HomeMy WebLinkAbout815 N. HARBOR, L.P.-2013A- 2013 -158
SPACE A13OVE THIS LINE FOR RECORDING US
-'� FREE RECORDING REQUESTED
[Government Code Section 6103]
LOAN AGREEMENT
by and between the
CI'T'Y OF SANTA ANA,
and
815 N HARBOR, L.P.
(815 N Harbor Boulevard, Santa Ana, California)
Dated: September _j (L 2013
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FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 27383
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When Recorded Mail to:
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City of Santa Ana
Community Development Agency
20 Civic Center Plaza (M -37)
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P.O. Box 1988
Santa Ana, California 92702
Attention: Housing Manager
SPACE A13OVE THIS LINE FOR RECORDING US
-'� FREE RECORDING REQUESTED
[Government Code Section 6103]
LOAN AGREEMENT
by and between the
CI'T'Y OF SANTA ANA,
and
815 N HARBOR, L.P.
(815 N Harbor Boulevard, Santa Ana, California)
Dated: September _j (L 2013
1
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LOAN AGREEMENT
NEIGHBORHOOD STABILIZATION PROGRAM FUNDS
THIS LOAN AGREEMENT (the "Agreement ") dated, for identification purposes only,
as of September _jj�_, 2013, is made and entered into by and between the City of Santa Ana, a
charter city and municipal corporation ( "City ") and 815 N Harbor, L.P. ( "Developer ") with
reference to the following:
RECITALS
A. Developer has entered into an agreement (the "Purchase Agreement ") to
purchase property, located at 815 N. Harbor Boulevard, Santa Ana, California, as more
particularly described in the legal description, Exhibit A attached hereto and incorporated herein
(the "Property "). Pursuant to the Purchase Agreement, the price to be paid for the Property, is
$3,856,366_ (the "Purchase Price ").
B. This Agreement is made pursuant to the authority of Title XII of Division A of
the American Recovery and Reinvestment Act of 2009 (Public Law 111 -5 {February 17, 2009))
(Recovery Act) and sections 2301 -2304 of the Housing and Economic Recovery Act of 2008
(Public Law 110 -289 {July 30, 20081) (HERA). Section 2301 -2304 of HERA is known as the
"Neighborhood Stabilization Program" or "NSP" with money funded through the Program as
"NSP Funds ". The term "NSP2" refers to the second appropriation of NSP Funds provided
under the Recovery Act, and the term 'NSPY refers to the third appropriation of NSP Funds
provided under the Recovery Act.
C. The City was notified that its application under the NSP for NSP2 Funds was
approved by the U.S. Department of Housing and Urban Development ( "HUD ") with funding
allocated for acquisition and construction of the multi - family rental component of the NSP. The
parties hereto have executed the "Neighborhood Stabilization Program (Program 2) Rental
Housing Development Agreement" dated March 1, 2010 in the amount not to exceed $6,500,000
but no less than $2,500,000 plus program income. Developer must comply with all of the NSP
Program requirements as set forth in the Agreement. Pursuant to this Agreement, NSP2 and
NSP3 Funds will be used for the acquisition of the Property. This agreement amends the
agreement dated March 1, 2010 to include redevelopment activities as authorized by the
substantial amendment.
D. On March 4, 2011, the City was notified that its application under the NSP for
NSP 3 Funds was approved by HUD. Funding for the Developer is allocated for acquisition and
construction of the multi - family rental components of the NSP 3 program in an amount not to
exceed $1,500,000.
E. A Request for Proposals was issued by the City to competitively choose a
Developer for the NSP Funds. Developer was awarded an agreement for the NSP I Funds for the
Rental Program, further funding for NSP2 and now this Agreement, due to its successful
implementation of said agreements to use such Funds.
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F. The City agrees to loan to Developer and Developer agrees to borrow from the
City, money towards acquisition of the Property, for a total of $2,000,000.00 (the "City Loan ")
pursuant to the Program, subject to the terms and conditions set forth herein. The City Loan
shall be secured by a Deed of Trust in the principal amount of Two Million Dollars
($2,000,000.00).
G. Developer is entering into this agreement to acquire and, subject to entitlement
approvals, develop a mixed use project consisting of approximately seventy (70) unit multi-
family residential housing development with a community room (the "Project ") located at 815 N.
Harbor Street, within the City of Santa Ana, California, and legally described in Exhibit A
attached hereto (the "Property ").
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein contained, City and Developer agree as follows:
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized terms used herein, including, without
limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly
defined, are defined where first used in this Agreement and /or as set forth in this Article 1.
"Affordable Housing" means housing operated in accordance with the
requirements of 24 CFR 92.252 and 24 CFR 570.
"Affordability Period" also referred to as "Term of Affordability ", shall be fifty -
five (55) years from date of issuance of Certificate of Completion.
"Affordable Rent" means the monthly rents which do not exceed the maximum
amount applicable to Extremely Low, Very Low and Low Income households, as promulgated
by the U.S. Department of Housing and Urban Development (HUD).
"Affordability Restrictions on Transfer of Property" means that certain
document affecting real property benefiting the City, attached hereto as Exhibit B.
"Agreement" means this Neighborhood Stabilization Program Agreement
between the City and the Developer, and any attachments thereto.
"Applicable Law" shall mean those federal, state and local laws, ordinances,
regulations, policies and procedures applicable to the NSP 2 and NSP 3 Funds.
"Building Permit" means the building permit(s) issued by City and required
for the construction, if any.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday
on which Santa Ana City Hall is open to the public for the conduct of City affairs.
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"Calendar Year" means each consecutive twelve (12) month period from
January 1 to December 31.
"Certificate of Completion" has the meaning set forth in Article 17.
"City" means the City of Santa Ana, California, a charter city and municipal
corporation.
"City Deed of Trust" means the deed of trust encumbering the Property, in the
form attached hereto as Exhibit C, to be executed by Developer pursuant to Section 53.2 in
order to secure the Loan Note.
"City Loan" means the loan to be made by the City to Developer in the principal
amount of Two Million Dollars ($2,000,000.00) in accordance with this Agreement.
"City Project Manager" shall mean the City Manager and/or his /her designee.
"City Promissory Note" means that certain promissory note in the original
principal amount of $2,000,000 in the form attached hereto as Exhibit D, and to be executed by
Developer in favor of City to evidence the obligation of Developer to repay the City Loan
through residual receipts as further described in the City Promissory Note.
"Close of Escrow" shall mean the date upon which the Loan Agreement and City
Deed of Trust is recorded in the Official Records of the County.
"Closing Statement" means the final statement of Developer's Escrow account
for the purchase of the Property pursuant to the purchase contract.
"County" means the County of Orange, California.
"Developer" means 815 N Harbor, LP, a California limited partnership comprised
of OHDC 815 N Harbor, LLC, California limited liability company as managing general partner
and C &C 815 N Harbor, LLC, a California limited liability company, as developer general
partner.
"Developer's Representative" shall mean the Chief Executive Officer of
the Managing General Partner of Developer or his /her designee.
"Escrow" means Escrow No. 588306 -A.
"Escrow Holder" means First American Title Company, 5 First American Way,
Santa Ana, California 92707.
"Extremely Low Income" means an adjusted income which does not exceed
thirty percent (30 %) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
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"Event of Default" has the meaning set forth in Section 8.1.
"Foreclosed" As defined by HUD for the purposes of NSP means "A home or
residential property has been foreclosed upon if any of the following conditions apply" (a) The
property's current delinquency status is at least 60 days delinquent under the Mortgage Bankers
of America delinquency calculation and the owner has been notified; (b) the property owner is
90 days or more delinquent on tax payments; (c) under state, local, or tribal law, foreclosure
proceedings have been initiated or completed; or (d) foreclosure proceedings have been
completed and title has been transferred to an intermediary aggregator or servicer that is not an
NSP grantee, contractor, subrecipient, developer, or end user.
"Governmental Authority" means any governmental or quasi governmental
agency, board, bureau, commission, department, court, administrative tribunal or other
instrumentality or authority, and any public utility.
"Hazardous Materials" means flammable materials, explosives, radioactive
materials, hazardous wastes, toxic substances and similar substances and materials, including all
substances and materials defined as hazardous or toxic wastes, substances or materials under any
applicable law, including without limitation the Resource Conservation and Recovery Act, 42
U.S.C. §§ 6901 et sec., and the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended.
"HOME" means the HOME Investment Partnership Program (the "HOME
Program ") (42 U.S.C. §12701, et seq.,) to be used in accordance with applicable statutory
requirements and regulations (the "HOME Regulations ") (24 CFR Part 92).
"HUD" means the United States Department of Housing and Urban Development
and any successors or assigns thereof.
"Improvements" means all improvements and fixtures now and hereafter
comprising any portion of the Property, including, without limitation, landscaping, trees and
plant materials; and offsite improvements (including, without limitation, streets, curbs, storm
drains, and adjacent street lighting).
"Indebtedness" of a person means (a) all indebtedness for borrowed money,
(b) notes payable and drafts accepted representing extensions of credit, whether or not
representing obligations for borrowed money, (c) any obligation for the purchase of property or
services in excess of $10,000 in the aggregate that is (i) deferred for more than six (6) months, or
(ii) evidenced by a note or similar instrument, and (d) all recourse and all non - recourse
indebtedness secured by any Lien on any property or asset of such person (whether or not
assumed by such person).
"Indemnitees" has the meaning set forth in Section 14.5 this definition is
actually in Section 14.5]
"Laws" means all statutes, laws, ordinances, regulations, orders, writs,
judgments, injunctions, decrees or awards of the United States or any state, county,
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municipality or other Governmental Authority .
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any lien or security interest).
"Loan Documents" means, collectively, this Agreement, the City Promissory
Note, the City Deed of Trust, and the Affordability Restrictions on Transfer of Property, and any
other agreement, document, or instrument that the City requires in connection with the execution
of this Agreement or from time to time to effectuate the purposes of this Agreement.
"Low Income" means an adjusted income which does not exceed eighty percent
(80 %) of the area median income for the Orange County, California PMSA, adjusted for
household size, as published by HUD.
"Median Income for the Area" means the median income for the Orange
County, California PMSA as most recently determined by HUD. Also may be referred to
interchangeably in the Loan Documents as "Area Median Income" or "AMP'.
"Neighborhood Stabilization Program" (NSP) has the meaning set forth in the
Recitals above.
"Neighborhood Stabilization Program (NSP) Regulations" has the meaning
set forth in the Recitals above.
"NSP Assisted Units" shall mean those residential units constructed which are
subject to the term of affordability.
"NSP Funds" shall mean the money provided under the NSP 2 and NSP 3
Program for the development of affordable rental units.
"Partnership Agreement" means the Agreement of Limited Partnership of
815 N Harbor L.P., dated as of August 30, 2013.
"Permitted Encumbrances for the Affordable Housing Restrictions" means
collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with
respect to the Property hereafter approved by the City Project Manager in writing.
"Permitted Encumbrances for the City Deed of Trust" means the
Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the
Property hereafter approved by the City Project Manager in writing.
"Project" means the construction of the Improvements upon the Property by
Developer pursuant to this Agreement.
"Project Budget" means the line -item budget for the Project attached hereto
as Exhibit E, as modified from time to time in accordance with this Agreement.
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"Project Costs" means all costs of any nature incurred in connection with
the Project in accordance with generally accepted accounting principles.
"Property" means the property that is located at 815 N. Harbor Boulevard in the
City of Santa Ana, and is more fully described in the "Legal Description" of the Property attached
hereto as Exhibit A and incorporated herein by reference.
"Scope of Work" means the detailed statement of the work to be performed by
Developer on and to the Property pursuant to this Agreement, which is attached hereto as Exhibit
F.
"Schedule of Performance" means the detailed schedule setting forth
timeframes for certain tasks, which document is attached hereto as Exhibit G.
"Senior Lender" means a commercial financial institution providing the Senior
Loan or any other holder of the Senior Loan Note.
"Senior Loan" means a loan from the Senior Lender, which is any of an
acquisition loan in the approximate amount of $2,000,000 from Grandpoint Bank, a construction
loan in the approximate principal amount of $17,607,180 with a term of approximately two (2)
years or permanent loan(s) in the approximate principal amount of $5,089,440.00 with a term of
approximately 18 years and an amortization period of 30 years.
"Senior Loan Deed of Trust" means the first deed of trust securing the
Senior Loan by encumbering the Property.
"Senior Loan Documents" means, collectively, the loan agreement governing
the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement,
document or instrument that the Senior Lender requires in connection with the Senior Loan.
"Senior Loan Note" means the promissory note evidencing the Senior Loan
from the Senior Lender.
"Target Area" shall mean the map attached hereto and incorporated herein as
Exhibit H.
"Term of Affordability" the terms and conditions contained herein shall remain
in effect for fifty -five (55) years from the date of issuance of the Certificate of Completion.
"Very Low Income" means an adjusted income which does not exceed fifty
percent (50 %) of the area median income for the Orange County, California PMSA, adjusted for
household size, as published by HUD.
"Vicinity" shall mean the Target Area as identified by the City for the NSP funds
and approved by HUD.
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1.2 Singular and Plural Terms. Any defined term used in the plural in this
Agreement shall refer to all members of the relevant class and any defined term used in the
singular shall refer to any number of the members of the relevant class.
1.3 References and Other Terms. Any reference to this Agreement shall include
such document both as originally executed and as it may from time to time be modified.
References herein to Articles, Sections and Exhibits shall be construed as references to this
Agreement unless a different document is named. References to subparagraphs shall be
construed as references to the same Section in which the reference appears. The term "document"
is used in its broadest sense and encompasses agreements, certificates, opinions, consents,
instruments and other written material of every kind. The terms "including" and "include" mean
"including (include) without limitation."
1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement, as now
existing and as the same may from time to time be modified, are incorporated herein by this
reference.
2. SCOPE OF WORK/PROJECT BUDGET
A "Scope of Work" (Exhibit F) and "Schedule of Performance" (Exhibit G) for the
Property is attached hereto. Any material change to the Scope of Work and /or Schedule of
Performance requested by the Developer shall be subject to the prior written approval of the City
Project Manager. The Scope of Work and /or Schedule sets forth the construction work that shall
be performed on the Property and timeframes for approvals and such work.
A line -item budget for the Project, including a summary statement of sources and uses of funds,
is incorporated into Exhibit E (the 'Project Budget "). Any material change to the Project Budget
requested by Developer shall be subject to the prior written approval of the City Project
Manager.
3. CITY LOAN:
The City Loan shall be evidenced by the City Promissory Note in the form attached
hereto as Exhibit D. The City Loan shall be secured by the City Deed of Trust in the form
attached hereto as Exhibit C. The terms and conditions of the City Loan are as set forth in the
City Promissory Note which is a residual receipts note. The NSP terms of affordable compliance
period is fifty -five (55) years or repayment, commencing on the date that all work is complete
and the Property is fully occupied, however the term of affordability for the Project is fifty -five
years or repayment of the City Loan, whichever is longer.
