HomeMy WebLinkAboutRDA 2 AFFORD HSNG AG 02-17-04Agenda Item RDA 2
Reviewed:
AGENDAREPORT City Manager
Finance Director
MEETING DATE: FEBRUARY 17, 2004
TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR
FROM: REDEVELOPMENT AGENCY STAFF
SUBJECT: APPROVAL OF AFFORDABLE HOUSING ASSISTANCE AGREEMENT FOR
THE REDEVELOPMENT OF PROPERTY LOCATED IN THE VICINITY OF
WALNUT AVENUE AND NEWPORT AVENUE
SUMMARY
Agency approval is requested for an Affordable Housing Assistance Agreement
(Agreement) and related Promissory Notes and Deeds of Trust for the site at 14522
Newport Avenue.
RECOMMENDATION
It is recommended that the Redevelopment Agency take the following actions:
1. Subject to non -substantive modifications as may be required by Agency Counsel,
authorize the Executive Director, or his designee, to execute the Agreement between
the Tustin Community Redevelopment Agency and Olson Urban Housing, LLC., and
authorize the Executive Director, or his designee, to execute related Promissory Notes,
and Deeds of Trust for condominium housing development project proposed at 14522
Newport Avenue;
2. Appropriate $969,960 for the proposed project out of the unappropriated balance
in the Low and Moderate Income Housing Set -Aside Fund for the South Central
Redevelopment Project.
FISCAL IMPACT
Agency assistance will be provided in the form of a long-term Afforability Assistance
Loan not to exceed $969,960 to be assigned to the very low and moderate income unit
purchasers.
William A. Huston
February 17, 2004
Page 2
BACKGROUND
On November 10, 2003, the Planning Commission of the City of Tustin adopted
Resolution No. 3900 recommending that the City Council approve Tentative Tract Map
16506, and Resolution No. 3901, approving the Design Review 03-009 authorizing the
construction of sixty-three (63) residential condominium units at 14552 Newport Avenue
known as the Tustin Block property. As a condition of approval, the development is
required to include ten (10) affordable units at an affordable housing cost for Very Low
and Moderate Income Households. Six (6) units must be set aside for sale and
occupancy by Moderate Income Households and four (4) units must be set aside for
sale and occupancy by Very Low Income Households. On December 1, 2003 the City
Council adopted Resolution No. 03-131 approving General Plan Amendment 03-001,
amending the Land Use designation from Public/Institutional to High density Residential
for the property and adopted Resolution No. 03-132 approving Tentative Tract Map
16506. On January 5, 2004, the City Council adopted Ordinance No. 1282 amending
the Zoning Map from the Commercial General (CG) Zoning District to the Multiple
Family Residential (R-3) Zoning District for the property.
The site is located adjacent to the South Central Project Area. On May 3, 1993 Tustin
City Council adopted Resolution No. 93-45 and the Tustin Community Redevelopment
Agency adopted Resolution No. 93-7 finding that the use of low and moderate income
housing set-aside funds outside of the Project Area constituted a primary benefit to the
South Central Project Area. On March 6, 2000 the Tustin Community Redevelopment
Agency adopted a Second Five -Year Implementation Plan for the Town Center and
South Central Redevelopment Project areas for fiscal years 2000-2001 through 2004-
2005. The Implementation Plan was composed of two parts, a five-year plan for
redevelopment activities and a five-year plan for housing activities.
The proposed residential condominium development project is consistent with the
Implementation Plan's five-year plan for housing activities for the Project Areas.
Anticipated accomplishments and expenditures for the five-year period included the
construction of new owner occupied units to benefit the Town Center and South Central
Project Areas. The proposed project will remove a blighting influence adjacent to the
South Central Project Area by redeveloping the former Tustin Block industrial property
with a 63 -unit residential condominium housing project and serve to increase
homeownership in the Southwest Neighborhood of the City. The project will allow the
recording of long-term affordability covenants for 10 units to be sold to and occupied by
4 very low Income and 6 moderate income households, and the expenditure of housing
set-aside funds.
William A. Huston
February 17, 2004
Page 3
On December 1, 2003, the Tustin City Council adopted Resolution No. 03-130
approving a Mitigated Negative Declaration for the proposed project including the
proposed Housing Assistance Agreement as required by the California Environmental
Quality Act. No further environmental clearance is needed for this recommended
action.
Staff will be available to answer any questions the Agency may have.
