approved.
Section 53 Performance Review. In addition to the reporting requirements under
Section 3.2 above, the Agency reserves the right to conduct an annual (or more frequently,:if
deemed reasonably necessary by the Agency) review of the management practices and financial
status of the Development. The purpose of each periodic review will 6e to enable the Agency to
determine if the Development is being operated and managed in accordance with the
requirements and standards of this .Agreement. The Owner shall cooperate with the Agency in
such reviews.
Section 5.4 Replacement of Management Agent or On-Site Resident Manager.
14
OGardens Reg and Dec 3-8-1 I
(a) If, as a result of a periodic review,. the Agency determines, in its reasonable
judgment, that the Development is not being operated and managed in accordance with,any of
the materia] requirements and standards of this Agreement, the Agency shall deliver notice to
Owner of its intention to cause replacement of the Management Agent or on-site resident.
manager, including the reasons therefor. Within fifteen (15) days of receipt by Owner of such
written notice, Agency staff and the Developer shall meet in good faith to consider methods for
improving the financial and operating status of the Development. If, after a reasonable peribd.as
determined by the Agency (not to exceed sixty (60) days afrer the meeting between the.Agency
and the Developer), the Agency determines that the Owner is not operating and managing the
Development in accordance with the riiaterial requirements and standards of this Agreement, the
Agency may require replacement of the Management Agent or on-site resident manager.
(b) If, after the above procedure, the Agency requires in writing tfie replacement of
the Management Agent or on-site resident manager, Owner shall promptly dismiss' the then
Management Agent or on-site resident manager within thirty (30) days notice, and shall appoint
as the Management Agent or on-site resident manager a person or entity meeting the standards
for a_Management Agent or on-site xesident manager set forth in Section 5.2 above and approved
by the Agency pursuant to Section 52 above.
(c) Any contract for the operation or management of the Development entered�into by
Owner shall provide that the contract can be terminated as set forth abovz. Failure to,remove the
Management Agent or on-site resident manager in accordance with the provisions of this Section
shall constitute default under this Agreement, and the Agency may enforce thi's provision
through legal proceedings as specified in Section 6.4 below.
Section 5.5 Approval of Management Policies The Owner shall submit its written
management policies with respect to the Development to the Agency for its.review, and shall
amend such policies in any way necessary to ensure that such policies ,comply with the
provisions of this Agreement.
Section 5.6 Property Maintenance.
(a) The Owner agrees,,for the entire Term of this Agreeinent, to maintain all interior
and exterior improvements, including landscaping, on the Property in good condition and iepair
(and, as to landscaping, in a healthy condition) and in accardance with all applicable laws„rules,
o;dinances„ orders and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction and a11 their respective
departmerits, bureaus, and officials, and in accordance with the following maintenance
conditions:
(1) Landscaping. The Owner agrees to have landscape maintenance
performed at least every other week, including replacement of dead or diseased plants with
comparable plants. Owner agrees to adequately water the landscaping on the Property in
compliance with City and Water District policies. No improperly maintained landscaping on the
Property shall be visible from public streets and(or rights of way.
15
OGudem Reg an8 Dec 3-R-11
(2) Yard Area. No yard areas on the Property shall be ]eft unmaintained,
including:
(i) broken or discarded furniture, appliances and other, household
equipment stored in yard areas for a period exceeding one (1) week;
(ii) packing boxes, lumber trash, dirt and other debris in areas visible
from public property or neighboring properties; and
(iii) vehicles parked or stored in other than approved parking areas.
(3) Building. No buildings located on the Property rriay be lefr in an
unmaintained condition so that any of the following exist:
(i) violations of state law, uniform codes, or City ordinances;
(ii) conditions that constitute an unsightly appearance that detracts
from the aesthetics or value of the Property'or constitutes a private or public nuisance;
(iii) broken windows;
(iv) graffiti (must be removed within seventy-two (72) hours); and
(v) conditions constituting hazards and/or inviting trespassers, or
malicious mischief.
(4) Sidewalks. The Owner shall maintain, repair, and replace as necessary all
private sidewalks adjacent to the Development.
(5) Private Driveway: The Owner shall maintain, repair, and replace as
necessary all areas of tl�e private driveway adjacent to the Development in accordance with the
reciprocal easement agreement entered into with the ad}acent property owners by the.Owner.