3.1 Citv Loan. The City agrees to lend to Developer, and Developer agrees to
borrow from the City, the City Loan , with interest as provided in Section 4(a) of this Agreement,
subject to the conditions and restrictions set forth in this Agreement, in the City Promissory
Note, the Affordability Restrictions on Transfer of Property, and in the City Deed of Trust.
When all conditions to the close of escrow other than payment of the Purchase Price have been
satisfied, the City shall deposit the City Loan proceeds into escrow. The City shall direct the
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Escrow Agent to apply the proceeds of the City Loan on behalf of Developer to the Purchase
Price of the Property and related soft costs. Developer shall execute and deliver to the Escrow
Agent the City Promissory Note, the City Deed of Trust and the Affordability Restrictions on
Transfer of Property.
3.2 Authorized Use of City Loan. The City Loan proceeds may be used for the
acquisition of the foreclosed Property, as well as pre- approved reasonable soft costs related to
such purchase.
3.3 Loan Repayment. Developer shall make payments to the City as provided in
Sections 3.4 (Residual Receipts), 3.5 (Refinancing Proceeds), 3.6 (Sale Proceeds) and 3.7
(Accelerated Loan Repayment).
3.4 Annual Loan Repavment/ Residual Receipts.
a. The Developer shall make a loan payment to the City annually, in the
amount of the lesser of the outstanding balance due under the City Promissory Note or the City's
percentage of the residual receipts , as provided in this Section 3.4.
b. Within one hundred fifty (150) days after the close of the initial Calendar
Year following the issuance of the Certificate of Completion and on or before the 150`x' day of
each Calendar Year thereafter, the Developer shall submit to the City an audited financial
statement of gross revenues and operating expenses attributable to the Property for the applicable
Calendar Year, along with a computation of the residual receipts due to the City for the Calendar
Year.
c. Except as otherwise provided, the Developer shall pay to the City fifty
percent (50 %) of the Residual Receipts. Fifty percent (50 %) of the Residual Receipts shall
remain with the Developer.
d. The Residual Receipts payment shall be made not later than one hundred
fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to any
late fees, then to reduce the principal balance of the loan.
3.5 Loan Repayment from Refinancing Proceeds. The Developer shall make a
loan payment to the City from every refinancing that occurs during the term of this Agreement
not to exceed the outstanding balance of principal on this City Promissory Note, to the extent of
the City's percentage, which is fifty percent (50 %), of the Refinancing Proceeds (if any), as
follows: the cash proceeds from such Refinancing shall be applied first to pay closing costs; next,
the amount necessary to pay in full the balance remaining on the Senior Loan; next, the amount
necessary to pay any deferred developer fee in full; and next, the Developer shall pay to the City
the City's percentage of the remaining Refinancing Proceeds to the extent of the outstanding
balance on this City Promissory Note. At least fifty percent (50 %) of the Refinancing proceeds
shall remain with Developer, with all remaining Refinancing proceeds remaining with the
Developer to the extent the outstanding balance of the City Promissory Note has been fully paid..
Such payment shall be due on the date of such Refinancing, and shall be applied to reduce the
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principal balance of the City Loan, The City shall not be required to reconvey the lien of the
Deed of Trust if Refinancing Proceeds are insufficient to repay the City Loan in full.
3.6 Loan Repayment from Sale Proceeds. The Developer shall make a loan
payment, not to exceed the outstanding balance of principal on the City Promissory Note to the
City from any Sale that occurs during the term of the City Loan, to the extent of the City's
percentage of the Sale proceeds, as follows: gross sale proceeds are applied first to pay Closing
Costs, next to pay in full the balance remaining on the Senior Loan; next, the amount necessary
to pay any deferred developer fee in full, and next, the Developer shall pay to the City the City's
percentage, which is fifty percent (50) %), of the remaining sale proceeds, not to exceed the
outstanding amount of principal due on this City Promissory Note. At least fifty percent (50 %)
of the Sale proceeds shall remain with Developer, with all remaining Sale proceeds remaining
with the Developer to the extent the outstanding balance of the City Promissory Note has been
fully paid. Such payment shall be due on the date of such Sale, and shall be applied to reduce the
principal balance of the City Loan. The City shall not be required to reconvey the lien of the
Deed of Trust if Sale proceeds are insufficient to repay the City Loan in full.
3.7 Accelerated Loan Payment. The full principal amount outstanding shall be due
and payable on the earlier to occur of the following:
a. Sale or Refinancing of the Property as provided herein; unless: (i) in the case
of a Sale in which the Sale Proceeds are insufficient to repay in full the City Loan, the City
approves such sale and the purchaser assumes the balance of the City Loan in accordance with
the terms of the City Promissory Note; or (ii) in the case of a Refinancing in which the
Refinancing Proceeds are insufficient to repay in full the City Loan, the City approves such
Refinancing and the Developer remains obligated pursuant to the terms of this City Promissory
Note; or
b. In event of default (subject to any applicable notice and cure provisions)
pursuant to any of the City Loan Documents or the Senior Loan Documents; or
C. Any default (subject to any applicable notice and cure provisions by
Developer as to any other loan or loans by City to Developer with respect to the Property; or
d. The date that is fifty -five (55) years after the date of the Certificate of
Completion, is issued by the City of Santa Ana. On that date, the City agrees to review the
performance of the Property and consider in good faith any reasonable request by Developer to
modify the terms or extend the Term of the City Promissory Note.
3.8 Prepayment Developer may prepay the outstanding principal balance under the
City Promissory Note, in whole or in part, at any time without penalty, however the Affordability
Restrictions on Transfer of Property still remain for the entire Affordability Period of fifty -five
(55) years.
3.9 Acceleration by Reason of Transfer or Financine.
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a. In order to induce City to make the loan evidenced hereby, Developer
agrees that in the event of any transfer of the Property without the prior written consent of City
(other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure,
by the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option,
without prior demand or notice, to declare all sums secured hereby immediately due and payable.
Consent to one such transaction shall not be deemed to be a waiver of the right to require consent
to future or successive transactions. City may grant or deny such consent in its sole discretion
and, if consent should be given, any such transfer shall be subject to this Section, and any such
transferee shall assume all obligations hereunder and agree to be bound by all provisions
contained herein. Such assumption shall not, however, release Developer from any liability
thereunder without the prior written consent of City.
b. As used herein, "transfer" includes the sale, agreement to sell, transfer or
conveyance of the Property, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, the execution of any installment land sale contract
or similar instrument affecting all or a portion of the Property, or the lease of all or substantially
all of the Property. 'Transfer' shall not include the leasing of individual residential units on the
Property, so long as Developer complies with the provisions of the Loan Agreement and the
Affordability Covenants and Restrictions relating to such leasing activity, nor shall it include a
conveyance of the Property to a limited partnership in which Developer is a general partner, or to
a corporation or limited liability company that is wholly owned by the Developer or its affiliates
and that is formed for the sole purpose of owning and operating the Property, or the sale back to
the Developer. In the event of any Refinancing or partial Refinancing in an amount in excess of
the balance of the Senior Loan, without the prior written consent of City (which consent City
may grant or deny in its sole discretion), then the entire outstanding balance of the City Loan
shall be repaid to the City at the time of each Refinancing or partial Refinancing.
c. Notwithstanding anything to the contrary contained herein, a "transfer" shall
not include (and it shall not be deemed a sale) (i) a transfer of a general partner's interest in
Developer when made in connection with the exercise by the Developer's limited partner (the
"Limited Partner ") of its rights upon a default by a general partner under the Developer's
partnership agreement (the "Partnership Agreement ") or upon a general partner's withdrawal in
violation of the Partnership Agreement, so long as the removal and substitution of the defaulting
general partner is made within thirty (30) days of such default or, if such removal and
substitution cannot reasonably be completed within thirty (30) days, so long as the Limited
Partner commences to take action to remove and substitute the general partner with a reasonable
period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the
Property to the managing general partner of Developer pursuant to the right of first refusal or to
the general partners of Developer pursuant to the purchase option, as provided for in the
Partnership Agreement; (iii) any transfer of the Limited Partner's interest in connection with a
default by the Limited Partner under and in accordance with the Partnership Agreement; and (iv)
any sale, transfer or other disposition of an interest in a limited partner of the Developer.
4. [RESERVED]
5. [RESERVED]
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6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS
6.1 Conditions Precedent. City's obligation to disburse the loan is subject to the
satisfaction, or waiver by the City Project Manager, of the following conditions precedent:
a. Loan Documents. Developer shall have delivered to the Escrow
Holder, signed by the authorized officer or officers of Developer, with such signature(s)
acknowledged where necessary, each of the following documents:
(i) this Loan Agreement;
(ii) the City Promissory Note;
(iii) the City Deed of Trust; and
(iv) the Affordability Restrictions on Transfer of Property.
b. Title Insurance. City shall have received an LP -10 ALTA Lender loan
policy of title insurance (1970 edition), or evidence of a commitment therefore satisfactory to
City, issued by First American Title Insurance Company and in form and substance satisfactory
to City, together with all endorsements and binders required, naming City as the insured, in a
policy amount of not less than the total City Loan Amount, showing Developer as the fee owner
of the Property and insuring the City Deed of Trust to be a valid priority lien on the Property.
The City Promissory Note and Deed of Trust shall be subordinate to the Senior Loan Note and
Senior Loan Deed of Trust.
C. Affordability Restrictions on Transfer of Property. Developer shall have
delivered to the Escrow Holder, in the form attached hereto as Exhibit B, the Affordability
Restrictions on Transfer of Property pursuant to which, among other things, Developer agrees
that the Property shall be used only for decent, safe, sanitary and affordable rental housing
pursuant to the affordability requirements of Code of Federal Regulations ( "CFR ") section
92.252 or 92.254. The City's Affordability Restrictions on Transfer of Property shall remain in
first position on title and shall not be subordinated.
d. Documents Recorded. This Loan Agreement, the City Deed of Trust and
the Affordability Restrictions on Transfer of Property shall have been recorded in the Official
Records of the County.
e. Request for Notice. For the benefit of City, Escrow Holder shall have
recorded a request for notice of default of the Senior Loan (the "Request for Notice of Default ").
f Insurance. City shall have received evidence satisfactory to the City
Attorney that all of the policies of insurance required by Section 19 of this Agreement are in full
force and effect.
g. Representations and Warranties The representations and warranties of
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Developer contained in this Agreement and the other Loan Documents shall be correct as of the
Close of Escrow as though made on and as of that date, and if requested by the City Project
Manager, City shall have received a certificate to that effect signed by Developer's
Representative.
f No Default. No Event of Default by Developer shall have occurred, and no
event shall have occurred which, with the giving of notice or the passage of time or both, would
constitute an Event of Default by Developer under this Agreement, and if requested by the City
Project Manager, City shall have received a certificate to that effect signed by Developer's
Representative.
6.2 Disbursement Procedures for Loan(s).
The City Loan proceeds shall be disbursed through Escrow to finance the acquisition and soft costs
of the Project Budget (as evidenced in Exhibit E). The City Loan proceeds shall not be used for any
purpose other than for acquisition and soft costs related to the development of the Project (costs all
subject to City's prior review).
6.3 Termination for Failure of Condition. If (a) any of the conditions set forth
herein are not timely satisfied (subject to applicable notice and cure rights) or waived by the City
Project Manager, and (b) City is not in default under this Agreement, City may terminate this
Agreement without any further liability on its part by giving written notice of termination to
Developer. Upon the giving of such notice, all principal, interest and other amounts owing under
the specified due date.
6.4 Other Terms and Conditions of City Loan.
a. The City Promissory Note shall become immediately due and payable, in the
event of any of the following:
(1) failure to complete the Project within four (4) years of the recording date
tuiless such time is extended by written consent of the City Project Manager
which shall not be unreasonable withheld;
(2) Developer fails to show diligence in obtaining financing for construction
which shall not be unreasonable withheld if unsuccessful in obtaining tax
credits;
(3) violation of any of the use covenants and restrictions contained in this
Agreement after the expiration of any applicable notice and cure periods;
(4) an Event of Default by Developer which is not timely cured after
expiration of any applicable notice and cure periods pursuant to the terms of
this Agreement.
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6.5 Closing Costs and Fees. Developer shall pay (a) all escrow fees and charges,
(b) all recording fees and charges on any document recorded pursuant to this Agreement, and (c)
the premium for the title insurance required hereunder.
7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE
PROJECT
7.1 Use Covenants and Restrictions.
a. Developer agrees and covenants, which covenants shall run with the land and
bind Developer, its successors, its assign and every successor in interest to the Property that
Developer will make all rental units on the Property available to extremely -low, very low and low
income households at rents affordable to such households for fifty- five (55) years from the effective
date of the issuance of the Certificate of Completion.
b. The Project shall consist of approximately seventy (70) units of which
there will be forty -nine (49) two - bedroom units and twenty -one (21) three- bedroom units. There
will be seven (7) units with incomes at or below 30% AMI, forty -two (42) units for households
with incomes at or below 50% AMI; twenty (20) units for households with incomes at or below
60% AMI; and the remaining unit will be reserved for the on -site manager. If entitlement changes
the number of units, the City Project Manager must approve affordability mix.
C. Affordable rents shall be governed as provided in the NSP Regulations.
Rental increases shall be in conformance with federal and state law.
d. Initial rents may be recalculated to allowable rental amounts at the time of
initial lease -up following completion of construction in accordance with any changes in allowable
rent and income tables as published by HUD.
7.2 Affordability Levels/Unit Mix:
The proposed unit mix and levels of affordability are as follows:
Bedroom Size
30% AMI
50% AMI
60% AMI ITotal
2 Bedroom
5
30
14
49
3 Bedroom
2
12
6
20
Totals
7
42
20
69
The remaining unit will be a 3- bedroom unit reserved for the onsite manager.
The affordable rents charged at the Project must comply with the lowest of the following
standards:
1. The standards set forth by California Tax Credit Allocation Committee (TCAC), or
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2. During the 55 -year affordability period for the sixty -nine (69) NSP assisted units, the rent
schedule periodically published by HUD.
* Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing
Authority of the City of Santa Ana publishes the utility allowance.
7.3 Rent Increases: On an annual basis, the City shall provide the Developer with the
maximum allowable schedule of rents for the Property. In no event can Developer charge any
tenant more than such amount.
7.4 Maintenance of the Property. Solely at Developer's expense, Developer agrees to
maintain the Property in a clean and orderly condition and in good condition and repair and keep the
Property free from any accumulation of debris and waste materials. If at any time Developer fails to
maintain, or cause to be maintained, the Property as required by this section, and said condition is
not corrected after the expiration of a reasonable period of time not to exceed thirty (30) days from
the date of written notice from the City, unless such condition cannot reasonably be cured within
thirty (30) days, in which case Developer shall have such additional time as reasonably necessary to
complete such cure, the City may perform the necessary maintenance and Developer shall pay all
reasonable costs incurred for such maintenance. The City shall inspect the Property annually after
the date of issuance of the Certificate of Completion as described in Section 17 of this Agreement.