Christine A. Shingleton
Assistant City Manage
Jam/es raughon
Redevelopment Program Manager
AFFORDABLE HOUSING ASSISTANCE AGREEMENT
by and between the
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
and
OLSON URBAN HOUSING LLC, A DELAWARE LIMITED LIABILITY COMPANY
DATED: 2004
DOCS001019673v3\22782.0047
Table of Contents
Page
1. Subject and Purpose of Agreement; Parties; Applicable Requirements............................................1
1.1
Background Regarding the Project...........................................................................................1
1.2
Purpose of the Agreement.........................................................................................................1
1.3
Scope of Agreement..................................................................................................................1
1.4
Parties to the Agreement...........................................................................................................2
1.5
Local Governmental Requirements Applicable to Agreement.................................................2
1.6
Not a Development Agreement.................................................................................................2
1.7
Definitions; Attachments...........................................................................................................2
2. Prohibition Against Change in Ownership, Management and Control of Developer .......................3
Local, State and Federal Laws................................................................................................14
2.1
Importance of Developer Qualifications...................................................................................3
Taxes, Assessments, Encumbrances and Liens.......................................................................14
2.2
Ownership Transfer or Assignment..........................................................................................3
2.3
Permitted Transfers...................................................................................................................3
2.4
Agency Consideration of Requested Transfer..........................................................................4
2.5
Assignment and Assumption Agreement..................................................................................4
2.6
Successors and Assigns.............................................................................................................4
2.7
Financing of the Improvements.................................................................................................4
3. Representations and Warranties........................................................................................................5
3.1
Developer's Representations and Warranties............................................................................5
3.2
Agency Representations and Warranties...................................................................................7
3.3
Survival...........................................................................................................................8
4. Financial Assistance To Developer...................................................................................................8
4.1 Purpose of Agency Financial Assistance to Developer.............................................................8
4.2 Affordability Assistance Loan..................................................................................................9
5. Development of the Project...............................................................................................................9
5.1 Scope of Development............................................................................................................11
6. Timing and Conditions of Project Development.............................................................................1 l
6.1 Schedule of Performance........................................................................................................11
6.2 Conditions Relating to Timing and Sequencing of the Development of the Project ..............12
7. Land Use Matters............................................................................................................................12
7.1
Entitlements.........................................................................................................................12
7.2
Agreement Does Not Grant Entitlements................................................................................12
7.3
Design Approval.....................................................................................................................12
7.4
Construction Covenants..........................................................................................................13
7.5
Agency Rights of Access........................................................................................................13
7.6
Disclaimer of Responsibility by Agency................................................................................13
7.7
CC&Rs.........................................................................................................................14
7.8
Local, State and Federal Laws................................................................................................14
7.9
Taxes, Assessments, Encumbrances and Liens.......................................................................14
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Table of Contents
(continued)
Page
8. Certificate of Compliance................................................................................................................14
8.1 Completion: Schedule of Performance...................................................................................14
8.2 Issuance of Certificate of Compliance....................................................................................14
8.3 Conclusive Presumption..........................................................................................................15
8.4 Not Evidence of Satisfaction of Other Requirements.............................................................15
8.5 Conditions Precedent to Issuance of Certificate of Compliance.............................................15
8.6 Agency Obligations.................................................................................................................15
9. Indemnification and Environmental Provisions..............................................................................16
9.1
Developer's Indemnification...................................................................................................16
9.2
Environmental Indemnity........................................................................................................16
9.3
Duration of Indemnities..........................................................................................................17
9.4
Claim Response.......................................................................................................................17
9.5
Release Notification and Remedial Actions............................................................................17
10. Insurance......................................................................................................................................17
15. GENERAL PROVISIONS............................................................................................................23
15.1 Consent to Jurisdiction..........................................................................................................23
15.2 Legal Fees and Costs.............................................................................................................24
15.3 Modifications or Amendments..............................................................................................24
15.4 Applicable Law.....................................................................................................................24
15.5 Further Assurances................................................................................................................24
15.6 Rights and Remedies are Cumulative...................................................................................25
15.7 Notices, Demands and Communications between the Parties..............................................25
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10.1 Required Insurance................................................................................................................17
10.2 General Insurance Requirements..........................................................................................19
11.
Covenants and Restrictions...........................................................................................................19
11.1 Use Covenant........................................................................................................................19
11.2 Maintenance Covenant..........................................................................................................19
11.3 Nondiscrimination and Equal Opportunity...........................................................................19
12.
Affordable Housing Unit Obligations...........................................................................................20
12.1 Affordable Unit Obligations..................................................................................................20
12.2 Covenant Re Affordable Housing Units...............................................................................20
12.3 Compliance with Health and Safety Code............................................................................22
13.
Potential and Material Defaults.....................................................................................................22
13.1 Potential Defaults..................................................................................................................22
13.2 Material Defaults...................................................................................................................22
13.3 Certain Agency Remedies.....................................................................................................23
14.
