16-1101_SEASONS SAN JUAN CAPISTRANO, AR L.P_B4_Agenda ReportSJCHA 11/1/2016
San Juan Capistrano Housing Authority
Agenda Report
TO : Honorable Chair and Members of the Authority
FROM: ~n Siegel, Executive Director
SUBMITIED BY : Joel Rojas, Development Services Di re ct o~
Ken Al-lmam, Director of Finance
PREPARED BY : Laura Stokes, Housing Coordinator I Assistant Planner(j}
DATE: November 1, 2016
84
SUBJECT: Consideration of a Loan Request from Seasons San Juan
Capistrano AR, L. P., to Provide Rehabilitation and Energy Efficiency
Improvements to 112 Senior Units Within the Seasons at San Juan
Capistrano Apartments
RECOMMENDATION :
By motion, approve and authorize the Executive Director to execute a $1,000 ,000 loan
agreement with Seasons San Juan Capistrano AR, LP, to fund rehabilitations and energy
efficiency improvements to 112 senior units within the Seasons at San Juan Capistrano
Apartments.
EXECUTIVE SUMMARY :
On April 27, 2016, the City of San Juan Capistrano received a request for funding from
Highridge Costa Housing Partners LLC , in order to provide energy efficiency
rehabilitations to 112 units within Seasons at San Juan Capistrano Apartments, located
at 31641 Rancho Viejo Road. Staff reviewed the request and identified Housing Authority
housing bond funds which are available to be used for rehabilitation of affordable housing
units.
Staff has worked with representatives from Seasons San Juan Capistrano AR, L.P. to
prepare a loan document which identifies that the City will provide a $1,000,000 loan at
3% interest, to be repaid in annual installments equal to 50% of available cash flow from
net operating income, after debt service and after repayment of the deferred developer
fee note. The loan document is provided as Attachment 1. The loan will be dispersed
once rehabilitation and energy efficient improvements are completed and confirmed by
staff. The proposed rehabilitation and energy efficient improvements are listed in
Attachment 5 of the loan document. Staff is recommending that the Housing Authority
approve the $1 , 000,000 loan and authorize the Executive Director to Execute all
necessary loan documents .
Housing Authority Agenda Report
November 1, 2016
Page 2 of 3
BACKGROUND :
In 1995, the City's former Redevelopment Agency ("Agency") issued San Juan
Capistrano Housing Investors, L.P. a development loan for $1,550,000 in conjunction
with a 57 -year Owner Participation Agreement and Restrictive Covenpnts to provide
housing affordable to lower income residents. As of April 27, 2016, approximately
$90,000 remains outstanding from the original loan. San Juan Capistrano Housing
Investors, L.P. is proposing to sell Seasons at San Juan . Capistrano Apartments to
Seasons San Juan Capistrano AR, L.P., which includes Highridge Costa Housing
Partners LLC as an Administrative General Partner. Seasons San Juan Capistrano AR,
L.P. anticipates the outstanding balance of the Agency's loan to be approximately $7,400
in December 2016, when they expect the property transfer to be finalized.
Seasons San Juan Capistrano AR, L.P. is pursuing multiple financial sources to
purchase and rehabilitate the property. Seasons San Juan Capistrano AR, L.P. has
provided a request for a $1,000,000 loan with 3% interest from the Housing Authority, to
be repaid in annual installments equal to 50% of available cash flow from net operating
income, after debt service and after repayment of the deferred developer fee note.
Seasons San Juan Capistrano AR, L.P. has detailed that the Housing Authority's loan
will help provide necessary rehabilitations and energy efficiency improvements to 112
senior units within the Seasons at San Juan Capistrano Apartments.
The energy efficiency rehabilitations to 112 senior units are projected to have a total
expense of approximately $2,870,000. The proposed energy efficiency upgrades that
would be undertaken with funds received from the loan include: convert lighting to LED,
install photovoltaic in common areas, install drought tolerant landscaping and irrigation,
replace all windows, repair dry rot, replace existing boilers and pumps, replace existing
refrigerators and stoves, and install new faucet aerators, showerheads, and toilets.
These energy efficiency upgrades are designed to reduce the project's consumption of
energy and reduce the water used on the property up to 10%. Many of the items
proposed with the rehabilitation require permits and inspections. Staff will conduct final
inspections of all work associated with the rehabilitation prior to releasing the loan funds.
This way, the Authority will effectively reimburse Seasons San Juan Capistrano AR, L.P.
for rehabilitation work up to $1,000,000.
As the new property owner, Seasons San Juan Capistrano AR, L.P. would take
responsibility of the existing affordability covenants over the 112 residential units through
December 20, 2053. The loan agreement proposes to modify the term of the affordability
covenants to 55 years from the date the new agreement, which would extend affordability
by 18 years.
FISCAL IMPACT:
The Housing Authority currently has approximately $6 million in housing bond funds,
which are required to be used on housing projects affordable to lower income residents.
The proposed rehabilitations and energy efficiency improvements to 112 affordable
senior units within the Seasons at San Juan Capistrano Apartments, with the required
Housing Authority Agenda Report
November 1, 2016
Page 3 of 3
extension of affordability covenants, meet the use requirements of the housing bond
funds. There are currently no other plans or requests for the use of Housing Authority
bond funds and therefore there are sufficient housing bond funds to meet the needs of
this request.
ENVIRONMENTAL IMPACT:
The proposed loan together with the proposed energy efficiency rehabilitation of 112
existing affordable senior residential units, is categorically exempt from the California
Environmental Quality Act (CEQA) pursuant to a Class 1 exemption for existing facilities.
These energy efficiency upgrades are designed to reduce the project's consumption of
energy and do not change the density or intensity of use. State CEQA Guidelines,
section 15301 provides that operation, repair, maintenance, or minor alteration of existing
private structures, facilities, mechanical equipment, or topographical features, involving
negligible or no expansion of use beyond that existing at the time of the City's exemption
determination are categorically exempt from CEQA.
None of the exceptions to the use of the Class 1 categorical exemption identified in State
CEQA Guidelines section 15300.2 apply. The project will not result in a cumulative
impact from successive projects of the same type in the same place, over time. There
are no unusual circumstances surrounding the project that result in a reasonably
possibility of a significant effect on the environment. The project will not damage scenic
resources, including trees, historic buildings, rock outcroppings, or similar resources. The
project does not include any hazardous waste sites, and the project will not cause a
substantial adverse change in the significance of a historical resource. Thus, the Class 1
exemption applies, and no further environmental review is required.
PRIOR HOUSING AUTHORITY REVIEW:
On August 2, 2016, the Housing Authority authorized staff to negotiate with
representatives from Seasons San Juan Capistrano AR, L.P. on the terms of the
proposed $1,000,000 loan request.
COMMISS ION/BOARD REV IEW AND RECOMMENDATIONS:
Not Applicable.
NOTIFICATION:
Highridge Costa Housing Partners, LLC
ATIACHMENTS:
Attachment 1 -Affordable Housing Loan Agreement
AFFORDABLE HOUSING LOAN AGREEMENT
By and Between the
SAN JUAN CAPISTRANO HOUSING AUTHORITY,
and
SEASONS SAN JUAN CAPISTRANO AR, L.P.
a California limited partnership
SEASONS AT SAN JUAN CAPISTRANO APARTMENTS PROJECT
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TABLE OF CONTENTS
Page
100. DEFINITIONS .................................................................................................................... 2
101. Terms ............................................................................................................................ 2
200. LOAN AGREEMENT ........................................................................................................ 7
201. Loan .............................................................................................................................. 7
202. Repayment of Loan ....................................................................................................... 7
203. Use of Funds ................................................................ Enor! Bookmark not defined.
204. Conditions Precedent to Disbursement of Loan Funds ................................................. 7
205. Authority Not Liable ..................................................................................................... 9
300. REPRESENTATIONS AND WARRANTIES ................................................................... 9
301. Authority Representations ............................................................................................ 9
301.1 Authority ........................................................................................................... 9
301.2 No Conflict. ....................................................................................................... 9
301.3 No Bankruptcy .................................................................................................. 9
302. Borrower's Representations .......................................................................................... 9
302.1
302.2
302.3
302.4
302.5
302.6
302.7
302.8
302.9
302.10
302.11
302.12
302.13
302.14
Organization ...................................................................................................... 9
Authority to Borrow .......................................................................................... 9
Authority of Persons Executing Documents ..................................................... 9
No Conflict ...................................................................................................... 10
Compliance with Laws; Consent and Approvals ............................................ 10
Valid Binding Agreement ............................................................................... 10
Pending Proceedings ....................................................................................... 1 0
Financial Statements ....................................................................................... 10
No Material Adverse Event ............................................................................ 1 0
Accuracy ......................................................................................................... 1 0
Disclosure of Information ............................................................................... 11
No Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .. . . .. . . . . . . .. . . . . . .. . .. .. . .. .. . .. . . .. . .. .. . . 11
Eligible Costs .................................................................................................. 11
FIRPTA ........................................................................................................... 11
400 . COVENANTS OF BORROWER. .................................................................................... 11
401. Borrower's Financing ................................................................................................. 11
402. Rehabilitation of Project ............................................................................................. 11
403. Permits, Licenses and Approvals ................................................................................ 12
404. Notices to Authority .................................................................................................... 12
405. Insurance ..................................................................................................................... 12
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405.1 Required Insurance ......................................................................................... 12
405.2 Nature of Insurance ......................................................................................... 12
405.3 Policy Requirements and Endorsements ......................................................... 13
406. Indemnity .................................................................................................................... 14
406.1 Borrower Indemnity Obligations .................................................................... 15
406.2 Independence oflnsurance Obligations .......................................................... 15
406.3 Survival oflndemnification and Defense Obligations .................................... 15
406.4 Indemnification Procedures ............................................................................ 15
407. Financial Statements and Reports ............................................................................... 16
408. Books and Records ..................................................................................................... 16
409. Compliance ................................................................................................................. 16
500 . CONSTRUCTION OF PROJECT .................................................................................... 17
501. [Intentionally Omitted] ............................................................................................... 17
502. Project Entitlements .................................................................................................... 17
503. Cost Breakdown .......................................................................................................... 17
504. Cost of Construction ................................................................................................... 17
505. [Intentionally Omitted] ................................................ Error! Bookmark not defined.
506. [Intentionally Omitted] ............................................................................................... 17
507. Permits and Approvals ................................................................................................ 17
508. Anti-Discrimination .................................................................................................... 17
509. Certificate of Completion ........................................................................................... 17
600. USE AND MAINTENANCE OF THE PROPERTY; NONDISCRIMINATION;
RIGHTS OF SECURITY FINANCING HOLDERS ............................................................. 18
601. Restrictive Covenants ................................................................................................. 18
602. Maintenance ofthe Property ....................................................................................... 18
603. Obligation to Refrain from Discrimination ................................................................. 19
604. Form ofNondiscrimination and Nonsegregation Clause ............................................ 19
605. Rights of Access ......................................................................................................... 20
606. Effect and Duration of Covenants ............................................................................... 20
700. DEFAULTS AND REMEDIES ....................................................................................... 20
701. Default. ........................................................................................................................ 20
702. Remedies ..................................................................................................................... 20
702.1 Authority ......................................................................................................... 20
702.2 Borrower ......................................................................................................... 20
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703. Rights and Remedies Cumulative ............................................................................... 21
800. GENERAL PROVISIONS ............................................................................................... 21
801. Notices ........................................................................................................................ 21
802. Applicable Law ........................................................................................................... 21
803. Enforced Delay; Extension of Times for Performance ............................................... 22
804. Transfers oflnterest in Property or Agreement .......................................................... 22
804.1 Prohibition ....................................................................................................... 22
804.2 Permitted Transfers ......................................................................................... 22
804.3 Transfer by Authority ..................................................................................... 23
805. Relationship Between Authority and Borrower .......................................................... 23
806. Authority Approvals and Actions ............................................................................... 23
807. Counterparts ................................................................................................................ 23
808. Integration ................................................................................................................... 24
809. Attorneys' Fees ........................................................................................................... 24
810. Titles and Captions ..................................................................................................... 24
811. Interpretation ............................................................................................................... 24
812. No Waiver ................................................................................................................... 24
813. Modifications .............................................................................................................. 24
814. Severability ................................................................................................................. 24
815. Incorporation ofRecita1s ............................................................................................. 25
816. Incorporation of Attachments ..................................................................................... 25
817. Legal Advice ............................................................................................................... 25
818. Time of Essence .......................................................................................................... 25
819. Cooperation ................................................................................................................. 25
820. Conflicts of Interest ..................................................................................................... 25
821. Time for Acceptance of Agreement ............................................................................ 25
822. Agreement Binding ..................................................................................................... 25
823. Non-Liability of Officials and Employees of Authority ............................................. 25
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Attachment No.1
Attachment No.2
Attachment No.3
Attachment No.4
Attachment No. 5
Attachment No. 6
Attachment No.7
Attachment No.8
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ATTACHMENTS
Legal Description of Property
Map of Property
Scope of Development
[Intentionally Omitted]
Initial Cost Breakdown
Form of Promissory Note
Form of Deed ofTrust
Form of Regulatory Agreement
IV
AFFORDABLE HOUSING LOAN AGREEMENT
(SEASONS AT SAN JUAN CAPISTRANO APARTMENTS PROJECT)
This Affordable Housing Loan Agreement (Seasons at San Juan Capistrano Apartments
Project) ("Agreement") is entered into as of , 2016, by and among the SAN
JUAN CAPISTRANO HOUSING AUTHORITY ("Authority") and SEASONS SAN JUAN
CAPISTRANO AR, L.P., a California limited partnership ("Borrower").
RECITALS
The following recitals are incorporated as a substantive part of this Agreement.
A. The City Council of the City of San Juan Capistrano ("City"), in 1983, adopted
the Redevelopment Plan (as amended, the "Redevelopment Plan") for the San Juan Capistrano
Central Redevelopment Project area (the "Project Area"). Until February 1, 2012, the San Juan
Capistrano Community Redevelopment Agency ("Redevelopment Agency") was responsible
for carrying out the Redevelopment Plan in the Project Area in accordance with the Community
Redevelopment Law (Health and Safety Code, Section 33000 et seq.).
B. As part of its responsibility in carrying out the Redevelopment Plan, the
Redevelopment Agency was required to deposit twenty percent (20%) of all tax increment
revenues received by the Redevelopment Agency in a separate Low and Moderate Income
Housing Fund ("LMIHF"), to be used for the purpose of increasing, improving and preserving
the community's supply oflow-and moderate-income housing.
C. Pursuant to Assembly Bill IX 26, adopted in 2011, the decision of the California
Supreme Court in California Redevelopment Association et a!. v. Ana Matosantos, et a!.,
Assembly Bill 1484, adopted in 2012, and other subsequently adopted legislation (all,
collectively, the "Dissolution Act"), all redevelopment agencies throughout the State were
deemed dissolved on February 1, 2012.
D. Pursuant to the authority provided in Health and Safety Code Section 34176, the
City Council adopted Resolution No. , on January 10, 2012, assigning the housing
functions of the Redevelopment Agency to the Authority, and as such, all the housing assets and
functions previously performed by the Redevelopment Agency and all housing related rights,
powers, duties and obligations of the Redevelopment Agency were transferred to the Authority,
as the "Housing Successor" to the Redevelopment Agency. Following dissolution of the
Redevelopment Agency, any funds transferred to the Housing Successor, together with any funds
generated from housing assets, are to be maintained in a separate Low and Moderate Income
Housing Asset Fund ("LMIHAF") created by the Housing Successor. Pursuant to Health and
Safety Code Section 34176.1, funds in the LMIHAF shall be used in accordance with the
provisions of the Community Redevelopment Law relating to the LMIHF .
E. In June 2008, prior to its dissolution, the Redevelopment Agency issued its 2008
Tax Allocation Bonds -Series B, which were specifically issued for affordable housing
purposes, and pursuant to Health and Safety Code Section 34176(g)(2), said funds must be used
and committed in a manner consistent with the purposes of the LMIHAF.
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F. The Borrower and Authority desire to enter into this Agreement pursuant to which
the Authority will loan to Borrower bond funds from the LMIHAF to assist Borrower in
financing the acquisition and rehabilitation of certain property, as more particularly described
herein.