7.5 Obligation to Refrain from Discrimination. Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part thereof,
that there shall be no discrimination against or segregation of any person or group of persons on
account of race, color, creed, disability, religion, sex, marital status, ancestry or national origin in
the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall
Developer itself or any person claiming under or through him establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, mnnber, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing
covenants shall run with the land and shall remain in effect for the term of the Agreement.
8. DEFAULTS AND REMEDIES
8.1 Event of Default. Failure or delay by either party to perform any term of provision
of this Agreement within the time periods provided herein for such performance constitutes a
default Linder the Agreement. If any party defaults in performance of its obligations, covenants or
agreements hereunder, the defaulting party shall be entitled to cure the default in accordance with
this section. The injured party shall give written notice of default to the party in default, specifying
the default complained of by the injure party. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default. The defaulting party must, within
thirty (30) days following service of said written notice, commence to cure, correct or remedy such
failure or delay and shall complete such cure, correction, or remedy with reasonable diligence.
Upon a default by Developer which is not cured within thirty (30) days following service of said
notice, unless such default cannot reasonably be cured within thirty (30) days, in which case
Developer shall have such additional time as reasonably necessary to complete such cure but no
more than ninety (90) days, the City shall have the right to terminate this Agreement by delivery of
written notice of termination to Developer.
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8.2 Institution of Legal Actions. In addition to any other rights or remedies, either party
may institute legal action to care, correct or remedy any default to recover damages for any default,
or to obtain any other remedy consistent with the purpose of this Agreement.
8.3 Rights and Remedies are Cumulative. Except with respect to rights and remedies
expressly declared to be exclusive in this Agreement, the right and remedies of the parties are
cumulative and the exercise by either party 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 other parry.
8.4 Damages. In the event that the City is liable for damages to Developer, such liability
shall not exceed costs incurred by the Developer in the performance of this Agreement and shall not
extend to compensation for loss of future income, profits or assets; provided, however, Developer's
only remedy for any breach of this Agreement by the City shall be an action for specific
performance of such party's obligations.
8.5 Nonrecourse Liability. Neither Developer, nor any partner of Developer, shall have
any personal liability under this Agreement, or the attached City Promissory Note and Deed of
Trust, and any judgment, decree or order for the payment of money obtained in any action to
enforce the obligation of Developer to repay the loan evidenced by such documents shall be
enforceable against Developer only to the extent of Developer's interest in the Property.
9. GENERAL PROVISIONS AND WARRANTIES
As a material inducement to City to enter into this Agreement, Developer represents and
warrants as follows:
9.1 Formation, Qualification and Compliance. 815 N Harbor, LP, is a California
limited partnership comprised of OIIDC 815 N Harbor, LLC, a California limited liability
company with Orange Housing Development Corporation as its sole member, and C &C 815 N
Harbor, LLC, a California limited liability company„ as the general partners. Orange Housing
Development Corporation is (a) a non - profit public - benefit corporation, validly existing and in
good standing under the laws of the State of California, (b) has all requisite authority to conduct
its business and own and lease its properties, and (c) is qualified and in good standing in every
jurisdiction in which the nature of its business snakes qualification necessary or where failure to
qualify could have a material adverse effect on its financial condition or the performance of its
obligations under the Loan Documents. Developer is in compliance with all laws applicable to its
business and has obtained all approvals, licenses, exemptions and other authorizations from, and
has accomplished all filings, registrations and qualifications with, any Governmental Authority
that are necessary for the transaction of its business.
9.2 Senior Lender. Developer shall provide City with a minimuin of three (3)
lending institutions to insure the most competitive interest rate, fees and services for construction
and permanent financing loans. If lender not the lowest, Developer must provide documentation
supporting their decision.
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9.3 Execution and Performance of Loan Documents.
a. Developer has all requisite authority to execute and perform its
obligations under the Loan Documents.
b. The execution and delivery of Developer of, and the performance by
Developer of its obligations under, each Loan Document has been authorized by all necessary
action and does not and will not:
(1) require any consent or approval not heretofore
obtained of any person having any interest in Developer;
(2) violate any provision of, or require any consent or
approval not heretofore obtained under, any articles of incorporation, by -laws or other governing
document applicable to Developer;
(3) result in or require the creation of any lien, claim,
charge or other right of others of any kind (other than under the City Loan Documents) on or
with respect to any property now or hereafter owned or leased by Developer;
(4) to best of its knowledge, violate any provision of any law
presently in effect; or
(5) constitute a breach or default tinder, or permit the
acceleration of obligations owed under, any contract, loan agreement, lease or other agreement or
document to which Developer is a party or by which Developer or any of its property is bound.
C. Developer is not in default, in any respect that is materially adverse
to the interests of City under the Loan Documents or that would have any material adverse effect
on the financial condition of Developer or the conduct of its business, under any law, contract,
lease or other agreement or document described in sub - paragraph (4) or (5) of the previous
subsection.
d. No approval, license, exemption or other authorization from, or
filing, registration or qualification with, any Governmental Authority is required which has not
been previously obtained in connection with:
(1) the execution of Developer of, and the performance by
Developer of its obligations under, the Loan Documents except for necessary City permits
necessary for the demolition and construction work on the Property as called for in the Loan
Documents; and
(2) the creation of the liens described in the Loan Documents.
9.4 Financial and Other Information. To the best of Developer's knowledge, all
financial information furnished to City with respect to Developer in connection with the Loans
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(a) is complete and correct in all material respects as of the date of preparation thereof, (b)
accurately presents the financial condition of Developer, and (c) has been prepared in accordance
with generally accepted accounting principles consistently applied or in accordance with such
other principles or methods as are reasonably acceptable to City. To the best of Developer's
knowledge, all other documents and information furnished to City with respect to Developer, in
connection with the Loans, are correct and complete insofar as completeness is necessary to give
the City accurate laiowledge of the subject matter. As of the date of this Agreement, to the best
of Developer's knowledge Developer has no material liability or contingent liability not
disclosed to City in writing and there is no material lien, claim, charge or other right of others of
any kinds (including liens or retained security titles of conditional vendors) on any property of
Developer not disclosed in such financial statements or otherwise disclosed to City in writing.
9.5 No Material Adverse Change. There has been no material adverse change in
the condition, financial or otherwise, of Developer since the dates of the latest financial
statements furnished to City. Since those dates, Developer has not entered into any material
transaction not disclosed in such financial statements or otherwise disclosed to City in writing.
9.6 Tax Liability. Developer has filed all required federal, state and local tax returns
and has paid all taxes (including interest and penalties, but subject to lawful extensions disclosed
to City in writing) other than taxes being promptly and actively contested in good faith and by
appropriate proceedings. Developer is maintaining adequate reserves for tax liabilities
(including contested liabilities) in accordance with generally accepted accounting principles or in
accordance with such other principles or methods as are reasonably acceptable to City.
9.7 Governmental Requirements. To best of its knowledge, Developer is in
compliance with all laws relating to the Property and all Governmental Authority approvals,
including zoning, land use, planning requirements, and requirements arising from or relating to
the adoption or amendment of, any applicable general plan, subdivision and parcel map
requirement; environmental requirements, including the requirements of the California
Environmental Quality Act and the National Environmental Policy Act and the preparation and
approval of all required environmental impact statements and reports; use, occupancy and
building permit requirements; and public utilities requirements.
9.8 Rights of Others. Developer is in compliance with all covenants, conditions,
restrictions, easements, rights of way and other rights of third parties relating to the Property.
9.9 Litigation. There are no material actions or proceedings pending or, to the best of
the Developer's knowledge, threatened against or affecting Developer or any property of
Developer before any Governmental Authority, except as disclosed to City in writing prior to the
execution of this Agreement.
9.10 Bankruptcy. To the best of Developer's knowledge, no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or
other proceedings are pending or threatened against Developer, nor are any of such proceedings
contemplated by Developer.
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9.11 Information Accurate. To the best of Developer's knowledge, all information,
regardless of its form, conveyed by Developer to City, by whatever means, is accurate, correct
and sufficiently complete to give City true and accurate knowledge of its subject matter, and
does not contain any misrepresentation or omission.
9.12 Conflicts of Interest. No member, official or employee of the City shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his/her personal
interests or the interests of any corporation, partnership or association in which he /she has a direct or
indirect financial interest. The Developer warrants that it neither has paid nor given, nor will pay or
give, any third party any money or other consideration for obtaining this Agreement.
9.13 Nonliability of City Officials and Employees. No member, official or employee of
the City shall be personally liable to the Developer in the event of any default or breach by the City
or for any amount which may become due to Developer or on any obligations under the terms of
this Agreement.
9.14 No Assignment. Developer expressly acknowledges and agrees that the City has
only agreed to assist the Developer as a means by which to induce the construction/development of
the Project. Accordingly, Developer further expressly acknowledges and agrees that this Agreement
is a personal right of Developer that is neither negotiable, transferable, nor assignable except as set
forth herein. Developer may assign some or all of its rights under the Agreement only with the prior
written consent of the City Project Manager (such consent not to be unreasonably withheld), except
that no prior consent is necessary for an assignment by a limited partner of Developer to an affiliate,
or as otherwise provided in the Deed of Trust.
9.15 Applicable Law. This Agreement shall be interpreted, governed and enforced under
federal and California state law with venue in Orange County California.
9.16 Third Parties. This Agreement is made for the sole benefit of Developer and the
City and their successors and assigns, and no other person or persons shall have any rights or
remedies under or by reason of this Agreement or any right to the exercise of any right or power of
the City hereunder or arising from any default by Developer, nor shall the City owe any duty
whatsoever to any claimant for labor performed or materials furnished in connection with the
construction of the Property.
9.17 Control of Property. The parties acknowledge that the City has not at any time
participated in any manner in the management or operation of the Property, and will not so
participate at any time hereafter.
10. CONDITIONS FOR CONSTRUCTION
10.1 Permits and Approvals. Developer shall diligently obtain all permits, including
all building permits, licenses, approvals, exemptions and other authorizations of Governmental
Agencies required in connection with the construction and conversion of the Property.
a. General Contractor. If the City Project Manager has not yet approved the
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General Contractor, the City Project Manager shall have approved the identity and
qualifications of the General Contractor.
b. Contract for Construction. The City Project Manager must have reviewed
and approved the contract for construction.
10.2 Commencement and Completion of Construction. The construction of the
Project shall be considered complete for purposes of this Agreement only when (a) all work
described has been completed and fully paid for, and (b) all work requiring inspection or
certification by Governmental Authority has been completed and all requisite certificates,
approvals and other necessary authorizations (including required final certificates of occupancy)
have been obtained.
10.3 . Intentionally Omitted.
10.4 Entry and Inspection. At all times prior to completion of the construction, upon
reasonable notice, City and its agents shall have (a) the right of free access to the Property and all
sites away from the Property where materials for the construction are stored, (b) the right to
inspect all labor performed and materials furnished for the construction, and (c) the right to
inspect and copy all documents pertaining to the construction.
10.5 Economic Opportunities for Low Income People. (24 CFR 570.487, Section 3
of the Housing and Urban Development Act of 1968, 12 USC 1701u, as amended by Section 915
of the Housing and Community Development Act of 1992). Developer certifies that it
implements a policy in accordance with Section 3 of the Housing and Urban Development Act of
1968 that requires employment and other economic opportunities arising in connection with
housing rehabilitation, housing construction and other public construction projects shall, to the
extent feasible and consistent with existing federal, state and local laws and regulations, be given
to low and very low- income persons. Noncompliance with HUD's regulations in 24 CFR part
135 may result in sanctions, termination of this contract for default, and debarment or suspension
from future HUD assisted contracts. To the extent applicable, the Developer shall comply and /or
cause compliance with Section 3 Clause requirements for the NSP. For example, when and if
Developer or its contractor(s) /subcontractor(s) hire(s) full time employees, Section 3 is
applicable and all disclosure and reporting requirements apply.
To the maximum extent feasible, the Developer shall provide for the hiring of employees
who reside in the vicinity of the Target Area or contract with small businesses that are owned
and /or operated by persons residing in the vicinity of the Target Area. The Developer shall
report to the City information regarding efforts taken to comply with this section through the
Vicinity Hiring Report (Exhibit 1) 15 days after the end of each calendar quarter.
10.6 Construction Information. From time to time during the course of the
construction, within ten (10) Business Days following City's written demand therefore,
Developer shall furnish requested reports of project costs, progress schedules and contractors'
costs breakdowns for the construction, itemized as to trade description and item, showing the
name of the contractor(s) and /or subcontractor(s), and including such indirect costs as real estate
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taxes, legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest
during construction and contractors' overhead.
10.7 Protection Against Liens: Developer shall diligently file a valid Notice of
Completion upon completion of the construction, diligently file a notice of cessation in the event
of a cessation of labor on the construction for a period of thirty (30) days or more, and take all
actions reasonably required to prevent the assertion of claims of lien against the Property. In the
event that any claim of lien is asserted against the property or any stop notice or claim is asserted
against the City by any person furnishing labor or materials to the Property, Developer shall
immediately give written notice of the same to City and shall, promptly and in any event within
ten (10) Business Days after written demand therefor, (a) pay and discharge the same, (b) effect
the release thereof by delivering to City a surety bond complying with the requirement of
applicable laws for such release, or (c) take such other action as City may require to release City
from any obligation or liability with respect to such stop notice or claim.
11. GOVERNMENT REQUIREMENTS
11.1 Qualification as Affordable Housing. As more particularly provided in the
Affordability Restrictions on Transfer of Property, Developer shall use, manage and operate the
Property in accordance with the requirements of 24 CFR 92.252, 24 CFR 570 so as to qualify the
housing on the Property as Affordable Housing with affordable rents.
11.2 Tenant and Participant Protection. Developer shall comply with the
requirements of 24 CFR 92.253.
11.3 [Intentionally Omitted]
11.4 Handicapped Accessibilitv. Developer shall comply with (a) Section
504 of the Rehabilitation Act of 1973, and implementing regulations; and (b) the Americans with
Disabilities Act of 1990, and implementing regulations at 28 CFR 35 -36 in order to make the
Project readily accessible to and usable by individuals with disabilities.
11.6 Use of Debarred, Suspended, or Ineligible Participants. Developer shall comply
with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding
of contracts, or funding of any contractor or subcontractor during any period of debarment,
suspension, or placement in ineligibility status.
11.7 Maintenance of Drug -Free Workplace. Developer shall certify that Developer
will provide a drug -free workplace in accordance with 24 CFR 84.13.
11.8 Lead -Based Paint. Developer shall comply with the requirements, as applicable
of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821 -4846) and implementing
regulations at 24 CPR 35.
11.9 Affirmative Marketing. Developer shall implement and perform such
affirmative marketing procedures and requirements for the Property as required by 24 CFR
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92.351 and the City of Santa Ana's adopted affirmative marketing procedures and minority
outreach program.
11.10 Property Standards. Developer shall cause the Property to meet the housing
quality standards set forth in 24 CFR 882.109, as well as all applicable local, state and federal
codes and ordinances, including zoning ordinances. Developer shall also cause the Property to
meet the current edition of the Model Energy Code published by the Council of American
Building Officials.