Failure to Timely Pay Amounts Due.............................................................................................23
15. GENERAL PROVISIONS............................................................................................................23
15.1 Consent to Jurisdiction..........................................................................................................23
15.2 Legal Fees and Costs.............................................................................................................24
15.3 Modifications or Amendments..............................................................................................24
15.4 Applicable Law.....................................................................................................................24
15.5 Further Assurances................................................................................................................24
15.6 Rights and Remedies are Cumulative...................................................................................25
15.7 Notices, Demands and Communications between the Parties..............................................25
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Table of Contents
(continued)
Page
15.8 Force Majeure Delay.............................................................................................................26
15.9 Conflict of Interest................................................................................................................27
15.10
Non -liability of Agency Officials and Employees..............................................................27
15.11
Inspection of Books and Records........................................................................................28
15.12
Approvals..........................................................................................................................28
15.13
Real Estate Commissions....................................................................................................28
15.14
Date and Delivery of Agreement........................................................................................28
15.15
Survival of Covenants.........................................................................................................28
15.16
Construction and Interpretation of Agreement....................................................................28
15.17
Time of Essence..................................................................................................................29
15.18
Fees and Other Expenses.....................................................................................................30
15.19
No Partnership.....................................................................................................................30
15.20
Compliance with Law.........................................................................................................30
15.21
Binding Effect.....................................................................................................................30
15.22
No Third Party Beneficiaries...............................................................................................30
15.23
Counterparts........................................................................................................................30
15.24
Authority of Signatories to Agreement...............................................................................30
15.25
Entire Agreement, Waivers and Amendments....................................................................30
15.26
Approval Procedures...........................................................................................................31
15.27
Memorandum of Agreement...............................................................................................31
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ATTACHMENT NO. 1
ATTACHMENT NO. 2
ATTACHMENT NO. 3
ATTACHMENT NO. 4
ATTACHMENT NO. 5
ATTACHMENT NO. 6
ATTACHMENT NO. 7
ATTACHMENT NO. 8
ATTACHMENT NO. 9
ATTACHMENT NO. 10
ATTACHMENT NO. 11
ATTACHMENT NO. 12
ATTACHMENT NO. 13
ATTACHMENT NO. 14
ATTACHMENT NO. 15
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LIST OF ATTACHMENTS
LEGAL DESCRIPTION OF THE SITE
GLOSSARY OF DEFINED TERMS
MEMORANDUM OF AGREEMENT
SCOPE OF DEVELOPMENT
METHOD OF FINANCING
SCHEDULE OF PERFORMANCE
[Deleted]
[Deleted]
AFFORDABILITY ASSISTANCE LOAN
PROMISSORY NOTE
AFFORDABILITY ASSISTANCE LOAN DEED
OF TRUST
AFFORDABLE HOUSING PROMISSORY NOTE
(VERY LOW INCOME)
AFFORDABLE HOUSING PROMISSORY NOTE
(MODERATE INCOME)
AFFORDABLE HOUSING DEED OF TRUST
AFFORDABLE HOUSING COVENANT (VERY
LOW INCOME)
AFFORDABLE HOUSING COVENANT
(MODERATE INCOME)
AFFORDABLE HOUSING ASSISTANCE AGREEMENT
THIS AFFORDABLE HOUSING ASSISTANCE AGREEMENT (the "Agreement")
is entered into as of , 2004 (the "Effective Date") by and between the
TUSTIN COMMUNITY REDEVELOPMENT AGENCY (as defined in Section 1.4.1, the
"Agency") and b, a Delaware Limited liability company (as defined in Section 1.4.2, the
"Developer"). The Agency and the Developer are sometimes referred to herein individually as a
"Party" and collectively as the "Parties." The Parties agree as follows:
1. Subiect and Purpose of AEreement; Parties; Applicable Requirements.
1.1 BackEround Reeardins the Proiect.
1.1.1 The real property that is the primary subject of this Agreement is located at
14522 Newport Avenue in Tustin, California (the "Site"). A legal description of the Site is attached
hereto as Attachment No. 1. The Developer has a purchase contract with the owner of the Site that is
contingent upon rezoning approval. The Developer plans to build a 63 unit residential condominium
project on the Site. With Agency financial assistance, the Developer is willing to construct ten (10)
of the units as Affordable Housing Units, four (4) for Very Low Income Households, and six (6) for
Moderate Income Households.
1.2 Purpose of the Agreement.
1.2.1 The purpose of this Agreement is to provide financial assistance to the
Developer, in order to develop and construct ten (10) Affordable Housing Units. The fulfillment of
this Agreement is in the vital and best interests of the Tustin community and the health, safety,
morals, and welfare of its residents, and is in accord with the public purposes and provisions of
applicable federal, state, and local laws and requirements.
