19-0716_CC_F1a_Attachment_1_Part2efforts to conduct capital repairs and replacements and ordinary repair and maintenance
(collectively, "Repairs") in good faith and in a manner that does not result in the displacement of
any of the residents of the Units. If any of the Owner's actions to conduct Repairs result in
displacement of any of the Units' residents, the Owner shall notify the City in writing, prior to
conducting such Repairs, of the identities of the residents to be displaced, the Units they will be
displaced from, and the estimated length of time such residents shall be displaced. If the
displacement of the residents triggers relocation obligations, the Owner shall be responsible, at its
sole cost and expense, for any and all such relocation obligations and related expenses. The Owner
shall comply with all applicable federal, state and local laws, rules and regulations regarding such
relocation obligations and related expenses, including any relocation requirements set forth by the
City. The Owner shall defend, indemnify and hold harmless the City Parties from and against all
liability for any relocation obligations and related expenses attributable to any Repairs.
13. Covenants to Run With the Land. The Owner and the City hereby declare their specific
intent that the covenants, reservations and restrictions set forth herein are part of a plan for the
promotion and preservation of affordable housing within the territorial jurisdiction(s) of the City
and that each shall be deemed covenants running with the land and shall pass to and be binding
upon the Property and each successor-in-interest of the Owner in the Property for the Term. The
Owner hereby expressly assumes the duty and obligation to perform each of the covenants and to
honor each of the reservations and restrictions set forth in this Regulatory Agreement. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Property or
any interest therein shall conclusively be held to have been executed, delivered and accepted
subject to such covenants, reservations, and restrictions, regardless of whether such covenants,
reservations and restrictions are set forth in such contract, deed or other instrument.
14. Burden and Benefit. The City and the Owner hereby declare their understanding and intent
that the burden of the covenants set forth herein touch and concern the land in that the Owner's
legal interest in the Property is affected by the affordable dwelling use and occupancy covenants
hereunder. The City and the Owner hereby further declare their understanding and intent that the
benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment
and use of the Property by the intended beneficiaries of such covenants, reservations and
restrictions, and by furthering the affordable housing goals and objectives of the City and in order
to make the Property available for acquisition by the Owner.
15. Defaults
15.1. Events of Default. The occurrence of any of the following is a default and shall
constitute amaterialbreach of this Regulatory Agreement and, if not corrected, cured or remedied
in the time period set forth in Section 15.2, shall constitute an "Event of Default" hereunder:
15.1 .1. failure of the Owner or any person under its direction or control to comply
with or perform when due any material term, obligation, covenant or condition contained in this
Regulatory Agreement;
15.1.2. any warranty, representation or statement made or furnished to the City by
the Owner under this Regulatory Agreement that is false or misleading in any material respect
either now or at the time made or furnished;
6 t t 47 .oo t 4s\32t 623 t 4. 21 5
15.1.3. the dissolution or termination of the existence of the Owner as an ongoing
business, insolvency, appointment of a receiver for any part of the Property of the Owner, any
assignment for the benefit of creditors, any type of creditor workout or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against the Owner; or
15.I.4. an Event of Default pursuant to the Affordable Housing Agreement.
I5.2. Notice of Default. The City shall give written notice of default to the Owner, in
accordance with Section22, stating that such notice is a "Notice of Default", specifying the default
complained of by the City and requiring the default to be remedied within thirty (30) calendar days
of the date of the Notice of Default. Except as required to protect against further material damage,
the City may not institute legal proceedings against the Owner until thirty (30) calendar days after
providing the Notice of Default. Failure or delay in giving a Notice of Default shall not constitute
a waiver of any default, nor shall it change the time of occurrence of the default. If the default
specified in the Notice of Default is such that it is not reasonably capable of being cured within
thirty (30) calendar days, and if the Owner initiates corrective action within said thifty (30)
calendar day period and diligently works to effect a cure as soon as possible, then the Owner may
have such additional time as authorized in writing by the City as reasonably necessary to complete
the cure of the default prior to exercise of any other remedy for the occurrence of an Event of
Default. Such authorization for additional time to cure shall not be unreasonably withheld,
conditioned or delayed. The City shall give the investor limited partner in the Owner the following
notice and cure rights:
15.2.I. The City will give the limited partner a copy of any Notice (at the limited
partner's address provided in a notice by the Owner to the City) that the City gives to the Owner
under this Regulatory Agreement, provided that Owner has provided the address and contact
information for the investor limited partner in writing to the City;
15.2.2. The City will give the limited partner thirty (30) days after the limited
partner's receipt of such Notice to cure a non-payment of any sum due under this Regulatory
Agreement;
15.2.3. The City will give the limited partner sixty (60) days after the limited
partner's receipt of such Notice to cure any other default under this Regulatory Agreement;
| 5 .2.4 . If a non-monetary default is incapable of being cured within sixty (60) days,
the City will give the limited partner an additional ninety (90) days to cure such default provided
the limited partner has commenced to cure such default and is diligently proceeding to cure such
default through the end of such period; and
15.2.5.If the limited partner makes any such payment or otherwise cures such
default, the City will accept such action as curing such default as if such payment or cure were
made by the Owner.
If the Owner fails to take corrective action relating to a default within thirty (30) calendar days
following the date of Notice of Default (or to complete the cure within the additional as may be
authorized by the City or set forth above for the limited partner of the Owner), an Event of
Default shall be deemed to have occurred.
6t t 47 .oor 4s\321 623 1 4. 21 6
15.3. Inaction Not a alvet of Default. Any failure or delays by the City in asserting
any of its rights and remedies as to any default shall not operate as a waiver of any default or of
any such rights or remedies. Delays by the City in asserting any of its rights and remedies shall
not deprive the City of its right to institute and maintain any actions or proceedings which it may
deem necessary to protect, assert or enforce any such rights or remedies.
16. Remedies. Upon the occurrence of an Event of Default, the City shall, in addition to the
remedial provisions of Section 12 as related to a Maintenance Deficiency at the Property, be
entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i)
by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to
perform its obligations and covenants hereunder, or enjoin any acts or things which may be
unlawful or in violation of the rights of the City; or (ii) by other action at law or in equity as
necessary or convenient to enforce the obligations, covenants and Agreements of the Owner to the
City.
16.1. Rights and Remedies are Cumulative. The rights and remedies of the City as set
forth in this Section 16 arc cumulative and the exercise by the City 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 by the Owner.
16.2. Enforcement by Third Parties. No third party shall have any right or power to
enforce any provision of this Regulatory Agreement on behalf of the City or to compel the City to
enforce any provision of this Regulatory Agreement against the Owner or the Project.
17. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of
California and applicable federal laws, without regard to its conflicts of laws principles.
18. Amendment. This Regulatory Agreement may be amended after its recordation only by a
written instrument executed by the Owner and the City.
19. Attorney's Fees. In the event that a parly to this Regulatory Agreement brings an action to
enforce any condition or covenant, representation or warranty in this Regulatory Agreement or
otherwise arising out of this Regulatory Agreement, the prevailing party(ies) in such action shall
be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court in
which ajudgment is entered, as well as the costs of such suit. for the purposes of this Section 19,
the words "reasonable attorneys' fees," in the case of the City, shall include the salaries, costs and
overhead of the City Attorney as well as any other legal counsel hired by the City in such action,
as allocated on an hourly basis.
20. Severability. If any provision of this Regulatory Agreement shall be declared invalid,
inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction
such invalidity or unenforceability of such provision shall not affect the remaining parts of this
Regulatory Agreement which are hereby declared by the parties to be severable from any other
part which is found by a court to be invalid or unenforceable.
21. Time is of the Essence. For each provision of this Regulatory Agreement which states a
specific amount of time within which the requirements thereof are to be satisfied, time shall be
deemed to be of the essence.
6 t | 47 .oo I 45\3zt 623 | 4. 217
22 Demands Any and all notices
submitted by any party to another party pursuant to or as required by this Regulatory Agreement
shall be dispatched by messenger for immediate personal delivery, or by registered or certified
United States mail, postage prepaid, return receipt requested, to the address of the party, as set
forth in this Section. Such notice may be sent in the same manner to such other addresses as any
farty may from time to time designate by notice. Any notice shall be deemed to be received by
the addressee, regardless of whether or when any return receipt is received by the sender or the
date set forth on such return receipt, on the day that it is dispatched by messenger for immediate
personal delivery, or two (2) calendar days after it is placed in the United States mail, as provided
in this Section. Rejection, other refusal to accept or the inability to deliver any notice because of
a changed address of which no notice was given or other action by a person or entity to whom
notice is sent, shall be deemed receipt of the notice.
The following are the authorized addresses for the submission of notices to the parties, as of the
date of this Regulatory Agreement:
To the Owner:LP
With copies to C &. C Development Co., LLC
l42II Yorba Street, Suite 200
Tustin, CA92780
Attn: Todd Cottle
The Waterford Group, Inc.
PO Box 10175
Newport Beach, CA92658
Attn: Sean Rawson
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA94612
Attn: Lynn Hutchins
To the City:City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: City Manager
23. Recording. The parties hereto shall cause this Regulatory Agreement to be recorded in the
official records of the County of Orange.
24. No Third Part)' Beneficiary. No claim as a third-party beneficiary under this Regulatory
6r I 47 .oo 1 4s\321 623 | 4. 21 8
Agreement by any person, corporation or any other entity, shall be made or be valid against the
City or the Owner.