(b) The Agency places prime importance on quality maintenance to protect its
investment and to ensure that all Agency and City-assisted affordable housing projects within the
City are not allowed to deteriorate due to below-average maintenance. Nornial wear and tear of
the Development will be acceptable to the Agency assuming the Owner agrees to provide all
necessary improvements to assure the Development is maintained in good condition. The Owner
shall make all repairs and replacements necessary to keep the improvements in good condition
and repair.
(c) In fhe event that the Owner breaches any of the covenants contained in this
Section 5:6'and'such default continues for a period of seven (7) days afrer written notice from the
Agency with respect to graffiti, debris, waste material, and general maintenance or thirty (30)
days after written notice from the Agency with respect to landscaping and building
improvements, then the Agency, in addition to whatever other remedy it may have at law or in
16
OGardens Reg and Dec 3-8-11
equity, shall have,the right to enter upon the Property and perform or cause-to be performed all
such acts and work necessary to cure the default. Pursuant to such right of entry; the A�ency
shall be pennitted (but is not required) to enter upon°ihe Property�and perform all acts and'work
necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Property, and to attach a lien on the Property, or to assess the Property, in the amount of the
expenditures azising from suchlacts and woik of protection, maintenance, and preservatiou by the
Agency and/or costs of such cure, including a ten percent (10%) administrative charge, which
amount shall be promptlypaid by the Owner to the Agency upon demand.
Section 5.7 Safety Conditions.
(a) The Owner acknowledges that the Agency places a prime importance on the
security of Agency.assisted projects,and the safety of the residents and,surrounding community.
The Owner agrees to implement and maintain throughout the Term the following security
measures in the Development:
(1) to the extent feasible employ defensible space design principles and crime
prevention measures in the operation of the Development including but not limited to
maintaining adequate lighting.in parkirig.areas and pathways;
(2) use its best efforts to work with the Poway SherrifPs Department to
� implement and operate an effective neighborhood watch program and participate in the Crime
Free Multi-Housing'Program; and
(3) provide added security including dead-bolt locks for edery entry door, and
where entry doors are damaged, replace them with solid-core doors.
(b) The Agency shall have the rightto enter on the Property and/or contact the,Po�aay
Sherriff's Department if it becomes aware of or is notified of any conditions that pose a danger
to the peace, health, welfare or;safety of the Residents and/or the surrounding community, and to
perform or cause to be.performed such.acts as are necessary to correct the condition.
ARTICLE.6
MISCELLANEOUS
Section 6.1 Term. The provisions of this Agreement shall apply to the Property for
the entire Term even if the entire Loan is paid in full prior to the end of the Term; provided,
fiowever, that the provisions of Sections 4.4 and 5.6 of tMs Agreement shall run with the
Property and shall remain in effect in perpetuity. This Agreement shall bind any successor, heir
or assign of O,wner, whether a change in interest occurs voluntarily or involuntarily, by operation
of la�v or otherwise, except as ehpressly released by the Agency. The Agency makes the Loan
on the condition, and in consideration of, this provision, and would not do so otherwise.
Section 6.2 Compliance with Loan Agreement and Program Requirements. The
Owner's actions with respect to the Property shall at all times be in full conformity with: (i) all
requirements of tfie Agency Loan Agreement; (ii) all requirements imposed on.projects assisted
17
OGardens Reg and Uec 3-A-1 I
with Redevelopment Low and Moderate Income Housing Fund monies under Galifomia Health
and Safety Code Section 33334.2 et seq.
Section 63 Covenants to Run With the Land. Tfie Agency and Owner hereby declare
their expr.ess intent that the covenants and restrictions set forth in this Agreement shall run with
the land, and sha_ll bind all successors in title to the Property, provided, however, that on the
expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and
every contract, deed or other instrument hereafrer executed covering or conveying the-Property
or any portion thereof shal] be held conclusively to have been executed, delivered and accepted
subject to such covenants and restrictions, regardless of whether such covenants or restricfions
are set forth in such contract, deed or other instrument, unless the Agency expressly releases
such conveyed portion of the Property from the requirements of this Agreement.
Section 6.4 Enforcement by the Agency. [f Owner fails to perform any obligation
under this Agreement, and fails to cure the default within thirty (30) days after the Agency has
notified the Owner in writing of the default or, if the default cannot be cured within thirty (30)
days, failed to commence to cure within thirty (30) days and thereafrer diligently 'pursue such
cure, the Agency shall have the right.to enforee this Agreement by any or all of the following
actions, or any other remedy provided b'y law:
(a) Calling the Loan. The.Agency may declare a default under the Note, accelerate
the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed of Trust:
(b) Action to Compel Performance or For Damages. The Agency may bring an action
at law or in equity to compel Owner's performance of its obligations under this Agreeinent,
and/or for damages.