1.3 Scope of Agreement.
1.3.1 This Agreement provides for the following:
(a) Site Improvements. Improvement of the Site with a 63 -unit attached
residential condominium project, subject to this Agreement and all conditions of approval by the City
of Tustin for: General Plan Amendment 03-001; Zone Change 03-001; Tentative Tract Map No.
16506; and Design Review 03-009.
(b) Affordable Housing Units. The marketing and sale of ten (10)
Affordable Housing Units, six (6) for Moderate Income Households and four (4) for Very Low
Income Households, all in compliance with this Agreement. The Developer's obligations to
construct, market, and sell the ten (10) affordable housing units is further described in Section 12.
(c) Agency Financial Assistance. Agency Financial Assistance is the
total amount of Nine Hundred Sixty -Nine Thousand, Nine Hundred Sixty Dollars ($969,960) in order
to provide assistance to the Moderate Income and Very Low Income purchasers of the ten Affordable
Units as necessary to purchase such units at an Affordable Housing Cost. Agency Financial
Assistance is further described in Section 4.
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1.4 Parties to the Agreement.
1.4.1 Agency. The Agency is a state agency organized for local purposes (Health
and Safety Code Sections 33000 et. seq.). It is a public body, corporate and politic. The City
Council of the City of Tustin ("City") serves as the legislative body of the Agency.
1.4.2 Developer. The Developer is Olson Urban Housing LLC, a Delaware limited
liability company, located at 3020 Old Ranch Parkway, Suite 400, Seal Beach, California, 90740-
2751. Its managing member is The Olson Company, a California corporation. Whenever the term
"Developer" is used herein, such term shall be limited to Olson Urban Housing LLC, which is the
Developer as of the Effective Date, or, following an Ownership Transfer pursuant to a Permitted
Transfer approved by the Agency or otherwise permitted hereunder, to any assignee of or successor
to the Developer's rights, powers and responsibilities permitted by this Agreement.
1.4.3 Relationship of Agency to Developer.
(a) It is hereby acknowledged that the relationship of the Agency to the
Developer is neither that of a partnership nor that of a joint venture and that the Agency shall not be
deemed or construed for any purpose to be the agent of the Developer, nor shall the Developer be
deemed or construed to be the agent of the Agency.
(b) Notwithstanding any provision of this Agreement, the Developer is
not, and shall not be deemed to be, the agent of the Agency for any purpose, and shall not have the
power or the authority to bind the Agency to any contractual or other obligation. The Developer shall
not at any time hold itself out to the Agency or to any other third party as an agent of the Agency,
and shall not, by any act or omission, mislead any third party into believing, or allow any third party
to continue in the mistaken belief, that the Developer is an agent of the Agency or has the power or
authority to bind the Agency to any contractual or other obligation.
1.5 Local Governmental Requirements Applicable to Agreement. This Agreement is
subject to all Governmental Regulations, including the City of Tustin General Plan and the Tustin
City Code.
1.6 Not a Development Agreement. This Agreement is not a Development Agreement
as provided in California Government Code Section 65864, and is not a grant of any Entitlements in
favor of the Developer. The Agency shall cooperate in good faith, within applicable legal constraints
and consistent with applicable Agency policies, and take such actions as may be necessary or
appropriate to effectuate and carry out this Agreement in a timely and commercially reasonable
manner.
1.7 Definitions: Attachments.
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Capitalized terms used herein, including in the Attachments attached hereto,
unless otherwise defined herein, shall have the respective meanings set forth herein/or as
specified in the Glossary of Defined Terms attached hereto as Attachment No. 2. Unless
otherwise indicated, references in this Agreement to sections, paragraphs, clauses, exhibits,
attachments and schedules are to the same that are contained within or attached to this
Agreement and all attachments and schedules referenced herein are incorporated herein by this
reference as through fully set forth herein.
2. Prohibition Against Change in Ownership, Management and Control of Developer.
2.1 Importance of Developer Qualifications. The Developer represents and agrees that
its undertakings pursuant to this Agreement are for the purpose of development of the Project and not
for speculation in land holding. The Developer further recognizes that the qualifications and identity
of the Developer are of particular concern to the Agency and community in light of the following:
2.2 Ownership Transfer or Assignment. For the period commencing upon the date of
this Agreement and until the Agency's issuance of the Certificate of Conformance, (a) no voluntary
or involuntary successor in interest of the Developer shall acquire any rights or powers under this
Agreement, and (b) nor shall the Developer make any total or partial sale, transfer, conveyance,
assignment, subdivision, of the whole or any part of the Site (collectively, a "Transfer"), without the
prior written approval of the Agency, except as expressly set forth herein. Subsequent to the
recordation of a Certificate of Compliance, a Transfer shall not require the consent of the Agency.