NOW, THEREFORE, Authority and Borrower hereby agree as follows:
AGREEMENT
100. DEFINITIONS
101. Terms. The following terms, as used in this Agreement, shall have the meaning
ascribed them in this Section:
a. "Additional Borrower Financing" has the meaning set forth in Section
401.
b. "Agreement" means this Affordable Housing Loan Agreement ("Seasons
at San Juan Capistrano Apartments Project").
c. "Area Median Income" means the area median income for the Orange
County Metropolitan Statistical Area as published by the U.S. Department of Housing and Urban
Development (HUD) as the same may be adjusted for small and larger households.
d. "Authority" means the San Juan Capistrano Housing Authority, a public
agency created under the California Housing Authorities Law, Health and Safety Code Section
34200 et seq. (the "Housing Authorities Law"). As noted above, all housing assets and functions
previously performed by the Redevelopment Agency and all housing related rights, powers,
duties and obligations of the Redevelopment Agency were transferred to the Authority, as the
"Housing Successor" to the Redevelopment Agency.
e. "Borrower" means the Seasons San Juan Capistrano AR, L.P., a
California limited partnership, whose managing general partner is LINC-Gardena Associates,
LLC, a California limited liability company, whose administrative general partner is HCHP
Affordable Multi-Family, LLC, a California limited liability company, and whose limited partner
is Victoria Capital, LLC, a California limited liability company.
f. "Certificate of Completion" means the certificate to be issued by the
Authority upon satisfaction of the conditions described in Section 509.
g. "Certificate of Costs Incurred" means a certification signed by the
Borrower describing Eligible Costs incurred in connection with completion of the Project
Improvements, along with such supporting documentation as the Authority may reasonably
request.
h. "City" means the City of San Juan Capistrano, a municipal corporation of
the State of California.
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i. "Claim" means any claim, loss, cost, damage, expense, liability, Lien,
action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise),
charge, award, assessment, fine or penalty of any kind.
J. "Conditions Precedent to Disbursement" has the meaning set forth in
Section 204.1.
k. "Community Redevelopment Law" means the California Community
Redevelopment Law ofthe State of California (Health and Safety Code Section 33000, et seq.).
I. "Cost Breakdown" has the meaning set forth in Section 503.
m. "Deed of Trust" means the 'Short Form Deed of Trust and Assignment of
Rents," attached hereto as Attachment No. 7, to be executed by and between the Authority and
Borrower, and recorded as a lien against the Project for the purpose of securing Borrower's
obligations under the Loan.
n. "Effective Date" means the date upon which this Agreement shall have
been executed by the Authority.
o. "Eligible Costs" means hard costs directly related to the rehabilitation of
the Project.
p. "Environmental Claim" means any and all claims, demands, damages,
losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits,
proceedings, costs, disbursements and expenses, including reasonable attorney's fees and costs
of environmental consultants and other experts, and all foreseeable and unforeseeable damages
or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from
any actual or alleged violation of any Environmental Law or Hazardous Substance Discharge.
q. "Environmental Document" means any exemption determination, any
Negative Declaration (mitigated or otherwise) or any Environmental Impact Report (including
any addendum or amendment to, or subsequent or supplemental Environmental Impact Report)
required or permitted pursuant to the National Environmental Policy Act (codified as 42 U.S.C.
§§ 4321 et seq.) or the California Environmental Quality Act (codified as Public Resources Code
Sections 21000 et seq.), as applicable, to issue any discretionary Approval required to approve
this Agreement.
r. "Environmental Law" means any Federal or California law regarding
any of the following at, in, under, above, or upon the Property: (a) air, environmental, ground
water, or soil conditions; or (b) clean-up, remediation, control, disposal, generation, storage,
release, discharge, transportation, use of, or liability or standards of conduct concerning,
Hazardous Substances, as now or may, at any later time, be in effect.
s. "Financing Deadline" has the meaning set forth in Section 401.
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t. "GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with similar functions of comparable stature
and authority within the accounting profession), or in such other statements by such other entity
as may be in general use by significant segments of the United States accounting profession,
which are applicable to the circumstances as of the date of determination.
u. "Governmental Requirements" means all laws, ordinances, statutes,
codes, rules, regulations, orders and decrees, ofthe United States, the state, the county, City, or
any other political subdivision in which the Project is located, and of any other political
subdivision, agency or instrumentality exercising jurisdiction over the Authority, Borrower or
the Project.
v. "Hazardous Substance" means any flammable substances, explosives,
radioactive materials, asbestos, asbestos-containing materials, polychlorinated biphenyls,
chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous
wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum
products and any "hazardous" or "toxic" material, substance or waste that is defined by those or
similar terms or is regulated as such under any Law, including any material, substance or waste
that is: (a) defined as a "hazardous substance" under Section 311 of the Water Pollution Control
Act (33 U.S.C. § 1317), as amended; (b) substances designated as "hazardous substances"
pursuant to 33 U.S.C. § 1321; (c) defined as a "hazardous waste" under Section 1004 of the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended;
(d) defined as a "hazardous substance" or "hazardous waste" under Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
by the Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called
'superfund" or 'superlien" law; (e) defined as a "pollutant" or "contaminant" under 42 U.S.C. §
9601(33); (f) defined as "hazardous waste" under 40 C.F.R. Part 260; (g) defined as a "hazardous
chemical" under 29 C.F .R. Part 191 0; (h) any matter within the definition of "hazardous
substance" set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the
Toxic Substances Control Act ("TSCA") [15 U.S.C. Sections 2601, et seq.]; G) any matter, waste
or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq.; (k) those substances listed in the United States Department of Transportation
(DOT) Table [49 C.F.R. 172.101]; (1) any matter, waste or substances designated by the EPA, or
any successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste or
substances defined as "hazardous waste" in Section 25117 of the California Health and Safety
Code; (n) any substance defined as a "hazardous substance" in Section 25316 of the California
Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law
regulating, relating to or imposing obligations, liability or standards of conduct concerning
protection of human health, plant life, animal life, natural resources, property or the enjoyment of
life or property free from the presence in the environment of any solid, liquid, gas, odor or any
form of energy from whatever source; or (p) other substances, materials, and wastes that are, or
become, regulated or classified as hazardous or toxic under Law or in the regulations adopted
pursuant to said Law, including manure, asbestos, polychlorinated biphenyl, flammable
explosives and radioactive material. Notwithstanding the foregoing, "Hazardous Substances"
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shall not include such products in quantities as are customarily used in the construction,
maintenance, development or management of residential developments or associated buildings
and grounds, or typically used in residential activities in a manner generally used in other
comparable residential developments, or substances commonly ingested by a significant
population living within the Project including, without limitation, alcohol, aspirin, tobacco and
saccharine.
w . "Hazardous Substance Discharge" means any deposit, discharge,
generation, release, or spill of a Hazardous Substance that occurs at on, under, into or from the
Property, or during transportation of any Hazardous Substance to or from the Property, or that
arises at any time from the construction, rehabilitation, use or operation of the Project or any
activities conducted at, on, under or from the Property, whether or not caused by a Party.
x. "Land Use Laws" has the meaning set forth in Section 502.
y. "Liability Insurance" means commercial general liability insurance
against claims for bodily injury, personal injury, death, or property damage occurring upon, in,
or about the Property, the Project or adjoining streets or passageways, at least as broad as
Insurance Services Office Occurrence Form CGOOOl, with a minimum liability limit of Two
Million Dollars ($2,000,000) for any one occurrence and which may be provided through a
combination of primary and excess or umbrella insurance policies. If commercial general
liability insurance or other form with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the Project or the general aggregate limit shall be twice
the required minimum liability limit for any one occurrence.
z. "LMIHAF" has the meaning set forth in Recital D.
aa. "Loan" has the meaning set forth in Section 201.
bb. "Loan Documents" means the documents, instruments and agreements
evidencing and securing the Loan including, but not limited to, this Agreement, the Note, the
Deed of Trust and the Regulatory Agreement.
cc. "Note" means the "Promissory Note," attached hereto as Attachment No .
.Q, to be executed by Borrower, for the purpose of evidencing Borrower's repayment obligations
under the Loan.
dd . "Official Records" means the Official Records of the County of Orange,
State of California.
ee. "Prevailing Wage Action" means any of the following: (a) any
determination by the California Department of Industrial Relations that prevailing wage rates
should have been paid, but were not; (b) any determination by the California Department of
Industrial Relations that higher prevailing wage rates than those paid should have been paid;
(c) any administrative or legal action or proceeding arising from any failure to comply with the
Federal Davis-Bacon Act (codified as 40 U.S. C. § § 3141 et seq.) or California Labor Code
Sections 1720 through 1781, as amended from time to time, regarding prevailing wages,
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including maintaining certified payroll records; or (d) any administrative or legal action or
proceeding to recover wage amounts at law or in equity.
ff. "Project" means the 112-unit, affordable senior rental apartment complex
currently located on the Property, to be acquired and rehabilitated by Borrower as set forth
herein. The Project includes 1 and 2 bedroom units (each a "Unit" and collectively, the
"Units"). Of the Units included in the Project, not less than twenty (20) of the Units shall be
made available and rented to persons or families whose income does not exceed fifty percent
(50%) of the Area Median Income (the "50% Units"), and not less than ninety (90) of the Units
shall be made available and rented to persons or families whose income does not exceed sixty
percent (60%) of the Area Median Income (the "60% Units"), for the full term of the Regulatory
Agreement; two (2) Units shall be unrestricted employee exempt units. The gross monthly rent
(excluding any supplemental rental assistance from the State of California, the federal
government or any other public agency to those tenants or on behalf of those Units) for the 60%
Units shall not exceed one-twelfth of 30% of 60% of the Area Median Income, adjusted by
household size appropriate for the Unit. The gross monthly rent (excluding any supplemental
rental assistance from the State of California, the federal government or any other public agency
to those tenants or on behalf of those Units) for the 50% Units shall not exceed one-twelfth of
30% of 50% of the Area Median Income, adjusted by household size appropriate for the Unit.
Notwithstanding the foregoing, rent levels will be established based on those published by the
California Tax Credit Allocation Committee (TCAC) for Low Income Housing Tax Credit
projects. The Project shall be rehabilitated as more specifically provided in the Scope of
Development.
gg. "Project Improvements" means the Project improvements, repairs, and
replacements, including energy efficiency improvements, described on Attachment No.5 hereto.
hh. "Property" means the real property located at, and commonly referred to
as, 31641 Rancho Viejo Road, San Juan Capistrano, California (APN 666-241-10), including the
affordable housing apartment complex and all related improvements currently located thereon, to
be acquired by the Borrower and rehabilitated and operated pursuant to this Agreement.
ii. "Property Insurance" means insurance providing coverage for the
Property and all improvements on or to the Property against loss, damage, or destruction by fire
and other hazards encompassed under the broadest form of property insurance coverage then
customarily used for like properties in the County of Orange, in an amount equal to one hundred
percent (100%) of the replacement value (without deduction for depreciation) of all
improvements comprising the Project (excluding excavations and foundations) and in any event
sufficient to avoid co-insurance and with no co-insurance penalty provision, with "ordinance or
law" coverage. To the extent customary for like properties in the County of Orange at the time,
such insurance shall include coverage for explosion of steam and pressure boilers and similar
apparatus located on the Property; an "increased cost of construction" endorsement; and an
endorsement covering demolition and cost of debris removal, all subject to policy sublimits.
jj. "Redevelopment Agency" means the former San Juan Capistrano
Community Redevelopment Agency.
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kk. "Regulatory Agreement" means the "Affordable Housing Regulatory
Agreement" attached hereto as Attachment No. 8, to be executed by Authority and Borrower, for
the purpose of ensuring that the Project shall continue to be operated as an affordable multi-
family residential development in accordance with the terms ofthis Agreement.
ll. "Scope of Development" means the "Scope of Development" attached
hereto as Attachment No. 4.
mm. "Tax Credit Partnership" has the meaning set forth in Section 804.2.
nn. "Third Person" means any Person that is not a Party, an affiliate of a
Party, or an elected official, officer, director, manager, shareholder, member, principal, partner,
employee or agent of a Party.
200. LOAN AGREEMENT
201. Loan. Authority hereby agrees make a loan (the "Loan") to Borrower in the
amount of ONE MILLION DOLLARS ($1,000,000.00), or such lesser amount as may be
evidenced in the Certification of Costs Incurred. The Loan shall be funded from the proceeds of
housing bonds issued by the former Redevelopment Agency, which are required to be used by
the Housing Successor for affordable housing purposes. The Loan shall be evidenced by, and
repayable in accordance with, the Note and secured by the Deed of Trust. Authority and
Borrower shall execute the Note, Deed of Trust and Regulatory Agreement as a condition
precedent to disbursement of the Loan, or any portion thereof, and the Deed of Trust and
Regulatory Agreement shall thereafter be immediately recorded in the Official Records.
202. Repayment of Loan. The Loan shall be repaid from Residual Receipts, as defined
in and in accordance with the Note. The entire unpaid balance of the Loan shall be due and
payable in full at the earlier of (i) sale of the Property or transfer of all or any interest in the
Borrower, other than a transfer permitted under Section 804.2 hereof; (ii) a Default under this
Agreement or any of the Loan Documents and the expiration of any applicable cure period; or
(iii) forty ( 40) years after the date of execution of the Note (the "Maturity Date"). The Loan
shall bear simple interest at the rate of three percent (3%) per annum, commencing upon the date
of Disbursement of the Loan.
203. Reimbursement of Eligible Costs. Loan funds disbursed to Borrower shall be
attributable to Eligible Costs incurred in connection with completion of the Project
Improvements as evidenced by the Certification of Costs Incurred.
204. Conditions Precedent to Disbursement of Loan Funds. The Authority shall
disburse the Loan funds (the "Disbursement") upon completion of the Project Improvements by
the Borrower and concurrently with the issuance of a Certificate of Completion by the Authority.
The Authority's obligation to make the Disbursement is conditioned upon the satisfaction or
waiver by Authority of each and all of the conditions precedent described below ("Conditions
Precedent to Disbursement"), which are solely for the benefit of the Authority, and which shall
be fulfilled or waived by the time periods provided for herein. If the Conditions Precedent to
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Disbursement are not satisfied or expressly waived by the Authority, then either party may
terminate this Agreement by delivering written notice of such termination to the other party, and
thereafter neither party shall have any further rights, liability or obligations under this
Agreement. The Conditions Precedent to Disbursement include:
a. Execution and delivery of the Regulatory Agreement, the Note and the
Deed of Trust, and evidence that the Regulatory Agreement and Deed of Trust have been
recorded against the Property.
b. A title insurance company acceptable to the Authority has issued to the
Authority a lender's policy of Title Insurance with any endorsements the Authority may
reasonably require, insuring the Authority in the principal amount of the Loan, of the validity
and priority of the Deed of Trust upon the Property, subject only to liens and matters of record
approved by the Authority in writing, including, without limitation, that certain Shared Use
Agreement and Grant of Reciprocal Non Exclusive Easements recorded on October 17, 2008 as
Document No. 2008000479988, and showing fee simple title to the Property in the name of the
Borrower.
c. Borrower shall have provided the Authority with a copy of the resolution
of the Borrower approving and authorizing execution of this Agreement and all documents
contemplated hereby on behalf of Borrower and with such other documentation required by the
Authority regarding Borrower's creation, status and authority to enter into this transaction.
d. Borrower shall have provided Authority with a certificate showing it to be
in good standing under the laws of the State of California.
e. Borrower shall have obtained all City and other governmental permits
required for the rehabilitation of the existing improvements on the Property, and have completed
the Project Improvements.
f. Borrower shall have satisfied all of the applicable terms and conditions set
forth in this Agreement, including without limitation providing evidence that it possesses the
insurance required by Section 405 ofthis Agreement.
g. Borrower shall not be in default under this Agreement or any of the Loan
Documents.
h . Borrower shall have received a Certificate of Completion from the
Authority.
i. Borrower shall have submitted to the Authority a Certificate of Costs
Incurred, evidencing Eligible Costs at least equal to the Loan funds to be disbursed.
j. All of the representations and warranties made by the Borrower in this
Agreement and in the Note, the Deed of Trust and the Regulatory Agreement shall be true and
correct in all material respects as of the date of the Disbursement.
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205. Authority Not Liable. In no event shall Authority be liable to Borrower or any
other party, including but not limited to any lender, contractor or subcontractor, for any damage
whatsoever which may result in whole or in part from any action or inaction of Authority
hereunder, including without limitation, failure or delay in making any disbursement of Loan
funds, except to the extent of Authority's gross negligence or willful misconduct.
300. REPRESENTATIONS AND WARRANTIES
301. Authority Representations. Authority represents and warrants to Borrower as
follows:
301.1 Authority. This Agreement is entered into by the Authority in its capacity
as the Housing Successor to the Redevelopment Agency under the Dissolution Act, to assist in
the creation of affordable housing in the City for the benefit of low and moderate-income
households.
301.2 No Conflict. To the best of Authority's knowledge, Authority's
execution, delivery and performance of its obligations under this Agreement will not constitute a
default or a breach under any contract, agreement or order to which Authority is a party or by
which it is bound.
301.3 No Bankruptcy. Authority is not the subject of a bankruptcy proceeding.
302. Borrower's Representations. To induce Authority to make the Loan, Borrower
hereby makes the following representations and warranties to Authority, and shall remake these
representations and warranties on the date of disbursement of Loan proceeds. The Borrower
shall, upon learning of any fact or condition which would cause any of the warranties and
representations in this Section not to be true, immediately provide written notice of such fact or
condition to Authority.