25. Prohibition Transfer
25.1. Except as expressly provided in the Affordable Housing Agreement, the Owner
shall not, without prior written approval of the City, which may not be unreasonably withheld,
delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right
herein; or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment
of the whole or any part of the Property or the improvements thereon, with the exception of leases
of the residential units as permitted by this Regulatory Agreement, or permit to be placed on any
of the Property any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien.
25.2. In the absence of specific written agreement or approval by the City, no
unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property shall be
deemed to relieve the Owner or any other party from any obligations under this Regulatory
Agreement.
26.Citv Aoorov anrl Actions. The Ci ty Manager shall have the authority to make approvals,
issue interpretations, waive provisions, grant extensions of time, approve amendments to this
Regulatory Agreement and execute documents on behalf of the City (to the extent not provided
otherwise in this Regulatory Agreement), including, without limitation, any documents necessary
to implement any changes in the number or affordability of the Qualifying Units, as may be
required by TCAC, so long as such actions do not reduce the length of affordability of the
Qualiffing Units or add to the costs incurred or to be incurred by the City as specified herein. The
City Manager reserves the right, in his or her sole and absolute discretion, to submit any requested
modification, interpretation, amendment or waiver to the City Council if the City Manager
determines or believes that such action could increase the risk, liability or costs to the City, or
reduce the length of affordability of the Project.
IN V/ITNESS WHEREOF, the Owner and the City have caused this Regulatory
Agreement to be signed, acknowledged and attested on their behalf by duly authorized
representatives in counterpart original copies which shall upon execution by all of the parties be
deemed to be one original document.
[Signatures on following pages]
6 | I 47 .oo | 4s\321 623 t 4. 21 9
CITY:
CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation
By:
City Manager
ATTEST:
City Clerk
CITY SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(The Groves at V/illiams Ranch)
Date:
6t I 47 .oor 4s\32r62314. 220
OWNER SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(The Groves at V/illiams Ranch)
OWNER:
LP, a California limited partnership
By:LLC,
a California limited liability company,
its managing general partner
By:
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C&C Development Co., LLC,
a Califomia limited liability company,
its member and manager
By
a California nonprofit corporation, its sole member and manager
Todd R. Cottle, Trustee of 2001
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
6 t | 47 .oo | 4s\3zr 623 I 4. 22 I
ATTACHMENT NO. 1
TO
REGULATORY AGREEMENT
(The Groves at V/illiams Ranch)
Property Legal Description
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COLINTY OF ORANGE, STATE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30,1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COLINTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOV/ING DESCzuBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITH THE EAST-
V/EST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCzuBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTE,RLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 3'6, T7S,
R8V/, SBM, NORTH 89"01'53'' WEST 4T7.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00"56'38'' EAST 58.57 FEET;
THENCENORTH 26"21'O2U WEST T2.70 FEET;
THENCE, NORTH 47"09'31'' EAST 120.82 FEET;
THENCE NORTH 45"44'28U EAST 144.28 FEET;
THENCE NORTH 46"25'09" EAST 74.13 FEET;
THENCE NORTH 37"40'58'' EAST 94.88 FEET;
THENCE NORTH 28"02'57U EAST 1 1 1.60 FEET;
THENCE NORTH 33"02'08'' EAST 31.69 FEET;
THENCE NORTH 25"17'OI'' EAST 132.21 FEET;
ATTACHMENTNO. l
-1-
6t t 47 .00t 4s\321 623 1 4.2
THENCE SOUTH 73"21'32" EAST T48.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245,OF DEEDS;
CONTAINING: 3.853 ACRES, MORE OR LESS
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
ATTACHMENTNO. l
-2-
6 t 1 47 .00 I 45\321 623 1 4.2
ATTACHMENT NO. 2
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
Certification of Tenant Eligibility
NOTE TO PROPERTY OWNER: This form is desi$ned to assist you in computing Annual
Income.
Re: The Groves at V/illiams Ranch, San Juan Capistrano, Califomia
I/We, the undersigned, state that l/we have read and answered fully, frankly and personally each
of the following questions for all persons who are to occupy the unit being applied for in the
property listed above. Listed below are the names of all persons who intend to reside in the unit:
1.)
Names of
Members of
Household
Relationship
to Head of
Household
Social
Security
Number
Place of
Employment
543
Age
6. Head of Household (check one):
Mother
Father:
Other:(specify relationship - i.e. legal guardian, sister, brother, etc.)
ATTACHMENTNO.2-1-
6 I | 47 .001 45\321 623 I 4.2
Income Computation
7. The total anticipated income, calculated in accordance with the provisions of this Section
7, of all persons over the age of 18 years listed above for the l2-month period beginning the date
that l/we plan to move into a unit is $
Included in the total anticipated income listed above are:
(a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other
compensation for personal services, before payroll deductions;
(b) the net income from the operation of a business or profession or from the rental of
real or personal property (without deducting expenditures for business expansion or amortization
of capital indebtedness or any allowance for depreciation of capital assets);
(c) interest and dividends (including income from assets excluded below);
(d) the full amount of periodic payments received from social security, annuities,
insurance policies, retirement funds, pensions, disability or death benefits and other similar types
of period receipts, including any lump sum payment for the delayed start of a periodic payment;
(e) payments in lieu of earnings, such as unemployment and disability compensation,
workmen's compensation and severance pay;
(f) the maximum amount of public assistance available to the above persons other than the
amount of any assistance specifically designated for shelter and utilities;
(g) periodic and determinable allowances, such as alimony and child support payments
and regular contributions and gifts received from persons not residing in the dwelling;
(h) all regular pay, special pay and allowances of a member of the Armed Forces
(whether or not living in the dwelling) who is the head of the household or spouse; and
(i) any earned income tax credit to the extent that it exceeds income tax liability.
Excluded from such anticipated income are:
(a) casual, sporadic or irregular gifts;
(b) amounts which are specifically for or in reimbursement of medical expenses;
(c) lump sum additions to family assets, such as inheritances, insurance payments
(including payments under health and accident insurance and workmen's compensation), capital
gains and settlement for personal or property losses;
ATTACHMENTNO.2
a
61 t 47 .00 I 45\321 623 | 4.2
(d) amounts of educational scholarship paid directly to the student of the educational
institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition,
ATTACHMENTNO.2
-'t-
6 I | 47 .00 1 45\32 I 623 I 4.2
fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used
for the above purposes, are to be included in income;
(e) special pay to a household member who is away from home and exposed to hostile
fire;
(Ð relocation payments under Title 11 of the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 19701'
(g)foster child care payments;
the value of coupon allotments for the purchase of food pursuant to the Food Stamp(h)
Act of 1977;
(Ð payments to volunteers under the Domestic Volunteer Service Act of 1973;
payments received under the Alaska Native Claims Settlement Act.
0) income derived from certain submarginal land of the United States that is held in
trust for certain Indian tribes;
(k) payments or allowances made under the Department of Health and Human
Services' Low-Income Home Energy Assistance Program;
(1) payments received from the Job Training Partnership Act;
(m) the first $2,000 of per capita shares received from judgment funds awarded by the
Indian Claims Commission or the Court of Claims.
8. Do the persons whose income or contributions are included in item 6 above:
(a) have savings, stocks, bonds, equity in real property or other form of capital
investment (excluding the values of necessary items of personal property such as furniture and
automobiles and interests in Indian trust land)?
-
Yes
-
No; or
(b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale)
during the last two years at less than fair market value?
-Yes -No(c) If the answer to (a) or (b) above is yes, does the combined total value of all such
assets owned or disposed of by all such persons total more than $5,000?
-Yes -No(d) If the answer to (c) is yes, state:
(i) the amount of income expected to be derived from such assets in the 12-
month period beginning on the date of initial occupancy in the unit that you propose to rent:
$ ;and
ATTACHMENTNO.2
-4-
6 | I 47 .00 I 4 5\32 I 623 1 4.2
$
(ii) the amount of such income, if any, that was included in item 6 above:
Are all of the individuals who propose to reside in the unit full-time students*?
No
9
(a)
Yes
*A full-time student is an individual enrolled as a full-time student during each of five calendar
months during the calendar year in which occupancy of the unit begins at an educational
organization which normally maintains a regular faculty and curriculum and normally has a
regularly enrolled body of students in attendance and is not an individual pursuing a full-time
course of institutional or farm training under the supervision of an accredited agent of such an
educational organization or of a state or political subdivision thereof.
(b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a
husband and wife entitled to file a joint federal income tax return?
-Yes
No
10. Neither myself nor any other occupant of the unit l/we propose to rent is the Owner of the
property in which the unit is located (hereinafter the "Owner"), has any family relationship to the
Ownerorowns,directlyorindirectly,anyinterestintheOwnership. Forpurposesofthissection,
indirect the Ownership by an individual shall mean the Ownership by a family member, the
Ownership by a corporation, partnership, estate or trust in proportion to the Ownership or
beneficial interest in such corporation, partnership, estate or trust held by the individual or a family
member, and the Ownership, direct or indirect, by a partner of the individual.
11. This certificate is made with the knowledge that it will be relied upon by the Owner to
determine maximum income for eligibility to occupy the unit; and I/we declare that all information
set forth herein is true, correct and complete and, based upon information I/we deem reliable and
that the statement of total anticipated income contained in Section 7 is reasonable and based upon
such investigation as the undersigned deemed necessary.