(c) Remedies Provi'ded Under Loan Agreement. The Agency may exercise any other
remedy provided w�der the Loan Agreement.
Section 6.-5 Rights of Third Parties to Enforce Covenants. Notwithstanding,any.other
provisions of law, all covenants and restrictions contained herein which implement Health and
Safety Code Sections 33334.3 and/or 33413(b)(4), or successor provisions, shall run with the
land and shall be enforceable by the Agency, the City of Poway, and any of the parties listed in
Health and Safety Code Section 333343(�(7), so long as such provision or successor provision
�remains in effect.
Section 6.6 Listing of Property-in Database. Owner hereby acknowledges and agrees
tfiat Health.and Safety Code Section 33418(c) requires that the Property be listed in a database
that shall be made available to the public on the internet and wliich will include the street
address, assessor's parcel number, and other information about the Property. The Owner must
disclose this requirement to al] Residents and prospective Residents.
Section 6.7 Attomeys Fees and Costs. In any action brought to enforce this
Agreement, the prevailing party shall be entitled to all costs and expenses oF suit; including
18
OGardens Rcg and Ucc 3-5-11
attorneys' fees. This Section 6.7 shall be interpreted in accordance with California Civil Code
Section 1717 and judicial decisions interpreting that.sfatute:
Section 6.8 Recording and Filing. The Agency and Owner shall cause this
Agreement, and all amendments and supplements to it, to be recorded against the Property in the
Official Records of the County of San Diego.
Section 6.9 Goveming Law. This Agreement shall be govemed by the laws of the
State of California.
Section 6.10 Amendments. This Agreement may be amended only by a written
instrument executed by all the.parties hereto or their suecessors in title, and duly recorded in the
real property records of the County of San Diego, California.
Section 6.11 Notice. All notices .given or certificates delivered under this Agreement
shall be.in writing and be deemed received on the delivery or refusal,date-shown on the delivery
receipt, i£ (i) personally delivered'.by a commercial service which furnishes signed r.eceipts of
delivery or (ii) mailed by certified mail, retum receipt requested, postage prepaid, addressed,as
shown below. Any of the parties may, by notice given hereunder, designate any further or
differentaddresses to which subsequent notices, certificates or communications shall be sent.
If to the Owner: Poway Family Housing Partners, L.P.
c/o.Foundation for Affordable Housing V, Inc.
30950 Rancfio Viejo Road, Suite 100
San,Juan Capistrano, CA 92675
Attention: Managing General Partner
With a'Copy to Affirmed: Affirmed Housing Group, Inc.
13250 Evening Creek Drive North, Suite 160
San Diego, CA 92128
Attention: President
If to the Agency: The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
Section 6.12 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the balidity, legality and enforceability of the remaining portions of this
Agreement shall not in any way be affected or impaired thereby
Section 6.13 Termination of Original Regulatory Agreement. This Agreeinent,amends,
restates, and replaces the Original Regulatory Agreement in its entirety. Upon execution and
recordation of this Agreement the Original Regulatory Agreement shall be terminated and
removed as a lien against the Property.
19
OGardens Reg and Dec 3-8-1 I _
IN WITNESS WHEREOF, the Agency and Owner have executed this Agreement by
duly authorized representatives, all on the date first written above.
AGENCY:
THE POWAY REDEVELOPM�NT AGENCY, a pu6lic
body corporate and politic
By:
Penny Riley, Executive Director
APPROVED AS TO FORM:
KANE BALLMER& BERKMAN
By:
Glenn F. Wasserman
Agency Special Counsel
OWNER:
POWAY PAMILY HOUSING PARTNERS, L.P., a
Califomia limited partnership
By: Foundation for Affordable Housing V, Inc.,
a California nonprofit public benefit corporation
Its: Managing General Partner
By:
Deborrah Willard, President
� By: Affirmed Housing Group, Inc., a Delaware
Corporation
Its: Administrative General Partner
. BY; -
James Silverwood, President
20 -
OGazdens Reg and Dee J-8-11
STATE OF CALIFORNIA )
)
COUNTY OF )
On , 20 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 tfie same
in his/her/their authorized capacity(ies), and that by his/her/their signatuie(s) on the instrument
the person(s); or the entity upon behalf of which the person(s) acted, executed tHe instruinent.