302.1 Organi zation. Borrower is a duly organized California limited partnership
in good standing. Borrower was established by its partners, LINC-Gardena Associates, LLC,
HCHP Affordable Multi-Family, LLC, and Victoria Capital, LLC, for the purpose of entering
into this Agreement and acquiring and rehabilitating the Property. The copies of the documents
evidencing the organization of Borrower which have been delivered to Authority are true and
complete copies of the originals, as amended to the date of Borrower's execution of this
Agreement.
302.2 Authority to Borrow. Borrower has full power and authority to execute
and deliver this Agreement, to make and accept the borrowings contemplated hereunder, to
execute and deliver all applicable Loan Documents and to perform and observe the terms and
provisions of all of the above.
302.3 Authority of Persons Exe cuting Documents. The applicable Loan
Documents have been executed and delivered by persons who are duly authorized to execute and
deliver the same for and on behalf of Borrower, and all actions required under the Borrower's
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organizational documents and applicable governing law for the authorization, execution, delivery
and performance of the Loan Documents have been duly taken.
302.4 No Conflict. The execution, delivery and performance by Borrower of the
Loan Documents to which it is a party will not, to the best of Borrower's knowledge, (i) violate
any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction,
decree, determination or award of any court, governmental agency or arbitrator presently in
effect having applicability to Borrower or the Property; or (ii) result in a breach of or constitute a
default under any indenture, loan or credit agreement or any other agreement, lease or instrument
to which Borrower is a party or by which any of its properties may be bound or, except as
specifically contemplated herein, result in the creation of any lien on any asset of Borrower.
302.5 Compliance with Laws; Consent and Approvals. The rehabilitation and
operation of the Project shall comply with all Governmental Requirements, including all
applicable directions, rules and regulations of the fire marshal, health officer, building inspector
and other officers of any such government or agency as applicable.
302.6 Valid Binding Agr emerrt. The Loan Documents executed by Borrower
constitute, or if not yet executed, will constitute when so executed, legal, valid and binding
obligations of Borrower enforceable by and against it in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting
the rights of creditors generally and general principals of equity.
302.7 Pending Proceedings. Borrower is not in material default under any law
or regulation or under any order of any court, board, commission or agency whatsoever, and
there are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, at law or in equity, before or by any court, board,
commission or agency whatsoever which might, if determined adversely to Borrower, materially
and adversely affect Borrower's ability to repay the Loan or rehabilitate and operate the Project.
302.8 Financial Statements. All financial statements and information delivered
to Authority by or on behalf of Borrower, including information relating to the financial
condition of Borrower and the Property, fairly and accurately represent the financial condition of
the subject thereof and have been prepared in accordance with GAAP, consistently applied, or
another sound accounting practice consistently applied as previously submitted by Borrower to
the Authority and approved by the Authority. Borrower acknowledges and agrees that Authority
may request and obtain additional information from third parties.
302.9 No Material Adverse Event. There has been no material adverse change
in the value or physical condition of the Property or in the financial condition of Borrower since
the dates of the latest financial statements of Borrower furnished to Authority, and except as
otherwise disclosed to Authority in a specified writing, Borrower has not entered into any
material transaction that is not disclosed in such financial statements.
302.10 Accuracy. All reports, documents, instruments, information and forms of
evidence delivered to Authority concerning the Loan or security for the Loan or required by the
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Loan Documents are accurate, correct and sufficiently complete to give Authority true and
accurate knowledge of their subject matter and do not contain any material misrepresentation or
OmiSSIOn.
302.11 Disclosure of Information. All material information concernmg the
Property or the Project known to Borrower, or that should have been known to Borrower in the
exercise of reasonable care, has been disclosed to Authority. All material information concerning
the Property or the Project known to Borrower, or that should have been known to Borrower in
the exercise of reasonable care, has been disclosed to Authority. There are no facts or
information known to Borrower, or that should have been known to Borrower in the exercise of
reasonable care, that would make any of the information furnished to Authority by Borrower
inaccurate, incomplete, or misleading in any material respect.
302.12 No Condemnation. No condemnation proceeding or moratorium is
pending or threatened against the Property or any portion thereof that would impair the use,
occupancy or full operation of the Project in any manner whatsoever.
302.13 E ligible Costs. The proceeds of the Loan shall be attributable to Eligible
Costs as reflected in the Cost Breakdown.
302.14 FIRPTA. Borrower is not a "Foreign Person" within the meaning of
FIRPT A, or is exempt from the provisions of FIRPT A, and Borrower has complied and will
comply with all ofthe requirements under FIRPTA.
400. COVENANTS OF BORROWER
401. Borrower's F inancing. In connection with rehabilitation ofthe Project, the
Borrower anticipates securing financing of approximately TWENTY FOUR MILLION SEVEN
HUNDRED SEVENTY-FOUR THOUSAND FIVE HUNDRED TWENTY-FIVE DOLLARS
($24,774,525), which shall consist of loans funded with the proceeds of California Debt Limit
Allocation Committee ("CDLAC") tax exempt bonds in the aggregate amount of $18,949,000
and seller financing in the approximate amount of $5,825,525 (the "Additional Borrower
Financing"). In addition, Borrower intends to apply to TCAC requesting annual federal tax
credits of approximately $[815,495]. The Authority agrees that the Deed of Trust shall be
subject to and subordinate to the terms and conditions of one or more senior mortgage loans
(including the loans from America First Multifamily Investors, L.P. to be funded by the proceeds
of the tax exempt bonds) obtained by Borrower as part of the Additional Borrower Financing,
pursuant to the terms of a subordination agreement executed by the Authority and such lender(s),
the terms of which shall be subject to the approval of the Authority, which approval shall not be
unreasonably withheld, and provided the total aggregate amount of financing secured by the
Deed of Trust together with the outstanding indebtedness secured by such senior lender deeds of
trust shall not exceed the total appraised value of the Property.
402. Rehabilitation of Project. In connection with rehabilitation of the Project,
Borrower shall comply with all existing and future Governmental Requirements and other laws,
regulations, orders, building codes, restrictions and requirements of, and all agreements with and
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commitments to, all governmental, judicial or legal authorities having jurisdiction over the
Property, including those pertaining to the construction of the Project, and with all recorded
covenants and restrictions affecting the Property.
403. Permits, Licenses and pprovals. Borrower shall properly obtain, comply with
and keep in effect all permits, licenses and approvals which are required to be obtained in order
to rehabilitate and operate the Project, if any.
404. Notices to Authority. Borrower shall promptly notify Authority in writing of:
a. Any litigation affecting Borrower, where the amount claimed is Fifteen
Thousand Dollars ($15,000.00) or more;
b. Any communication, whether written or oral, that Borrower may receive
from any governmental, judicial or legal authority, giving notice of any claim or assertion that
any portion of the Property or the Project fail in any respect to comply with any Governmental
Requirement;
c. Any material adverse change in the physical condition of the Property
(including any damage suffered as a result of earthquakes or floods), or in Borrower's business
condition (financial or otherwise), property or Borrower's ability to repay the Loan;
d. Any lien or encumbrance filed or recorded against or affecting the
Property or the Project of $25,000 or more; or
e. The institution of any litigation, arbitration or governmental proceeding,
or the rendering of a judgment or decision in such litigation or proceeding, which may cause a
material adverse effect to Borrower, the Property or the completion of the construction.
405. Insurance.
405.1 Required Insmance. Upon completion of rehabilitation of the Project,
Borrower shall maintain Liability Insurance and Property Insurance (or their then reasonably
available equivalent).
405.2 Nature of Insurance. The Liability Insurance and Property Insurance
policies required by this Agreement shall be issued by carriers that: (a) are listed in the then
current "Best's Key Rating Guide-Property/Casualty-United States & Canada" publication
(or its equivalent, if such publication ceases to be published) with a minimum financial strength
rating of "A-" and a minimum financial size category of "XI" (exception may be made for the
California Compensation Insurance Fund when not specifically rated); and (b) are authorized to
do business in California. A Party may provide any insurance under a "blanket" or "umbrella"
insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the
amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall
equal or exceed the amount(s) required by this Agreement; and (ii) such policy otherwise
complies with this Agreement.
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405.3 Policy Requirements and Endor ements. All insurance policies required
by this Agreement shall contain (by endorsement or otherwise) the following provisions:
a. Insured. Liability Insurance policy shall name Authority, City or their
successor in interest, as applicable, as "additional insured." Property Insurance policy shall
name Authority and City as a "loss payee." The coverage afforded to Authority and City shall be
at least as broad as that afforded to Borrower regarding the Property and the Project and may not
contain any terms, conditions, exclusions, or limitations applicable to Authority and City that do
not apply to Borrower.
b. Primary Coverage. Any insurance or self-insurance maintained by
Authority or City or its successor in interest shall be in excess of all insurance required under this
Agreement and shall not contribute to any insurance required under this Agreement.
c. Contractual Liability. Liability Insurance policies shall contain
contractual liability coverage, for Borrower's indemnity obligations under this Agreement.
Borrower's obtaining or failure to obtain such contractual liability coverage shall not relieve
Borrower from nor satisfy any indemnity obligation of Borrower under this Agreement.
d. Deliveries to Authority. Borrower shall deliver to Authority evidence of
all insurance policies required by this Agreement as set forth in Section 405.1. No later than
three (3) days before any insurance required by this Agreement expires, is cancelled or its
liability limits are reduced or exhausted, Borrower shall deliver to Authority evidence of
Borrower's maintenance of all insurance this Agreement requires. Each insurance policy
required by this Agreement shall be endorsed to state that coverage shall not be cancelled,
suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days'
advance written notice of such action has been given to Authority by certified mail, return receipt
requested; provided, however, that thirty (30) days advance written notice shall be required for
any such action arising from non-payment of the premium for the insurance. Phrases such as
"endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any
kind upon the company" shall not be included in the cancellation wording of any certificates or
policies of insurance applicable to Authority pursuant to this Agreement.
e. Waiver of Certain Claims. Borrower shall cause each insurance carrier
providing any Liability Insurance or Property Insurance coverage under this Agreement to
endorse their applicable policy(ies) with a Waiver of Subrogation with respect to Authority, if
not already in the policy. To the extent that Borrower obtains insurance with a Waiver of
Subrogation, the Parties release each other, and their respective authorized representatives, from
any Claims for damage to any Person or property to the extent such Claims are paid by such
insurance policies obtained pursuant to and in satisfaction of the provisions of this Agreement.
f. No Claims Made Coverage. None of the insurance coverage required
under this Agreement may be written on a claims-made basis.
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g. Fully Paid and Non-Assessable. All insurance obtained and maintained
by Borrower pursuant to this Section 405 shall be fully paid for and non-assessable. However,
such insurance policies may be subject to insurer audits.
h. Authority Option to Obtain Coverage. During the continuance of a
Default arising from the failure of Borrower to carry any insurance required by this Agreement,
Authority may, at its sole option, purchase any such required insurance coverage and Authority
shall be entitled to immediate payment from the Borrower of any premiums and associated
reasonable costs paid by Authority for such insurance coverage. Any amount becoming due and
payable to Authority under this Section 405 that is not paid within fifteen (15) calendar days
after written demand from Authority for payment of such amount, within an explanation of the
amounts demanded, will bear interest from the date of the demand at the rate of ten percent
(10%) per annum or the maximum interest rate allowed by applicable law, whichever is less.
Any election by Authority to purchase or not to purchase insurance otherwise required by the
terms of this Agreement to be carried by the Borrower shall not relieve the Borrower of its
obligation to obtain and maintain any insurance coverage required by this Agreement.
i. Separation of Insured. All Liability Insurance shall provide for separation
of insured for Borrower and the Authority. Insurance policies obtained in satisfaction of or in
accordance with the requirements of this Agreement may provide a cross-suits exclusion for suits
between named insured persons, but shall not exclude suits between named insured persons and
additional insured persons.
j. Deductibles and Self-Insured Retentions. Any deductibles or self-insured
retentions under insurance policies required by this Agreement shall be declared to and approved
by Authority. Borrower shall pay all such deductibles or self-insured retentions regarding
Authority or, alternatively, the insurer under each such insurance policy shall eliminate such
deductibles or self-insured retentions with respect to Authority.
k. No Separate Insurance. Borrower shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under this
Agreement, unless Authority and City are made an additional insured thereon as required by this
Agreement. ·
l. Insurance Independent of Indemnification. The insurance requirements of
this Agreement are independent of the Parties' indemnification and other obligations under this
Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or
modify the Parties' indemnification or other obligations or to limit the Parties' liability under this
Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or
insolvency of the insurer that issues the coverage; nor shall the provision of such insurance
preclude Authority from taking such other actions as are available to it under any other provision
of this Agreement or otherwise at law or in equity.
406. Indemnity.
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406.1 Borrower Indemnity Obligations. Borrower shall indemnify Authority
and City against any Claim to the extent such Claim arises from any wrongful intentional act or
gross negligence of Borrower. Borrower shall also indemnify Authority and City for Claims to
the extent arising from any of the following: (a) any application made by or at Borrower's
request; (b) any agreements that Borrower (or anyone claiming by or through Borrower) makes
with a Third Person regarding the Property or the Project; (c) any workers compensation claim or
determination relating to any employee of Borrower or their contractors; (d) any Prevailing
Wage Action relating to this Agreement or the Project; and (e) any Environmental Claim
attributable to any action or failure to act by Borrower.
Borrower assumes the risk of delays and damages that may result to Borrower
from any Third Person legal actions related to Authority's approval of this Agreement or any
associated approvals, even in the event that an error, omission or abuse of discretion by
Authority is determined to have occurred. If a Third Person files a legal action regarding
Authority's approve this Agreement or any associated approval (exclusive of legal actions
alleging violation of Government Code Section 1090 by officials of Authority or City), Borrower
shall indemnify Authority and City against such Third Person legal action, including all legal
costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and
the expenses of any and all financial or performance obligations resulting from the disposition of
the legal action. Authority shall reasonably cooperate in its defense in any legal action subject to
this Section 406 subject to Borrower's indemnity obligations for such legal action. Nothing
contained in this Section 406 is intended to be nor shall be deemed or construed to be an express
or implied admission that Authority may be liable to Borrower or any other party for damages or
other relief regarding any alleged or established failure of Authority to comply with any law.
Any legal action that is subject to this Section 406 (including any appeal periods and the
pendency of any appeals) shall constitute an Enforced Delay and the time periods for
performance by any Party under this Agreement may be extended pursuant to the provisions of
this Agreement in Section 803.
406.2 Jndependence of Insurance Obligation . The indemnification obligations
made by Borrower under this Agreement shall not be construed or interpreted as in any way
restricting, limiting, or modifying Borrower insurance or other obligations under this Agreement.
Borrower's obligation to indemnify Authority and City under this Agreement is independent of
Borrower's insurance and other obligations under this Agreement. Borrower's compliance with
its insurance obligations and other obligations under this Agreement shall not iri any way restrict,
limit, or modify Borrower's indemnification obligations under this Agreement and are
independent of Borrower's indemnification and other obligations under this Agreement.
406.3 Survival of Indemnification and Defense Obligation . The indemnity and
defense obligations of the Parties under this Agreement shall survive the expiration or earlier
termination of this Agreement, until any and all actual or prospective claims regarding any
matter subject to an indemnity obligation under this Agreement are fully, finally, absolutely and
completely barred by applicable statutes of limitations.
406.4 Indemnification Procedures. Wherever this Agreement requires any Party
to indemnify the other Party:
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a. Prompt Notice. The indemnifying Party shall promptly notify the other
Party of any claim.
b. Selection of Counsel. The indemnifying Party shall select counsel
reasonably acceptable to the other Party. Counsel to indemnifying Party's insurance carrier that
is providing coverage for a claim shall be deemed reasonably satisfactory, except in the event of
a potential or actual conflict of interest for such counsel regarding such representation or such
counsel proves to be incompetent regarding such representation. Even though the indemnifying
Party shall defend the claim, the other Party may, at its option and its own expense, engage
separate counsel to advise it regarding the claim and its defense. The other Party's separate
counsel may attend all proceedings and meetings. The indemnifying Party's counsel shall
actively consult with the other Party's separate counsel. The indemnifying Party's counsel shall,
however, control the defense, except to the extent that the other Party waives its rights to
indemnity and defense of such Claim.
c. Cooperation. The other Party shall reasonably cooperate with the
indemnifying Party's defense of the other Party.
d. Settlement. The indemnifying Party may only settle a claim without the
consent of other Party, if the claim is within the policy limits of applicable insurance policies
provided in satisfaction of the requirements of this Agreement and such settlement procures a
release of other Party from the subject claims, does not require other Party to make any payment
to the claimant and neither the indemnified Party nor indemnifying Party on behalf of the
indemnified Party admits any liability.
e. Insurance Proceeds. The indemnifying Party's obligations shall be
reduced by any net insurance proceeds actually received by the other Party for the matter giving
rise to the indemnification obligation.
407. Financial Statements and Reports. Borrower shall furnish to Authority, within ten
(10) days after demand, the financial statements of Borrower, which may be internally prepared,
on a consolidating and consolidated basis and in conformity with GAAP, consisting of at least
statements of income, cash flow, changes in financial position and stockholders' equity, and a
consolidated balance sheet, setting forth in each case in comparative form corresponding figures
from the previous financial statements delivered to Authority pursuant to this Section.