11.11 Displacement and Relocation. Developer acknowledges and agrees that,
pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this part, City
must ensure that it has taken all reasonable steps to minimize the displacement of persons as a
result of the construction. Furthermore, to the extent feasible, residential tenants must be
provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and
affordable dwelling unit on the Property upon completion of the construction. Developer agrees
to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and
shall take all actions and measures reasonably required by the City Project Manager in
connection therewith. All applicable state guidelines must also be followed.
11.12 Other Program Requirements. Developer shall carry out each activity in
compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except
that Developer does not assume City's responsibilities for environmental review in 24 CFR
92.352 or the intergovernmental review process in 24 CFR 92.359.
11.13 Request for Disbursements of Funds. Notwithstanding anything contained in
this Agreement to the contrary, Developer may not request disbursements of funds under this
Agreement until the funds are needed for payment of eligible costs (such funds shall be used
solely towards the acquisition and soft costs of the Project). The amount of each request shall be
limited to the amount needed.
11.14 Eligible Costs. Developer shall use NSP Funds to pay costs defined as "eligible
costs" pursuant to 24 CFR 92.206.
11.15 Records and Reports. Developer shall maintain and from time to time submit to
City such records, reports and information as the City Project Manager may reasonably require
in order to permit City to meet the record keeping and reporting requirements required of it
pursuant to 24 CFR 92.508.
11.16 Use of Debarred. Suspended, or Ineligible Participants. Developer shall
comply with the provisions of 24 CFR 24 relating to the employment, engagement of services,
awarding of contracts, or funding of any contractor or subcontractor during any period of
debarment, suspension, or placement in ineligibility status.
11.17 Maintenance of Drug -Free Workplace. Developer shall certify that Developer
will provide a drug -free workplace in accordance with 24 CFR 84.13.
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11.18 Books and Records. Developer shall maintain complete books of account and
other records, reports and information, as the Executive Director may reasonably require,
reflecting its operations (in connection with any other businesses as well as with respect to the
NSP Assisted Units), in accordance with generally accepted accounting principles applied on a
consistent basis or in accordance with such other principles or methods as are reasonably
acceptable to City, to meet the record keeping and reporting requirements required of it in
accordance with 24 CFR 92.508.
11.19 Equal Opportunity and Fair Housing. Developer shall carry out the
construction and perform its obligations under this Agreement in compliance with all of the state
and federal laws and regulations regarding equal opportunity and fair housing described in 24
CPR 92.350.
11.20 Conflict of Interest. Developer shall comply with and be bound by the conflict
of interest provisions set forth at 24 CFR 570.611, as well as state regulations pertaining to
conflict of interest.
1. 11.21 Uniform Administrative Requirements. Developer shall comply
with the requirements and standards of OMB Circular No. A -122, "Cost
Principles for Non -Profit Organizations," and with the following Attachments to
OMB Circular No. A -110:
a. Attachment A, "Cash Depositories ", except for paragraph 4 concerning
deposit insurance;
b. Attachment B, 'Bonding and Insurance ";
C. Attachment C, "Retention and Custodial Requirements for Records ",
except that in lieu of the provisions in paragraph 4, the retention period for
records pertaining to individual NSP activities starts from the date of
submission of the annual performance and evaluation report, as prescribed
in 24 CFR 570.507, in which the specific activity is reported on for the
final time;
d. Attachment F, "Standards for Financial Management Systems';
e. Attachment H, "Monitoring and Reporting Program Performance ",
Paragraph 2;
f. Attachment O, 'Procurement Standards."
11.22 Monitoring. Developer shall allow the City to conduct periodic inspections of
each of the assisted units on the Property as required by the Program 'after the date of
construction completion, with reasonable notice. Developer shall cure any defects or
deficiencies found by the City while conducting such inspections within two weeks of written
notice thereof, or such longer period as is reasonable within the sole discretion of the City.
11.23 Recertification of Tenant Income.
a. The HOME program guidelines and regulations will be used for the
recertification of Tenant Income for the Project.
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b. Developer shall take all necessary steps to review the income of all tenants
prior to renting to them, as well as reviewing current tenants on an annual basis, in accordance
with HOME regulations and guidelines. Every fifth (5a) year, Developer shall require new
original income documents to be submitted by tenants. Tenants in NSP assisted units whose
incomes no longer comply with federal income guidelines shall have their rents adjusted in
accordance with federal HOME guidelines (24 CPR 92.252- 92.253).
C. Developer shall allow the City to conduct periodic reviews of tenant files
and files relating to affirmative marketing and outreach to insure the Project's compliance with
applicable regulations and guidelines.
d. NSP assisted units continue to qualify as affordable housing despite a
temporary non - compliance caused by increases in the incomes of existing tenants if actions
satisfactory to HUD are being taken to ensure that all vacancies are filled in accordance with this
section until the non - compliance is corrected.
11.24 Controlling Covenants. If there is a discrepancy between State and Federal law
with regard to any of the aforementioned covenants, the more stringent shall apply.
12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND
REPAIR OF PROPERTY
12.1 Maintenance. Developer shall maintain the Property (and all abutting grounds,
sidewalks, roads, parking and landscape areas which Developer is otherwise required to
maintain) in good condition and repair; shall operate the Property in a businesslike manner; shall
prudently preserve and protect its own as well as the City's interests in connection with the
Property; shall not commit or permit any waste or deterioration of the Property (except for
normal wear and tear); shall not abandon any portion of the Property or leave the Property
unguarded or unprotected; and shall not otherwise act, or fail to act, in such a way as to
unreasonably increase the risk of any damage to the Property or of any other impairment of
City's interests under the Loan Documents. Without limiting the generality of the foregoing, and
except as otherwise agreed by City in writing from time to time, Developer shall promptly and
faithfully perform and observe each of the following provisions:
a. Alterations and Repair. Developer shall not remove, demolish or
materially alter any Improvement without City's prior consent, other than demolition of existing
improvements and except to make non - structural repairs which preserve or increase the
Property's value, and shall promptly restore, in a good and professional manner, any
improvement (or other aspect or portion of the Property) that is damaged or destroyed from any
cause.
12.2 Compliance. Developer shall comply with all laws and requirements of
Governmental Authority (including, without limitation, all requirements relating to the obtaining
of Governmental Authority approvals), all Governmental Authority approvals and all rights of
third parties, relating to Developer, the Property or Developer's business thereon.
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12.3 Taxes and Impositions. Developer shall pay, prior to delinquency, all of the
following (collectively, the "Impositions "): (a) all general and special real property taxes and
assessments imposed on the Property; (b) all other taxes and assessments and charges of every
kind that are assessed upon the Property (or upon the owner and /or operator of the Property) and
that create or may create a lien upon the Property (or upon any personal property or fixtures used
in connection with the Property), including, without limitation, non - governmental levies and
assessments pursuant to applicable covenants, conditions or restrictions; and (c) all license fees,
taxes and assessments imposed on City (other than City's income or franchise taxes) which are
measured by or based upon (in whole or in part) the amount of the obligations secured by the
Property. If permitted by law, Developer may pay any Imposition in installments (together with
any accrued interest).
a. Right to Contest. Developer shall not be required to pay any Imposition
so long as (a) its validity is being actively contested in good faith and by appropriate
proceedings, (b) Developer has demonstrated to City's reasonable satisfaction that leaving such
Imposition unpaid pending the outcome of such proceedings could not result in conveyance of
the Property in satisfaction of such Imposition or otherwise impair the City's interests under the
Loan Documents, and (c) Developer has furnished City with a bond or other security satisfactory
in an amount not less than 100°/% of the applicable claim (including interest and penalties).
b. Evidence of Payment. Upon demand by City from time to time,
Developer shall deliver to City, within thirty (30) days following the due date of any Imposition,
evidence of payment reasonably satisfactory to City.
C. Books and Records. Developer shall maintain complete books of account
and other records reflecting its operations (in connection with any other businesses as well as
with respect to the Property), in accordance with generally accepted accounting principles
applied on a consistent basis or in accordance with such other principles or methods as are
reasonably acceptable to City, in accordance with 24 CPR 92.508.
12.4 Project Operating Budget. Developer must promptly deposit all project income
directly into a segregated depository account established exclusively for the Project ( "Project
Operating Account "). Withdrawals from this account may be made only in accordance with the
provisions of this Agreement and the approved Budget, as it may be revised from time to time
with prior City approval. Developer may make withdrawals from this account solely for the
payment of Project expenses and Project fees. Withdrawals from this account for other purposes
may be made only with the prior written approval of the City which must be consistent with
other lender and investor approvals.
12.5 Replacement Reserve Account. Developer must establish or cause to be
established a segregated interest - bearing replacement reserve depository account ( "Replacement
Reserve Account ") concurrently with conversion from the construction loan to the conventional
permanent loan. Developer must make monthly deposits from project income into the
Replacement Reserve in accordance with Developer's Budget, as amended from time to time.
Developer may withdraw funds from the Replacement Reserve Account solely to fund capital
improvements for the Project, such as replacing or repairing structural elements, furniture,
fixtures or equipment of the Project that are reasonably required to preserve the Project.
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Developer may not withdraw funds from the Replacement Reserve Account for any other
purpose without the prior written approval of the City which must be consistent with other lender
and investor approvals.
13. NONDISCRIMINATION COVENANTS
13.1 Obligation to Refrain from Discrimination. Developer covenants and agrees
that:
a. In Use of Property. There shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed, disability,
religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property, nor shall Developer or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees, or vendors of the Property.
b. In Affordable Housing Restrictions. The foregoing covenant shall (a)
be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and
(c) remain effective for the term of the contract (for 55 years).
C. In Employment. In construction on the Property, Developer shall not
discriminate against any employee or applicant because of race, color, creed, religion, sex,
marital status, disability, national origin, or ancestry. Developer shall take affirmative action to
ensure that applicants are employed, and that employees are treated during employment, without
regard to their race, color, disability, creed, religion, sex, marital status, disability, national
origin, or ancestry.
d. In all Contracts. Developer shall cause the foregoing covenants to be
inserted in all contracts for any work covered by this Agreement so that such provisions will be
binding upon each contractor for the benefit of City, provided that the foregoing covenant shall
not apply to contracts or subcontracts for standard commercial supplies or raw materials.
14. ENVIRONMENTAL MATTERS
14.1 Representation and Warranty. Except as disclosed in writing to the City,
Developer has no knowledge (a) of the presence on, under or about the Property, now or in the
past, of any Hazardous Materials, or of the transportation to or from the Property of any
Hazardous Materials, (b) that asbestos or polychlorinated biphenyls (PCBs) are contained in or
stored on the Property, or (c) that there are any underground storage tanks located in, on or under
the Property.
14.2 Compliance with Environmental Laws. Developer shall (a) comply with all
environmental laws and environmental permits applicable to the construction of the Property, (b)
immediately pay or cause to be paid all costs and expenses incurred by reason of such
compliance, (c) keep the Property free and clear of any environmental claims or liens imposed
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pursuant to any environmental law, and (d) obtain and renew all environmental permits required
for ownership or use of the Property.
14.3 Presence of Hazardous Materials. Developer shall not, and shall not permit
anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous Materials on
the Property, or transport or permit the transportation of Hazardous Materials to or from the
Property except for de minimis quantities used at the Property in compliance with all applicable
environmental laws and required in connection with the routine operation and maintenance of the
Property or except use of commercially available household products by tenants.
14.4 Notice of Environmental Matters. Developer shall immediately advise City in
writing of any of the following: (a) any pending or threatened environmental claim against
Developer or the Property, (b) any condition or occurrence that (i) results in noncompliance with
any applicable environmental law, (ii) could reasonably be anticipated to cause the Property to
be subject to any restrictions on the ownership, occupancy, use or transferability of the Property
under any environmental Law, or (iii) could reasonably be anticipated to form the basis of an
environmental claim against the Property or Developer.
14.5 Environmental Indemnification by the Developer. Developer agrees to defend,
indemnify and hold harmless the City and its respective officers, directors, employees and agents
(collectively the "lndemnitees ") from and against any and all obligations (including removal and
rem,ediation), losses, claims (including third party claims), suits, judgments, liabilities, penalties,
damages (including consequential and punitive damages), costs and expenses (including
consultants, and attorneys' fees) of whatever kind or nature whatsoever that may at any time be
incurred by, imposed on, or asserted against the lndemnitees directly or indirectly based on, or
arising or resulting from the actual or alleged presence of Hazardous Materials on the Property.
15. OTHER AFFIRMATIVE COVENANTS
While any obligation of Developer under the City Promissory Note or Deed of Trust
remain outstanding, the following provisions shall apply, except to the extent that City Project
Manager otherwise consents in writing:
15.1 Existence. The sole member of Developer's managing general partner (OHDC)
shall maintain its existence in good standing under the laws of the State of California, and its
status as a CHDO under federal law and Developer shall provide documentation of such status
annually to the City.
15.2 Protection of Lien. Developer shall maintain the lien of the City Deed of Trust
as a valid second priority deed of trust on the Property and take all actions, and execute and
deliver to City all documents, reasonably required by City from time to time in connection
therewith.
15.3 Notice of Certain Matters. Developer shall give notice to City, within ten (10)
days of Developer's learning thereof, of each of the following:
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a. any filed litigation or claim affecting or relating to the Property and
involving an amount in excess of $5,000; and any litigation or claim that might subject
Developer or any general partner to liability in excess of $5,000, whether covered by insurance
or not;
b. any dispute between Developer and a Governmental Authority relating to
the Property, the adverse determination of which might materially affect the Property;
C. any change in Developer's principal place of business;
d. any aspect of the Improvements that is not in substantial conformity with
the plans or code;
e. any Event of Default or event which, with the giving of notice or the
passage of time or both, would constitute an Event of Default;
f any material default by Developer or any other party under any Senior
Loan document, or the receipt by Developer of any notice of default under any Senior Loan
document;
g. the creation or imposition of any mechanics' or materialmans' lien or other
lien against the Property which might materially affect the Property; and /or
h, any material adverse change in the financial condition of Developer.
15.4 Further Assurances. Developer shall execute and acknowledge (or cause to be
executed and acknowledged) and deliver to City all documents, and take all actions, reasonably
required by City from time to time to confirm the rights created or now or hereafter intended to
be created under the Loan Documents; to protect and further the validity, priority and
enforceability of the City Deed of Trust; to subject to the Deed of Trust any property intended by
the terms of any Loan Documents) to be covered by the City Deed of Trust or otherwise to carry
out the purposes of the Loan Documents and the transactions contemplated thereunder.
15.5 Annual Financial Statements. Developer shall deliver to City, within one
hundred fifty (150) days after the end of each Calendar Year, (a) a certified public accountant
reviewed balance sheet for Developer as of the end of such Calendar Year and a certified public
accountant reviewed statement of profit and loss for Developer and for Developer's operations in
connection with the Property for such Calendar Year, together with all supporting schedules, (b)
a certificate of such certified public accountant that such documents were reviewed by such
certified public accountant in accordance with generally accepted accounting principles and
otherwise comply with generally accepted accounting principles review requirements, and (c) a
certificate of Developer's chief financial officer that such documents: (i) were prepared in
accordance with generally accepted accounting principles applied on a consistent basis or in
accordance with such other principles or methods as are reasonably acceptable to City, (ii) fairly
present Developer's financial condition, (iii) show all material liabilities, direct and contingent,
and (iv) fairly present the results of Developer's operations. Developer shall also provide the
City with any other annual audit reports issued by other monitoring agencies.