2.3 Permitted Transfers. Notwithstanding any other provision of this Agreement to the
contrary, Agency approval of a Transfer shall not be required in connection with any of the
following:
(a) Any Transfer to a limited liability company, partnership, corporation,
or other entity or entities in which Olson Urban Housing, LLC and/or The Olson Company retains a
portion of the ownership or beneficial interest and retains management and control of the transferee
entity or entities.
(b) The conveyance or dedication of any portion of the Site to the City or
other appropriate governmental agency, or the granting of easements or permits to facilitate
construction of the Improvements.
(c) Any requested assignment for financing purposes (subject to such
financing being considered and approved by the Agency pursuant to Section 2.7 herein), including
the grant of a deed of trust to secure the funds necessary for construction of the Improvements.
(d) Any conveyance of completed Units to individual homebuyers in the
ordinary course of business.
(e) Any leaseback to Developer of model Units for the period of the
marketing of the Residential Units.
(f) Any conveyance of common area improvements to the homeowner's
association formed for the Project.
DOCSOC\1019673 v3\22782.0047
In the event of a Transfer by Developer under subparagraph (a) above not requiring the
Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days before such
transfer it shall give written notice to the Agency of such assignment and satisfactory evidence
that the assignee has assumed in writing through an assignment and assumption agreement of all
of the obligations of this Agreement. Such assignment shall release the assigning Developer
from any obligations to the Agency hereunder.
2.4 Agency Consideration of Requested Transfer. The Agency agrees that it will not
unreasonably withhold approval of a request for approval of a Transfer made pursuant to Section 2.2,
provided the Developer delivers written notice to the Agency requesting such approval. Such notice
shall be accompanied by evidence regarding the proposed transferee's development qualifications
and experience, and its financial commitments and resources, in sufficient detail to enable the
Agency to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this
Section 2.4 and as reasonably determined by the Agency. The Agency may, in considering any such
request, take into consideration such factors as (i) the quality of any new and/or replacement
operator, (ii) the transferee's past performance as an developer of residential developments, (iii) the
current financial condition of the transferee, and similar factors. The Agency agrees not to
unreasonably withhold its approval of any such requested Transfer, taking into consideration the
foregoing factors.
2.5 Assignment and Assumption Agreement. An assignment and assumption
agreement in form satisfactory to the Agency's legal counsel shall also be required for all proposed
Transfers. Within thirty (30) days after the receipt of the Developer's written notice requesting
Agency approval of a Transfer pursuant to Section 2.2, the Agency shall either approve or disapprove
such proposed assignment or shall respond in writing by stating what further information, if any, the
Agency reasonably requires in order to complete the request and determine whether or not to grant
the requested approval. Upon receipt of such a response, the Developer shall promptly furnish to the
Agency such further information as may be reasonably requested.
2.6 Successors and Assigns. All of the terms, covenants and conditions of this
Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever
the term "Developer" is used in this Agreement, such term shall include any other permitted
successors and assigns as herein provided.
2.7 Financing of the Improvements.
2.7.1 No Encumbrances Except Mortgages and Deeds of Trust. Mortgages and
deeds of trust shall be permitted for the purpose of securing loans of funds to be used for financing
the construction of the Improvements (including architecture, engineering, legal, and related direct
costs as well as indirect costs) on or in connection with the development of the Site, and any other
purposes necessary and appropriate in connection with development under this Agreement. The
Developer shall notify the Agency in advance of any mortgage or deed of trust financing, if the
Developer proposes to enter into the same before completion of the construction of the
Improvements.
2.7.2 Holder Not Obligated to Construct Improvements. The holder of any
mortgage or deed of trust authorized by this Agreement (a "Permitted Mortgage") shall not be
obligated by the provisions of this Agreement to construct or complete the Improvements or any
portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other
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provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall
be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to
construct any improvements thereon, other than those uses or improvements provided for or
authorized by this Agreement.
2.7.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure.
With respect to any Permitted Mortgage granted by Developer as provided herein, whenever the
Agency may deliver any notice or demand to Developer with respect to any breach or default by the
Developer in completion of construction of the Improvements, the Agency shall at the same time
deliver to each holder of record of a Permitted Mortgage ("Permitted Mortgagee") a copy of such
notice or demand. Each such holder shall (insofar as the rights granted by the Agency are concerned)
have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or
commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any
such default and to add the cost thereof to the mortgage debt and the lien of its mortgage.