408. Books and Records. Borrower shall keep adequate and proper records and books
of account in connection with the Project, including rehabilitation of the Project, in which full
and correct entries will be made of its dealings, business and affairs. All records and books of
accounts and other materials deemed to be relevant to the Project shall be accessible upon forty-
eight ( 48) hours advance notice during business hours to the authorized representatives of
Authority for the purpose of examination or audit.
409. Compliance. Borrower shall comply and shall cause the Property and Project to
comply at all times in all material respects with all Governmental Requirements to which they
may be subject.
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500. CONSTRUCTION OF PROJECT
501. [Intentionally Omitted]
502. Project E ntitlements. Borrower acknowledges and agrees that the rehabilitation
of the Project shall be subject to the City's zoning, building and land use regulations (whether
contained in ordinances, the municipal code of the City, conditions of approval or elsewhere)
(collectively, "Land Use Laws"). No action by Authority with reference to this Agreement or
any related documents shall be deemed to constitute a waiver of any Land Use Laws required for
the rehabilitation of the Project as applicable to Borrower, any successor in interest of Borrower,
or any successor in interest to the ownership, use or occupancy of the Property. Land Use Laws
may only be changed or waived by modification or variance approved by the City.
503. Cost Breakdown. An itemization of the anticipated costs of funding to complete
the rehabilitation of the Project (as revised from time to time, the "Cost Breakdown") is
attached hereto as Attachment No.5. Upon completion of rehabilitation ofthe Project, Borrower
shall submit, along with the Certificate of Costs Incurred, a revised Cost Breakdown reflecting
the costs incurred in connection with completion of the Project Improvements
504. Cost of Construction. All cost and expense in performing the rehabilitation of the
Project, and for all materials and equipment related thereto, shall be borne solely by Borrower.
505. [Intentionally Omitted].
506. [Intentionally Omitted].
507. Permits and Approvals. Before commencement of the Project Improvements,
Borrower shall secure or cause to be secured any and all permits and approvals which may be
required pursuant to any Governmental Requirements for such rehabilitation work. Authority
staff will work cooperatively with Borrower to assist in coordinating the expeditious processing
and consideration of all necessary permits, entitlements and approvals that may be required from
City.
508. Anti-Discrimi nation. Borrower, for itself and its successors and assigns, agrees
that, in performing the rehabilitation of the Project, it shall not discriminate against any
employee or applicant for employment on account of any basis listed in subdivision (a) or (d) of
Section 12955 ofthe 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.
509. Certificate of Completion. Authority's obligation to issue a Certificate of
Completion shall be subject to the satisfaction of the following conditions precedent in addition
to the other requirements set forth in this Section 509:
a. If applicable, Borrower shall have secured and delivered to Authority final
inspection sign-offs as required by any government authorities certifying that the rehabilitation
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17
of the Project and its intended uses are m compliance with all applicable Governmental
Requirements; and
b. Borrower shall deliver to Authority evidence that (i) all cost and expense
related to the rehabilitation of the Project shall have been paid in full; and (ii) the period for
filing mechanic's liens has expired or conditional final lien waivers and releases in form and
substance satisfactory to Authority have been obtained by Borrower from all applicable
contractors, subcontractors, mechanics and materialmen.
Promptly after the completion of the rehabilitation of the Project, Borrower's delivery of the
items set forth in (a) and (b) above to Authority's satisfaction, and upon the written request by
Borrower, Authority shall inspect the Project and furnish Borrower with a Certificate of
Completion, which shall evidence and determine the satisfactory completion of the rehabilitation
of the Project. The Certificate of Completion shall not be withheld or delayed by Authority
unless Borrower shall have failed to satisfactorily complete the construction in substantial
compliance with the terms and provisions hereof.
A Certificate of Completion shall not be deemed or construed to constitute evidence of
compliance with or satisfaction of any obligation of Borrower to any holder of a mortgage or any
insurer of a mortgage securing money loaned to finance improvements on the Property, or any
portion thereof. Such Certificate of Completion is not a notice of completion as referred to in
Section 3093 of the California Civil Code.
600. USE AND MAINTENANCE OF THE PROPERTY; NONDISCRIMINATION;
RIGHTS OF SECURITY FINANCING HOLDERS
60 1. Restrictive Covenants. Borrower covenants and agrees for itself, its successors,
assigns, and every successor in interest to devote the Property to the continued operation of an
affordable housing project in accordance with the terms of the Regulatory Agreement and this
Agreement for the period of time specified therein. The foregoing covenant shall run with the
land.
602. Maintenance of the Property. For the period of time set forth in Section 606,
Borrower shall keep the Property in good condition, order and repair and shall not commit waste
or permit impairment, demolition or deterioration of the Property; shall comply with all
applicable state and federal regulations addressing the physical condition of the Property and
buildings located on the Property and all applicable standards of the City including but not
limited to building standards, planning regulations, and utilities code; shall complete or restore
promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed and to pay when due all claims for labor performed and materials
furnished; shall maintain the buildings in a habitable condition; and do all other acts which from
the character or use of the Property may be reasonably necessary. The Authority shall have the
right to inspect the Property during normal business hours, provided Borrower and the occupant
are given at least seventy-two (72) hours written notice prior to any such inspection.
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603. Obligation to Refrain from Discrimination. The Borrower covenants and agrees
for itself, its successors, its assigns and every successor in interest to the Property, or any part
thereof, 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 are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 ofthe Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor
shall the Borrower itself or any person claiming under or through it establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees of the Property.
The foregoing covenants shall run with the land and shall remain in effect in perpetuity.
604. Form ofNondiscrimination and Nonsegregation Clause. The Borrower shall
refrain from restricting the rental, sale or lease of the Property on 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 subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code. All such deeds, leases or contracts shall contain or be
subject to substantially the following nondiscrimination or nonsegregation clauses.
In deeds. "The grantee herein covenants by and for himself, his 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 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 land herein conveyed, nor shall the grantee
himself, or any person claiming under or through him, 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, sub lessees or vendees in the land herein conveyed.
The foregoing covenants shall run with the land."
In leases. "The lessee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through him, and this lease is made
and accepted upon and subject to the following conditions: "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 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 land herein leased, nor shall the lessee himself, or any
person claiming under or through him, 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 land herein leased."
In contracts. "There shall be no discrimination against or segregation of any person or
group ofpersons on account of any basis listed in subdivision (a) or (d) of Section 12955 ofthe
Government Code, as those basis are defined in Sections 12926, 12936.1, subdivision (m) and
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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 land, nor shall
the transferee himself, or any person claiming under or through him, 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 of the land."
605. Rights of Access. For the purposes of assuring compliance with this Agreement,
upon forty-eight ( 48) hours prior notice representatives of the Authority shall have the
reasonable right of access to the Property during business hours or other agreed upon time
without charges or fees for the purpose of inspection of the Property as to maintenance of the
improvements thereon. Such representatives of the Authority shall be those who are so
identified in writing by the Authority.
606. Effect and Duration of Covenants. The covenants contained in Sections 601 and
602 of this Agreement shall remain in effect for fifty-five (55) years commencing with the date
the Regulatory Agreement is recorded on the Property. The covenants against discrimination
contained in Sections 603 and 604 of this Agreement shall remain in effect in perpetuity. The
coveants established in this Agreement shall, without regard to technical classification and
designation, be binding on the part of the Borrower and any successors and assigns to the
Property or any part thereof, and the tenants, lessees, sublessees and occupants of the Property,
for the benefit of and in favor of the Authority and any successor in interest thereto.
700. DEFAULTS AND REMEDIES
701. Default. A party to this Agreement shall be in default if it fails to perform or
satisfy any obligation or requirement set forth (i) herein after thirty (30) days for obligations or
requirements that can be satisfied by the payment of money, or after forty-five (45) days (or such
longer period as may be reasonably required so long as such party has commenced such cure
within such forty-five (45) day period and diligently pursues such cure to completion) for any
other obligations or requirements, of receiving written notice from the non-defaulting party of
such default; or (ii) under any applicable Loan Document after any applicable cure period.
Borrower's limited partner shall have the right, but not the obligation, to cure any default
hereunder or under any Loan Document, and any such cure shall be accepted by Lender as if
rendered by Borrower.
702. Remedies.
702.1 Authority. Upon default by Borrower, Authority shall not be obligated to
disburse any Loan proceeds pursuant to this Agreement and Borrower shall immediately remit to
Authority all cost and expense, interest and principal due Authority under the Note.
702.2 Borrower. Upon default by Authority, Borrower's sole remedy for such
breach shall be to institute an action at law or equity to seek specific performance of the terms of
this Agreement. Borrower shall not be entitled to recover damages for any default by Authority
hereunder. Such legal actions must be instituted in the Superior Court of the County of Orange,
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20
State of California, or in the United States District Court for the District of California in which
Orange County is located.
703. Ri ghts ru1d R emedi es umul ativ e. The rights and remedies of Authority
hereunder are cumulative, and the exercise by Authority of one or more of such rights or
remedies shall not preclude the exercise by it, at the same or different times, of any other rights
or remedies for the same default or any other default caused by the Borrower.
800. GENERAL PROVISIONS
801. Notices. Any notice required or authorized under this Agreement, or service of
process, shall be effective if, and only if, in writing and if, and only if, personally served or
mailed, postage prepaid, by registered or certified mail, to the party in question at the address
shown below:
Borrower: Seasons San Juan Capistrano AR, L.P.
330 West Victoria Street
Gardena, CA 90248
Attn: Michael Costa
With a copy to Borrower's limited partner at the following address , or at such other
address as Borrower may provide to Lender:
Authority:
Victoria Capital, LLC
330 West Victoria Street
Gardena, CA 90248
Attn: Michael Costa
San Juan Capistrano Housing Authority
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn:
With a copy to: Best Best & Krieger LLP
Attn: Elizabeth Hull
181 01 Von Karman A venue, Suite 1000
Irvine , CA 92612
An address set forth in this Section may be changed by the respective party providing the
other party with written notice indicating the new address for purposes of this Section.
802. Appl icabl e Law. The laws ofthe State of California shall govern the
interpretation and enforcement of this Agreement.
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21
803. Enforced Delay: Extension of Times for Performance. In addition to specific
provisions of this Agreement, performance by a party hereunder shall not be deemed to be in
default, and all performance and other dates specified in this Agreement shall be extended, where
delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires;
casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight
embargoes; lack of transportation; governmental restrictions or priority; litigation; inability to
secure necessary labor, materials or tools; acts or omissions of the other party; acts or failures to
act of Authority or any other public or governmental agency or entity (other than the acts or
failures to act of Authority which shall not excuse performance by Authority); or any other cause
beyond the control or without the fault of the party claiming an extension of time to perform.
Notwithstanding anything to the contrary in this Agreement, an extension of time for any such
cause shall be for the period of the enforced delay and shall commence to run from the time of
the commencement of the cause, if notice by the party claiming such extension is sent to the
other party within thirty (30) days of the commencement of the cause. Times of performance
under this Agreement may also be extended in writing by the mutual agreement of Authority and
Borrower. Notwithstanding any provision of this Agreement to the contrary, the lack of funding
to complete the construction of the Project on the Property shall not constitute grounds of
enforced delay pursuant to this Section.
804. Transfers oflnterest in Property or Agreement.
804.1 Prohibition. The qualifications and identity of Borrower are of particular
concern to Authority. It is because of those unique qualifications and identity that Authority has
entered into this Agreement with Borrower. Borrower shall not transfer, assign, sell or grant any
interest in this Agreement or any portion of the Property except as expressly set forth herein.
804.2 Permitted Transfers. Authority approval of a transfer of this Agreement or
an interest in the Property, or any part thereof, shall not be required in connection with any of the
following transfers:
a. Any requested assignment for purposes of financing the acquisition and
rehabilitation ofthe improvements upon the Property;
b. Any mortgage, deed of trust, or other form of conveyance for all or any
portion of the Additional Borrower Financing approved by the Authority, as provided in Section
401, but Borrower shall notify Authority in advance of any such mortgage, deed of trust or other
form of conveyance for financing pertaining to the Property;
c. Any mortgage, deed of trust or other form of conveyance for restructuring
or refinancing of any amount of indebtedness described in subsection (b) above, provided any
such restructuring or refinancing does not result in any release of funds to Borrower, typically
referred to as a "cash-out" loan;
d. Admission of a tax credit investor that IS obligated to make capital
contributions as the limited partner;
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22
e. (A) Sale, transfer, conveyance or pledge of limited partnership interests in
Borrower to another party, or (B) the appointment by the partners of Borrower of an additional
or substitute general partner in accordance with the partnership agreement of Borrower; provided
Borrower delivers prior written notice thereof to the Authority, and such additional or substitute
general partner shall be subject to the approval of the Authority, which approval shall not be
unreasonably withheld, conditioned, or delayed, provided that such approval shall not be
required if (i) the substitute administrative general partner is an affiliate of the limited partner or
administrative general partner of Borrower or (ii) the substitute managing general partner is an
entity holding an organizational clearance certificate issued by the California Board of
Equalization;
f. [Intentionally Omitted];
g. [Intentionally Omitted];
h. The lease of residential units at the Project to qualified tenants; or
i. Transfer of the Project or partnership interests in Borrower to a general
partner of Borrower at the end of the fifteen year tax credit initial compliance period.
In the event of a transfer by Borrower under subparagraphs (a) through (i), inclusive
except for subparagraph (h), above, not requiring Authority's prior approval, Borrower
nevertheless agrees that at least ten (10) days prior to such assignment it shall give written notice
to Authority of such transfer and satisfactory evidence that the transferee has assumed the
obligations of this Agreement, if applicable.
804.3 Transfer by Author ity. Authority may assign, sell, transfer or grant any of
its rights or obligations under this Agreement to any third party.
805. Relationship Between Authority and Borrower. It is hereby acknowledged that
the relationship between Authority and Borrower is not that of a partnership or joint venture and
that Authority and Borrower shall not be deemed or construed for any purpose to be the agent of
the other. Accordingly, except as expressly provided herein, Authority shall have no rights,
powers, duties or obligations with respect to the development, operation, maintenance or
management of the Property. Borrower agrees to indemnify, hold harmless and defend
Authority from any claim made against Authority arising from a claimed relationship of
partnership or joint venture between Authority and Borrower with respect to the development,
operation, maintenance or management of the Property.
806. Authority Approvals and Actions. Whenever a reference is made herein to an
action or approval to be undertaken by the Authority, the Executive Director of the Authority or
his or her designee is authorized to act on behalf of Authority unless specifically provided
otherwise or the context should require otherwise.
807. Counterparts. This Agreement may be executed in any number of counterparts
and by different signatories hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the
23
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same instrument, for the same effect as if all signatories hereto had signed the same signature
page. Any signature page of this Agreement may be detached from any counterpart of this
Agreement without impairing the legal effect of any signatures thereon and may be attached to
another counterpart of this Agreement identical in form hereto but having attached to it one or
more additional signature pages.
808. Integration. This Agreement and the Loan Documents contain the entire
understanding between the parties relating to the transaction contemplated by this Agreement.
All prior or contemporaneous agreements, understandings, representations and statements , oral
or written, are merged into the Loan Documents and shall be of no further force or effect. Each
party is entering into the Loan Documents upon the representations set forth in the Loan
Documents and upon each party's own independent investigation of any and all facts such party
deems material.
809. Attorneys Fees. In any action between the parties to interpret, enforce, reform,
modify, rescind, or otherwise in connection with any of the terms or provisions of the Loan
Documents, the prevailing party in the action shall be entitled, in addition to damages, injunctive
relief, or any other relief to which it might be entitled, reasonable costs and expenses including,
without limitation, litigation costs and reasonable attorneys' fees.
810. Titles and Captions. Titles and captions are for convenience of reference only and
do not define, describe or limit the scope or the intent of this Agreement or of any of its terms.
Reference to section numbers are to sections in this Agreement, unless expressly stated
otherwise.
811. Interpretation. As used in this Agreement, masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others where and when the
context so dictates. The word "including" shall be construed as if followed by the words
"without limitation." This Agreement shall be interpreted as though prepared jointly by both
parties.
812. No Waiver. Authority may at any time and from time to time waive any one or
more of the terms or conditions contained in this Agreement, but any such waiver shall be
deemed to be made pursuant to this Agreement and not in modification thereof, and any such
waiver in any instance or under any particular circumstances shall not be construed a waiver of
such term or condition or of any subsequent default. In order to be effective, all such waivers
must be in writing. The failure of Authority to promptly exercise its rights or remedies shall not
be deemed to be a waiver or grounds for the claim of estoppel.
813. Modifications. Any alteration, change or modification of or to this Agreement, in
order to become effective, shall be made in writing and in each instance signed on behalf of each
party.
814. everability. If any term, provision, condition or covenant ofthis Agreement or
its application to any party or circumstances shall be held, to any extent, invalid or
unenforceable, the remainder of this Agreement, or the application of the term, provision,
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24
condition or covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the
fullest extent permitted by law.