I certify under PENALTY OF PERNRY under the laws of the State of Califortmia that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
' STATE OF CALIFORNIA )
)
COUNTY OF )
On , 20_ before me, ,
Notazy Public, personally appeared
who
proyed. 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/shelthey executed.the:same
in his/hei/their authorized capacit'y(ies), and that 6y 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.
Signature (Seal)
EXHIBIT A
PROPERTY DESCRIPTION
, �
J
EXHIBIT J
FORM OF ASSIGNMENT OF PLANS
EXHIBIT J
FORM OF ASSIGNMENT OF PLANS
ASSIGNMENT OF PLANS '
FOR VALUE RECENED, the undersigned, , a Califomia
("Borrower"), pursuant to that certain First Amended and Restated
Agency Loan Agreement between Borrower and The Poway Redevelopment Agency
("Agency") dated as of (the "Loan Agreement"), hereby assigns to the
Agency all of Borrower's rights'and interest, but not its obligations, in, under and to the
following, as they relate to the Development (defined in the Loan Agreement), as of the
date hereof, , 20_(the "Effective Date"):
1. All architectural, design, engineering and development agreements, and any and all
amendments; modifications, supplements, addenda and general conditions thereto
(collectively, "Architectural or Engineering Agreemenfs") heretofore or hereafter
entered into or prepared by any Architect, engineer or other person or entity
(collectively "Arcfiitect(s)"), for or on behalf of Borrower in connection with the
construction of the Development, including but not limited to that certain
Agreement between Borrower and Architect, dated as of ,
between Rodriguez Associates, Architects and Planners, Inc. and Bonower;
2. All plans and specifications, shop drawings, working drawings, amendments,
modifications, changes, supplements, general conditions and addenda thereto
(collectively "Plans and Specifications") heretofore or fiereafter prepared by any
architect, engineer or other person or entity (collectively "Arcfiitect(s)"), for or=on
behalf of Borrower in connection with the construction of the Development; and
3. All governmental permits, approvals and entitlements (collectively "Entitlements")
relating to the construction and operation of the Development heretofore or
hereafter granted by the City of Poway or any other govemn�ental authority having
jurisdiction over the Property.
The:Axchitectural or Engineering Agreements, Plans and Specifications and-Entitlements
con'sist=of are those which Borrower has heretofore entered into, received or obtained and
shall include but not be limited to those described in the Schedule of Architectural and
Engineering Agreements, Plans and Specifications and Entitlements attached to this
Assignment.as Exhibit "B".
This ASSIGNMENT OF PLANS ("Assignment") constitutes a present and absolute
assignment to Agency as the Effective Date. Borrower represents and warrants to Agency,
as of the Effective Date, that, to the actual knowledge of Borrower: (a) all Architectural or
Engineering Agreements entered into by Borrower are in full force and effect and are
enforceable in accordance with their terms and no default, or event which would constitute
Assignment
Page 1 of 6
ASSIGNMENT OF PLANS '
3-8-II
a default afrer notice or the passage of time, or both, exists with respect to said
Architectural or Engineering Agreements; (b) all copies of the Architectural or,Eggineering
Agreements and Plans and Specifications delivered to Agency are complete;and correct
copies; and (c) except in connection with any Senior Loan, Borrower has not assigned any
of its rights under the Architectural and Engineering Agreements or with respect to the
Plans and Specifications.
This Assignment shall be governed by the laws of the State of California, except to the
extent that Federal laws preemphthe la�vs of the State of California, and Borrower consents
to tHe jurisdiction of any Federal or State Court within the State of California having proper
venue for the filing and maintenance of any action arising hereunder and agrees that the
prevailing party in any such action shall be entitled, in addition to any other recovery, to
reasonable attomey's fees and costs.
This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in-interest of Borrower and Agency.
The attached Consent, Exfiibit "A" and Exhibit "B" are incorporated by reference.
DEVELOPER
POWAY FAMILY HOUSING PARTNERS;
L.P., a California limited partnership _
By: Foundation for Affordable Housing V,
inc. a California nonprofit public
benefit corporation, its Managing '
General Partner
By:
Deborrah Willazd, President
By: Affirmed Housing Group, Inc., a
Delaware Corporation, its
Administrative General Partner
By:
James Silverwood, President
Executed by Borrower as of , 20_.