Notwithstanding the foregoing, however, in no event shall such holder be liable for any defaults or
other actions of the Developer which occur prior to such holder acquiring title to the Site. Nothing
contained in this Agreement shall be deemed to permit or authorize such holder to undertake or
continue the construction or completion of the Improvements, or any portion thereof (beyond the
extent necessary to conserve or protect the improvements or construction already made) without first
having expressly assumed the Developer's obligations to the Agency by written agreement
reasonably satisfactory to the Agency. The holder, in that event, must agree to complete, in the
manner provided in this Agreement, the improvements to which the lien or title of such holder
relates. Any such holder properly completing such improvement shall be entitled, upon compliance
with the requirements of Section 8 of this Agreement, to a Certificate of Compliance. It is
understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth
above for commencing to cure or remedy a Developer default which requires title and/or possession
of the Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day
period commenced proceedings to obtain title and/or possession and thereafter the holder diligently
pursues such proceedings to completion and cures or remedies the default.
3. Representations and Warranties.
3.1 Developer's Representations and Warranties.
As an inducement to the Agency to enter into this Agreement and to perform its
obligations hereunder, the Developer represents and warrants to the Agency, to the Best of
Developer's Knowledge, as follows:
(a) The Developer has the necessary expertise, experience, qualifications
and legal status necessary to perform as the Developer pursuant to this Agreement and to construct
and complete the Project;
(b) The Developer intends that its acquisition of the Site and its other
undertakings pursuant to this Agreement are for the purpose of timely redevelopment of the Site in
accordance with the Schedule of Performance attached to this Agreement;
(c) The Developer is a limited liability company, duly organized,
qualified, and validly existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business and in good standing under the laws of California;
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(d) The Developer has all requisite power and authority required to enter
into this Agreement and the instruments referenced herein, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations hereunder and thereunder. No consent of any additional partner, individual, corporation,
shareholder, creditor, investor, judicial or administrative body, authority or other party is required for
the execution of this Agreement.
(e) The Developer has obtained all requisite consents in connection with
entering into this Agreement.
(f) The individuals executing this Agreement and the instruments
referenced herein on behalf of the Developer have the legal power, right and actual authority to bind
the Developer to the terms and conditions hereof and thereof.
(g) This Agreement has been duly authorized, executed and delivered by
the Developer and all documents required herein to be executed by the Developer pursuant to this
Agreement shall be, at such time as they are required to be executed by the Developer, duly
authorized, executed and delivered by the Developer and are or shall be, at such time as the same are
required to be executed hereunder, valid, legally binding obligations of and enforceable against the
Developer in accordance with their terms.
(h) Neither the execution or delivery of this Agreement and the
documents referenced herein, nor the incurring of the obligations set forth herein, nor the
consummation of the transactions herein contemplated, nor compliance with the terms of this
Agreement and the documents referenced herein, will violate any provision of law, any order of any
court or other government entity or conflict with or result in the breach of any terms, conditions, or
provisions of, or constitute a default under any bond, note, or other evidence of indebtedness or any
contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreements or
instruments to which the Developer or any of its members are a party or which affect the Site.
(i) No attachments, execution proceedings, assignments of benefit to
creditors, bankruptcy, reorganization or other proceedings are pending or threatened against the
Developer or its members.
0) The Developer is relying solely upon its own inspections and
investigations in proceeding with the acquisition of the Site, and is not relying on the accuracy or
reliability of any information provided to it by the Agency, on any oral or written representation or
on the nondisclosure of any facts or conclusions of law made by the Agency, or any of its elected and
appointed officials, officials, employees, agents, attorneys or representatives made in connection with
the condition of the Site. In making such investigation and assessment, the Developer has been
provided access to any persons, records or other sources of information which it has deemed
appropriate to review.
(k) Without limiting the generality of the foregoing provisions, the
Developer acknowledges that the Agency has not made and will not make any representations or
warranties concerning compliance or non-compliance of the Site with Environmental Laws or the
existence or non-existence of Hazardous Materials to the Site or otherwise.
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(1) There are no adverse conditions or circumstances, pending or, to the
best of the Developer's knowledge, threatened, litigation, governmental action, or other conditions
which could prevent or materially impair the Developer's ability to develop the Site and the Project
as contemplated by the terms of this Agreement.
(m) The Developer has not paid or given, and will not pay or give, any
third person any money or other consideration for obtaining this Agreement, other than the normal
cost of conducting business and cost of professional services such as architects, engineers and
attorneys.
(n) All reports, documents, instruments, information and forms of
evidence delivered by the Developer to the Agency concerning or related to this Agreement are
accurate, correct and sufficiently complete to give the Agency true and accurate knowledge of the
subject matter, and do not contain any material misrepresentation or omission.