815. Incorporation of Recitals. The recitals set forth above, and all defined terms set
forth in such recitals and in the introductory paragraph preceding the recitals, are hereby
incorporated into this Agreement as if set forth in full.
816. Incorporation of Attachments. All attachments referenced in this Agreement are
hereby incorporated into this Agreement by this reference.
817. Legal Advice. Each party represents and warrants to the other the following:
they have carefully read the Loan Documents, and in signing the Loan Documents, they do so
with full knowledge of any right which they may have; they have received independent legal
advice from their respective legal counsel as to the matters set forth in the Loan Documents, or
have knowingly chosen not to consult legal counsel as to the matters set forth in the Loan
Documents; and, they have freely signed the Loan Documents without any reliance upon any
agreement, promise, statement or representation by or on behalf of the other party, or their
respective agents, employees, or attorneys, except as specifically set forth in the Loan
Documents, and without duress or coercion, whether economic or otherwise.
818. Time of Essence. Time is expressly made of the essence with respect to the
performance by Authority and Borrower of each and every obligation and condition of the Loan
Documents.
819. Cooperation. Each party agrees to cooperate with the other in this transaction
and, in that regard, shall execute any and all documents which may be reasonably necessary,
helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not
limited to, releases or additional agreements.
820. Conflicts oflnterest. No member, official or employee of Authority or City shall
have any personal interest, direct or indirect, in the Loan Documents, nor shall any such member,
official or employee participate in any decision relating to the Loan Documents which affects his
personal interests or the interests of any corporation, partnership or association in which he is
directly or indirectly interested.
821. Time for Acceptance of Agreement. This Agreement, when executed by
Borrower and delivered to Authority, must be authorized, executed and delivered by Authority
on or before forty-five ( 45) days after signing and delivery of this Agreement by Borrower or
this Agreement shall be void, except to the extent that Borrower shall consent in writing to a
further extension oftime for the authorization, execution and delivery of this Agreement.
822. Agreement Binding. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
823. Non-Liability of Officials and Employees of Authority. No member, official or
employee of Authority or City shall be personally liable to Borrower, or any successor in
25
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interest, in the event of any default or breach by the Authority or City or for any amount which
may become due to Borrower or its successors, or on any obligations under the terms of the Loan
Documents. Borrower hereby waives and releases any claim it may have against the members,
officials or employees of the Authority or City with respect to any default or breach by the
Authority or City or for any amount which may become due to Borrower or its successors, or on
any obligations under the terms of the Loan Documents. Borrower makes such release with full
knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the
extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code
provides as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the
debtor."
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[Signatures to appear on the following page.]
26
IN WITNESS WHEREOF, Authority and Borrower have executed this Agreement on the
respective dates set forth below.
Date:
ATTEST:
APPROVED AS TO FORM:
Date:
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AUTHORITY:
SAN JUAN CAPISTRANO HOUSING
AUTHORITY
By:
Title:
BORROWER:
SEASONS SAN JUAN CAPISTRANO AR,
L.P., a California limited partnership
27
By: LINC-Gardena Associates, LLC, a
California limited liability company, its
managing general partner
By: LINC Housing Corporation, a
California nonprofit public
benefit corporation, its sole
member and manager
By:
Name :
Title:
By: HCHP Affordable Multi-Family, LLC,
a California limited liability company,
its administrative general partner
By:
Thomas Erickson
Senior Vice President
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28
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ATTACHMENT NO.1
LEGAL DESCRIPTION
[To Be Inserted.]
Attachment 1
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ATTACHMENT NO.2
PROPERTY MAP
[To Be Inserted.]
Attachment 2
ATTACHMENT NO.3
SCOPE OF DEVELOPMENT
The rehabilitation of the Property shall substantially conform with the following
prOVlSlOnS.
A. General. The Property shall be rehabilitated and improved in accordance with the
provisions of this Agreement and the plans, drawings and related documents approved by the
Authority and the City, if any.
B. The Project. Borrower will acquire the Property, and rehabilitate the existing
improvements located on the Property consisting of 112 multi-family apartment units, and
related improvements and amenities. The rehabilitation work to be performed on the Property
will improve the energy efficiency of each residential building by approximately 10%, and
endeavor to reduce the Project's overall water consumption as is mandated by California water
supply agencies. The actual scope of the rehabilitation work to be performed will be determined
following a physical needs assessment of each individual apartment unit and all other aspects of
the entire Project site, termite report and energy audit to be completed by the Borrower.
C. Affordable Housing. Of the 112 housing units in the Project, a minimum of
twenty (20) units will be affordable to persons or families of very-low income (up to 50% HCD
AMI), a minimum of ninety (90) units will be affordable to persons or families of low income
(up to 60% HCD AMI), and two (2) of the housing units will be employee exempt units. For
purposes hereof, "HCD AMI" shall mean the area median income for the Orange County Area,
adjusted for family size appropriate to the unit, as established on an annual basis by the
California State Department of Housing and Community Development. Rents levels will be
established based on those required by the California Tax Credit Allocation Committee (TCAC)
for Low Income Housing Tax Credit projects.
D. Applicable Codes. The Project shall be rehabilitated in accordance with the
Uniform Building Code (with City modifications) and applicable City standards and ordinances.
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Attachment 3
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ATTACHMENT NO.4
[INTENTIONALLY OMJTTEDJ
Attachment 4
ATTACHMENT NO.5
INITIAL COST BREAKDOWN
!Seasons Senior (SJCI
111 Units vith R~reatlon Center ........ ~ a.-... ''"' 4 ..
92 10 4
20 2 1
112 12 5
E Ef!!d n.e.rn ~!!!X m,e r av:eft\~t.:
I a.,; ~r: t. ~ (7 o..o!<kr,;: 1 237.000
l Pc;t~ P~:.cr: "'itt-> E~·;y Sw lola n-tv: 111 8!,150
3S"-~179"" 1~14
4ltec:>l~~ ~~Wni<IM: _12.100
5 PV SF ~"' L"'O,OCIO
6lt..~a)X • ....: '"'n~ Rec!.c:.o~ L50.000
i lllc.:lbc E...c:...: R>~: (1Uj 97.000
£ VI~ RcJ>L,-cc......,t f>ducir:; Sl""~ Door: 1.610.792
9 l ~Tai'-,.;u, '-·'lo..Te><:et HGPM (W I S6,000
IC ~~~;«[_..,.,..e.. C.fl; l.~t Firt<JTe! ... itHID F "'""'! 57000
1 MI>Oii~/CD"'""""d1>0r 12 'S25Al00 SOD.OOO
2 Ert<orior hi~r; ZAIO,IfiJD
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.: S.rl<l Shny )<><l St-i~ Pllrl<l"C lot ~000
S lr:otall AI"'""""" c...,_...: {112.1 SZ4.8110
6~~/T~T~~/f ~~cP~mT~ 40,000
7 Re-o :; ...... a-e;.: ~w;,lk. deci:= af"'ld 0\lti'b y ~! e:a~t~ dreclli....: ;rtC ~~ 9).000
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9 Up;ndt u.~~i; Offia hcili~> '7,619
ol£><y Ro< ltef»ir 8-! 195
t iP,.,....: 2$.000
wm-OT£~1
1) General !Wquifements
2) Contrartor Overheild
3) Contrartor Profit
4) Construction Contincency
Subto~l
T"tal Aeh~tb lkAd&d
Attachment 6
4852-2143-6984.v4
61147 .10045\29142630.8
4814-6623-9034.v2
11 .. 5
1,l56,J~
2.405.
144300 610
48,10<1 Z'.O
144,100 fi'•
117.465 s• ...
464 u.:;
1,869,165
ATTACHMENT N0.6
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
(Seasons at San Juan Capistrano Apartments Project)
Principal Sum Not to Exceed ----------' 20_
$1,000,000.00 San Juan Capistrano, California
FOR VALUE RECEIVED, SEASONS SAN JUAN CAPISTRANO AR, L.P., a California
limited partners (the "Maker" or "Borrower"), having an address at 330 West Victoria Street,
Gardena, CA 90248, promises to pay the SAN JUAN CAPISTRANO HOUSING AUTHORITY
("Payee" or "Authority"), the principal sum not to exceed ONE MILLION DOLLARS
($1,000,000.00) (the "Loan"), or so much of such principal as may be advanced from time to
time, with interest at the rate of three percent (3%) per annum accruing against the principal
balance outstanding from time to time. Interest shall be simple interest only.
1. Purpose. This Note is made and delivered pursuant to and in implementation of that
certain Affordable Housing Loan Agreement entered into between Authority and Borrower,
dated 2016 (the "Loan Agreement"), which provides for the acquisition of
the Property and rehabilitation by the Maker of the Project described in Section 3 below. The
term "Property" means that real property located at 31641 Rancho Viejo Road, San Juan
Capistrano, California, and more particularly described in the Deed of Trust securing this Note.
All capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan
Agreement.
2. Security. Payment of this Note is secured by a deed oftrust, assignment ofrents, security
agreement and fixture filing (the "Deed of Trust") from Maker to Payee recorded against the
Property.
3. Project. Maker will acquire the Property and rehabilitate the 112-unit multi-family
residential apartment affordable housing complex, including all related improvements and
amenities located on the Property (the "Project"). The 112 units that are contained in the Project
are referred to herein as the "Housing Units." The Project shall consist of a minimum of twenty
(20) Housing Units that are made available and rented to persons or families whose income does
not exceed fifty percent (50%) of the Area Median Income (the "50% Units"), a minimum of
ninety (90) Housing Units that are made available and rented to persons or families whose
income does not exceed sixty percent (60%) of the Area Median Income (the "60% Units"), and
two (2) of the Housing Units will be employee exempt units. For purposes hereof, "Area Median
Income" shall mean the area median income for the Orange County Area as published by the
U.S. Department of Housing and Urban Development (HUD) as the same may be adjusted for
small and larger households. The gross monthly rent (excluding any supplemental rental
assistance from the State of California, the federal government or any other public agency to
those tenants or on behalf of those units, and a utility allowance) for the 60% Units shall not
4852-2143-6984.v4
61147 .10045\29142630.8
4814-6623-9034.v2
Attachment 6
exceed one-twelfth of 30% of 60% of the Area Median Income, adjusted by household size
appropriate for the unit. The gross monthly rent (excluding any supplemental rental assistance
from the State of California, the federal government or any other public agency to those tenants
or on behalf of those units, and a utility allowance) for the 50% Units shall not exceed one-
twelfth of 30% of 50% of the Area Median Income, adjusted by household size appropriate for
the unit. Notwithstanding the foregoing, rent levels will be established based on those required
by the California Tax Credit Allocation Committee (TCAC) for Low Income Housing Tax
Credit projects. The Project shall be maintained and operated in accordance with that certain
Affordable Housing Regulatory Agreement by and between Authority and Borrower, dated
_______ , 20 _, and recorded concurrently with the Deed of Trust ("Regulatory
Agreement").
4. Maturity Date. This Note shall be due and payable in full at the earlier of (i) sale of the
Property or transfer of all or any interest in the Borrower other than a transfer permitted under
Section 804.2 of the Loan Agreement or Section 4.02 of the Regulatory Agreement; (ii) a
Default under the Loan Agreement or any of the Loan Documents beyond any applicable cure
period; or (iii) forty ( 40) years after the date hereof (the "Maturity Date").
5. Payment. Maker shall make annual payments of principal and interest to the Payee in an
amount equal to the Residual Receipts Payment defined herein. The payments described
hereinabove shall be paid to Holder no later than one hundred twenty (120) days after the end of
Maker's fiscal year. Residual Receipts Payments received by Payee shall be credited first to
accrued but unpaid interest, then to current interest due and owing, and lastly to principal.
A. The "Residual Receipts Payment" shall equal fifty percent (50%) of the
Residual Receipts, as defined below. The Residual Receipts Payment as set forth herein
constitutes the cumulative annual payment due to the Payee under this Note.
B. For the purposes of this Note, "Residual Receipts" shall mean the sum of money
computed as follows:
i. All rents, revenues, consideration or income (of any form) derived by
Maker in connection with or relating to the ownership or operation of the Project, including any
net revenue derived from any refinancing of the Project and any revenue from contributions,
loans or grants which is not required to meet future project obligations (but excluding tenants'
security deposits, partner capital contributions and similar advances) less all of the following: all
customary and reasonable costs and expenses in connection with the operation and maintenance
of the Project approved by Payee in the budget described below, including but not limited to
premiums for property and liability insurance, utility services not paid directly by tenants,
maintenance and repair, security services, asset management fees not to exceed $18,000 per year
(subject to an annual 3% increase), a partnership management fee in the amount of $7,500 per
year increased annually by 4%, deferred developer fee, provided that the aggregate developer fee
does not exceed the maximum fee allowed by TCAC or pursuant to any other agreements
entered into between the Maker and Payee, deferred general contractor fee, property
management fees not to exceed six percent ( 6%) of income; payments of principal and interest
due on financing from sources reviewed and approved in writing by Payee (including on
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4814-6623-9034.v2
Attachment 6
development and deficit loans made by Maker or any partner of Maker); provided, however, that
no such written approval from Payee shall be required with respect to development and deficit
loans made by Maker or any Partner of Maker to prevent a default or other material breach under
any of the Additional Borrower Financing; repayment of any other loans made by partners of
Borrower to Borrower pursuant to Borrower's governing partnership agreement, as amended
from time to time; payment of any credit adjusters; amounts approved by Payee expended to
restore the Project after a casualty loss or condemnation; reasonable and customary cost for
accounting and auditing the books and records of the Project; taxes; franchise tax filing fees;
local, state and federal monitoring compliance fees; and deposits to Project reserves approved by
Payee or required by any other lender or the tax credit investor.
ii. Notwithstanding the generality of the foregoing, the following items are
not expenses or deductible in computing Residual Receipts:
(a) Payment of any fees or expenses or of any portion of the Residual
Receipts to Maker, except as expressly provided in Section 5.B.i, above;
(b) Income taxes imposed upon Borrower's income; and
(c) Depreciation, cost recovery, amortization and similar items which do
not involve the expenditure of cash.
6 Payment Location. Payment shall be made in lawful money of the United States to the
San Juan Capistrano Housing Authority, 32400 Paseo Adelanto, San Juan Capistrano, California
92675. The place of payment may be changed from time to time as the Payee may from time to
time designate in writing.
7. Default. The occurrence of any of the following shall constitute an event of default under
this Note:
A. Maker fails to pay any amount due hereunder within thirty (30) days of its due
date; or
B. Any other default by Maker under this Note, the Deed of Trust, the Loan
Agreement or the Regulatory Agreement recorded against the Property after the expiration of all
applicable cure periods
Maker shall not be considered in default under this Note until the expiration of all notice and
cure periods provided to Maker.
Upon the occurrence of any uncured event of default, or at any time thereafter , at the option of
the Payee hereof, the entire unpaid principal and interest owing on this Note shall become
immediately due and payable. This option may be exercised at any time following any such
event, and the acceptance of one or more installments thereafter shall not constitute a waiver of
Payee's option. Payee's failure to exercise such option shall not constitute a waiver of such
option with respect to any subsequent event. Payee's failure in the exercise of any other right or
remedy hereunder or under any agreement which secures the indebtedness or is related thereto
4852-2143-6984.v4
61147.10045\29142630.8
4814-6623-9034 .v2
Attachment 6
shall not affect any right or remedy and no single or partial exercise of any such right or remedy
shall preclude any further exercise thereof.
8. Default Interest Rate. At all times when Maker is in default hereunder by reason of
Maker's failure to pay principal due under this Note within applicable cure periods, the interest
rate on the sums as to which Maker is in default (including principal, if Payee has elected to
declare it immediately due and payable), shall be the highest rate then allowed by law as of the
date of the default or ten percent (10%) whichever is lower.
9. Waivers. Maker and any endorsers hereof and all others who may become liable for all
or any part of this obligation, severally waive presentment for payment, demand and protest and
notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any
extension of the time of payment hereof or of any installment hereof, to the release of any party
liable for this obligation, and any such extension or release may be made without notice to any of
said parties and without any way affecting or discharging this liability.
10. Costs. Maker agrees to pay immediately upon demand all costs and expenses of Payee
including reasonable attorneys' fees:
A. If after default and the expiration of all notice and cure periods this Note is placed
in the hands of an attorney or attorneys for collection,
B. If after a default hereunder or under the Deed of Trust or Loan Agreement and
after the expiration of all notice and cure periods Payee finds it necessary or desirable to secure
the services or advice of one or more attorneys with regard to collection of this Note against
Maker, any guarantor or any other party liable therefor or to the protection of its rights under this
Note, the Deed of Trust, the Loan Agreement or other loan document executed in connection
with the Project, or
C. If Payee seeks to have the Property abandoned by or reclaimed from any estate in
bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection
of this Note or prohibiting the enforcement of the Deed of Trust or any other agreement
evidencing or securing this Note lifted by any bankruptcy or other court.