Assignment
Page 2 of 6
� ASSIGNMENT OF PLANS
3-8-11
AGENCY
POWAY REDEVELOPMENT AGENCY,a
public body, corporate and politic
By .
Penny Riley, Executive Director
APPROVED AS TO FORM:
KANE, BALLMER& BERKMAN
Agency Special Counsel
By:
Glenn F. Wasserman
Assignment
Page 3 of 6
ASSIGNMENT OF PLANS
3-5-11
CONSENT
The undersigned Rodri�uez Associates Architects and Planners, Inc, ("ArchitecP') hereby
consents to the foregoing Assignment to which this Consent ("Consent") is part, .and
acknowledges that.there presently exists no unpaid claims due to the Architect except as
disclosed in writing to Agency, arising out of the preparation and delivery of tfie Plans.and
Specifications to Borrower and/or the performance of the Architect's obligations under the
Assignment.
Architect agrees that if Agency shall become the owner of said Property and elects to �
undertake or the construction of the Development on any portion of the Property, in
accordance with the Plans and Specifications, and gives Architect written notice of such
election; THEN, so long as Architect has received, receives or continues to receive the
compensation called for under ttie Agreements, Agency may, at its option, use and rely on
the Plans and Specifications for the purposes for which they were prepared, and Architect
will continue to perform its obligations,under the Agreements for the benefit and account
of Agency in the same manner as if performed for the benefit or account of Borrower in the
absence of the Assignment.
Architect warrants and represents that they have.no knowledge of any prior assigninent(s)
of any interest in either the P.lans and Specifications and/or the Agreements, ezcept for an
assignment to �iNSER'T NAME OF BANK, ETC.�. Except as otherwise defined herein,
the terms used herein shall have the meanings given them in the Assignment.
Esecuted on
�ARCHPI'�CT'S S[GNA7'U12E BLOCKJ
By:
ArchitecYs Address:
Aeencv's Address: �
Poway Redevelopment Agency
13325 CiviaCenterDrive
Poway, CA 92064
Attention: Executive Director
Assignment
Page 4 of 6
ASSIGNMENT OF PLANS
3-8-II
EXHIBIT A
PROPERTY DESCRIPTION
Exhibit A to Assignment of Plans dated as of , 20 between Poway Family
Housing Partners, L.P., as "Borrower", and The Poway Redevelopment Agency, as
"Agency".
All that certain real property located in the County of San Diego, State of California,
described as follows:
Assignment
Page 5 of 6
ASSIGNMENT OF PLANS
3-8-11
EXHIBIT B
LIST OF ARCHITECTURAL OR ENGINEERING AGREEMENTS,PLANS AND
SPECIFICATIONS AND ENTITLEMEIVTS
1. Standard Form ofAgreement between Poway Family Housing, L.P. and Rodriguez
Associates, Architects and Planners, Ine., , dated as of
[Others to be added]
Assignment
Page 6 of 6
ASSIGNM6NT OF PLANS
3-S-ll
K
EXHIBI'C K
FORM OF RESIDUAL RECEIPTS REPORT
v�
' EXHIBIT K
FORM OF RESIDUAL RECEIPTS REPORT
CALCULATION OF RESIDUAL RECEIPTS
ASSET MANAGEMENT FRAMEWORK AND ONGOING MONITORING
CITY OF POWAY
Date:
Project:
YearEnding:
Prior Year Renortinq Year
i. Project Yeor Revenue 5 S
il. Operating Expenses and Reserves
A. Operating Expenses
Administrative 5 5
Utilities S S
Qperating and Maintenartce S 5
PayrolUPayroll Taxes 5 S
Taxes and Insurance 5 5
Marketing and Lease-Up $ S
ManagementFee
TotalOperaling Ezpenses 5 S
B. Reserves
Operaling Reserves 5 S
Replacement Reserves 5 5
� Other S S
Total Reserves 3 5
Total Operatmg Expenses and Reserves fAtB) $ S
111. Debt Service , S S
IV. Partnership Mana�ement Fee S S �
V. DeferreA Developer Fee S S
VI. Residual Receipts 5 S
Vil. Agency Share ofFesidual Receipts� _% 5 S
Prepared by:Keyser fdarston Associates, Int.
Date:May S,2005