12. I/we will assist the Owner in obtaining any information or documents required to verify
the statements made herein, including either an income verification from mylour present
employer(s) or copies of federal tax returns for the immediately preceding calendar year.
13. I/we acknowledge that I/we have been advised that the making of any misrepresentation or
misstatement in this declaration will constitute a material breach of my/our agreement with the
Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of
the unit by institution of an action for eviction or other appropriate proceedings.
ATTACHMENTNO.2-5-
6 t 1 47 .00 1 4 5\32 1 623 I 4.2
t4
Marital Status:
Race (Head of Household)
V/hite Asian Hispanic
African-American Native American Other
Physical Disability: Yes
-
No
-
I/we declare under penalty of perjury that the foregoing is true and correct.
Executed this _ day of _ in the County of Orange, California.
Housing Issuer Statistical Information (Optional--will be used forreporting purposes only)
Applicant
Applicant
[Signature of all persons over the age of 18 years listed in number 2 above required]
ATTACHMENTNO.2-6-
6 1 r 47 .00 | 45\32 t 623 | 4 .2
FOR COMPLETION BY PROPERTY THE OWNER ONLY:
1. Calculation of eligible income:
(a) Enter amount entered for entire household in 6 above: $-
(b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1),
subtract from that figure the amount entered in 7(dX2) and enter the remaining balance
)
(2) Multiply the amount entered in 7(c) times the current passbook savings rate
to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook
ATTACHMENTNO.2-1-
6t I 47 .001 45\321 623 14.2
$
savings ($ ), subtract from that figure the amount entered in 7(d)(2) and enter the
remaining balance
(3) Enter at right the greater of the amount calculated under (1) or (2) above:
2.
(c) TOTAL ELIGIBLE INCOME
(Line l(a) plus line 1(b)(3): $-
The amount entered in l(c):
Qualifies the applicant(s) as a Qualified Household.
Does not qualify the applicant(s) as Qualified Household.
Apartment unit assigned:
Bedroom Size: Rent: $
4. This apartment unit [was/was not] last occupied for aperiod of 31 consecutive days by
persons whose aggregate anticipated annual income, as certified in the above manner upon their
initial occupancy of the apartment unit, qualified them as a Qualified Household.
5. Method used to verify applicant(s) income:
Employer income verification.
Copies of tax returns.
Other
Manager
The undersigned employee has applied for a rental unit located in a project financed in part by the
City of San Juan Capistrano for persons of very low income. Every income statement of a
prospective tenant must be stringently verified. Please indicate below the employee's current
ATTACHMENTNO.2-8-
ô-t
6 I 1 47 .00 | 4 5\32 t 623 t 4.2
annual income from wages, overtime, bonuses, commissions or any other form of compensation
received on a regular basis.
Annual wages
Commissions
Overtime Bonuses
Total current income
I hereby certify that the statements above are true and complete to the best of my knowledge
Signature Date Title
I hereby grant you permission to disclose my income to
order that they may determine my income eligibility for rental of an apartment
1n
at
Signature
Please send to
Date
I hereby attach copies of my individual federal and state income tax retums for the immediately
preceding calendar year and certify that the information shown in such income tax returns is true
and complete to the best of my knowledge.
Signature Date
ATTACHMENTNO.2
-9 -
6 I | 47 .00 | 45\321 623 | 4.2
ATTACHMENT NO. 3
TO
REGULATORY AGREEMENT
(The Groves at V/illiams Ranch)
Certificate of Continuing Program Compliance
For Annual Reporting Period Ending
The undersigned,as the authorized representative of
-
LP,
a California limited partnership ("Owner"), has read and is thoroughly familiar with the provisions
of the various documents associated with the financial assistance provided by the City of San Juan
Capistrano ("City"), as established in numerous documents including the Regulatory Agreement,
dated as of 2020, between the Owner and the City
As of the date of this Certificate, the following percentage of residential units in the Project are (i)
occupied by Qualified Households (as such term is defined in the Regulatory Agreement) or (ii)
are currently vacant and being held available for such occupancy and have been so held
continuously since the date a Qualified Household vacated such unit, as indicated:
Number of Units occupied by Qualified Households:
Number of Vacant Units
Number of Qualified Households who commenced
occupancy during the preceding reporting period:
Attached is a separate sheet ("Occupancy Summary") listing, among other items, the appropriate
information for each residential unit in the Project, the occupants of each unit and the rent paid for
each unit. The information contained thereon is true and accurate and reasonable and is based on
information submitted to the Owner and is certified under penalty of perjury by each tenant.
[Signatures on following page]
ATTACHMENTNO.3-l-
(, t I 4't .00 | 4 5\32 I 623 I 4.2
The undersigned hereby certifies that (1) a review of the activities of the Owner during such
reporting period and of the Owner's performance under the Regulatory Agreement has been made
under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned,
based on the review described in clause (1) hereof, the Owner is not in default under any of the
terms and provisions of the above documents.
Dated:OWNER
LP, a California limited
partnership
By:
Name:
Its:
ATTACHMENTNO.3
a
6 l 147.00 I 45\32 1623 14.2
OCCUPANCY SUMMARY
Total Number of Units in the Project:
Total Units occupied by Qualified Households:
Total Units available for rent to Qualified Households:
ATTACHED IS THE FOLLOV/ING INFORMATION
Dated
A. Resident and rental information on each occupied apartment in the complex.
B. Certification of Tenant Eligibility for all Qualified Households who have moved
into San Juan Capistrano, California, since the filing of the last
Occupancy Summary. The same are true and correct to the best of the undersigned's
knowledge and belief.
OWNER:
LP, a California limited
partnership
By:
Name
Its:
ATTACHMENTNO.3
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EXHIBIT I
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at V/illiams Ranch)
Form of Deed of Trust
[Attached Behind This Page]
EXHIBIT I
I-1
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: City Manager
APN: l2l-050-21 SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE 527383
DEED OF TRUST . SECI]RITY AGREEMENT AND FILING
OF RENTS
(City of San Juan Capistrano - The Groves at Williams Ranch)
This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) ("Deed
of Trust") is dated as of 2020,by LP, a California
limited partnership, whose address is ("Trustor"), to TICOR
TITLE COMPANY OF CALIFORNtrA, a California corporation ("Trustee"), for the benefit of
the CITY OF SAN JUAN CAPISTRANO, a municipal corporation, whose address is 32400
Paseo Adelanto, San Juan Capistrano, California 92675 ("Beneficiary"), and is executed to
secure those two certain Promissory Notes each of even date herewith, in the principal amounts
of Four Million One Hundred Thousand Dollars ($4,100,000.00) and Four Million Eight
Hundred Thousand Dollars ($4,800,000.00), respectively, executed by Trustor in favor of
Beneficiary (such Promissory Notes, as it may from time to time be supplemented, amended
extended, renewed or otherwise modified), the provisions of which are incorporated in the Deed
of Trust by this reference.
This Deed of Trust is made with respect to that certain Affordable Housing Disposition
and Development Agreement (City of San Juan Capistrano - The Groves at Williams Ranch),
dated July 16, 2019, for reference purposes only, between the Trustor's predecessor-in-interest
and the Beneficiary (the "Affordable Housing Agreement").