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15.6 Audits and Access to Records. Developer agrees that City, the U.S. Department
of Housing and Urban Development, the Comptroller General of the United States or any of their
authorized representatives shall have the right of access, upon reasonable notice, to any books,
documents, papers, or other records of Developer which are pertinent to this Agreement in order
to make audits, examinations, abstracts, excerpts or transcripts. Developer will maintain all
books and records pertaining to this Agreement for a period of not less than five (5) years after
all matters pertaining to this Agreement (i.e., audit, disputes or litigation) are resolved in
accordance with applicable federal or state laws, regulations or policies, and when a period of
affordability or recapture applies to Developer's activities, for a period of not less than five (5)
years after the affordability or recapture period ends.
15.7 Termite Inspection Report. Developer shall deliver a termite report pertaining
to the Property to the City every fifth (5t') year beginning January 2021.
16. OTHER COVENANTS
While any obligation of Developer under the City Promissory Note or City Deed of Trust
remain outstanding, the following provisions shall apply, except to the extent that City Project
Manager otherwise consents in writing:
16.1 Default on Senior Loan. Developer shall not default on any of the Senior Loan
documents, provided however, that Developer shall have such period as is provided in the Senior
Loan Documents during which to effectuate a cure.
16.2 Sale or Lease of Property. Unless and until Developer has received a Certificate
of Completion for the construction from City, Developer shall not sell, lease, sublease or
otherwise transfer all or any part of the Property or any interest therein, other than leases of the
existing improvements prior to their demolition and commencement of construction of the
Project if allowable under NSP regulations, without the prior written consent of the City Project
Manager, which consent may be withheld in the City Project Manager's reasonable discretion. In
connection with the foregoing consent requirements, Developer acknowledges that City relied
upon Developer's particular expertise in entering into this Agreement and continues to rely on
such expertise to ensure the satisfactory completion of the construction.
Notwithstanding anything to the contrary contained herein, a "transfer" shall not include
(i) a transfer of a General Partner's interest in Developer when made in connection with the
exercise by the Developer's limited partner (the "Limited Partner ") of its rights upon a default by
a General Partner wider the Developer's Partnership Agreement (the "Partnership Agreement ")
or upon a General Partner's withdrawal in violation of the Partnership Agreement, so long as the
removal and substitution of the defaulting General Partner is made within thirty (30) days of
such default or, if such removal and substitution cannot reasonably be completed within thirty
(30) days, so long as the Limited Partner commences to take action to remove and substitute the
General Partner with a reasonable period and thereafter diligently proceeds to complete such
substitution; (ii) any transfer of the Property to the Managing General Partner pursuant to the
right of first refusal or to the General Partners pursuant to the purchase option, as provided for in
the Partnership Agreement; (iii) any transfer of the Limited Partner's interest in connection with
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a default by the Limited Partner under and in accordance with the Partnership Agreement; and
(iv) any sale, transfer or other disposition of an interest in a limited partner of the Developer.
16.3 Nondiscrimination.
a. There shall be no discrimination against or segregation of any person, or
group of persons, on account of race, color, disability, religion, sex, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the Property, or any part thereof, nor shall Developer or any person claiming under or through
Developer establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, or vendees of the Property. The foregoing covenants shall rum with the land and shall
remain in effect in perpetuity.
b. Developer shall refrain from restricting the rental, sale or lease of the
Property or any portion thereof on the basis of any of the characteristics listed above. Developer
shall also comply with the equal opportunity and fair housing requirements set forth in applicable
NSP Regulations. The foregoing covenants shall run with the land and remain in effect in
perpetuity.
17. CERTIFICATE OF COMPLETION
Upon satisfactory completion of the construction and upon the request of Developer, or at
its own election, the City of Santa Ana shall issue a Certificate of Completion. Such Certificate
of Completion shall be, and shall so state, conclusive determination of satisfactory completion of
the construction.
If City declines to furnish a Certificate of Completion after written request from
Developer, the City Project Manager shall, within thirty (30) days after receipt of the request,
provide Developer with a written statement of the reasons therefore. The statement shall contain
a description of the action Developer must take to obtain a Certificate of Completion. If the
reason therefore is that the Developer has not completed a minor portion of the construction, City
may, in its sole and absolute discretion, issue the Certificate of Completion upon the posting with
City of a bond or other form of security acceptable to the City Project Manager in the amount of
the fair value of the uncompleted work.
A Certificate of Completion is not evidence of compliance with or satisfaction of the
Loan Documents or any obligation of Developer to any other party whatsoever, including any
holder of a mortgage or deed of trust. A Certificate of Completion is not "notice of completion"
referred to in Section 3093 of the California Civil Code.
18. INDEMNIFICATION
18.1 Nonliability of City. Developer acknowledges and agrees that:
a. The relationship between Developer and the City is and shall remain
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solely that of Developer and lender, City neither undertakes nor assumes any responsibility to
review, inspect, supervise, approve (other than for aesthetics) or inform Developer of any matter
in connection with the construction, including matters relating to: (i) the performance of the
construction work, (ii) architects, contractors, subcontractors and materialmen, or the
workmanship of or materials used by any of them, or (iii) the progress of the construction; and
Developer shall rely entirely on its own judgment with respect to such matters and acknowledges
that any review, inspection, supervision, approval or information supplied to Developer by City
in connection with such matters is solely for the protection of City and that neither Developer nor
any third party is entitled to rely on it;
b. Notwithstanding any other provision of any Loan Document: (i) the City
is not a partner, joint venture, alter -ego, manager, controlling person or other business associate
or participant of any kind of Developer and City does not intend to ever assume any such status;
(ii) City's activities in connection with the Loan shall not be "outside the scope of the activities of
a lender of money" within the meaning of California Civil Code Section 3434, as modified or
recodified from time to time, and City does not intend to ever assume any responsibility to any
person for the quality or safety of the Property; and (iii) City shall not be deemed responsible for
or a participant in any acts, omissions or decisions of Developer;
C. City shall not be directly or indirectly liable or responsible for any loss or
injury of any kind to any person or property resulting from any construction on, or occupancy or
use of, the Property, whether arising from: (i) any defect in any building, grading, landscaping or
other onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer's
agents, employees, independent contractors, licensees or invitees; or (iii) any accident on the
Property or any fire or other casualty or hazard thereon; and
d. By accepting or approving anything required to be performed or given to
City under the Loan Documents, including any certificate, financial statement, survey, appraisal
or insurance policy, City shall not be deemed to have warranted or represented the sufficiency or
legal effect of the same, and no such acceptance or approval shall constitute a warranty or
representation by City to anyone.
18.2 Indemnity. Developer shall defend (by counsel satisfactory to City), indemnify
and save and hold harmless the Indemnitees from and against all claims, damages, demands,
actions, losses, liabilities, costs and expenses (including, without limitation, attorneys' fees and
court costs) arising from or relating to (i) this Agreement; (ii) the malting of the Loan(s); (iii) a
claim, demand or cause of action that any person has or asserts against Developer; (iv) any act or
omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or
other person with respect to the Property; or (vi) the ownership, occupancy or use of the
Property. Notwithstanding the foregoing, Developer shall not be obligated to indemnify City
with respect to the consequences of any act of gross negligence or willful misconduct of City.
Developer's obligations under this Section shall survive the cancellation of the City Promissory
Note, release and reconveyance of the City Deed of Trust, issuance of the Certificate of
Completion, and termination of this Agreement.
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a. Notwithstanding the foregoing, neither Developer, nor any of its partners,
shall be personally liable for any indemnification obligation hereunder which would result as the
repayment of principal and /or interest under the Loan.
18.3 Reimbursement of City. Developer shall reimburse City immediately upon
written demand for all costs reasonably incurred by City (including the reasonable fees and
expenses of attorneys, accountants, appraisers and other consultants, whether the same are
independent contractors or employees of City) in connection with the enforcement of the Loan
Documents and all related matters including all claims, demands, causes of action, liabilities,
losses, commissions and other costs against which City is indemnified under the Loan
Documents. Such reimbursement obligations shall bear interest from the date occurring twenty
(20) days after City gives written demand to Developer and shall be secured by the City Deed of
Trust. Such reimbursement obligations shall survive the cancellation of the Loan Note, release
and reconveyance of the City Deed of Trust, issuance of a Certificate of Completion, and
termination of this Agreement
19. INSURANCE, CASUALTY AND CONDEMNATION
19.1 Policies Required. While any obligation of Developer under the Loan
Documents remains outstanding, Developer shall maintain at Developer's sole expense, with
insurers either (i) admitted in California or (ii) are not admitted to California but have an A.M.
Best Rating of "A" or above and reasonably approved by the City, the following policies of
insurance in form and substance reasonably satisfactory to the City Attorney:
a. worker's compensation insurance to extent Developer has employees and
any other insurance required by
law in connection with the construction;
b. prior to commencement and following completion of the construction, fire
and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements in
the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks
normally covered by "all risk" coverage policies in the area where the Property is located
(including loss by flood if the Property is in an area designated as subject to the danger of flood);
C. upon commencement of the construction and at all times prior to
completion of the construction, builder's risk -all risk insurance covering 100% of the
replacement cost of all Improvements (including offsite materials) during the course of
construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious
mischief and all other risks normally covered by "all risk" coverage policies in the area where the
Property is located (including loss by flood if the Property is in au area designated as subject to
the danger of flood);
d. public liability insurance in amounts reasonably required by City
from time to time, and in no event less than $1,000,000 for "single occurrence;"
C. property damage insurance in amounts reasonably required by the
City from time to time, and in no event less than $1,000,000; and
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f. any other insurance reasonably required by City.
All such insurance shall provide that it may not be canceled or materially modified without thirty
(30) days prior written notice to City. The policies required under subparagraphs (b) and (c) shall
include a "lender's loss payable endorsement" in form and substance satisfactory to City,
showing the City as encumbrance. The City shall be named as an additional insured in the
policies required under subparagraphs (d) and (e). Certificates of insurance for the above policies
(and/or original policies, if required by City) shall be primary and delivered within ten (10) days
after demand therefore, and prior to start of any construction work. All policies insuring against
damage to the Improvements shall contain an agreed value clause sufficient to eliminate any risk
of co- insurance. No less than thirty (30) days prior to the expiration of each policy, Developer
shall deliver to City evidence of renewal or replacement of such policy reasonably satisfactory to
the City Attorney.
The copy of the certificate of insurance and loss payee endorsement shall be delivered to the City
as follows:
City of Santa Ana, Community Development Agency
20 Civic Center Plaza, M -37
P.O. Box 1988
Santa Ana, CA 92702
Attention: Housing Manager
Any certificate of insurance required by this section must be in a form, content and with an
insurance company that is acceptable to the City in its sole discretion.
19.2 City Attorney May Modify. The City Attorney may modify the type and
amounts of insurance required pursuant to this Section.
19.3 Claims and Proceedings. Developer shall give City immediate notice
of any material casualty to any portion of the Property, whether or not covered by insurance, and
of the initiation or threatened initiation of any proceeding for the condemnation or other taking
for public or quasi - public use of any portion of the Property (collectively, "Condemnation "), and
shall provide City with copies of all documents which pertain to any such casualty or
Condemnation. Developer shall take all action reasonably required by City in connection
therewith to protect the interests of Developer and /or City, and City shall be entitled (without
regard to the adequacy of its security) to participate in any action, claim, adjustment or
proceeding and to be represented therein by counsel of its choice. Developer shall not settle,
adjust, or compromise any claim, action, adjustment or proceeding without prior written
approval, which approval shall not be unreasonably withheld or delayed.
19.4 Delivery of Proceeds to City. In the event that, notwithstanding the
"lender's loss payable endorsement" requirement set forth above, the proceeds of any casualty
insurance policy described herein are paid to Developer, Developer shall, subject to any superior
rights of the Senior Lender, deliver such proceeds to the City immediately upon receipt.
19.5 Application of Casualty Insurance Proceeds. Any proceeds collected
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(the "Proceeds ") under any casualty insurance policy described in this Agreement shall be
disbursed to Developer as provided below, but only upon fulfillment of each of the following
conditions (the "Restoration Conditions ") within ninety (90) days after the applicable insurance
company has processed any claim (unless extended by mutual agreement of Developer and City)
following the occurrence of the damage for which the Proceeds are collected:
a. Developer shall demonstrate to City's reasonable satisfaction
that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b))
will be adequate to repair the Improvements and to restore the fair market value of the Property,
within a time period reasonably determined by City, to at least the value it had immediately prior
to sustaining the damage. Such demonstration shall include delivery to City of (i) plans and
specifications reasonably satisfactory to City, and (ii) a construction contract in form and
content, and with a contractor, reasonably satisfactory to City.
b. To the extent that the Proceeds are insufficient to accomplish the
restoration required above, Developer shall deliver to City fiords (the "Shortfall Funds ") in the
amount of such shortfall, which funds shall be assigned to City as security for Developer's
obligation hereunder and held and disbursed in the same manner as the Proceeds.
C. Developer shall execute such documents as City requires to
evidence and secure Developer's obligation to use all amounts disbursed for the diligent
restoration of the Property.
d. No Event of Default shall remain uncured.
19.6 Method of Disbursement and Undisbursed Funds. Subject to the rights of
Senior Lender, any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by
City and disbursed in accordance with then customary disbursement procedures and related
provisions. Any amoimts remaining undisbursed following completion of such restoration shall
be returned to Developer up to the amount of any Shortfall Funds deposited by Developer, and
any other amounts remaining shall, subject to the rights of Senior Lender either be paid to
Developer or applied by City against any obligations to City that are secured by a lien on the
Property, as they elect in their sole and absolute discretion.
19.7 Failure to Satisfy Conditions. In the event that Developer fails to fulfill the
Restoration Conditions within one hundred twenty (120) days (unless extended pursuant to
Section 19.5) following the date on which the applicable insurance company has processed any
claim, the Proceeds shall be applied by City against any obligations to City that are secured by a
lien on the Property, and the selection of which such obligations to apply the Proceeds against
shall be made by City in its sole and absolute discretion.
19.8 Restoration. Nothing in this Section 19 shall be construed to excuse Developer
from repairing and restoring all damage to the Property in accordance with other Loan Document
provisions, regardless of whether insurance proceeds are available or sufficient.
19.9 Condemnation: Treatment of Compensation. Subject to any superior rights of
Senior Lender, Developer hereby assigns to the City, as security for all obligations to City
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secured by a lien on the Property, all amounts payable to Developer in connection with any
Condemnation, and any proceeds of any related settlement (collectively, "Compensation ").