(o) There are no legal proceedings either pending or, to the best of the
Developer's knowledge, threatened, to which the Developer is or may be made a party, or to which
any of the Developer's property, including the Site, is or may become subject, which has not been
fully disclosed in the documents submitted to the Agency and which could materially affect the
ability of the Developer to carry out its obligations hereunder.
As used in this Section 3.1. "to the best of the Developer's knowledge" means the
best knowledge of the employees of the Developer who have participated in the negotiation of
this Agreement and the acquisition of the Site after conducting commercially reasonable inquiry.
3.2 Agency Representations and Warranties.
As an inducement to the Developer to enter into this Agreement and perform its
obligations hereunder, the Agency represents and warrants to the Developer, to the best of the
Agency's knowledge, as follows:
(a) The Agency is a redevelopment agency existing pursuant to the laws
of the State of California.
(b) All of the financial assistance being provided by Agency pursuant to
this Agreement is being provided for the purpose of increasing the City's supply of low and moderate
income housing available at an Affordable Housing Cost, pursuant to Health and Safety Code
Section 33334.2, and is entirely composed of funds deposited in the Agency's Low and Moderate
Income Housing Fund pursuant to Sections 33334.2 and 33334.3 of the Health and Safety Code.
(c) The Agency has all requisite power and authority required to enter
into this Agreement and the instruments referenced herein, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations hereunder and thereunder. No consent of any additional individual, official, board,
division, judicial or administrative body, authority or other party is required in connection with any
of the foregoing.
DOCSOCA1019673v3\22782.0047
(d) All requisite action has been taken by the Agency and the Agency has
obtained all requisite consents in connection with entering into this Agreement and the instruments
and documents referenced herein to which the Agency is a party and the consummation of the
transactions contemplated hereby.
(e) The individual executing this Agreement and the instruments
referenced herein on behalf of the Agency has the legal power, right and actual authority to bind the
Agency to the terms and conditions hereof and thereof.
(f) This Agreement is duly authorized, executed and delivered by the
Agency and all documents required herein to be executed by the Agency pursuant to this Agreement
shall be, at such time as they are required to be executed by the Agency, duly authorized, executed
and delivered by the Agency and are or shall be, at such time as the same are required to be executed
hereunder, valid, legally binding obligations of and enforceable against the Agency in accordance
with their terms.
(g) There are no legal proceedings either pending or, to the actual
knowledge of the Assistant Executive Director or Agency Legal Counsel, threatened, to which the
Agency is or may be made a party, or to which any of the Agency's property, including the Site, is or
may become subject, which has not been fully disclosed in the documents submitted to the Developer
and which could reasonably affect the ability of the Agency to carry out its obligations hereunder.
As used in this Section 3.2. "to the best of the Agency's knowledge" means the best
knowledge of the employees of the Agency who have participated in the negotiation of this
Agreement after conducting commercially reasonable inquiry.
3.3 Survival. Each of the items in Sections 3.1 and 3.2 in its entirety is deemed to be an
ongoing representation and warranty and shall survive the termination of this Agreement. The
Developer shall promptly advise the Agency in writing if there is any material change pertaining to
any matters set forth or referenced in Section 3.1., and the Agency shall promptly advise the
Developer in writing if there is any material change pertaining to any matters set forth or referenced
in Section 3.2.
4. Agency Financial Assistance
4.1 Purpose of Agency Financial Assistance
The purpose of Agency financial assistance hereunder is to provide Nine Hundred
Sixty -Nine Thousand Nine Hundred Sixty Dollars ($969,960) for affordable homebuyer gap
financing assistance to help purchasers finance the purchase price of the Affordable Housing
Units described below and in the Scope of Development, attached hereto as Attachment 4, and
incorporated herein by this reference.
Following acquisition of the Site, and within the time frames required under this
Agreement and the Attachments hereto, Developer shall in accordance with the Agreement: (1)
develop a 63 -unit for -sale residential condominium project on the Site with not less than ten (10)
units affordable to very low and moderate income households; and (2) record covenants
requiring the maintenance of affordability restrictions for a period not less than forty-five (45)
years. Of the ten (10) affordable units, four (4) units shall be made available for sale to and held
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available for occupancy by Very Low Income Households, and six (6) such units shall be made
available for sale to and held available for occupancy by Moderate Income Households. It shall
be the responsibility of Developer to obtain funds necessary to develop the Site in accordance
with this Agreement, including funding any Project Costs (as defined in the Method of
Financing, attached hereto and incorporated herein by reference as Attachment 5) in excess of
the estimated total Project Cost of approximately $20,000,000.