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION, the following property ("Trust Estate"):
(a) Atl of that certain real property in the City of San Juan Capistrano, County
of Orange, State of California, more particularly described in Exhibit "4" attached hereto and by
this reference made apart hereof ("Subject Properfy");
(b) All buildings, structures and other improvements no\¡/ or in the future
located or to be constructed on the Subject Property ("Improvements");
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(c) All tenements, hereditament, appurtenances, privileges, franchises and
other rights and interests now or in the future benefitting or otherwise relating to the Subject
Property or the Improvements, including easements, rights-of-way and development rights
("Appurtenances"). (Appurtenances, together with the Subject Property and the Improvements,
are hereafter collectively referred to as the "Real Property");
(d) Subject to the assignment to Beneficiary set forth in Paragraph 4 below,
all rents, issues, income, revenues, royalties and profits now or in the future payable with respect
to or otherwise derived from the Trust Estate or the ownership, use, management operation,
leasing or occupancy of the Trust Estate, including those past due and unpaid ("Rents");
(e) All present and future right, title and interest of Trustor in and to all
inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the
California Uniform Commercial Code ("UCC"), whether existing now or in the future) located
at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used
in connection with or otherwise relating to the Real Property or the ownership, use, development,
construction, maintenance, management, operation, marketing, leasing or occupancy of the Real
Property, including furniture, furnishings, machinery, appliances, building materials and
supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air conditioning
equipment and all other types of tangible personal property of any kind or nature, and all
accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property ("Goods," and together with the Real Property,
collectively the "Property"); and
(Ð All present and future right, title and interest of Trustor in and to all
accounts, general intangibles, chattel paper, deposit accounts, money, instruments and
documents (as those terms are defined in the UCC) and all other agreements, obligations, rights
and written material (in each case whether existing now or in the future) now or in the future
relating to or otherwise arising in connection with or derived from the Property or any other part
of the Trust Estate or the ownership, use, development, construction, maintenance, management,
operation, marketing, leasing, occupancy, sale or financing of the Property or any other part of
the Trust Estate, including (to the extent applicable to the Property or any other portion of the
Trust Estate) (i) permits, approvals and other goverrìmental authorizations, (ii) improvement
plans and specifications and architectural drawings, (iii) agreements with contractors,
subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales
agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and
permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies,
together with insurance payments and unearned insurance premiums, (vi) claims, demands,
awards, settlements, and other payments arising or resulting from or otherwise relating to any
insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation
(or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license
agreements, service and maintenance agreements, purchase and sale agreements and purchase
options, together with advance payments, security deposits and other amounts paid to or
deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred
payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other
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rights to the payment of money, trade names, ttademarks, goodwill and all other types of
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property (collectively, "Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest
in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and
all of the Trust Estates described above in which a security interest may be created under the
UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security
agreement under the UCC, conveying a security interest in the Personal Property to Trustee and
Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided
herein, all the rights and remedies of a "secured party" under the UCC and other applicable
California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing
under Sections 9313 and9402(6) of the UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Benef,rciary may elect,
the following: (a) payment of that certain Land Promissory Note dated 2020 inthe
(the "Land)original principal amount of
-
Dollars
Note',),(b)paymentofthatcertainProjectPromissoryNotedated-)2020inthe
original principal amount of Four Million Eight Hundred Thousand Dollars ($4,800,000.00) (the
"Project Note", and together with the Land Note referred to herein as the "Notes"); and (c) due,
prompt and complete observance, performance and discharge of each and every monetary and
non-monetary condition, obligation, covenant and agreement contained herein or contained in
the Affordable Housing Agreement. The Affordable Housing Agreement, that certain
Regulatory Agreement (San Juan Capistrano - The Groves at Williams Ranch) dated
2020, for reference purposes only, between the Trustor and the Beneficiary ("Regulatory
Agreement") and the Notes (collectively, "Secured Obligations") and all of their terms are
incorporated herein by reference and this conveyance shall secure any and all extensions,
amendments, modifications or renewals thereof, however evidenced.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall perform its obligations as set forth in the Secured Obligations
at the time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the property for any
purpose other than the use for which the same was intended at the time this Deed of Trust was
executed;
3. That the Secured Obligations are incorporated in and made apart of this Deed of
Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of
any applicable cure period, the Beneficiary, at its option, may declare the whole of the
indebtedness secured hereby to be due and payable. This Deed of Trust shall cover, and the
property subject hereto shall include, all property now or hereafter affixed or attached to or
incorporated upon the Subject Property in, to or under which Trustor now has or hereafter
acquires any right, title or interest, which, to the fullest extent permitted by law, shall be deemed
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fixtures and a part of the Subject Property. To the extent any of the property subject to this Deed
of Trust consists of rights in action or personal property covered by the UCC, this Deed of Trust
shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured
party, a security interest in such property, including all proceeds thereof, for the purpose of
securing the Secured Obligations. In addition, for the purpose of securing the Secured
Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of
the property described herein in, to, or under which Trustor now has or hereafter acquires any
right, title or interest, whether present, future or contingent, including, but not limited to, all
equipment, inventory, accounts, general intangibles, instruments, documents and chattel paper,
as those terms are defined in the UCC, and all other personal property of any kind (including,
without limitation, money and rights to the payment of money), whether now existing or
hereafter created, that are now or at any time hereafter (i) in the possession or control of
Beneficiary in any capacity; (ii) erected upon, attached to or appurtenant to the Subject Property;
(iii) located or used on the Subject Property or identified for use on the Subject Property
(whether stored on the Subject Property or elsewhere); or (iv) used in connection with, arising
from, related to, or associated with the Subject Property or any of the personal property
described herein, the construction of any improvements on the Subject Property, the ownership,
development, maintenance, management or operation of the Subject Property, the use or
enjoyment of the Subject Property or the operation of any business conducted thereon, including,
without limitation, all such property described as the Trust Estate hereinabove. The security
interests granted in this Paragraph 3 are hereinafter severally and collectively called the
"security Interest". The Security Interest shall be self-operative with respect to the real property
described herein but Trustor shall execute and deliver on demand such additional security
agreements, financing statements and other instruments as may be requested in order to impose
the Security Interest more specifically upon the real and personal property encumbered hereby.
The Security Interest, at all times, shall be prior to any other interest in the personal property
encumbered hereby. Trustor shall act and perform as necessary and shall execute and file all
security agreements, financing statements, continuation statements and other documents
requested by Beneficiary to establish, maintain and continue the perfected Security Interest.
Trustor, on demand, shall promptly pay all costs and expenses of filing and recordation, to
ensure the continued priority of the Security Interest. Trustor shall not sell, transfer, assign or
otherwise dispose of any personal property encumbered hereby without obtaining the prior
written consent of Beneficiary, except that the Trustor may, in the ordinary course of business,
replace personal property or dispose of personal property that will not be replaced because of its
obsolescence. Unless Beneficiary then agrees otherwise in writing, all proceeds from any
permitted sale or disposition in excess of that required for full replacement shall be paid to
Beneficiary to be applied on the Notes subject to the rights of any senior lenders. Although
proceeds of personal property are covered hereby, this shall not be construed to mean that
Beneficiary consents to any sale of such personal property. Upon its recordation in the real
property records of Orange County, this Deed of Trust shall be effective as a financing statement
filed as a fixture filing. In addition, a carbon, photostatic or other reproduced copy of this Deed
of Trust and/or any financing statement relating hereto shall be sufficient for filing and/or
recording as a financing statement;
4. That all rents, profits and income from the property covered by this Deed of Trust
are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured.
Permission is hereby given to Trustor so long as no default exists hereunder after the giving of
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notice and the expiration of any applicable cure period, to collect such tents, profits and income
for use in accordance with the provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after
the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled
to the appointment of a receiver by any court having jurisdiction, without notice, to take
possession and protect the property described herein and operate same and collect the rents,
profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the
property insured against loss by fire and such other hazards, casualties, and contingencies as may
be required by applicable provisions of the Secured Obligations, and all such insurance shall be
evidenced by standard fire and extended coverage insurance policy or policies. Such policies
shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and
certificates thereof together with copies of original policies, if requested, shall be deposited with
the Beneficiary;
7. To pay before delinquency any taxes and assessments affecting said Property; to
pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part
thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall
not be required to pay and discharge any such tax, assessment charge or levy so long as Trustor
is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has
adequate funds to pay any liabilities contested pursuant to this ParagraphT;
8. As it is provided more specifically in the Secured Obligations, to keep said
property in good condition and repair, subject to ordinary wear and tear, casualty and
condemnation, not to remove or demolish any buildings 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
therefor; to comply with all laws affecting said property or requiring any alterations or
improvements to be made thereon (subject to Trustor's right to contest the validity or
applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer
or permit any actupon said property in violation of law andlor covenants, conditions andlor
restrictions affecting said property; not to permit or suffer any material alteration of or addition
to the buildings or improvements hereafter constructed in or upon said property without the
consent of the Beneficiary;
9. 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 reasonable attorney's fees in a reasonable sum, in any such
action or proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable
cure period, to make any payment or 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
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such extent as either may deem necessary to protect the security hereof. Following default, after
the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee,
being authorized to enter upon said property for such purposes, may commence, appear in and/or
defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; may 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, may pay necessary expenses, employ counsel, and pay his reasonable fees;
1 1. Beneficiary shall have the right to pay all insurance premiums required by the
Secured Obligations when due should Trustor fail to make any required premium payments. All
such payments made by the Beneficiary shall be added to the sums secured hereby;
T2. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, under permission given under this Deed of Trust, with interest from date of expenditure,
at the highest rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with
applicable provisions of the Secured Obligations; upon the failure of Trustor to do so, after the
giving of notice and the expiration of any applicable cure period, Trustor shall be in default
hereunder;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this Deed of Trust any lien or liens except as authorized
by Beneficiary and/or as provided in the Secured Obligations and further that it will keep and
maintain the property free from the claims of all persons supplying labor or materials which will
enter into the construction ofany and all buildings now being erected or to be erected on said
premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor
shall not be obligated to pay any claims for labor, materials or services which Trustor in good
faith disputes and is diligently contesting, provided that Trustor shall, at Beneficiary's written
request, within thirty (30) days after the filing of any claim or lien (but in any event, and without
any requirement that Beneficiary must first provide a written request prior to foreclosure) record
in the Office of the Recorder of Orange County, a surety bond in the amount required by law to
protect against a claim of lien, or provide such other security reasonably satisfactory to
Beneficiary;
15. That any and all improvements made or about to be made upon the premises
covered by this Deed of Trust and all plans and specifications, comply with all applicable
municipal ordinances and regulations and all other applicable regulations made or promulgated,
now or hereafter, by lawful authority, and that the same will upon completion comply with all
such municipal ordinances and regulations and with the rules of the applicable fire rating or
inspection organization, bureau, association or office.
IT IS MUTUALLY AGREED THAT:
16. Trustor confirms that if Trustor should sell, enter into a contract of sale, convey,
or in any way transfer all or any interest of Trustor in the Real Property encumbered by this Deed
of Trust or suffer Trustor's title or any interest therein to be divested, whether voluntarily or
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involuntarily, unless the same is a Permitted Transfer as defined in the Affordable Housing
Agreement, without the prior written consent of the Beneficiary being first obtained, then
Beneficiary shall have the right, at Beneficiary's sole option, to declare all sums payable under
the Notes secured hereby immediately due and payable in full, irrespective of the maturity date
otherwise specified in the Notes. No waiver of this right shall be effective unless in writing and
signed by the Beneficiary. Consent by the Beneficiary to any one such transaction shall not be
deemed a waiver of the right to require such consent to future or successive transactions.