Subject to any superior rights of Senior Lender, Developer shall deliver such remaining
Compensation to City immediately upon receipt. If the taking results in a loss of the Property to
an extent that, in the reasonable opinion of City, renders or is likely to render the Property not
economically viable or if, in City's reasonable judgment Developer's security is otherwise
impaired, City may apply the Compensation received due to judgment or settlement in
connection with any condemnation or other taking to reduce the unpaid obligations secured in
such order as City may determine, and without any adjustment in the amount or due dates of
payments due under the City Promissory Note. If so applied, any award in excess of the unpaid
balance of the City Promissory Note and other sums due to City shall be paid to Developer or
Developer's assignee. City shall have no obligation to take any action in connection with any
actual or threatened condemnation or other proceeding.
a. Notwithstanding the foregoing, as long as the value of City's liens are not
impaired, any condemnation proceeds may be used by the Developer for repair and /or restoration
of the Project.
b. Nothwithstanding the foregoing, during the tax credit compliance period
for the Project, as determined under Section 42 of the Internal Revenue Code, any condemnation
proceeds may be used by the Developer for repair and /or restoration of the Project.
19.10 Waiver of Subrogation. Developer hereby waives all rights to recover
against the City (or any officer, employee, agent or representative of City) for any loss incurred
by Developer from any cause insured against or required by any Loan Document, to be insured
against; provided, however, that this waiver of subrogation shall not be effective with respect to
any insurance policy if the coverage thereunder would be materially reduced or impaired as a
result. Developer shall use its best efforts to obtain only policies which permit the foregoing
waiver of subrogation.
20. DEFAULTS AND REMEDIES
20.1 Events of Default. The occurrence of any of the following, whatever the reason
therefore, shall constitute an Event of Default by Developer:
a. Developer fails to make any payment of principal or interest under the
City Promissory Note when due, and such failure is not cured within fifteen (15) Business Days
after Developer's receipt of written notice that such payment was not received when due;
b. Developer fails to perform any other obligation for the payment of money
under any Loan Document, and such failure is not cured within fifteen (15) Business Days after
Developer's receipt of written notice that such obligation was not performed when due;
C. Developer fails to perform any obligation (other than the obligations
described in subparagraphs (a) and (b) above) under any Loan Document, and such failure is not
cured within thirty (30) days after Developer's receipt of written notice that such obligation was
not performed; provided that, if cure cannot reasonably be effected within such thirty (30) -day
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period, such failure shall not be an Event of Default so long as Developer (in any event, within
ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any
event within ninety (90) days after receipt of such notice) prosecutes such cure to completion;
d. Any representation or warranty in any Loan Document proves to have
been incorrect in any material respect when made;
e. The Property is materially damaged or destroyed by fire or other casualty
unless Developer fulfills the Restoration Conditions set forth in the insurance provisions of this
Agreement within one hundred twenty (120) days after the applicable insurance company has
processed any claim (unless extended pursuant to Section 19.5) and thereafter diligently restores
the Property in accordance with this Agreement;
f. Work on the construction ceases for thirty (30) consecutive days for any
reason (other than governmental orders, decrees or regulations, acts of God or any other deity,
strikes or other causes beyond Developer's reasonable control), provided that the same do not, in
the aggregate and in the City's reasonable judgment, threaten to delay the completion of the
construction beyond the required completion date set forth in this Agreement;
g. Developer is enjoined or otherwise prohibited by any Governmental
Authority from constructing and /or occupying the improvements and such injunction or
prohibition continues unstayed for sixty (60) days or more for any reason;
h. Developer is dissolved, liquidated or terminated, or all or substantially all
of the assets of Developer are sold or otherwise transferred without the City Project Manager's
prior written consent;
i. Developer is the subject of an order for relief by a bankruptcy court, or
is unable or admits its inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or Developer applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its
property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of Developer and the appointment
continues undischarged or unstayed for ninety (90) days; or Developer institutes or consents to
any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution,
custodianship, conservatorship, liquidation, construction or similar proceeding relating to it or
any part of its property; or any similar proceeding is instituted without the consent of Developer
and continues undismissed or unstayed for one hundred twenty (120) days; or any judgment,
writ, warrant of attachment or execution, or similar process is issued or levied against any
property of Developer and is not released, vacated or hilly bonded within ninety (90) days after
its issue or levy; or
j. (i) any of the Senior Loan documents is revoked or terminated, in whole or
in part for any reason if Developer cannot replace with another loan within sixty (60) days of
such revocation or termination (except due to repayment of such loans), without the City Project
Manager's prior written consent, or (ii) Developer defaults or otherwise fails to perform any of
its duties or obligations under or in connection with any of the Senior Loan documents, subject
36
1076 \53 \1399352.1
to all applicable notice and cure periods, or (iii) any of the Senior Loan documents is materially
amended, supplemented or otherwise modified without City's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything
to the contrary contained herein, City hereby agrees that any cure of any default made or
tendered by Developer's Limited Partner shall be deemed to be a cure by Developer and shall be
accepted or rejected on the same basis as if made or tendered by Developer.
20.2 Remedies Upon Default. Upon the occurrence of any Event of Default, City
may, at its option and in its absolute discretion, do any or all of the following:
a. By written notice to Developer, declare the principal of all amounts owing
under the Loan Documents, together with all accrued interest and other amounts owing in
connection therewith, to be immediately due and payable, regardless of any other specified due
date; provided that any Event of Default described in Section 20.1 (e) shall automatically,
without notice or other action on City's part, cause all such amounts to be immediately due and
payable;
b. In its own right or by a court - appointed receiver, take possession of the
Property, enter into contracts for and otherwise proceed with the completion of the construction
by expenditure of its own funds;
C. Exercise any of its rights under the Loan Documents and any rights
provided by law, including, without limitation, the right to seek specific performance and the
right to foreclose on any security and exercise any other rights with respect to any security, all in
such order and manner as City elects in its sole and absolute discretion; and,
d. Suspend or terminate the award of NSP funds if Developer fails
to comply with any term of such award.
20.3 Cumulative Remedies: No Waiver. City's rights and remedies under the Loan
Documents are cumulative and in addition to all rights and remedies provided by law. The
exercise by City of any right or remedy shall not constitute a cure or waiver of any default, nor
invalidate any notice of default or any act done pursuant to any such notice, nor prejudice the
City in the exercise of any other right or remedy. No waiver of any default shall be implied from
any omission by City to take action on account of such default if such default persists or is
repeated. No waiver of any default shall affect any default other than the default expressly
waived, and any such waiver shall be operative only for the time and to the extent stated. No
waiver of any provision of any Loan Document shall be construed as a waiver of any subsequent
breach of the same provision. City's consent to or approval of any act by Developer requiring
further consent or approval shall not be deemed to waive or render \mnecessary City's consent to
or approval of any subsequent act. The City's acceptance of the late performance of any
obligation shall not constitute a waiver by City of the right to require prompt performance of all
further obligations; City's acceptance of any performance following the sending or filing of any
notice of default shall not constitute a waiver of either party's right to proceed with the exercise
of its remedies for any unfulfilled obligations; and City's acceptance of any partial performance
shall not constitute a waiver by City of any rights.
37
1076\53 \1389382.1
20.4 Force Maieure. 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 or other deities; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or
tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the City
or any other public or governmental City or entity (except that any act or failure to act of City
shall not excuse performance by City); 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 shall be for the period of the enforced delay and shall commence to run from the
time the party claiming such extension gives notice to the other party, provided notice by the
party claiming such extension is given within thirty (30) days after the commencement of the
cause. Times of performance under this Agreement may also be extended in writing by the City
and the Developer.
21. MISCELLANEOUS
21.1 Obligations Unconditional and Independent. Notwithstanding the existence at
any time of any obligation or liability of City to Developer, or any other claim by developer
against City, in connection with the City Loan or otherwise, Developer hereby waives any right
it might otherwise have (a) to offset any such obligation, liability or claim against Developer's
obligations under the Loan Documents, or (b) to claim that the existence of any such outstanding
obligation, liability or claim excuses the nonperformance by Developer of any of its obligations
under the Loan Documents.
21.2 Notices. All notices, demands, approvals and other communications provided for
in the Loan Documents shall be in writing and be delivered to the appropriate party by personal
service or U.S. mail at its address as follows:
If to Developer: 815 N Harbor, LP
c/o Orange Housing Development Corporation
414 E. Chapman Avenue
Orange, CA 92866
Attention: Chief Executive Officer
With a copy to: C &C Development Co., LLC
14211 Yorba Street, Suite 200
Tustin, CA 92781
With a copy to: Goldfarb & Lipman LLP
1300 Clay Street, 11`x' Floor
Oakland, CA 94612
Attention: Lynn Hutchins
If to City: City of Santa Ana
City Project Manager (CDA)
38
1076 \53 \1389382.1
20 Civic Center Plaza (M -25)
P.O. Box 1988
Santa Ana, California 92702
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M -29)
Santa Ana, California 92702
Addresses for notice may be changed as required by written notice to all other parties. All
notices personally served shall be effective when actually received. All notices mailed shall be
effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing
notwithstanding, the non - receipt of any notice as the result of a change of address of which the
sending party was not notified or as the result of a refusal to accept delivery shall be deemed
receipt of such notice.
21.3 Survival of Representations and Warranties. All representations and
warranties in the Loan Documents shall survive the malting of the Loan(s) described herein and
have been or will be relied on by City notwithstanding any investigation made by either party.
21.4 No Third Parties Benefited. This Agreement is made for the purpose of setting
forth rights and obligations of Developer and the City, and no other person shall have any rights
hereunder or by reason hereof.
21.5 Binding Effect; Assignment of Obligations. This Agreement shall bind, and
shall inure to the benefit of, Developer and City and their respective successors and assigns.
Other than as expressly provided to the contrary in this Agreement, Developer shall not assign
any of its rights or obligations under any Loan Document without the prior written consent of
City, which consent may be withheld in City's sole and absolute discretion. Any such assignment
without such consent shall, at City's option, be void.
21.6 Prior Agreements; Amendments; Consents. This Agreement (together with
the other Loan Documents) contains the entire agreement between the City and Developer with
respect to the City Loan and the Property, and all prior negotiations, understandings and
agreements are superseded by this Agreement and such other Loan Documents. No modification
of any Loan Document (including waivers of rights and conditions) shall be effective unless in
writing and signed by the party against whom enforcement of such modification is sought, and
then only in the specific instance and for the specific purpose given.
21.7 Governing Law. All of the Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of California and Federal law,
whichever is more stringent. Developer irrevocably and unconditionally submits to the
jurisdiction of the Superior Court of the State of California for the County of Orange or the
United States District Court of the Central District of California, as City may deem appropriate,
in connection with any legal action or proceeding arising out of or relating to this Agreement or
the Loan Documents. Assuming proper service of process, Developer also waives any objection
regarding personal or in rem jurisdiction or venue.
39
1076 \53 \1389382.1
21.8 Severability of Provisions. No provision of any Loan Document that is held to
be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of
the Loan Documents are hereby declared to be severable.
21.9 Headings. Article and section headings are included in the Loan Documents for
convenience of reference only and shall not be used in construing the Loan Documents.
21.10 Conflicts. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, this Agreement, unless otherwise expressly provided,
shall prevail; provided however that, with respect to any matter addressed in both such
documents, the fact that one document provides for greater, lesser or different rights or
obligations than the other shall not be deemed a conflict unless the applicable provisions are
inconsistent and could not be simultaneously enforced or performed.
21.11 Time of the Essence. Time is of the essence under this Agreement and in the
performance of every term, covenant, and obligation contained herein.
21.12 Conflict of Interest. No member, official or employee of the City shall have
any direct or indirect interest in this Agreement, nor participate in any decision relating to the
Agreement which is prohibited by law.
21.13 Warranty Against Payment of Consideration. Developer warrants that it
has not paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement.
21.14 Nonliability of City Officials and Employees. No member, official or
employee of City shall be personally liable to Developer, or any successor in interest, in the
event of any default or breach by City or for any amount which may become due to Developer or
successor, or on any obligation under the terms of this Agreement.
21.15 Plans and Data. Where Developer does not proceed with the work and
construction of the Project, and when this Agreement is terminated with respect thereto for any
reason, Developer shall deliver to City any and all plans and data concerning the Property, and
City or any person or entity designated by City shall have the right to use such plans and data
without compensation to Developer. Such right of City shall be subject to any right of the
preparer of the plans to their use.
21.16 Authority to Enter Agreement. Each undersigned represents and warrants that
its signature hereinbelow has the power, authority and right to bind their respective parties to each
of the terms of this Agreement, and shall indemnify the City fully, including reasonable costs and
attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in
fact, held by the signatory or is withdrawn.
21.17 Transfer of Developer Limited Partner's Interest. Notwithstanding
anything to the contrary in this Agreement or the Loan Documents, no consent shall be required
of the City (and it shall not be deemed a default or an Event of Default under any of the Loan
40
1076A53V1389382.1
Documents), in connection with the transfer and /or the assignment by the Developer's limited
partner of its interest in the Developer to an entity controlled or managed by an entity which is
related to or under common control with the Developer's limited partner.
21.18 Removal of Developer's General Partner. Notwithstanding anything to the
contrary in this Agreement or the Loan Documents, the removal and /or replacement of a General
Partner for cause in accordance with the Partnership Agreement shall not require the consent of
the City and shall not shall not constitute a default or an Event of Default under this Agreement
or the Loan Documents or accelerate the maturity of the City Loan. If the Developer's limited
partner exercises its right to remove a General Partner, City will not unreasonably withhold its
consent to the substitute general partner; provided however, the consent of either the City shall
not be required if the substitute general partner is an affiliate of the Developer's limited partner.
The substitute general partner shall assume all of the rights and obligations of the removed
general partner hereunder.
41
1076\53 \1389382.1
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
executed on the date set forth at the beginning of this Agreement.
ATTEST: CITY SA TA ANA
Maria D. Huizar Kevi lfourke
Clerk of the Council u Interim City Manager
42
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
By: Lisa E. Storck
Assistant City Attorney
(Signatures continue on following page)
1076 \53 \1389382.1
CALIFORNIA ALL - PURPOSE ACKNOWLEDGEMENT
State of California
County of Orange SS
City of Santa Ana
On this 16th day of September, 2013, before me, Maria D. Huizar , Notary Public,
personally appeared Kevin O'Rourke who proved to me on the basis of satisfactory
evidence to be the p`e�IV' persons whose 65fr"re %namescrs7bre-subscribed to the within
instrument and acknowledged to me that Y 8hefthey executed the same ir('s/hBT /their
authorized caq city cities and that by au /herltheir s natulc /signatures on the
instrument the pgrsorrtper-sons, or the entity upon behalf of which the ergo' ersans
acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing is true and correct. Witness my hand and
official seal.
NOTARY SEAL
d:.. MARIA U. HUIZAR
COmmissiorl a 1974202
=:H _q)� - Notary Public . California z
"" Orange County
MY r,rr . Expires Apr 5, 2016
CAPACITY CLAIMED BY SIGNER:
❑
Individual(s)
❑
Corporate
❑
Officers
Title(s)
❑
Partner(s)
❑
General Partner of a Limited
❑
Partnership
❑
Attorney -in -Fact
❑
Trustee (s)
❑
Subscribing Witness
❑
Guardian /Conservator
❑
Other:
Witness my hand and official seal.