D. If Payee shall be made a party to or shall reasonably intervene in any action or
proceeding, whether in court or before any governmental entity, affecting the Property or the title
thereto or the interest of the Payee under the Deed of Trust, including, without limitation, any
form of condemnation or eminent domain proceeding, Payee shall be reimbursed by Maker
immediately upon demand for all costs, charges and reasonable attorneys' fees incurred by Payee
in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien
upon the Property.
11. Notices. Any notices provided for in this Note shall be given by mailing such notice by
certified mail, return receipt requested at the address stated in the Loan Agreement or at such
address as either party may designate by written notice.
12. Successors. This Note shall be binding upon Maker, its successors and assigns.
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Attachment 6
13. California Law. This Note shall be construed in accordance with and be governed by the
laws of the State of California.
14. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
15. Nonrecourse. This Note is a nonrecourse obligation of Maker. Neither Maker nor any of
its officers, directors or general and limited partners shall have any personal liability for repaying
the principal or interest of the Note. In any action brought to enforce the obligations of Maker
under this Note, the Deed of Trust or any other instrument or agreement evidencing, securing or
relating to the indebtedness evidenced by this Note, the judgment or decree shall be enforceable
against Maker solely and only to the extent of its interest in the property described in the Deed of
Trust or its interest in any other security loaned by Maker as security for this Note, and Payee
shall not seek any deficiency judgment against the Maker. The foregoing provisions shall not
prevent recourse to the collateral security for the loan or constitute a waiver, release or discharge
of or otherwise affect the obligation to pay, any indebtedness evidenced by the loan documents
executed in connection with the Project or limit the right of any person to name the Maker or any
other person claiming an interest in or right to such collateral as party defendant in any action or
suit for judicial foreclosure or in the exercise of any other remedy, including injunctive or other
equitable relief, under any of the loan documents executed in connection with the Project so long
as no deficiency judgment shall be sought against the Maker.
The foregoing limitation shall not apply to any and all loss, damage, liability, action, cause of
action, cost or expense (including without limitation, reasonable attorneys' fees and expenses) to
the extent incurred by Payee as a result of any:
A. Fraud or material misrepresentation under or in connection with the loan or any
Loan Document executed in connection with the Project;
B. Intentional bad faith waste of the Property by the Maker;
C. Losses resulting from Maker's failure to maintain insurance as required under the
Deed of Trust; or
D. Misappropriation of any rents, security deposits, insurance proceeds,
condemnation awards or any other proceeds derived from the collateral security by the Maker.
If any of the events listed in the foregoing (A) through (D) occurs, Payee shall have the right to
proceed directly against Maker at the time the event giving rise to the recourse liability occurred
to recover any and all loss, damage, liability, action, cause of action, cost or expense (including
without limitation, reasonable attorneys' fees and expenses) incurred by Payee.
16. Nonliability of Maker and Payee Official and Employees.
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4814-6623-9034.v2
Attachment 6
A. No member, official or employee of the Payee shall be personally liable to the
Maker in the event of any default or breach by the Payee or on any obligations under the terms of
this Note.
B. No member, official or employee of the Maker shall be personally liable to the
Payee in the event of any default or breach by the Maker or for any amount which may become
due to the Payee or on any obligations under the terms of this Note.
4852-2143-6984.v4
6114 7.10045\29142630.8
4814-6623-9034 .v2
SEASONS SAN JUAN CAPISTRANO AR,
L.P ., a California limited partnership
By: LINC-Gardena Associates, LLC, a
California limited liability company,
its managing general partner
By: LINC Housing Corporation, a
California nonprofit public
benefit corporation, its sole
member and manager
By:
Name:
Title:
By: HCHP Affordable Multi-Family, LLC,
a California limited liability company,
its administrative general partner
By:
Attachment 6
Thomas Erickson
Senior Vice President
When Recorded Mail Document To:
San Juan Capistrano Housing Authority
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn:--------
Exempt from recording fees pursuant to
Government Code Section 27383
APN: 666-241-10
ATTACHMENT NO.7
FORM OF DEED OF TRUST
SPACE ABOVE THIS LINE FOR RECORDER'S USE
SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, together with the ADDENDUM TO DEED OF TRUST attached
hereto as Exhibit B and incorporated herein by this reference, both made as of
_______ , 20 _, between
SEASONS SAN JUAN CAPISTRANO AR, L.P., a California limited partnership, herein called
TRUSTOR, whose address is 330 West Victoria Street, Gardena, CA 90248-3527;
Fidelity National Title, a California corporation, herein called TRUSTEE, and
the SAN JUAN CAPISTRANO HOUSING AUTHORITY, herein called BENEFICIARY,
whose address is 32400 Paseo Adelanto, San Juan Capistrano, CA 92675.
WITNESSETH: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to
TRUSTEE IN TRUST, WITH POWER OF SALE, that PROPERTY in Orange County,
California, described as:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF
TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right,
power and authority given to and conferred upon Beneficiary by paragraph (10) of the provisions
incorporated herein by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of Trustor incorporated by
reference or contained herein . 2. Payment of the indebtedness evidenced by one Promissory
Note, dated as of 20_, and any extension or renewal thereof, in the principal
sum of One Million Dollars ($1,000,000.00) executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner of said property hereafter may
borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured.
4852-2143-6984.v4
61147 .10045\29142 630.8
4814-6623-9034. v2
Attachment 7
To Protect the Security of this Deed of Trust, Trustor Agrees: By the execution and delivery
of this Deed of Trust and the Promissory Note secured hereby, that provisions (1) to (14),
inclusive, of the fictitious deed of trust recorded in Santa Barbara County and Sonoma County
October 18, 1961, and in all other counties October 23, 1961, in the book and at the page of
Official Records in the office of the county recorder of the county where said property is located,
noted below opposite the name of such county, viz:
C'OlJ~TY BOOK PAGE co iTY BOOK l'A OE. co f:'o.I"TY BOOK PAGE COL:ITY BOOK PAGE
Ahm~ -1.>5 684 l.Gng; 79:2 8" .).J Placer 895 301 S!I!Ir.l 19 335
Alpine 1 :!50 Lake 6] 39 P!umns 151 5 Si kryou 468 1S1
• .\mad or 104 348 ~n 111 ~7 1 Rl~de 3005 523 Solano 1105 1S2
Butte I U5 1 Lo;~~e7 T2055 899 Sarr:unento 4331 62 Sonoma 1851 689
Ca.lnt·e•m 145 1 5~ .1adera. 810 170 San Benito 271 383 Stani•us li15 456
Colusi\ 296 617 :yf.mu 150& 339 San. 5567 61 Suiter 572 297
Bentardino
Conln 3978 47 .. 1.lnp05.11 77 291 s~n F I :\DCI'iCO A332 905 Teh= 401 189
Costa
Dell\ one 78 414 , ftndocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorl!do 568 456 !virn:rd 1547 538 San L\ris 11S1 12 Tulare 2294 275
Fresno 4626 572 .1odoc t!W 851
Obispo
San, 1ateo 4078 420 Tuolumne 135 47
Glem~ 422 184 .1ouo 52 429 Sanu Barbara 1878 860 Ve!~lura 2062 386
Humboldt 657 517 ~· .lonlm•y 219 4 538 Santa Clara 5336 341 Yolo 653 145
lmperia.l 1091 501 .. npa 639 86 Santa Cruz 1431 494 Yuro 334 486
lnJO 147 598 ~e-.-ada 305 320 Sh:;sta 684 528
Kern 3427 60 Ornuge 5889 611 San Diego ~rie> ~Book 1961, Page 183887
which provisions, identical in all counties, (printed on the attached unrecorded pages) are hereby
adopted and incorporated herein and made a part hereof as fully as though set forth herein at
length; that Trustor will observe and perform said provisions; and that the references to property,
obligations and parties in said provisions shall be construed to refer to the property, obligations,
and parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale
hereunder be mailed to him at his address hereinbefore set forth.
TRUSTOR:
SEASONS SAN JUAN CAPISTRANO AR,
L.P., a California limited partnership
By: LINC-Gardena Associates, LLC, a
California limited liability company,
its managing general partner
By: LINC Housing Corporation, a
California nonprofit public
benefit corporation, its sole
member and manager
4852-2143-6984.v4
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4814-6623-9034. v2
Attachment 7
By:
Name:
Title:
By: HCHP Affordable Multi-Family, LLC,
a California limited liability company,
its administrative general partner
By:
Thomas Erickson
Senior Vice President
4852-2143-6984.v4
61147.10045\29142630 .8
4814-6623-9034. v2
Attachment 7
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of ____________________ ___ )
On before me, Notary Public (insert name and title of the officer)
personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature----------------------(Seal)
4852-2143-6984.v4
6114 7.10045129142630.8
4814-6623-9034. v2
Attachment 7
DO NOT RECORD
The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust,
recorded in each county in California, as stated in the foregoing Deed of Trust and incorporated
by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
(1) To keep said property in good condition and repair; not to remove or demolish
any building thereon; to complete or restore promptly and in good and workmanlike manner any
building which may be constructed, damaged or destroyed thereon and to pay when due all
claims for labor performed and materials furnished therefore; to comply with all laws affecting
said property or requiring any alterations or improvements to be made thereon; not to commit or
permit waste thereof; not to commit, suffer or permit any act upon said property in violation of
law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character
or use of said property may be reasonably necessary, the specific enumerations herein not
excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and
with loss payable to Beneficiary. The amount collected under any fire or other insurance policy
may be applied by Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part
thereof may be released to Trustor. Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses,
including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary
to foreclose this Deed.
( 4) To pay: at least ten days before delinquency all taxes and assessments affecting
said property, including assessments on appurtenant water stock; when due, all encumbrances,
charges and liens, with interest, on said property or any part thereof, which appear to be prior or
superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon
Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in
such manner and to such extent as either may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in
and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance,
charge or lien which in the judgment of either appears to be prior or superior hereto; and, in
exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable
fees.
4852-2143-6984.v4
61147 .10045\29142630.8
4814-6623-9034. v2
Attachment 7
(5) To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date
hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.
(6) That any award of damages in connection with any condemnation for public use
of or InJury to said property or any part thereof is hereby assigned and shall be paid to
Beneficiary who may apply or release such moneys received by him in the same manner and
with the same effect as above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive his right either to require prompt payment when due of all other sums
so secured or to declare default for failure so to pay.
(8) That at any time or from time to time, without liability therefore and without
notice, upon written request of Beneficiary and presentation of this Deed and said note for
endorsement, and without affecting the personal liability of any person for payment of the
indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the
making of any map or plat thereof; join in granting any easement thereon; or JOin m any
extension agreement or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have
been paid, and upon surrender of this Deed and said note to Trustee for cancellation and
retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property
then held hereunder. The recitals in such reconveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be
described as "the person or persons legally entitled thereto." Five years after issuance of such
full reconveyance, Trustee may destroy said note and this Deed (unless directed in such request
to retain them).
(10) That as additional security, Trustor hereby gives to and confers upon Beneficiary
the right, power and authority, during the continuance of these Trusts, to collect the rents, issues
and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in
payment of any indebtedness secured hereby or in performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and payable. Upon any such
default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver
to be appointed by a court, and without regard to the adequacy of any security for the
indebtedness hereby secured, enter upon and take possession of said property or any part thereof,
in his own name sue for or otherwise collect such, rents, issues, and profits, including those past
due and unpaid, and apply the same, less costs and expenses of operation and collection,
including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as
Beneficiary may determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure
or waive any default or notice of default hereunder or invalidate any act done pursuant to such
notice.
4852-2143-6984.v4
61147.10045\29142630 .8
4814-6623-9034. v2
Attachment 7
(11) That upon default by Trustor in payment of any indebtedness secured hereby or in
performance of any agreement hereunder, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand
for sale and of written notice of default and of election to cause to be sold said property, which
notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this
Deed, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of
said notice of default, and notice of sale having been given as then required by law, Trustee,
without demand on Trustor, shall sell said property at the time and place fixed by it in said notice
of sale, either as a whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash of lawful money of the United States, payable at time of
sale. Trustee may postpone sale of all or any portion of said property by public announcement at
such time and place of sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the proceeding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any covenant or warranty, express
or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter
defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and ofthis Trust, including cost of
evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of:
all sums expended under the terms hereof, not then repaid, with accrued interest at the amount
allowed by law in effect at the date hereof; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby,
may from time to time, by instrument in writing, substitute a successor or successors to any
Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and
duly acknowledged and recorded in the office of the recorder of the county or counties where
said property is situated, shall be conclusive proof of proper substitution of such successor
Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all
its title, estate, rights, powers and duties. Said instrument must contain the name of the original
Trustor, Trustee and Beneficiary hereunder, the book and pages where this Deed is recorded and
the name and address of the new Trustee.
(13) That this Deed applies to , inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors and assigns. The term
Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby,
whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural.
(14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged ,
is made a public record as provided by law. Trustee is not obligated to notify any party hereto of
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Attachment 7
pending sale under any other Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
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Attachment 7
EXHIBIT A
PROPERTY LEGAL DESCRIPTION
[To Be Inserted]
APN: ____________________________ __
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Exhibit A to Attachment 7
EXHIBIT B
ADDENDUM TO DEED OF TRUST
This Addendum to Deed of Trust is part of the Deed of Trust dated
__________ , 20_, to which it is attached, by and between SEASONS SAN
JUAN CAPISTRANO AR, L.P., a California limited partnership, as "Trustor," and the SAN
JUAN CAPISTRANO HOUSING AUTHORITY, as "Beneficiary." The following provisions
are made a part of the Deed of Trust:
1. No Discrimination. The Trustor covenants by and for itself and any successors in
interest 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 are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 ofthe Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor
shall the Trustor itself or any person claiming under or through it establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.
2. Nondiscrimination Clauses. All deeds, leases or contracts made relative to the
Property, the improvements thereon or any part thereof, shall contain or be subject to the
nondiscrimination clauses set forth in California Health and Safety Code Section 33436.
3. Subordination. Beneficiary agrees that the terms and conditions of this Deed of
Trust shall be subject to and subordinate to the terms and conditions of financing, for the purpose
of developing the Property, obtained by Trustor through a lender acceptable to Beneficiary
pursuant to the terms of such subordination agreement executed by Beneficiary and such lender;
provided the total aggregate amount of financing secured by the Trustor together with the
indebtedness secured by this Deed of Trust shall not exceed the total appraised value of the
Property.
4. Default. Notwithstanding any other prov1s10ns in this Deed of Trust, the
occurrence of any of the following shall constitute an event of default under the Promissory Note
secured by this Deed of Trust and this Deed of Trust, and a default may be declared under this
Deed of Trust solely upon the occurrence of any of the following: Any failure by Trustor to
(i) pay any amount due or perform any obligation under the Promissory Note within thirty (30)
days of its due date; (ii) perform any of the terms or conditions of that certain Affordable
Housing Regulatory Agreement, dated 20_, by and between Trustor
and Beneficiary, after expiration of applicable notice and cure periods; (iii) perform any of the
terms or conditions of that certain Affordable Housing Loan Agreement, dated
_________ , 20_, by and between Trustor and Beneficiary after any applicable notice
and cure periods; and (iv) perform any obligation or covenant under this Deed of Trust within
forty-five ( 45) days after receiving written notice from Beneficiary of such default, or such
longer period as may reasonably be required to cure such default provided that Trustor has
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Exhibit B to Attachment 7
commenced the cure within such forty-five (45) day period and diligently prosecutes such cure to
completion.
5. Casualty. Beneficiary acknowledges and agrees that Trustor shall have the
absolute right, subject to the rights of any senior lienholders, to prosecute, settle, and adjust any
insurance claims, and use the proceeds thereof, provided Trustor holds and applies any insurance
proceeds following a casualty toward the restoration or rebuilding of the improvements on the
Property.
6. Hazardous Substances.
(a) As used in this Section 6, the following terms shall have the following
meanmgs:
(i) "Environmental Laws" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like now or hereafter in effect relating to (A)
Hazardous Substance Activity or Hazardous Substances; (B) the generation, use, storage,
transportation or disposal of Hazardous Substances, or solid waste; or (C) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or animal health, safety
or welfare, including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"); the
Hazardous Material Transportation Act (49 U.S.C. Section 180 et seq.); the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.); the Clean Air Act (42 U.S.C. Section 740 et
seq.); the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.); the
Occupational Safety and health Act (29 U.S.C. Section 651 et seq.); the Safe Drinking Water Act
(42 U.S.C. Section 300f et seq.); the Porter-Cologne Water Quality Control Act (California
Water Code Section 13020 et seq.); the Safe Drinking Water and Toxic Enforcement Act of 1986
(California Health & Safety Code Section 25249.5 et seq.); the Hazardous Substance Account
Act (California Health & Safety Code Section 25300 et seq.); the Hazardous Waste Control Act
(California Health & Safety Code Section 25100 et seq.); The California Environmental Quality
Act (California Public Resources Code Section 2100 et seq.); and the rules, regulations and
ordinances of the City of San Juan Capistrano or any applicable federal, state and local agencies
or bureaus, as amended from time to time. [REVISE DEFINITION TO MATCH DEFINITION
IN LOAN AGREEMENT]
(ii) "Foreclosure Transfer" means the transfer of title to all or any part
of the Property or the Trust Estate at a foreclosure sale under the Deed of Trust, either pursuant
to judicial decree or the power of sale contained in the Deed of Trust, or by deed in lieu of such
foreclosure.