Further, upon default under one of the Secured Obligations, and after the giving of notice and the
expiration of any applicable cure period provided therein, the Beneficiary, at its option, may
declare the whole of the indebtedness secured hereby to be immediately due and payable in full,
irrespective of the maturity date otherwise specified in the Notes;
17. As provided more specifically in the Secured Obligations, should the Property or
any partthereof be taken or damaged by reason of any public improvement or condemnation
proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of
any senior lenders, Beneficiary shall be entitled to all compensation, awards, and other payments
or relief therefor which are not used to reconstruct, restore or otherwise improve the property or
part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in
and prosecute in its own name, any action or proceedings, or to make any compromise or
settlement, in connection with such taking or damage subject to the rights of any senior lenders.
All such compensation, awards, damages, rights of action and proceeds which are not used to
reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged,
including the proceeds of any policies of fire and other insurance affecting said property, are
hereby assigned to Beneficiary subject to the rights of any senior lenders;
18. Notwithstanding Sections 16 and l7 , inthe event that a portion of the Property is
taken for a public improvement or pursuant to a condemnation proceeding and the Qualifying
Units (as defined in the Regulatory Agreement) remain intact and continue to be owned and
operated by Trustor in conformance with the Affordable Housing Agreement and the Regulatory
Agreement, Beneficiary shall not declare all sums due and payable under the Notes, nor shall the
Beneficiary be entitled to any compensation, awards and other payments therefor, provided that
such compensation, awards and other payments are used for (1) paying principal and interest
owed on the Permanent Loan (as defined in the Affordable Housing Agreement), (2) making
improvements to the Property that are approved.by Beneficiary, in its reasonable discretion, or
(3) payment of principal owing under the Notes. In the event that Trustor receives such
compensation, awards or other payments and fails to expend the funds in conformance with
subsections (l) and (2) this section within thirty (30) days of receipt of such funds, Trustor shall
be in default under this Deed of Trust.
19. Upon default by Trustor in taking any action or in making any payments provided
for herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or
agreement in this Deed of Trust within thirty (30) days after written demand therefor by
Beneficiary (or, in the event that more than thirty (30) days is reasonably required to cure such
default, should Trustor fail to promptly commence such cure, and diligently prosecute same to
completion), after the giving of notice and the expiration of any applicable cure period,
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
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of election to cause the property to be sold, which notice Trustee shall cause to be duly f,rled for
record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with
Trustee this Deed of Trust and all documents evidencing expenditures secured hereby;
20. 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 in 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 the time and place of sale, and from time to time thereafter may
postpone the sale by public announcement at the time and place of sale, and from time to time
thereafter may postpone the sale by public arìnouncement at the time fixed by the preceding
postponement. Trustee shall deliver to the purchaser its Deed conveying the property so sold,
but without any covenant or warranty, express or implied. The recitals in the Deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including
Trustor, Trustee or Benefici ary, may purchase at the sale. The Trustee shall apply the proceeds
of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this
trust including therein reasonable Trustee's fees or attomey's fees for conducting the sale, and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps
on Trustee's Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued
interest at the maximum rate allowed by law; (a) all other sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled thereto;
2I. Beneficiary may from time to time substitute a successor or successors to any
Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such
appointment, and without conveyance to the successor trustee, the latter shall be vested with all
title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each
such appointment and substitution shall be made by written instrument executed by Beneficiary,
containing reference to this Deed of Trust and its place of record, which, when duly recorded in
the proper office of the county or counties in which the property is situated, shall be conclusive
proof of proper appointment of the successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations
secured by this Deed of Trust is hereby waived to the fulI extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have
been paid and all obligations secured hereby have been satisfied, and upon surrender ofthis Deed
of Trust 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 of fact shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto";
24. The trust created hereby is irrevocable by Trustor;
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25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Benefìciary" shall include not only the original Beneficiary hereunder but also any future
successor in interest to Beneficiary. In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made public record as provided by law. Except as otherwise provided by law,
the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or
of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be aparty unless
brought by Trustee;
27 . The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to it at the address set forth in the Deed of Trust;
28. Trustor agrees at any time and from time to time, upon receipt of a written request
from Beneftciary,to furnish to Beneficiary detailed statements in writing of income, rents,
profits, and operating expenses of the premises, and the names of the occupants and tenants in
possession, together with the expiration dates of their leases and full information regarding all
rental and occupancy agreements, and the rents provided for by such leases and rental and
occupancy agreements, and such other information regarding the premises and their use as may
be requested by Beneficiary;
29. Trustor agrees that the obligations secured by this Deed of Trust are made
expressly for the purpose of acquiring the Property, completing the construction work necessary
to construct a new 75- unit affordable housing development on the Property, as is more
specifically provided in the Secured Obligations;
30. As is provided more specifically in the Secured Obligations, the obligations of
Trustor thereunder are nomecourse obligations of the Trustor. The sole recourse of Beneficiary
shall be the exercise of its rights against the Property;
3 I . Notwithstanding specific provisions of this Deed of Trust, non-monetary
performance hereunder shall not be deemed to be in default where delays or defaults are due to:
war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts
of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; govemmental restrictions or priority; litigation; unusually severe weather;
inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of
the other party; acts or failure to act of the Authority or any other public or governmental agency
or entity (except that any act or failure to act of Beneficiary shall not excuse performance by
Beneficiary unless such act or failure to act is allowed or required by law); or any other causes
beyond the reasonable control or without the fault of the party claiming an extension of time to
perform. An extension of time for any such cause (a "Force Majeure Delay") shall be for the
period of the enforced delay and shall commence to run from the time of the commencement of
the cause. If, however, notice by the party claiming such extension is sent to the other party
more than thirty (30) days ãfter the commencement of the cause, the period shall commence to
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run only thirty (30) days prior to the giving of such notice. Times of performance under this
Deed of Trust may also be extended in writing by the Beneficiary and Trustor;
32. If the rights and liens created by this Deed of Trust shall be held by a court of
competent jurisdiction to be invalid or unenforceable as to any part of the obligations described
herein, the unsecured portion of such obligations shall be completely performed and paid prior to
the performance and payment of the remaining and secured portion of the obligations, and all
performance and payments made by Trustor shall be considered to have been performed and paid
on and applied first to the complete payment of the unsecured portion of the obligations;
33 . (a) Subj ect to the extensions of time set forth in Paragraph 3 1 , and subj ect to
the fuither provisions of this Paragraph 33, failure or delay by Trustor to perform any term or
provision respectively required to be performed under the Secured Obligations or this Deed of
Trust constitutes a default under this Deed of Trust;
(b) Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by the Beneficiary. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default;
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive
Beneficiary of its right to institute and maintain any actions or proceedings which it may deem
necessary to protect, assert, or enforce any such rights or remedies;
(d) If an event of default occurs under the terms of this Deed of Trust, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of
such default. Trustor shall have a reasonable period of time after such notice is given within
which to cure the default prior to exercise of remedies by Beneficiary under this Deed of Trust.
In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is
about to become materially jeopardized by any failure to cure a default or the default is not cured
within thirty (30) days after the notice of default is first given;
(e) If an event of default occurs under the terms of the Secured Obligations,
prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of
such default. As is provided more specifically in the Secured Obligations, if the default is
reasonably capable of being cured within thirty (30) days, Trustor shall have such period to
effect a cure prior to exercise of remedies by the Beneficiary under the Secured Obligations, or
this Deed of Trust. If the default is such that it is not reasonably capable of being cured within
thirty (30) days, and Trustor (i) initiates corective action within said period, and (ii) diligently
and in good faith works to effect a cure as soon as possible, then Trustor shall have such
additional time as is reasonably necessary to cure the default prior to exercise of any remedies by
Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security
becomes or is about to become materially jeopardized by any failure to cure a default.
34. This Deed of Trust shall be subject and subordinate to the terms of that certain
extended use agreement executed by the Trustor in connection with the Trustor's allocation of
l 603\40\2603420.3
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l0
low-income housing tax credits under Section 42 of the Code (the "Extended Use Agreement").
If Beneficiary or its successors or assigns (collectively, the "subsequent Owner") acquires the
Property by foreclosure (or instrument in lieu of foreclosure), then the "extended use period" (as
defined in Section 42(hX6XD) of the Internal Revenue Code) shall terminate, except for the
obligation of the Subsequent Owner to comply with the limitations on evictions, termination of
tenancy and increase in rents for the three year period following the Subsequent Owner's
acquisition of the Property, as set forth in Section 42(hX6XE)(ii) of the Internal Revenue Code.
As provided in the Affordable Housing Agreement, upon request when appropriate, Beneficiary
shall execute such documentation as is necessary to subordinate this Deed of Trust to a Senior
Loan.
fSignatures on Following Page]
I 603\40U603420.3
6 I I 47 .00 I 4 5\32 I 8 t 929. I
1l
IN V/ITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first set forth above.