Signature of Notary
SIGNER IS REPRESENTING:
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED TO THE BELOW:
TITLE OR TYPE OF DOCUMENT:
NUMBER OF PAGES: DATE OF DOCUMENT:
SIGNER (S) OTHER THAN NAMED ABOVE:
DEVELOPER:
815 N Harbor, LP, a California limited partnership
By: OHDC 815 N Harbor, LLC,
a California limited liability company,
its managing general partner
By: Orange Housing Development Corporation,
a California nonprofit corporation, its sole member
0
Eunice Bobert, Chief Executive Officer
By: C &C 815 N Harbor, LLC,
a California limited liability company,
its developer general partner
C
Todd R. Cottle, its member
By: The Cottle Family Trust Dated 3/8/1987, its member
Barry A. Cottle, Trustee
43
1076 \53 \1389382.1
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:
City of Santa Ana
Community Development Agency
20 Civic Center Plaza (M -37)
P.O. Box 1988
Santa Ana, CA 92702 -1988
Attention: Housing Programs Coordinator
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
{Address: 815 N. Harbor Boulevard, Santa Ana, CAI
THESE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (the
"Restrictions ") are entered into by and between 815 N Harbor, LP, a California limited
partnership ( "Owner ") comprised of OHDC 815 N Harbor, LLC, ( "OHDC "), a California limited
liability company, and C &C 815 N Harbor, LLC, a California limited liability company and the
City of Santa Ana, a charter city and municipal corporation (the "City ").
RECITALS:
A. Owner is purchasing that certain real property located at 815 N. Harbor Boulevard
(the "Property ") located in the City of Santa Ana more particularly described in Exhibit "A"
which is attached hereto and incorporated herein by this reference.
B. This Agreement is made pursuant to the authority of Title XII of Division A of
the American Recovery and Reinvestment Act of 2009 (Public Law 111 -5 {February 17, 20091)
(Recovery Act) and sections 2301 -2304 of the Housing and Economic Recovery Act of 2008
(Public Law 110 -289 (July 30, 20081) (HERA). Section 2301 -2304 ofHERA is lrnown as the
"Neighborhood Stabilization Program" or "NSP" with money funded through the Program as
"NSP Funds ". The term "NSP2" refers to the second appropriation of NSP Funds provided
under the Recovery Act, and the term 'NSPY' refers to the third appropriation of NSP Funds
provided under the Recovery Act.
C. The City was notified that its application under the NSP for NSP2 Funds was
approved by the U.S. Department of Housing and Urban Development ( "HUD ") with funding
allocated for acquisition and construction of the multi - family rental component of the NSP. The
parties hereto have executed the "Neighborhood Stabilization Program (Program 2) Rental
Housing Development" dated March 1, 2010 in the amount not to exceed $6,500,000 but no less
than $2,500,000 plus program income. The parties hereto have executed the "Neighborhood
Stabilization Program Loan Agreement. Owner must comply with all of the NSP Program
requirements as set forth in the Agreement. Pursuant to this Agreement, NSP2 and NSP3 Funds
will be used for the acquisition of the Property. The Loan Agreement amends the agreement
dated March 1, 2010 to include redevelopment activities as authorized by the substantial
amendment.
D. On March 4, 2011, the City was notified that its application under the NSP for
NSP 3 Funds was approved by HUD. Funding for the Owner is allocated for acquisition and
construction of the multi - family rental components of the NSP 3 program in an amount not to
exceed $1,500,000.
E. A Request for Proposals was issued by the City to competitively choose a
developer for the NSP Funds. Owner was awarded an agreement for the NSP1 Funds for the
Rental Program, further funding for NSP2 and now this Agreement, due to its successful
implementation of said agreements to use such Funds.
F. Owner and the City are concurrently entering into that certain Loan Agreement. The
Loan Agreement, Deed of Trust and Promissory Note, dated concurrently herewith (collectively
the "Loan Agreements ") are entered into for the purpose of providing for affordable very low
income residential rental units in the City of Santa Ana pursuant to the NSP2 and NSP3
regulations and guidance.
NOW, THEREFORE, CITY AND OWNER COVENANT AND AGREE AS FOLLOWS:
1. Definitions
"Affordable Housing" means housing operated in accordance with the
requirements of 24 CFR 92.252 and 24 CFR 570.
"Affordability Period" also referred to as "Term of Affordability ", shall be fifty -five
(55) years from date of issuance of Certificate of Completion.
"Affordable Rent" means the monthly rents which do not exceed the maximum
amount applicable to Extremely Low, Very Low and Low Income households, as
promulgated by the U.S. Department of IIousing and Urban Development (HUD).
"Agreement" means this Affordability Restrictions on Transfer of Property between the
City and the Owner affecting real property.
"Applicable Law" shall mean those federal, state and local laws, ordinances, regulations,
policies and procedures applicable to the NSP 2 and NSP 3 Funds.
"Building Permit" means the building permit(s) issued by City and required
for the construction, if any.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on
which Santa Ana City Hall is open to the public for the conduct of City affairs.
"Calendar Year" means each consecutive twelve (12) month period from
January 1 to December 31.
"Certificate of Completion" has the meaning set forth in Article 17.
"City" means the City of Santa Ana, California, a charter city and municipal
corporation.
"City Deed of Trust" means the deed of trust encumbering the Property, in the
form attached as Exhibit C to the Loan Agreement, to be executed by Owner pursuant to
Section 5.13.2 in order to secure the Loan Note.
"City Loan" means the loan to be made by the City to Owner in the principal amount of
Two Million Dollars ($2,000,000.00) in accordance with this Agreement.
"City Project Manager" shall mean the City Manager and /or his /her designee.
"City Promissory Note" means that certain promissory note in the original principal
amount of $2,000,000 in the form attached as Exhibit D to the Loan Agreement, and to be
executed by Owner in favor of City to evidence the obligation of Owner to repay the City
Loan through residual receipts as further described in the Promissory Note.
"Close of Escrow" shall mean the date upon which the Loan Agreement and City
Deed of Trust recorded in the Official Records of the County.
"Closing Statement" means the final statement of Owner's Escrow account
for the purchase of the Property pursuant to the purchase contract.
"County" means the County of Orange, California.
"Owner" means 815 N Harbor, LP, a California limited partnership comprised of OHDC
815 N Harbor, LLC, California limited liability company as managing general partner and
C &C 815 N Harbor, LLC, a California limited liability company, as developer general
partner.
"Owner's Representative" shall mean the Chief Executive Officer of
the Managing General Partner of Owner or his /her designee.
"Escrow" means Escrow No. 588306 -A.
"Escrow Holder" means First American Title Company, 5 First American Way, Santa
Ana, and California 92707.
"Extremely Low Income" means an adjusted income which does not exceed
thirty percent (30 %) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
"Event of Default" has the meaning set forth in Section 20.1 of the Loan Agreement.
"Foreclosed" As defined by HUD for the purposes of NSP means "A home or residential
property has been foreclosed upon if any of the following conditions apply" (a) The
property's current delinquency status is at least 60 days delinquent under the Mortgage
Bankers of America delinquency calculation and the owner has been notified; (b) the
property owner is 90 days or more delinquent on tax payments; (c) tinder state, local, or tribal
law, foreclosure proceedings have been initiated or completed; or (d) foreclosure proceedings
have been completed and title has been transferred to an intermediary aggregator or servicer
that is not an NSP grantee, contractor, subrecipient, developer, or end user.
"Governmental Authority" means any governmental or quasi governmental
agency, board, bureau, commission, department, court, administrative tribunal or other
instrumentality or authority, and any public utility.
"Hazardous Materials" means flammable materials, explosives, radioactive
materials, hazardous wastes, toxic substances and similar substances and materials, including
all substances and materials defined as hazardous or toxic wastes, substances or materials
under any applicable law, including without limitation the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901 et sec., and the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended.
"HOME" means the HOME Investment Partnership Program (the "HOME Program ")
(42 U.S.C. §12701, et seq.,) to be used in accordance with applicable statutory requirements
and regulations (the "HOME Regulations ") (24 CFR Part 92).
"HUD" means the United States Department of Housing and Urban Development
and any successors or assigns thereof.
"Improvements" means all improvements and fixtures now and hereafter
comprising any portion of the Property, including, without limitation, landscaping, trees mid
plant materials; and offshe improvements (including, without limitation, streets, curbs, storm
drains, and adjacent street lighting).
"Indebtedness" of a person means (a) all indebtedness for borrowed money,
(b) notes payable and drafts accepted representing extensions of credit, whether or not
representing obligations for borrowed money, (c) any obligation for the purchase of property
or services in excess of $10,000 in the aggregate that is (i) deferred for more than six (6)
months, or (ii) evidenced by a note or similar instrument, and (d) all recourse and all non-
recourse indebtedness secured by any Lien on any property or asset of such person (whether
or not assumed by such person).
"Indemnitees" has the meaning set forth in Section 14.5 of the Loan Agreement.. .
"Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments,
injunctions, decrees or awards of the United States or any state, county,
municipality or other Governmental Authority .
"Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of
any kind (including any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any lien or security interest).
"Loan Agreement" means the Loan Agreement regarding the loan of Neighborhood
Stabilization Program funds between the City and the Owner, and any attachments thereto.
"Loan Documents" means, collectively, the Loan Agreement, the City Promissory Note,
the City Deed of Trust, and this Agreement, and any other agreement, document, or
instrument that the City requires in connection with the execution of this Agreement or from
time to time to effectuate the purposes of this Agreement.
"Low Income" means an adjusted income which does not exceed eighty percent (40 %,)
of the area median income for the Orange County, California PMSA, adjusted for household
size, as published by HUD.
"Median Income for the Area" means the median income for the Orange County,
California PMSA as most recently determined by HUD. Also may be referred to
interchangeably in the Loan Documents as "Area Median Income" or "AMI'.
"Neighborhood Stabilization Program" (NSP) has the meaning set forth in the
Recitals above.
"Neighborhood Stabilization Program (NSP) Regulations" has the meaning set forth
in the Recitals above.
"NSP Assisted Units" shall mean those residential units constructed which are subject to
the term of affordability.
"NSP Funds" shall mean the money provided under the NSP 2 and NSP 3 Program for
the development of affordable rental units.
"Partnership Agreement" means the Agreement of 1_,imited Partnership of 81.5 N
Harbor, L.P., dated as of August 30, 2013.
"Permitted Encumbrances for the Affordable Housing Restrictions" means
collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with
respect to the Property hereafter approved by the City Project Manager in writing.
"Permitted Encumbrances for the City Decd of Trust" means the Senior Low-1 Deed
of Trust and all other title exceptions and limitations with respect to the Property hereafter
approved by the City Project, Manager in writing.
"Project" means the construction of the Improvements upon the Property by Owner
pursuant to this Agreement.
"Project Budget" means the line -item budget for the Project attached as Exhibit E to
the Loan Agreement, as modified from time to time in accordance with the Loan Agreement.
"Project Costs" means all costs of any nature incurred in connection with the Project in
accordance with generally accepted accounting principles.
"Property" means the property that is located at 815 N. Harbor Boulevard in the City of
Santa Ana, and is more fully described in the "Legal Description" of the Property attached
hereto as Exhibit A and incorporated herein by reference.
"Scope of Work" means the detailed statement of the work to be performed by Owner
on and to the Property pursuant to this Agreement, which is attached as Exhibit F to the Loan
Agreement.
"Schedule of Performance" means the detailed schedule setting forth timeframes for
certain tasks, which document is attached as Exhibit G to the Loan Agreement.
"Senior Lender" means a commercial financial institution providing the Senior Loan or
any other holder of the Senior Loan Note.
"Senior Loan" means a loan from the Senior Lender, which is any of an acquisition loan
in the approximate amount of $2,000,000 from Grandpoint Bank, a construction loan in the
approximate principal amount of $17,607,180.00 with a term of approximately two (2) years
or a permanent loan(s) in the approximate principal amount of $5,089,440.00 with a term of
approximately 18 years and an amortization period of 30 years.
"Senior Loan Deed of Trust" means the first deed of trust securing the Senior Loan by
encumbering the Property.
"Senior Loan Documents" means, collectively, the loan agreement governing the
Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement,
document or instrument that the Senior Lender requires in connection with the Senior Loan.
"Senior Loan Note" means the promissory note evidencing the Senior Loan from the
Senior Lender.
"Target Area" shall mean the map attached as Exhibit H to the Loan Agreement. .
"Term of Affordability" the terms and conditions contained herein shall remain in
effect for fifty -five (55) years from the date of issuance of the Certificate of Completion.
"Very Low Income" means an adjusted income which does not exceed fifty percent
(50 %) of the area median income for the Orange County, California PMSA, adjusted for
household size, as published by HUD.
"Vicinity" shall mean the Target Area as identified by the City for the NSP funds and
approved by HUD.
2. Use of the Property. Owner covenants and agrees (for itself, its successors, its
assigns, and every successor in interest to the Property of any part thereof) that Owner, such
successors, and assigns shall use the Property to provide affordable rental housing, for Very Low
Income households, as provided in the Loan Agreement and these Restrictions, provided
however that the Owner may lease out the existing improvements for other uses on a short-term
basis prior to the commencement of construction of the Project.
3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE
PROPERTY
3.1 Use Covenants and Restrictions.
a. Owner agrees and covenants, which covenants shall run with the land and bind
Owner, its successors, its assign and every successor in interest to the Property that Owner will make
all rental units on the Property available to extremely -low, very low and low income households at
rents affordable to such households for fifty- five (55) years from the effective date of the issuance of
the Certificate of Completion.
b. The Project shall consist of approximately seventy (70) units of which
there will be forty -nine (49) two - bedroom units and twenty -one (21) three - bedroom units. There
will be seven (7) units with incomes at or below 30% AMI, forty -two (42) units for households
with incomes at or below 50% AMI; twenty (20) units for households with incomes at or below
60% AMI; and the remaining unit will be reserved for the on -site manager. If entitlement changes
the number of units, the City Project Manager must approve affordability mix.
c. Affordable rents shall be governed as provided in the NSP Regulations.
Rental increases shall be in conformance with federal and state law.
d. Initial rents may be recalculated to allowable rental amounts at the time of
initial lease -up following completion of construction in accordance with any changes in allowable
rent and income tables as published by HUD.
3.2 Rent Increases:
A. On an annual basis, the City shall provide the Owner with the maximum allowable schedule of
incomes and rents (less utility allowance appropriate for the NSP Assisted Unit for the Property.
B. Owner, its successors and assigns shall not charge rents for the NSP Assisted Units in excess
of the amounts set forth in the tables as adjusted from time -to -time by IIUD. The City Manager
shall notify Owner in writing of the adjusted allowable maximum incomes and rents.