(iii) "Hazardou Substances" means (A) any chemical, compound,
material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified
pursuant to, any Environmental Laws as a "hazardous substance," "hazardous material,"
"hazardous waste," "extremely hazardous waste," "acutely hazardous waste," "radioactive
waste," "infectious waste," "biohazardous waste," "toxic substance," "pollutant," "toxic
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Exhibit B to Attachment 7
pollutant," "contaminant" as well as any other formulation not mentioned herein intended to
define, list, or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP
toxicity"; (B) petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a
resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced
waters and other wastes associated with the exploration, development or production of crude oil,
natural gas, or geothermal resources; (C) "hazardous substance" as defined in Section 2782.6( d)
of the California Civil Code; (D) "waste" as defined in Section 13050(d) ofthe California Water
Code; (E) asbestos in any form; (F) urea formaldehyde foam insulation; (G) polychlorinated
biphenyls (PCBs); (H) radon; and (I) any other chemical, material, or substance that, because of
its quantity, concentration, or physical or chemical characteristics, exposure to which is limited
or regulated for health and safety reasons by any governmental authority, or which poses a
significant present or potential hazard to human health and safety or to the environment if
released into the workplace or the environment.
(iv) "Hazardou ub tance Activity" means any actual, proposed, or
threatened use, storage, holding, existence, location, release (including, without limitation, any
spilling, leaking, leaching, pumping, pouring, emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through soil, surface water, groundwater or
any body of water or the air), discharge, deposit, placement, generation, processing, construction,
treatment, abatement, removal, disposal, disposition, handling, or transportation of any
Hazardous Substance from, under, in, into, or on the Property, including without limitation, the
movement or migration of any Hazardous Substances from surrounding property, surface water,
groundwater or any body of water, or the air under, in, into or onto the Property and any residual
Hazardous Substances contamination in, on, or under the Property.
(v) "Losses" means all charges, losses, liabilities, damages (whether
actual, consequential, punitive, or otherwise denominated), costs, fees, demands, claims for
personal injury or real or personal property damage), actions, administrative proceedings
(including informal proceedings), judgments, causes of action, assessments, fines, penalties,
costs, and expenses of any kind or character, foreseeable and unforeseeable, liquidated and
contingent, proximate and remote, including, without limitation, the following: (A) the
reasonable fees and expenses of outside legal counsel; (B) the reasonable fees and expenses of
accountants, third-party consultants, and other independent contractors retained by an
Beneficiary; (C) costs, including capital, operating and maintenance costs, incurred in connection
with any investigation or monitoring of site conditions or any clean-up, remedial, removal or
restoration work required or performed by any federal, state or local governmental agency or
political subdivision or performed by any non-governmental entity or person that is required by
Environmental Laws or administrative ruling or directive because of the presence, suspected
presence, release or suspected release of Hazardous Substances in violation of Environmental
Laws in the air, soil, surface water or groundwater at the Property; (D) any and all diminution in
value ofthe Property, loss of use or damage to the Property, or loss of profits or loss ofbusiness
opportunity; and (E) reasonable costs and expenses of enforcing this Section 6.
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Exhibit B to Attachment 7
(vi) "Environmenta l Losse s" means Losses rising out of or as a result
of: (A) the occurrence of any Hazardous Substance Activity; (B) any violation of any applicable
Environmental laws relating to the Property or to the ownership, use, occupancy or operation
thereof; (C) any investigation, inquiry, order, hearing, action, or other proceeding by or before
any governmental agency in connection with any Hazardous Substance Activity; or (D) any
claim, demand or cause of action, or any action or other proceeding, whether meritorious or not,
brought or asserted against any Indemnitee which directly or indirectly relates to, arises from or
is based on any of the matters described in clause s (A), .(ill, or .(Q, or any allegation of any such
matters.
(b) Trustorrepresents and warrants to Beneficiary that Trustor has conducted
as appropriate inquiry and investigation, and, to the best of Trustor's knowledge, based on such
inquiry and investigation, no portion of the Property is being used or has ever been used at any
previous time, for the disposal, storage, treatment, processing or other handling of Hazardous
Substances, nor have any Hazardous Substances migrated onto or from the Property. Neither the
Property nor Trustor is in violation of or subject to any existing, pending or threatened
investigation by any governmental authority under any Environmental Law. Trustor's prior and
intended use of the Property will not result in the disposal or release of any Hazardous
Substances on, under, about or to the Property or the migration of any Hazardous Substances
from the Property. The foregoing representations and warranties shall be continuing and shall be
true and correct for the period from the date hereof to the release of this Deed of Trust (whether
by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these
representations and warranties shall survive such release.
(c) Trustor represents and warrants to Beneficiary that Trustor has complied
with all recommendations by any engineers retained by Trustor and all requirements of any
applicable department of environmental resources, environmental protection agency or similar
governmental agency, and there are no recommendations by said engineers or requirements
ordered by said agency or any other governmental body for environmental investigation or
cleanup with respect to the Property.
(d) On and after the date hereof, Trustor shall not (a) allow any Hazardous
Substances to be installed, used, introduced, stored, treated, disposed of, generated,
manufactured, discharged, dumped, transported or brought in, upon or over the Property in
violation of applicable law; (b) allow any soil or ground water contamination or pollution with
any Hazardous Substances on the Property in violation of applicable law; (c) allow any
Hazardous Substances to migrate from the Property in violation of applicable law; (d) allow any
Hazardous Substances to migrate onto the Property from any adjacent properties in violation of
applicable law; or (e) allow or cause the Property to be in violation of, or to trigger a duly
initiated and prosecuted investigation of the Property by any governmental authority under
applicable limitations , restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules or timetables contained in any local, state and/or federal laws, regulations , codes,
ordinances, plans, administrative or judicial orders, decrees, judgments, notices or demand letters
issued, entered, promulgated or approved thereunder relating to the environment, land use, water
and air quality and Hazardous Substances ("Environmental Requirements").
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Exhibit B to Attachment 7
(e) If the presence of any Hazardous Substances on the Property caused or
permitted by Trustor results in any contamination of the Property, Trustor shall promptly take all
actions, at its sole expense, as are necessary to return the Property to the condition existing prior
to the introduction of any such Hazardous Substances to the Property; provided that
Beneficiary's approval of such actions shall first be obtained, which approval shall not be
unreasonably withheld, conditioned, or delayed, so long as such actions would not potentially
have any material adverse long-term or short-term effect on the Property.
(f) At any time after the occurrence and during the continuance of any default
under this ection 6, Beneficiary shall have the following rights and remedies, in addition to any
other rights and remedies Beneficiary has under this Deed of Trust:
(i) As provided in California Code of Civil Procedure Section 564,
Beneficiary or its employees, acting by themselves or through a court appointed receiver may do
any of the following: (i) enter upon, possess, manage, operate, dispose of, and contract to dispose
of the Property or any part thereof; (ii) take custody of all accounts; (iii) negotiate with
governmental authorities with respect to the Property's environmental compliance and remedial
measures; (iv) take any action necessary to enforce compliance with environmental provisions,
including spending Rent Payments to abate any environmental problem; (v) make, terminate,
enforce or modify leases of part or all of the Property; (vi) contract for goods and services, hire
agents, employees, and counsel, make repairs, alterations, and improvements to the Property
necessary in Beneficiary's judgment to protect or enhance the security hereof; and/or (vii) take
any and all other actions which may be necessary or desirable to comply with Trustor's
obligations hereunder and under the Loan Documents. All sums realized by the receiver or
Beneficiary under this subparagraph, less all costs and expenses incurred by either of them under
this subparagraph, including attorneys' fees, and less such sums as Beneficiary or the receiver
deems reasonably appropriate as a reserve to meet future expenses under this subparagraph, shall
be applied on any indebtedness secured hereby in such order as Beneficiary shall determine.
Neither application of said sums to said indebtedness, nor any other action taken by Beneficiary
or the receiver under this subparagraph shall cure or waive any default or notice of default
hereunder, or nullify the effect of any such notice of default. Beneficiary, or any employee or
agent of Beneficiary, or a receiver appointed by a court, may take any action or proceeding
hereunder without regard to the adequacy of the security for the indebtedness secured hereunder,
the existence of a declaration that the indebtedness secured hereby has been declared
immediately due and payable, or the filing of a notice of default.
(ii) With or without notice, and without releasing Trustor from any
obligation hereunder, to cure any default of Trustor or in connection with any such default,
Beneficiary or its agents, acting by themselves or through a court-appointed receiver, may enter
upon the Property or any part thereof and perform such acts and things as Beneficiary deems
necessary or desirable to inspect, investigate, assess, and protect the security hereof, including of
any of Beneficiary's other rights: (i) to obtain a court order to enforce Beneficiary's right to enter
and inspect the Property under California Civil Code Section 2929.5 (in respect of which the
decision of Beneficiary as to whether there exists a release or threatened release of hazardous
substance, as defined therein, onto the Property shall be deemed reasonable and conclusive as
between the parties hereto); and (ii) to have a receiver appointed under California Code of Civil
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Exhibit B to Attachment 7
Procedure Section 564 to enforce Beneficiary's right to enter and inspect the Property for
hazardous substances as defined therein. All reasonable costs and expenses incurred by
Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary or
its agents or employees may conduct, including the fees of engineers, laboratories, contractors,
consultants, and attorneys, shall be paid by Trustor. All such reasonable costs and expenses
incurred by Trustee and Beneficiary pursuant to this subparagraph (including court costs,
consultant fees and attorney fees, whether incurred in litigation or not and whether before or after
judgment) shall bear interest at the Note Rate, from the date they are incurred until said sums
have been paid.
(iii) Beneficiary may seek a judgment that Trustor has breached its
covenants, representations and/or warranties with respect to the environmental matters set forth
above in this Section 6, by commencing and maintaining an action or actions in any court of
competent jurisdiction for breach of contract pursuant to California Code of Civil Procedure
Section 736, whether commenced prior to foreclosure of the Property or after foreclosure of the
Property, and to seek the recovery of any and all reasonable costs, damages, expenses, fees,
penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket
costs or expenses actually incurred by Beneficiary or advanced by Beneficiary (collectively, the
"Environmental Costs") relating to the cleanup, remediation or other response action required
by applicable law or which Beneficiary believes reasonably necessary to protect the Property, it
being presumed between Beneficiary and Trustor that all such Environmental Costs incurred or
advanced by Beneficiary relating to the cleanup, remediation, or other response action respecting
the Property were made by Beneficiary in good faith. All Environmental Costs incurred by
Beneficiary under this subparagraph (including court costs, consultant fees and attorney fees,
whether incurred in litigation or not and whether before or after judgment) shall bear interest at
the Note Rate, from the date of expenditure until said sums have been paid. Beneficiary shall be
entitled to bid, at any sale of the Property held hereunder, the amount of said costs, expenses and
interest in addition to the amount of the other obligations hereby secured as a credit bid, the
equivalent of cash.
(iv) As provided in California Code of Civil Procedure Section 726.5,
Beneficiary may waive its lien against the Property or any portion thereof, to the extent such
property is found to be environmentally impaired as defined therein, and to exercise any and all
rights and remedies of an unsecured creditor against Trustor and all of Trustor's assets and
property for the recovery of any deficiency and Environmental Costs, including seeking an
attachment order under California Code of Civil Procedure Section 483.010. Beneficiary and
Trustor each represents and warrants for itself that it has no actual knowledge of any release of
any Hazardous Substance (as defined in Section 726.5) on, to or under the Property. As between
Beneficiary and Trustor, for purposes of California Code of Civil Procedure Section 726.5,
Trustor shall have the burden of proving that Trustor or any related party (or any affiliate or
agent of Trustor or any related party) did not cause or contribute to, and was not in any way
negligent in permitting, any release or threatened release of the Hazardous Substance.
(v) Trustor acknowledges and agrees that notwithstanding any term or
provisiOn contained herein or in the Loan Documents, the Environmental Costs and all
judgments and awards entered against Trustor pursuant to ection 6([)(iv) above shall be
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Exhibit B to Attachment 7
exceptions to any nonrecourse or exculpatory provision of the Loan Documents, and Trustor
shall be fully and personally liable for the Environmental Costs and such judgments and awards
and such liability shall not be limited to the original principal amount of the obligations secured
by this Deed of Trust, and Trustor's obligations shall survive the foreclosure , deed in lieu of
foreclosure, release, reconveyance, or any other transfer of the Property or this Deed of Trust.
(g) Trustor hereby agrees to indemnify, defend and hold harmless Beneficiary
from and against any and all Environmental Losses except to the extent caused by the
Authority's negligence or misconduct.
TRUSTOR:
SEASONS SAN JUAN CAPISTRANO AR, L.P., a
California limited partnership
By: LINC-Gardena Associates, LLC, a California
limited liability company, its managing
general partner
By: LINC Housing Corporation, a
California nonprofit public benefit
corporation, its sole member and
manager
By:
Name:
Title:
By: HCHP Affordable Multi-Family, LLC, a
California limited liability company, its
administrative general partner
By:
Thomas Erickson
Senior Vice President
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Exhibit B to Attachment 7
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of ____________________ ___ )
On before me, Notary Public (insert name and title of the officer)
personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _____________ (Seal)
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Exhibit B to Attachment 7
ATTACHMENT NO.8
FORM OF AFFORDABLE HOU JNG REGULATORY AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
San Juan Capistrano Housing Authority
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.:
AFFORDABLE HOUSING REGULATORY AGREEMENT
This Affordable Housing Regulatory Agreement dated , 20_ (the
"Regulatory Agreement"), is between the SAN JUAN CAPISTRANO HOUSING AUTHORITY
(the "Authority") and SEASONS SAN JUAN CAPISTRANO AR, L.P., a California limited
partnership ("Borrower").
RECITALS
A. The Authority intends to create affordable rental housing opportunities for persons and
families of low income and very low income. Pursuant to an Affordable Housing Loan
Agreement between the Authority and Borrower dated 20_ (the "Loan
Agreement"), the Authority has made a loan to Borrower for the purpose of acquiring the certain
real property as described in Exhibit A attached hereto and incorporated herein by reference (the
"Property") and rehabilitating the 112 multi-family residential apartment units located thereon
(the "Housing Units"), to be available at an affordable rent to persons and families of low and
very low income levels (the "Project") as set forth in this Regulatory Agreement. Under the
Loan Agreement, the Authority has provided Borrower with a loan in the amount of not to
exceed ONE MILLION DOLLARS ($1 ,000,000) (the "Loan"). Borrower has executed a
promissory note for the Loan (the "Note"), which is secured by a deed of trust recorded against
the Property (the "Deed of Trust").
B. Pursuant to the Loan Agreement, in the event of any default under this Regulatory
Agreement and following the expiration of all applicable notice and cure periods, Borrower
agrees to repay Authority all amounts owing under the Note and the Deed of Trust recorded
against the Property.
C. The Authority and Borrower desire by the execution of this Regulatory Agreement to
assure the Property remains affordable to Eligible Households for a minimum of fifty-five (55)
years following the recordation of this Regulatory Agreement.
NOW THEREFORE, the parties acknowledge and agree as follows:
ARTICLE 1. ELIGIBLE HOUSEHOLDS
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Attachment 8
1.01. Households meeting the income restrictions as set forth in Section 2.01 shall be
referred to as "Eligible Households."
ARTICLE 2. AFFORDABILITY REQUIREMENTS FOR THE PROJECT
2.01. Rent and Income Restrictions. From the date of recordation of this Regulatory
Agreement, and for fifty-five (55) years thereafter, Borrower by and for itself and any successors
in interest, hereby covenants and agrees that the Borrower shall limit the rental of (i) a minimum
oftwenty (20) of the Housing Units to persons or families of low income whose income does not
exceed 50% of the Area Median Income (the "50% Units"); and (ii) the remaining not more than
a minimum of ninety (90) of the Housing Units to persons or families of very low income whose
income does not exceed 60% of the Area Median Income (the "60% Units"). Notwithstanding
the foregoing, two (2) units in the Project shall be employee units and shall be unrestricted so
long as said employee units are occupied by an employee ofthe Project's management company.