TRUSTOR:
a California limited partnership
By:LLC,
a Califomia limited liability company,
its managing general partner
a California nonprofit corporation, its sole member and manager
By
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C &. C Development Co., LLC,
a California limited liability company, its member and manager
By
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
[SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
I 603\40\2603420.3
6 I t 47 .00 I 45\32181929.1
By:
t2
EXHIBIT A TO
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(San Juan Capistrano - The Groves at Williams Ranch)
Legal Description of Subject Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COUNTY OF ORANGE, STATE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30.1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITH THE EAST-
WEST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, T995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE V/ESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89O01'53'' V/EST 417.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00O56'38'' EAST 58.57 FEET;
THENCE NORTH 26"2T'O2U V/EST 12.]O FEET;
THENCE NORTH 47"09'31'' EAST 120.82 FEET;
THENCE NORTH 45"44'28' EAST 144.28 FEET;
THENCE NORTH 46"25'09" EAST ]4.13 FEET;
THENCE NORTH 37"40'58'' EAST 94.88 FEET;
THENCE NORTH 28"02'57" EAST 1 1 1.60 FEET;
THENCE NORTH 33"02'08'' EAST 37.69 FEET;
THENCE NORTH 25"T7'OI'' EAST 132.27 FEET;
THENCE SOUTH 73"21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
CONTAINING: 3.853 ACRES, MORE OR LESS
I 603\40U603420.3
61 1 47 .00 | 45\32181929.1
A-1
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
1 603\40U603420.3
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A-2
EXHIBIT J
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at V/illiams Ranch)
Form of Land Note
[Attached Behind This Page]
EXHIBIT J
J-1
I 603\40\259s738.4
6 I I 47 .00 | 4 s\32 I 62022.3
LAND PROMISSORY NOTE SECURED BY DEED OF TRUST
(San Juan Capistrano - The Groves at Williams Ranch)
Principal Amount: $4,100,000 Date of Note: _,20-
Lender: CITY OF SAN JUAN
CAPISTRANO, a municipal corporation
Interest Rate: One-Quarter Percent (0.25%)
Maker:LP, A
California limited partnership
Maturity Date: Fifty-hve (55) years
from the date on which the Certificate of
Completion is issued
1. LandLoan.
FOR VALUE RECEIVED, the undersigned LP, a California limited
partnership ("Maker"), with its principal place of business located at
promises to pay to the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"
or "Holder") at 32400 Paseo Adelanto, San Juan Capistrano, California 92675, or such place as
the Holder may, from time to time, designate by written notice to the Maker, the principal sum of
FOUR MILLION ONE HTINDRED THOUSAND DOLLARS ($4,100,000), (the "Land Loan"),
together with any accrued interest, if applicable, as set forth in this Note. This Promissory Note
(the "Note") is made and given pursuant to that certain Affordable Housing Disposition and
Development Agreement between the City and Maker's predecessor-in-interest, dated July 16,
2019 (the "Affordable Housing Agreement"). The Affordable Housing Agreement is
incorporated herein by this reference. All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Affordable Housing Agreement. The Land Loan is
made for the conveyance of the Property by City to Maker in accordance with the terms and
conditions of the Affordable Housing Agreement.
2. Term of Loan and Rieht of Prepayment.
a. Maturity Date. All accrued interest, if any, and principal shall be due and
payable in full without any further demand or notice fifty-five (55) years from the date on which
the Certificate of Completion is recorded pursuant to the Affordable Housing Agreement
("Maturity Date").
b. Prepayment. This Note may be prepaid in whole or in part at any time and
from time to time without penalty or premium.
3. Security for Nole.
This Note is secured by a Deed of Trust executed by Maker which creates a lien on that
ceftain real property as described therein and in the Affordable Housing Agreement.
1603\40u603416.2
61 I 47 .001 45\321 62353.2
1
4. Interest Calculation
The principal outstanding under this Note shall accrue simple interest at the rate of one-
quarter percent (0.25%) per annum, except in the case of Default as set forth in Section 9 of this
Note. Principal and interest shall be payable in lawful money of the United States of America. If
applicable, interest shall be computed based on an actual day year and the actual number of days
elapsed. Interest shall commence on amounts disbursed hereunder from the date of disbursement.
5. Annual Payment.
Following completion of the Project as evidenced by the issuance by the City of a
Certificate of Completion as set forth in the Affordable Housing Agreement, and continuing each
year thereafter until the Maturity Date, a portion of the Residual Receipts (as defined below) from
the Project shall be paid to Holder and applied to pay down the amounts due and owing under this
Note. The payments described below shall be paid to Holder no later than April 1 each year, with
the first payment due on the April I following the issuance of a Certificate of Occupancy for the
Project, and continuing each year thereafter.
a.ts from Residual Maker shall make repayments
of the outstanding principal and accrued interest, if any, equal to the City's Land Percentage of
Fifty Percent (50%) of the Residual Receipts from the Project as repayment of amounts due and
owing under this Note. For the purposes of this Note, "City's Land Percentage" means the
percentage calculated by dividing (1) the original principal amount of the Land Loan actually
disbursed to Borrowerby (2) the sum of Total Assistance from all other government entities
obtained by the Borrower, any portion of which is a loan to be repaid utilizing Residual Receipts
"Total Assistance" means the original principal amounts of loans and grants made by the other
government entities plus the cumulative value of Project Based Section 8 or similar housing
vouchers provided by the other government entities.
Such annual payments shall be accompanied by the Maker's report of Residual
Receipts. The Maker shall provide the Holder with the audited financial statement provided for
in Section 6, and any other documentation reasonably requested by Holder to substantiate the
Maker's determination of Residual Receipts.
All payments made hereunder shall be credited first to any accrued but unpaid
interest (if applicable), then to current interest due and owing and lastly to principal. Interest not
paid current each year shall be added to and thereafter be considered additional principal due
hereunder.
Notwithstanding the foregoing, the entire outstanding balance of principal and any
interest owing under this Note shall be due and payable in full fifty-five (55) years from the date
hereof.
Prior to any sale of all or any portion of the Project, or Refinancing of all or any
portion of the outstanding debt from the Project, and so long as there is any outstanding amount due
and owing under this Note, Maker shall notiff Holder of any such proposed or intended sale or
Refinancing. In such event, Maker and Holder shall meet and confer, and shall use good faith efforts,
I 603\40\26034 I 6.2
6 1 | 4"t .00 | 45\32 | 623 53 .2
2
to determine the feasibilþ of the payoff or restructuring of the remaining balance owing under this
Note as part of any such sale or Refinancing to provide for repayment of this Note sooner than the
fifty-five (55) year repayment period.
b. Definition of Residual Receipts. 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) received
by Maker in connection with or relating to the ownership or operation of the Project, including
any net revenue derived from any Refinancing ofthe 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) ("Gross
Revenue") less all of the following: all customary and reasonable costs (i.e., mandatory (hard)
mortgage payments) and expenses reasonably and actually incurred in connection with the
operation and maintenance of the Project, including but not limited to premiums for property and
liability insurance; utility services not paid directly by tenants; maintenance and repair; security
services and payments for social/supportive services; any adjuster payments to the investor
limited partner required under Maker's partnership agreement; payment of principal or interest
on any indebtedness of Maker to any affiliate of Maker (individual or entity) or partner of Maker
to repay completion and operating deficit loans relating to the Project; asset management fee
payable to the limited partner of Maker in an amount approved as part of the Project Budget (as
defined in the Affordable Housing Agreement); partnership management fee payable to Maker,
not to exceed the amount approved as part of the Project Budget (as defined in the Affordable
Housing Agreement); reasonable property management fees not to exceed 8% of gross revenue;
defened developer fee in an amount approved as part of the Project Budget (as defined in the
Affordable Housing Agreement); amounts (approved by Holder) expended to restore the Project
after acasualty loss or condemnation; reasonable and customary cost for accounting and auditing
the books and records ofthe Project; taxes; franchise tax filing fees; and any other reserves
reasonably required by the investors or the lenders approved by the City for the Project
(collectively "Operating Expenses").
(iÐ Notwithstanding the generality of the foregoing, the following
items are not expenses or deductible in computing Residual Receipts:
(A) Depreciation, cost recovery, amortization and similar items
which do not involve the expenditure of cash.
6. Audited Statement.
Maker shall annually provide Holder with an audited financial statement documenting the
calculation of Residual Receipts for the previous calendar year ending December 31. The audited
financial statement shall be provided on or before April 1, together with payment of the Residual
Receipts payment due to Holder. Holder shall have the right to inspect and audit Maker's books
and records concerning the calculation of the Residual Receipts Payment and to object within
ninety (90) days from receipt of Maker's statement. Failure to timely object shall be deemed
acceptance. If Holder does object, Holder shall specify the reasons for disapproval. Maker shall
have thirty (30) days to reconcile any disapproved item. If Maker and Holder cannot agree on the
1603\40U6034 r 6.2
6 t t 47 00 t 4 s\32 I 623 53.2
-1
amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and
Holder shall resolve any disputed items. The cost of the auditor shall be shared equally by Maker
and Holder.
7. Annual Budget.
Maker shall prepare and submit to Holder a proposed annual operating budget for the
management and operation of the Project ("Annual Budget") no later than 60 days preceding the
effective year of such budget. The Annual Budget shall include the projected Gross Revenue and
Operating Expenses for the year and a line item showing the projected Residual Receipts from the
Project for the year. Holder will review the Annual Budget and, if acceptable, approve it, which
approval shall not be unreasonably withheld. If the Annual Budget is not acceptable, Holder shall
specify the reasons for disapproval. The intent of this section is to provide Holder an opportunity
to disapprove any unreasonable expenses which would diminish the Residual Receipts from the
Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of
the total Annual Budget shall require Holder's prior written consent, which consent shall not be
unreasonably withheld.