4. Miscellaneous Provisions:
A. Owner shall adopt and include as part of its Management Plan (described in subsection G
below), written tenant selection policies and criteria for the Units, that meet the following
requirements:
(a) Are consistent with the purpose of providing housing for Very Low
Income households;
(b) Are reasonably related to program eligibility and the applicants' ability to
perform the obligations of the lease;
(c) Give reasonable consideration to the housing needs of households that
would have a preference under 42 CPR §906.211 (Federal selection preferences for admission to
Public Housing);
(d) Provide for:
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of the
grounds for any rejection;
(e) Provide first priority in the selection of qualified eligible tenants to
households that are referred by the City; and
(f) Carry out the Affirmative Marketing procedures of the City of Santa Ana,
which are designed to provide information and otherwise attract eligible persons from all racial,
ethnic and gender groups in the housing market area to the units. Owner, the City shall
cooperate to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy,
and the re- renting of any NSP Assisted Units (24 CFR 92.351).
S. Owner, its successors and assigns, shall not refuse to lease a unit to a holder of a rental .
voucher under 24 CFR part 887 (Housing Choice Voucher Program) or to a holder of a
comparable document evidencing participation in a HOME tenant -based assistance program
because of the status of the prospective tenant as a holder of such certificate of family
participation, rental voucher, or comparable HOME tenant -based assistance document. Total
rents charged to such tenants, including the tenant contribution and rental assistance, shall not
exceed the allowable rents as described above.
C. Any lease of any of the Units must be for not less than one year, unless by mutual agreement
between the tenant and the Owner. Should the tenant and Owner agree to a term of less than one
year, said agreement shall be expressed in some type of written form, signed by the tenant, and
maintained in the tenant's rental file held by the Owner. The lease may not contain any of the
following provisions (in which references to "Owner" shall mean the Owner, its successors or
assigns):
(a) Agreement by the tenant to be sued, to admit guilt, or to a judgment in
favor of the owner in a lawsuit brought in connection with the lease;
(b) Agreement by the tenant that the owner may take, hold, or sell personal
property of household members without notice to the tenant and a court decision on the rights of
the parties. This prohibition, however, does not apply to an agreement by the tenant concerning
disposition of personal property remaining in the housing Unit after the tenant has moved out of
the Unit. The owner may dispose of this personal property in accordance with state law;
(c) Agreement by the tenant not to hold the owner or the owner's agent legally
responsible for any action or failure to act, whether intentional or negligent;
(d) Agreement of the tenant that the owner may institute a lawsuit without
notice to the tenant;
(e) Agreement by the tenant that the owner may evict the tenant or household
members without instituting a civil court proceeding in which the tenant has the opportunity to
present a defense, or before a court decision on the rights of the parties;
(f) Agreement by the tenant to waive any right to a trial by jury;
(g) Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
(h) Agreement by the tenant to pay attorney's fees or other legal costs even if
the tenant wins in a court proceeding by the owner against the tenant. The tenant, however, may
be obligated to pay costs if the tenant loses.
D. Owner, its successors or assigns, must adhere to state law requirements with regard to
termination of tenancy.
E. Owner shall maintain the improvements on the Property in compliance with all applicable
housing quality standards [24CFR 92.504 (c)(6)] and state and local code requirements and shall
keep the Property free from any unreasonable accumulation of debris or waste materials. Owner
shall also maintain in a healthy condition any landscaping planted on the Property.
F. Owner covenants and agrees for itself, its successors, its assigns and every successor in
interest to the Property or any part thereof, there shall be no discrimination against or segregation
of any person, or group of persons, on account of race, color, creed, religion, disability, sex,
marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or
enjoyment of the Property nor shall the Owner itself or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the Fair
Housing Act (42 U.S.C. 3601 -20) and all implementing regulations, and the Age Discrimination
Act of 1975, and all implementing regulations.
G. Not later than the closing for the construction low for the Project, Owner shall submit to the
City Project Manager a Management Plan in a form that is acceptable including, but not limited
to, the components listed below. Approval of the Management Plan must be obtained from the
City Project Manager not later than the time for the issuance of a certificate of occupancy for the
Project. Owner shall manage the NSP Assisted Units in accordance with the approved
Management Plan, including such amendments as may be approved in writing from time to time
by the City Project Manager, for the term of the income and rent restrictions contained in these
Restrictions. The components of the Management Plan shall include:
(a) Management Agent. Owner shall submit the name and qualifications of
the proposed Management Agent. The City Project Manager shall approve or disapprove the
proposed Management Agent in writing based on the experience and qualifications of the
Management Agent. The City hereby approves Advanced Property Services as the proposed
Management Agent for the Project.
(b) Management Agreement. Owner shall submit a copy of the proposed
management agreement specifying the amount of the management fee, and the relationship and
division of responsibilities between Owner and Management Agent.
(c) Annual Budget and Projected Cash Flows. Prior to the issuance of a
certificate of occupancy for the Project, and annually thereafter not later than one hundred fifty
(150) days after the close of each calendar year thereafter, Owner shall submit a projected
operating budget and cash flow to the City Project Manager. The budget and cash flow shall be
in a form that is acceptable to the City Project Manager.
(d) Tenant Selection Policies. Owner shall include in the Management Plan
the tenant selection policies in accordance with Section 4, above.
H. If at any time the City determines that the units are not being managed or maintained in
accordance with the approved Management Plan, Owner shall change the management agent or
the practices complained of, upon receipt of written notice from the City Manager. The City
Manager may require Owner to change management practices or to terminate the management
contract and designate and retain a different management agent. The management agreement
shall provide that it is subject to termination by Owner without penalty, upon thirty (30) days
prior written notice, at the direction of the City Manager. Within ten (10) days following a
direction of the City Manager to replace the management agent, the Owner shall select another
management agent or make other arrangements satisfactory to the City Manager or designee for
continuing management of the units.
I. The covenants established in these Restrictions and any amendments hereto approved by the
City, and Owner shall, without regard to technical classification and designation, be binding for
the benefit and in favor of the City and their respective successors and assigns. These
Restrictions shall remain in effect for fifty -five (55) years. In its discretion, the City may defer
repayment of the Loan or the City may agree to such reasonable modifications to the
requirements of these Restrictions, as they may determine are necessary for the continued
maintenance and operation of the NSP Assisted Units. The covenants against discrimination
shall remain in effect for the period of these Restrictions.
J. Owner shall not request disbursement of NSP funds until the funds are needed to pay eligible
costs. The City shall have the right to disapprove any request if the City determines the request
is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan
Agreements and these Restrictions [24 CFR 92.504 (c)(10)].
K. Owner shall prepare, maintain and submit to the City, as appropriate, the following records
and reports in compliance with 24 CFR 92.504 (c) (12):
a. Annual Reports. Owner shall file with the City an Annual Report (herein referred
to as the "Annual Report") within one hundred fifty (150) days following the end of each
calendar year, commencing the Calendar Year following the issuance of the Certificate of
Completion. The Annual Report shall contain a certification by Owner as to such information as
the City Project Manager may then require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 4.G. (c) of the this Agreement which shall include
an audited financial statement for the previous calendar year that includes a balance sheet and a
profit and loss statement indicating any surplus or deficit in operating accounts; a detailed
itemized listing of income and expenses; and the amounts of any fiscal reserves. Such Annual
Budget and audited financial statement shall be prepared in accordance with generally accepted
accounting practices.
(2) Any substantial physical defects in the Project, including a description of
any major repair or maintenance work undertaken or needed in the previous and current years.
Such statement shall describe what steps Owner has taken in order to maintain the Project in a
safe and sanitary condition in accordance with applicable housing and building codes and the
property standards set forth in 24 CFR 92.251.
(3) The occupancy of the units indicating the income of each current resident
and the current rents charged each resident and whether those rents include utilities, including
records that demonstrate that the Project meets the requirements of the NSP Program.
(4) General management performance, including tenant relations and other
relevant information.
(5) Records that demonstrate that the units meet the affordability requirements
of 24 CFR 92.252, for the required period of affordability.
(6) Evidence of a currently paid hazard insurance policy in accordance with
the requirements of Section 6 of the City Deed of Trust, with a loss payable endorsement naming
the City as a loss payee together with other approved lenders (as their interests may appear), with
a "Replacement Cost Endorsement" in amount sufficient to prevent Owner or City from
becoming a co- insurer under the terms of the policy, but in any event in an amount not less than
100% of the then full replacement cost, to be determined at least once annually and subject to
reasonable approval by the Executive Director.
(7) Evidence of a currently paid liability insurance policy, naming the City as
additional insured and in a form approved by the City Attorney with coverage as described in the
Loan Agreements.
(8) Termite reports pertaining to the Property every fifth (5`h) year.
(9) Such other information as may be reasonably required by the City Manager or
his /her designee.
b. Records and Audits. Owner shall maintain the following general program
records, and make them available for inspection by the City, the State or HUD:
(1) records which demonstrate that the project meets the property standard
specified in 24 CFR 92.251;
(2) records, for each NSP Assisted Unit, which demonstrates that the project
meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and participant
protections, as specified in 24 Section 29.253;
(4) records which demonstrate compliance with the Equal Opportunity and
Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and single
head of household (by gender of head of household) have applied for, participated in, or
benefited from, any program or activity funded in whole or in part with NSP funds;
(B) documentation of actions undertaken to meet the equal opportunity
requirements of 24 CFR 92.350, which implements Section 3 of the Housing Development Act
of 1968, as amended (12 U.S.C. 1701u);
(C) documentation and data on the steps taken to implement Owner's
outreach programs to minority -owned and women -owned businesses to meet the minority
outreach requirements of 24 CFR 92.350;
(5) documentation of the steps taken to carry out an affirmative marketing
program in accordance with 24 CFR 92.351, if applicable;
(6) if applicable, records which demonstrate compliance with the
requirements relating to relocation of displaced persons, as described in 24 CFR 92,353. At a
minimum, these shall include project occupancy lists identifying the name and address of all
persons occupying the project property up until the date of the date on which Owner obtained
ownership of the Property;
(7) records concerning lead -based paint in accordance with 24 CFR 92.355;
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) records of certifications of contractor qualifications as they relate to the
debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part 24; and
(10) any other reports issued by other monitoring agencies.
C. All records pertaining to each calendar year of NSP funds must be retained
for the most recent five year period, except that for rental housing projects, records may be
retained for five years after the project completion date; except that records of individual tenant
income verifications, project rents and project inspections must be retained for the most recent
five year period, until five years after the affordability period terminates (24 CFR 92.508).
Owner shall cooperate with the City to retain all books and records relevant to the Loan
Agreement for a minimum of five years after the expiration of the Loan Agreement and any and
all amendments hereto, or for five years after the conclusion or resolution of any and all audits or
litigation relevant to the Loan Agreement, whichever is later. The City, the State, the Office of
the Auditor General of HUD, and/or their representatives shall have unrestricted reasonable
access to all locations, books, and records for the purpose of monitoring, auditing, or otherwise
examining said locations, books, and records with or without prior notice.
d. If so directed by the City or FIUD upon termination of the Loan Agreement,
Owner shall cause all records, accounts, documentation and all other materials relevant to the
work to be delivered to the City or HUD, as depository.
C. All records, accounts, doctumentation and other materials relevant to the Project
shall be accessible at any time to the authorized representatives of the City, or HUD, on
reasonable prior notice, for the purpose of examination or audit.
f Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the close of
each calendar year in which these Restrictions are in effect. Owner shall reasonably cooperate
with City in performing such audit.
g. Owner shall permit the City to perform an Annual Physical Inspection of the
Property with at least seven (7) days notice. Owner shall cooperate with this Inspection and shall
take all steps necessary to quickly correct any code deficiencies identified during the Inspection.
L. The City is the beneficiary of the terms and provisions of these Restrictions and the covenants
herein, both for and in its own right and for the purposes of protecting the interests of the
community and other parties, public or private, for whose benefit these Restrictions and the
covenants running with the land have been provided. The City shall have the right if the
covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other proper proceedings to enforce the curing of such breaches to which
they or any other beneficiaries of these Restrictions and covenants are entitled.
M. The covenants and agreements contained herein shall run with the land and not be personal
obligations of Owner. Upon the sale, conveyance or other transfer of the Property (a "Transfer ")
and the assumption of the obligations hereunder by a transferee, Owner's liability for
performance shall be terminated as to any obligation to be performed hereunder after the date of
such Transfer.
N. The Loan Agreement and all of its attachments shall be enforceable by the
City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City Note and the City Deed of Trust provide a means
of enforcement by the City if Owner is in breach of its obligations hereunder and theretmder,
including liens on the Property, deed restrictions and covenants running with the land [24 CFR
92.504 (c) (13)].
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed
on the date set forth at the beginning of this Agreement.
ATTEST:
`.-/)/I a V`4 % / it
Maria D. Huizar
Clerk of the Council
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
By: Lisa E. Storck
Assistant City Attorney
(Signatures continue on following page)
CITY O NTA ANA
Kevi O'Rourke
Interim City Manager
CALIFORNIA ALL - PURPOSE ACKNOWLEDGEMENT
State of California
County of Orange SS
City of Santa Ana
On this 16th day of September, 2013, before me, Maria D. Huizar , Notary Public,
personally appeared Kevin O'Rourke who proved to me on the basis of satisfactory
evidence to be the perso.r� /persons whose6ajxie /namesjs /are - subscribed to the within
instrument and acknowledged to me that(be /she/Ahey- executed the same ir(htslherftheir
authorized gapacl– /Capacities and that by CWher/their s' hat /sigwatures on the
instrument the ��sopPpersorts, or the entity upon behalf of which the CQ —ions
acted, executed tF2 instrument. I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing is true and correct. Witness my hand and
official seal.
NOTARY SEAL
MARIA 0, HUIZAR
Commission ab 1874202
zs Notary Public - California
�+ Orange County
" My Comm Expires Apr 5, 2016
CAPACITY CLAIMED BY SIGNER:
❑ Individual(s)
❑ Corporate
❑ Officers
Witness my hand and official seal.
Signature of Notary
SIGNER IS REPRESENTING:
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED TO THE BELOW:
TITLE OR TYPE OF DOCUMENT:
NUMBER OF PAGES: DATE OF DOCUMENT:
SIGNER (S) OTHER THAN NAMED ABOVE:
Title(s)
❑
Partner(s)
❑
General Partner of a Limited
❑
Partnership
❑
Attorney -in -Fact
❑
Trustee (s)
❑
Subscribing Witness
❑
Guardian /Conservator
❑
Other:
Witness my hand and official seal.
Signature of Notary
SIGNER IS REPRESENTING:
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED TO THE BELOW:
TITLE OR TYPE OF DOCUMENT:
NUMBER OF PAGES: DATE OF DOCUMENT:
SIGNER (S) OTHER THAN NAMED ABOVE:
OWNER:
815 Harbor, LP, a California limited partnership
MANAGING GENERAL PARTNER
OHDC 815 N Harbor, LLC
a California limited liability company
ORANGE HOUSING DEVELOPMENT CORPORATION
a California nonprofit corporation, its sole member
By:
Eunice Bobert, Chief Executive Officer
DEVELOPER GENERAL PARTNER
C &C 815 N Harbor, LLC
a California limited liability company
By:
Todd R. Cottle, its member
By: Cottle Family Trust Dated 3/8/87,
Barry A. Cottle, its Trustee