For purposes hereof, "Area Median Income" shall mean the area median income for the Orange
County Area as published by the U.S. Department of Housing and Urban Development (HUD)
as the same may be adjusted for small and larger households. The gross monthly rent (excluding
any supplemental rental assistance from the State of California, the federal government or any
other public agency to those tenants or on behalf of those units, and a utility allowance) for the
60% Units shall not exceed one-twelfth of 30% of 60% of the Area Median Income, adjusted by
household size appropriate for the unit. The gross monthly rent (excluding any supplemental
rental assistance from the State of California, the federal government or any other public agency
to those tenants or on behalf of those units, and a utility allowance) for the 50% Units shall not
exceed one-twelfth of 30% of 50% of the Area Median Income, adjusted by household size
appropriate for the unit. Notwithstanding the foregoing, rent levels established based on those
required by the California Tax Credit Allocation Committee (TCAC) for Low Income Housing
Tax Credit projects shall be deemed to comply with this Section 2.01. During such period the
other requirements of this Article 2 shall apply.
2.02. Reporting Requirements. An annual report and annual income recertifications
must be submitted to the Authority. The reports, at a minimum, shall include:
A. The number of persons per unit;
B. Tenant name and Initial occupancy date;
C. Gross income per year as certified by Borrower;
D. Rent paid per month and percent ofrent paid in relation to income.
The annual reports and annual income recertifications submitted by Borrower shall be in
the form as provided by Authority.
Annual income recertifications shall also contain those documents used to certify
eligibility. Authority may from time to time during the term of this Agreement request
Attachment 8
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additional or different information and Borrower shall promptly supply such information in the
reports required hereunder. Borrower shall maintain all necessary books and records, including
property, personal and financial records, in accordance with requirements prescribed by the
Authority with respect to all matters covered by this Regulatory Agreement. Borrower, at such
time and in such forms as Authority may require, shall furnish to Authority statements, records,
reports, data and information pertaining to matters covered by this Regulatory Agreement. Upon
reasonable advance request for examination by Authority, Borrower, at any time during normal
business hours, shall make available all of its records with respect to all matters covered by this
Regulatory Agreement. Borrower shall permit Authority to audit, examine and make excerpts or
transcripts from these records at Authority's sole cost.
ARTICLE 3. PROVISION OF SERVICES AND MAINTENANCE OF PROPERTY
3.01. Maintenance. During the duration of this Regulatory Agreement, Borrower shall
keep the Property in good condition, order and repair and shall not commit waste or permit
impairment, demolition or deterioration of the Property; shall comply with all applicable state
and federal regulations addressing the physical condition of the Property and buildings located
on the Property and all applicable standards of the City of San Juan Capistrano including but not
limited to building standards, planning regulations, and utilities code; shall complete or restore
promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed and to pay when due all claims for labor performed and materials
furnished; shall maintain the buildings in a habitable condition; and do all other acts which from
the character or use of the Property may be reasonably necessary. Authority shall have the right
to inspect the Property during normal business hours, provided Borrower and the occupant are
given reasonable notice prior to any such inspection.
ARTICLE 4. NO TRANSFER
4.01. Prohibition. The identity and qualifications of Borrower as an experienced and
successful Borrower and operator of affordable rental housing developments are of particular
concern to the Authority. It is because of this identity and these qualifications that the Authority
has entered into this Regulatory Agreement with the Borrower. No voluntary or involuntary
successor in interest of the Borrower shall acquire any rights or powers under this Regulatory
Agreement by assignment or otherwise, nor shall Borrower make any total or partial sale,
transfer, conveyance, encumbrance to secure financing, assignment or lease of the whole or any
part of the Property without the prior written approval of the Authority pursuant to Section 4.03
hereof, except as expressly set forth herein, which approval shall not be unreasonably withheld.
4.02. Permitted Transfers. Notwithstanding any other provision of this Regulatory
Agreement to the contrary, Authority approval of an assignment or transfer of this Regulatory
Agreement, the Loan, the Loan Agreement, or conveyance of the Property or any part thereof
pursuant to Section 4.03 shall not be required in connection with any of the following (the
"Permitted Transfers"):
A. Any requested assignment for purposes of financing the construction of
improvements upon the Property;
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B. Any mortgage, deed of trust, or other form of conveyance for all or any
portion of the Additional Borrower Financing, as provided in the Loan Agreement, but Borrower
shall notify Authority in advance of any such mortgage, deed of trust or other form of
conveyance for financing pertaining to the Property;
C. Any mortgage, deed of trust or other form of conveyance for restructuring
or refinancing of any amount of indebtedness described in subsection B, above; provided any
such restructuring or refinancing does not result in any release of funds to Borrower, typically
referred to as a "cash-out" loan;
D. Admission of a tax credit investor that 1s obligated to make capital
contributions as the limited partner;
E. (A) Sale, transfer, conveyance or pledge of limited partnership interests in
Borrower to another party, or (B) the appointment by the partners of Borrower of an additional
or substitute general partner in accordance with the partnership agreement of Borrower; provided
Borrower delivers prior written notice thereof to the Authority, and such additional or substitute
general partner shall be subject to the approval of the Authority, which approval shall not be
unreasonably withheld, conditioned, or delayed, provided that such approval shall not be
required if (i) the substitute administrative general partner is an affiliate of the limited partner or
administrative general partner of Borrower or (ii) the substitute managing general partner is an
entity holding an organizational clearance certificate issued by the California Board of
Equalization;
F. [Intentionally Omitted];
G. [Intentionally Omitted];
H. The lease of residential units at the Project to qualified tenants; or
I. Transfer of the Project or partnership interests in Borrower to a general
partner of Borrower at the end of the fifteen year tax credit initial compliance period
In the event of a transfer by Borrower under subparagraphs A through I, inclusive, above,
except for subparagraph H, above, not requiring Authority's prior approval, Borrower
nevertheless agrees that at least ten (1 0) days prior to such assignment it shall give written notice
to Authority of such transfer and satisfactory evidence that the transferee has assumed the
obligations of this Regulatory Agreement, if applicable.
4.03. Authority Consideration of Requested Transfer. The Authority agrees that it will
not unreasonably withhold, condition or delay approval of a request made pursuant to this
ARTICLE 4, provided (a) the Borrower delivers written notice to the Authority requesting such
approval, and (b) the proposed assignee or transferee possesses comparable operational
experience and capability, and comparable net worth and resources, as the proposed transferor or
assignor, and (c) the assignee or transferee assumes the obligations of the Borrower under this
Regulatory Agreement in a form which is reasonably acceptable to the Authority. Such notice
shall be accompanied by evidence regarding the proposed assignee's or purchaser's
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Attachment 8
qualifications and experience and its financial commitments and resources sufficient to enable
the Authority to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in
this Section 4.03 and other criteria as reasonably determined by the Authority. The Authority
shall approve or disapprove the request within thirty (30) days of its receipt of the Borrower's
notice and all information and materials required herein. In no event, however, shall the
Authority be obligated to approve the assignment or transfer of the Loan, Note or Deed of Trust
pursuant to this Section 4.03, except to an approved transferee or assignee of the Borrower's
rights in and to the Project.
4.04. uccessors and A signs. This Regulatory Agreement shall run with
the land, and all of the terms, covenants and conditions of this Regulatory Agreement shall be
binding upon the Borrower and the permitted successors and assigns of the Borrower. Whenever
the term "Borrower" is used in this Regulatory Agreement, such term shall include any other
permitted successors and assigns as herein provided. In the event of a transfer or assignment
under Section 4.03, all rights and obligations of the transferor Borrower shall be assumed by the
transferee Borrower and the transferor Borrower shall have no further obligation or liability
under this Regulatory Agreement.
ARTICLE 5. NO DISCRIMINATION
5.01. Borrower covenants by and for itself and any successors in interest 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 ofthe 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 Borrower itself or any
person claiming under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Property.
ARTICLE 6. NONDISCRIMINATION CLAUSES
6.01. All deeds, leases or contracts made relative to the Property, the improvements
thereon or any part thereof, shall contain or be subject to substantially the following
nondiscrimination clauses:
A. In deeds: Borrower 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 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 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 land herein conveyed, nor shall the Borrower himself or
herself, or any person 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,
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Attachment 8
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein
conveyed. The foregoing covenants shall run with the land.
B. In leases: The lessee herein covenants by and for himself or herself, his or
her heirs, executors, administrators and assigns, and all persons claiming under or through him or
her, and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons on 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
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 land herein leased, nor shall
the lessee himself or herself, or any person 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 land herein leased.
C. In contracts. There shall be no discrimination against or segregation of
any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of
the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 ofthe Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall
the transferee himself or herself, or any person 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 land.
ARTICLE 7. NO IMPAIRMENT OF LIEN
7.01. No violation or breach of the covenants, conditions, restrictions, provisions or
limitation contained in this Agreement shall defeat or render invalid or in any way impair the lien
or charge of any mortgage, deed of trust or other financing or security instrument permitted
under the Loan Agreement and this Regulatory Agreement; provided, however, that any
successor of Borrower to the Property shall be bound by such covenants, conditions, restrictions,
limitations and provisions, whether such successor's title was acquired by foreclosure, deed in
lieu of foreclosure, trustee's sale or otherwise.
ARTICLE 8. GENERAL
8.01. Notices to Authority. Notices required to be sent to the Authority hereunder shall
be sent by certified mail, return receipt requested, to the following address as may change from
time to time:
San Juan Capistrano Housing Authority
32400 Paseo Adelanto
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Attachment 8
San Juan Capistrano, CA -2675
Attn.: __________ _
8.02. Notices to Borrower. Notices required to be sent to Borrower hereunder shall be
sent by certified mail, return receipt requested, to the following address as may change from time
to time:
Seasons San Juan Capistrano AR, L.P.
330 West Victoria Street
Gardena, CA 90248
Attn: Michael Costa
With a copy to Borrower's limited partner at the following address, or at such other
address as Borrower may provide to Lender:
Victoria Capital, LLC
330 West Victoria Street
Gardena, CA 90248
Attn: Michael Costa
8.03. Duration. The covenants set forth in Articles 1, 2 and 3 herein shall be covenants
rulll1ing with the land until fifty-five (55) years from the date of recordation of this Regulatory
Agreement against the Property. The covenants set forth in Articles 5 and 6 shall be covenants
rulll1ing with the land. All the covenants contained herein shall inure to the benefit of the San
Juan Capistrano Housing Authority, the City of San Juan Capistrano ("City"), and their
successors and assigns and are enforceable by the Authority, the City or their successors or
assigns, without regard to whether the Authority or the City is an owner of any land or interest to
which such covenants relate. The Authority and such aforementioned parties, in the event of any
breach of any such covenants contained herein, following the expiration of all applicable notice
and cure periods shall have the right to exercise all of its rights and remedies allowed by law and
to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing
of such breach. The covenants and agreements established in this Regulatory Agreement,
without regard to technical classification and designation, shall be binding upon all parties
having any right, title, or interest in the Property, or any portion thereof and on their heirs,
successors in interest and assigns until the covenants terminate. The parties agree that all future
deeds or transfers of interest shall show the applicable restrictions of this Agreement and, during
the duration of this Regulatory Agreement, any transfer of the Property shall be subject to the
terms and conditions ofthis Regulatory Agreement.
8.04. Successors and Assigns. Borrower, by and for itself and each successor to any
interest in the Property, hereby specifically acknowledges and agrees to be bound by the
covenants contained herein.
8.05. Amendment. This Agreement may be amended only in writing by the Authority
and the owner of the Property.
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Attachment 8
8.06. Non-Liability of Official s and E mplo ye es of th e Authority and the Borrower. No
member, official or employee of the Authority or the City shall be personally liable to the
Borrower, or any successor in interest, in the event of any default or breach by the Authority or
for any amount which may become due to the Borrower or its successors, or on any obligations
under the terms of this Regulatory Agreement.
8.07. Relationship Between Authority and Borrower. It is hereby acknowledged that
the relationship between the Authority and the Borrower is not that of a partnership or joint
venture and that the Authority and the Borrower shall not be deemed or construed for any
purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the
Attachments hereto, the Authority shall have no rights, powers, duties or obligations with respect
to the development, operation, maintenance or management of the Project. The Borrower agrees
to indemnify, hold harmless and defend the Authority and the City from any claim made against
the Authority arising from a claimed relationship of partnership or joint venture between the
Authority and the Borrower with respect to the development, operation, maintenance or
management of the Property or the Project.
8.08. Authority A pprova ls and Actions. Whenever a reference is made herein to an
action or approval to be undertaken by the Authority, the Executive Director of the Authority or
his or her designee is authorized to act on behalf of the Authority unless specifically provided
otherwise or the context should require otherwise.
8.09. Counterparts. This Regulatory Agreement may be signed in multiple counterparts
which, when signed by all parties, shall constitute a binding agreement. This Regulatory
Agreement is executed in three (3) originals, each of which is deemed to be an original.
8.1 0. Titles and Caption s . Titles and captions are for convenience of reference only and
do not define, describe or limit the scope or the intent of this Regulatory Agreement or of any of
its terms. References to section numbers are to sections in this Regulatory Agreement, unless
expressly stated otherwise.
8.11. Inte rpretation. As used in this Regulatory Agreement, masculine, feminine or
neuter gender and the singular or plural number shall each be deemed to include the others where
and when the context so dictates. The word "including" shall be construed as if followed by the
words "without limitation." This Regulatory Agreement shall be interpreted as though prepared
jointly by both parties.
8.12. No Waiver. A waiver by either party of a breach of any of the covenants ,
conditions or agreements under this Regulatory Agreement to be performed by the other party
shall not be construed as a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions of this Regulatory Agreement.
8.13. Modificat ion s. Any alteration, change or modification of or to this Regulatory
Agreement, in order to become effective, shall be made in writing and in each instance signed on
behalf of each party.
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Attachment 8
8.14. Severability. If any term, provision, condition or covenant of this Regulatory
Agreement or its application to any party or circumstances shall be held, to any extent, invalid or
unenforceable, the remainder of this Regulatory Agreement, or the application of the term,
provision, condition or covenant to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable
to the fullest extent permitted by law.
8.15. Computation of Time. The time in which any act is to be done under this
Regulatory Agreement is computed by excluding the first day (such as the day escrow opens),
and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that
day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700
and 6701 of the California Government Code. If any, act is to be done by a particular time
during a day, that time shall be Pacific Time Zone time.
8.16. Legal Advice . Each party represents and warrants to the other the following:
they have carefully read this Regulatory Agreement, and in signing this Regulatory Agreement,
they do so with full knowledge of any right which they may have; they have received
independent legal advice from their respective legal counsel as to the matters set forth in this
Regulatory Agreement, or have knowingly chosen not to consult legal counsel as to the matters
set forth in this Regulatory Agreement, and, they have freely signed this Regulatory Agreement
without any reliance upon any agreement, promise, statement or representation by or on behalf of
the other party, or their respective agents, employees, or attorneys, except as specifically set forth
in this Regulatory Agreement, and without duress or coercion, whether economic or otherwise.
8.17. Time of Essence. Time is expressly made of the essence with respect to the
performance by the Authority, the Borrower of each and every obligation and condition of this
Regulatory Agreement.
8.18. Cooperation. Each party agrees to cooperate with the other in this transaction
and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or
appropriate to carry out the purposes and intent of this Regulatory Agreement including, but not
limited to, releases or additional agreements.
8.19. Conflicts of Interest. No member, official or employee of the Authority or the
City shall have any personal interest, direct or indirect, in this Regulatory Agreement, nor shall
any such member, official or employee participate in any decision relating to the Regulatory
Agreement which affects his personal interests or the interests of any corporation, partnership or
association in which he is directly or indirectly interested.
8.20. Governing Law. This Regulatory Agreement, and the rights and obligations of
the parties, shall be governed and interpreted in accordance with the laws of the State of
California. Should litigation occur, venue shall be in Superior Court of Orange County.
8.21. Default; Cure. A party to this Agreement shall be in default if it fails to perform
or satisfy any obligation or requirement set forth herein after thirty (30) days for obligations or
requirements that can be satisfied by the payment of money, or after forty-five (45) days (or such
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Attachment 8
longer period as may be reasonably required so long as such party has commenced the cure
within such forty-five (45) day period and diligently pursues such cure to completion) for any
other obligations or requirements, of receiving written notice from the non-defaulting party of
such default. Borrower's limited partner shall have the right, but not the obligation, to cure any
default hereunder, and any such cure shall be accepted by Authority as if rendered by Borrower.
8.22. Date of Agreement. The date of this Regulatory Agreement shall be the date set
forth in the first paragraph hereof.
Date:
APPROVED AS TO FORM:
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SAN JUAN CAPISTRANO HOUSING
AUTHORITY
"AUTHORITY"
SEASONS SAN JUAN CAPISTRANO AR,
L.P., a California limited partnership
By: LINC-Gardena Associates, LLC, a
California limited liability company, its
managing general partner
By: LINC Housing Corporation, a
California nonprofit public
benefit corporation, its sole
member and manager
By:
Name:
Title:
By: HCHP Affordable Multi-Family, LLC,
a California limited liability company,
its administrative general partner
By:
Attachment 8
Thomas Erickson
Senior Vice President
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EXHIBIT A
Legal Description of Property
[to be inserted]
Exhibit A to Attachment 8
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of ____________________ ___ )
On before me, Notary Public (insert name and title of the officer)
personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature -------------(Seal)
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Exhibit A to Attachment 8