8 ,A n¡plerofinn I Tnnn Cartçti Events or T Tnnn Tìofortlf
In the event of any Default under the terms of this Note, the Affordable Housing Agreement
or the Regulatory Agreement, the Deed of Trust which is the security for this Note, or under any
Senior loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker,
providing Maker with thirty (30) days in which to cure any Default, and such Default not having
been cured within thirty (30) days (or if a greater amount of time is reasonably necessary to effect
a cure, if actions to cure such Default are not undertaken within said thirty (30) day period and
pursued with reasonable diligence thereafter), all principal and interest due under this Note shall
immediately become due and payable, upon thirty (30) day written notice from the Holder to the
Maker. Failure to exercise such option shall not constitute a waiver of the right to exercise it in
the event of any subsequent Default.
Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real
property described in the Deed of Trust securing this Note or any part thereof or interest therein,
without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as
defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and
interest due hereunder shall immediately become due and payable upon thirty (30) days written
notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a
waiver of the right to require consent to future or successive transactions.
Notwithstanding the generality of the foregoing, certain transfers permitted under the
Affordable Housing Agreement shall not constitute a Default hereunder or under the Affordable
Housing Agreement, and any such action shall not accelerate the maturity of this Promissory Note,
provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing
Agreement or is reasonably acceptable to the Authority with reasonable promptness, and any
transferee under such a transfer agrees to be bound by any and all instruments in favor of the
Authority.
l 603\40\26034 l 6.2
6 I I 47.001 45\32 I 62353.2
4
9. Interest on Default.
From and after a Default, the entire outstanding principal balance of this Note shall
automatically bear an annual interest rate equal to the lesser of: (a) eight percent (8%)
compounding annually; or (b) the maximum interest rate allowed by law.
10. Costs Paid bv Maker
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by
the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs
of collection, costs and expenses and attorneys fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such
sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment of this
instrument.
11. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this instrument, and expressly agrees that, without in any way
affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the
time for payment of any installment due hereunder, accept additional security, release any party
liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives,
to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a
defense to any demand on this instrument or any deed of trust, security agreement, guarantee or
other agreement now or hereafter securing this Note.
12. Indemnification.
Maker shall indemnify, defend, protect and hold the Authority harmless from and against
any and all loss, damage, liability, action, cause of açtion, cost or expense, including, without
limitation, reasonable attorneys fees and expenses incurred by the Holder hereof, arising as a result
of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or related agreements; (ii) intentional bad faith waste of the real
property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from
Maker's failure to maintain insurance as required under the provisions of the deed of trust securing
this Note and the Affordable Housing Agreement.
13. Nonrecourse
This Note shall become a noffecourse obligation of Maker on the date that Maker files a
valid and timely Notice of Completion for the Project and the Holder must resort only to the Project
or the Property, or both, for repayment should the Maker fail to repay the sums evidenced hereby.
At such time as this Note becomes nonrecourse, neither Maker nor any of its general and limited
partner shall have any personal liability for repayment of the Land Loan and no deficiency
judgment may be obtained against Maker or any of its general and limited partners except for
actual or constructive fraud, material misrepresentation, intentional bad faith waste of or on the
Project and such other matters as are referred to below. Notwithstanding the generality of the
foregoing, however, Maker shall indemnify, defend, protect and hold Holder harmless from and
5
t603\40U603416.2
6 | t 47 .00 1 45\32 | 623 53 .2
against any and all loss, damage, liability, action, cause of action, cost or expense, including,
without limitation, reasonable attorneys' fees and expenses incurred by the Holder arising as a
result of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or any other agreements or documents provided in connection
therewith; (ii) intentional bad faith waste of the Property encumbered by the deed of trust which
secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required
under the provisions of the deed of trust securing this Note. Maker's obligation to indemnify the
Holder hereof as aforesaid shall be recourse obligations of the Maker, and in the event of any
breach of such obligations, the Holder shall have the right to proceed directly against the Maker to
recover any and all losses, damages, liability, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) and may bring any action and institute any proceeding to
obtain a deficiency judgment in or following foreclosure for any and all such losses, damages,
liabilities, costs and expenses resulting from such breach.
14. Severabilig'
If any provision of this Note is determined by a court of competent jurisdiction to be void
or unenforceable, such determination shall not affect any other provision of this instrument, and
all other provisions hereof shall remain valid and in full force and effect.
15. Non-Waiver
No delay in demanding or failure to demand performance hereunder shall constitute a
waiver by the Holder hereof of its right to subsequently demand such performance or to exercise
any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of the
Holder's rights and remedies hereunder shall be expressed in a writing signed by a duly appointed
representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder
shall not constitute a waiver of any other right, including, but not limited to, the right to exercise
any and all remedies for a different or subsequent event of Default hereunder.
[Signatures on Following Page]
1603\40u603416.2
61 1 47 .001 45\321 62353.2
6
MAKER
LP, a California limited partnership
By LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
1603\40U603416.2
6t I 47 .001 4s\321 62353.2
By: C &, C Development Co., LLC,
a California limited liability company, its sole member and manager
By:
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
7
EXHIBIT K
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at V/illiams Ranch)
Form of Project Note
[Attached Behind This Page]
EXHIBIT K
K-1
I 603\40\2s95738.4
6 I I 47 . 00 | 45\32 I 62022.3
PROJECT PROMISSORY NOTE SECURED BY DEED OF TRUST
(San Juan Capistrano - The Groves at \ililliams Ranch)
Principal Amount: $4,800,000.00 Date of Note: _,20_
Lender: CITY OF SAN JUAN
CAPISTRANO, a municipal corporation
Interest Rate: One-Quarter Percent (0.25%)
Maker:LP ,a
California limited partnership
Maturity Date: Fifty-five (55) years
from the date on which the Certificate of
Completion is issued
1. Proiect Loan.
FOR VALUE RECEIVED, the undersigned LP, a California limited
partnership ("Maker"), with its principal place of business located at
promises to pay to the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"
or "Holder") at 32400 Paseo Adelanto, San Juan Capistrano, California 92675, or such place as
the Holder may, from time to time, designate by written notice to the Maker, the principal sum of
FOUR MILLION EIGHT HLINDRED THOUSAND DOLLARS ($4,800,000.00), (the "Project
Loan"), together with any accrued interest, if applicable, as set forth in this Note. This Promissory
Note (the "Note") is made and given pursuant to that certain Affordable Housing Disposition and
Development Agreement between the City and Maker's predecessor-in-interest, dated July 16,
2019 (the "Affordable Housing Agreement"). The Affordable Housing Agreement is
incorporated herein by this reference. All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Affordable Housing Agreement. Funds for the
Project Loan consist of City In-Lieu Fees. The Project Loan is made to finance the Project's
predevelopment, development and construction costs in accordance with the terms and conditions
of the Affordable Housing Agreement.
2. Term of Loan and Rieht of Prepayment.
a. Maturity Date. All accrued interest, if any, and principal shall be due and
payable in full without any further demand or notice fifty-five (55) years from the date on which
the Certificate of Completion is recorded pursuant to the Affordable Housing Agreement
("Maturity Date").
b. Prepayment. This Note may be prepaid in whole or in part at any time and
from time to time without penalty or premium.
3. Security for Note.
This Note is secured by a Deed of Trust executed by Maker which creates a lien on that
certain real property as described therein and in the Affordable Housing Agreement.
1603\40u603099. l
6 | | 47 .001 4s\32t 6237 8.2
I
4. Interest Calculation.
The principal outstanding under this Note shall accrue simple interest at the rate of one-
quarter percent (0.25%) per annum, except in the case of Default as set forth in Section 9 of this
Note. Principal and interest shall be payable in lawful money of the United States of America. If
applicable, interest shall be computed based on an actual day year and the actual number of days
elapsed. Interest shall commence on amounts disbursed hereunder from the date of disbursement.
5. Annual Payment.
Following completion of the Project as evidenced by the issuance by the City of a
Certificate of Completion as set forth in the Affordable Housing Agreement, and continuing each
year thereafter until the Maturity Date, a portion of the Residual Receipts (as defined below) from
the Project shall be paid to Holder and applied to pay down the amounts due and owing under this
Note. The payments described below shall be paid to Holder no later than April 1 each year, with
the first payment due on the April 1 following the issuance of a Certificate of Occupancy for the
Project, and continuing each year thereafter.
a. Annual Payments from Residual Receipts. Maker shall make repayments
of the outstanding principal and accrued interest, if any, equal to the City's Project Percentage of
Fifty Percent (50%) of the Residual Receipts from the Project as repayment of amounts due and
owing under this Note. For the pu{poses of this Note, "City's Project Percentage" means the
percentage calculated by dividing (1) the original principal amount of the Project Loan actually
disbursed to Borrower by (2) the sum of Total Assistance from all other government entities
obtained by the Borrower, any portion of which is a loan to be repaid utilizing Residual Receipts.
"Total Assistance" means the original principal amounts of loans and grants made by the other
government entities plus the cumulative value of Project Based Section 8 or similar housing
vouchers provided by the other government entities.
Such annual payments shall be accompanied by the Maker's report of Residual
Receipts. The Maker shall provide the Holder with the audited financial statement provided for
in Section 6, and any other documentation reasonably requested by Holder to substantiate the
Maker's determination of Residual Receipts.
All payments made hereunder shall be credited first to any accrued but unpaid
interest (if applicable), then to current interest due and owing and lastly to principal. Interest not
paid current each year shall be added to and thereafter be considered additional principal due
hereunder.
Notwithstanding the foregoing, the entire outstanding balance of principal and any
interest owing under this Note shall be due and payable in full fifty-five (55) years from the date
hereof.
Prior to any sale of all or any portion of the Project, or Refinancing of all or any
portion of the outstanding debt from the Project, and so long as there is any outstanding amount due
and owing under this Note, Maker shall notiff Holder of any such proposed or intended sale or
Refinancing. In such event, Maker and Holder shall meet and confer, and shall use good faith efforts,
2
l 603\40u603099. l
61 1 47 .00 1 45\32t 6237 8.2
to determine the feasibility of the payoff or restructuring of the remaining balance owing under this
Note as part of any such sale or Refinancing to provide for repayment of this Note sooner than the
fifty-five (55) year repayment period.
b. Definition of Residual Receipts. 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) received
by Maker in connection with or relating to the ownership or operation of the Project, including
any net revenue derived from any Refinancing ofthe 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) ("Gross
Revenue") less all of the following: all customary and reasonable costs (i.e., mandatory (hard)
mortgage payments) and expenses reasonably and actually incurred in connection with the
operation and maintenance of the Project, including but not limited to premiums for property and
liability insurance; utility services not paid directly by tenants; maintenance and repair; security
services and payments for social/supportive services; any adjuster payments to the investor
limited partner required under Maker's partnership agreement; payment of principal or interest
on any indebtedness of Maker to any affiliate of Maker (individual or entity) or partner of Maker
to repay completion and operating deficit loans relating to the Project; asset management fee
payable to the limited partner of Maker in an amount approved as part of the Project Budget (as
defined in the Affordable Housing Agreement); partnership management fee payable to Maker,
not to exceed the amount approved as part of the Project Budget (as defined in the Affordable
Housing Agreement); reasonable property management fees not to exceed \Yo of gross revenue;
deferred developer fee in an amount approved as part of the Project Budget (as dehned in the
Affordable Housing Agreement); amounts (approved by Holder) expended to restore the Project
after a casualty loss or condemnation; reasonable and customary cost for accounting and auditing
the books and records ofthe Project; taxes; franchise tax filing fees; and any other reserves
reasonably required by the investors or the lenders approved by the City for the Project
(collectively "Operating Expenses").
(ii) Notwithstanding the generality of the foregoing, the following
items are not expenses or deductible in computing Residual Receipts:
(A) Depreciation, cost recovery, amortization and similar items
which do not involve the expenditure of cash.
6. Audited Financial Statement.
Maker shall annually provide Holder with an audited financial statement documenting the
calculation of Residual Receipts for the previous calendar year ending December 3 1. The audited
financial statement shall be provided on or before April 1, together with payment of the Residual
Receipts payment due to Holder. Holder shall have the right to inspect and audit Maker's books
and records concerning the calculation of the Residual Receipts Payment and to object within
ninety (90) days from receipt of Maker's statement. Failure to timely object shall be deemed
acceptance. If Holder does object, Holder shall specify the reasons for disapproval. Maker shall
have thirty (30) days to reconcile any disapproved item. If Maker and Holder cannot agree on the
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amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and
Holder shall resolve any disputed items. The cost of the auditor shall be shared equally by Maker
and Holder.
l. Annual Budget.
Maker shall prepare and submit to Holder a proposed annual operating budget for the
management and operation of the Project ("Annual Budget") no later than 60 days preceding the
effective year of such budget. The Annual Budget shall include the projected Gross Revenue and
Operating Expenses for the year and a line item showing the projected Residual Receipts from the
Project for the year. Holder will review the Annual Budget and, if acceptable, approve it, which
approval shall not be unreasonably withheld. If the Annual Budget is not acceptable, Holder shall
specify the reasons for disapproval. The intent of this section is to provide Holder an opportunity
to disapprove any unreasonable expenses which would diminish the Residual Receipts from the
Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of
the total Annual Budget shall require Holder's prior written consent, which consent shall not be
unreasonably withheld.
8. Acceleration Upon Certain Events aLllnaq lefault.
' In the event of any Default under the terms of this Note, the Affordable Housing Agreement
or the Regulatory Agreement, the Deed of Trust which is the security for this Note, or under any
Senior loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker,
providing Maker with thirty (30) days in which to cure any Default, and such Default not having
been cured within thirty (30) days (or if a greater amount of time is reasonably necessary to effect
a cure, if actions to cure such Default are not undertaken within said thirty (30) day period and
pursued with reasonable diligence thereafter), all principal and interest due under this Note shall
immediately become due and payable, upon thirty (30) day written notice from the Holder to the
Maker. Failure to exercise such option shall not constitute a waiver of the right to exercise it in
the event of any subsequent Default.
Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real
property described in the Deed of Trust securing this Note or any part thereof or interest therein,
without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as
defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and
interest due hereunder shall immediately become due and payable upon thirty (30) days written
notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a
waiver of the right to require consent to future or successive transactions.
Notwithstanding the generality of the foregoing, certain transfers permitted under the
Affordable Housing Agreement shall not constitute a Default hereunder or under the Affordable
Housing Agreement, and any such action shall not accelerate the maturity of this Promissory Note,
provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing
Agreement or is reasonably acceptable to the Authority with reasonable promptness, and any
transferee under such a transfer agrees to be bound by any and all instruments in favor of the
Authority.
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4
9. Interest on Default.
From and after a Default, the entire outstanding principal balance of this Note shall
automatically bear an annual interest rate equal to the lesser of: (a) eight percent (8%)
compounding annually; or (b) the maximum interest rate allowed by law.
10. Costs Paid by Maker.
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by
the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs
of collection, costs and expenses and attorneys fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such
sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment of this
instrument.
11. 'Waiver
Maker hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this instrument, and expressly agrees that, without in any way
affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the
time for payment of any installment due hereunder, accept additional security, release any party
liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives,
to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a
defense to any demand on this instrument or any deed of ttust, security agreement, guarantee or
other agreement now or hereafter securing this Note.
12. Indemnificatron.
Maker shall indemnify, defend, protect and hold the Authority harmless from and against
any and all loss, damage, liability, action, cause of action, cost or expense, including, without
limitation, reasonable attorneys fees and expenses incurred by the Holder hereof, arising as a result
of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or related agreements; (ii) intentional bad faith waste of the real
property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from
Maker's failure to maintain insurance as required under the provisions of the deed of trust securing
this Note and the Affordable Housing Agreement.
13. Nonrecourse
This Note shall become a noffecourse obligation of Maker on the date that Maker files a
valid and timely Notice of Completion for the Project and the Holder must resort only to the Project
or the Property, or both, for repayment should the Maker fail to repay the sums evidenced hereby.
At such time as this Note becomes nonrecourse, neither Maker nor any of its general and limited
partner shall have any personal liability for repayment of the Project Loan and no deficiency
judgment may be obtained against Maker or any of its general and limited partners except for
actual or constructive fraud, material misrepresentation, intentional bad faith waste of or on the
Project and such other matters as are refened to below. Notwithstanding the generality of the
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foregoing, however, Maker shall indemnify, defend, protect and hold Holder harmless from and
against any and all loss, damage, liability, action, cause of action, cost or expense, including,
without limitation, reasonable attorneys' fees and expenses incurred by the Holder arising as a
result of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or any other agreements or documents provided in connection
therewith; (ii) intentional bad faith waste of the Property encumbered by the deed of trust which
secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required
under the provisions of the deed of trust securing this Note. Maker's obligation to indemnify the
Holder hereof as aforesaid shall be recourse obligations of the Maker, and in the event of any
breach of such obligations, the Holder shall have the right to proceed directly against the Maker to
recover any and all losses, damages, liability, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) and may bring any action and institute any proceeding to
obtain a deficiency judgment in or following foreclosure for any and all such losses, damages,
liabilities, costs and expenses resulting from such breach.
14. Severability
If any provision of this Note is determined by a court of competent jurisdiction to be void
or unenforceable, such determination shall not affect any other provision of this instrument, and
all other provisions hereof shall remain valid and in full force and effect.
15. Non-Waiver
No delay in demanding or failure to demand performance hereunder shall constitute a
waiver by the Holder hereof of its right to subsequently demand such performance or to exercise
any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of the
Holder's rights and remedies hereunder shall be expressed in a writing signed by a duly appointed
representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder
shall not constitute a waiver of any other right, including, but not limited to, the right to exercise
any and all remedies for a different or subsequent event of Default hereunder.
[Signatures on Following Page]
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MAKER:
LP, a California limited partnership
By:LLC,
a California limited liability company,
its managing general partner
By
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
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By: C &.C Development Co., LLC,
a California limited liability company, its sole member and manager
By:
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
7
EXHIBIT L
TO
AFFORDABLE HOUS ING DISPO SITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
List of Impact Fees Applicable to Project
The followine City Development Impact Fees are applicable to the Proiect:
o Parks and Recreation Facilities Development Fee (Ordinance 210, as amended)
o Agricultural Preservation Fee (Ordinance 316, as amended)
o Sewer Connection Fees (Resolution No. 04-11-16-05)
o Capistrano Circulation Fee Program Traffic Impact Fees (Resolution No. 02-05-21-02)
o Domestic 'Water (Resolution No. 04-05-18-04)
o Non-Domestic Water (Recycled Water) (CVV/D Resolution No. 00-9-5-1)
The following City Development Impact Fees are not Applicable to the Project (which is an
affordable senior housins development) :
Systems Development Fee (Ordinance #364)
New Building Construction Fee (Ordinance 211)
a Housing In-Lieu Fee (Ordinance 767)
EXHIBIT L
L-1
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