4.2 Affordability Assistance Loan
4.2.1 Purpose: In order to assist the Developer to sell the Affordable Units at an
Affordable Housing Cost and to assure the Agency that the Units will remain Affordable Units for a
forty-five year period, the Agency agrees to loan to Developer the amount of Nine Hundred Sixty
Nine Thousand, Nine Hundred Sixty Dollars ($969,960) (the "Affordability Assistance Loan"),
which shall be assigned to each Homebuyer in connection with the Homebuyer's purchase of the
Affordable Units as follows:
4.2.2 Conditions: As conditions precedent to receiving the Affordability
Assistance Loan:
(a) Developer shall have obtained a City of Tustin Temporary Certificate
of Occupancy for the Site Improvements;
(b) Developer shall have furnished Agency with an ALTA lender's
policy showing: (1) the Deed of Trust as a valid encumbrance to the ten Affordable Units, (2)
Agency as an insured lender, and (3) no monetary liens or encumbrances, other than a Permitted
Mortgage and the Bridge Loan Deed of Trust, and a lien for taxes not yet due and payable;
(c) Developer shall have furnished to Agency proof of insurance
coverage as provided in Section 10;
(d) Developer shall not then be in material default under this Agreement;
(e) The seller of the Site shall have provided the Agency a release of any
relocation benefits and assistance arising from this Agreement and the Agency's provision of
financial assistance hereunder, and an indemnity against relocation claims made by third parties,
which release and indemnity is reasonably acceptable to the Agency.
4.2.3 Terms of the Affordability Assistance Loan
(a) The Affordability Assistance Loan shall be evidenced by Developer
executing and delivering to Agency a promissory note in the form attached hereto as Attachment 9
and incorporated herein by this reference, for an amount not to exceed Nine Hundred Sixty -Nine
Thousand, Nine Hundred Sixty Dollars ($969,960)(the "Promissory Note" or "Note"). No interest
shall begin to accrue thereunder until the disbursement of the loan amount has been made by the
Agency.
(b) The Promissory Note shall be secured by an Affordability Assistance
Deed of Trust (the "Deed of Trust") which Developer shall execute and which shall be recorded as a
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DOCS OC\ 1019673 v3\22782.0047
lien against the ten Affordable Units. Such Deed of Trust shall be subordinate to any Permitted
Mortgage required for the financing of Developer's acquisition of the Site and construction of the
Site Improvements, and the Agency agrees to execute a reasonably acceptable subordination
agreement to memorialize such subordination. The Agency's foreclosure pursuant to the Deed of
Trust shall not destroy or affect the rights of the holder of a Permitted Mortgage. The form of the
Deed of Trust is attached as Attachment 10 and is incorporated herein by this reference.
(c) The disbursed and unpaid principal balance of the Affordability
Assistance Loan shall accrue interest at the rate of four percent (4%) per annum, simple interest,
from the date on which the Affordability Assistance Loan proceeds are disbursed;
(d) The total unpaid principal amount and all unpaid interest shall be due
and payable as a balloon payment three (3) years from the date of disbursement of the Affordability
Assistance Loan proceeds to Developer;
(e) In lieu of Developer's repayment of the Note, including all accrued
interest due thereunder, the Agency agrees to accept Promissory Notes secured by Deeds of Trust
from prospective Owner -Occupiers of the ten (10) Affordable Housing Units in the following amount
(subject to revision as provided in Section 12.1.2 hereof):
(i) For each Very Low Income Homebuyer, the amount of
$189,990; and
(ii) For each Moderate Income Homebuyer, the amount of
$35,000.
Each such Promissory Note shall be secured by an Affordable
Housing Deed of Trust, in the form which is attached to this Agreement as Attachment 13. Upon
close of escrow for each Affordable Housing Unit, the Agency shall provide the Developer with
a partial reconveyance for property comprising the Affordable Unit and thereby the principal
amount of the Affordability Assistance Loan to Developer;
(f) Upon the sale of all ten (10) of the Affordable Housing Units, and
provided Developer has caused each Homebuyer to execute an Affordable Housing Promissory Note
in the amount that conforms to this Section 4.4 and each Note has been secured by a recorded Deed
of Trust for the property comprising the Unit, the Developer may request cancellation of the
Affordability Assistance Note and Reconveyance of the entire remaining Deed of Trust. The Agency
shall agree to such cancellation and reconveyance;
(g) If prior to the City's issuance of a Certificate of Occupancy for the
first Unit on the Site (whether and Affordable Unit or a market -rate Unit), Developer defaults under
the terms of this Agreement, including the Promissory Note and the Deed of Trust, and fails to cure
any such default pursuant to the provisions of Section 13 herein, the Promissory Note, including all
accrued interest, shall become immediately due and payable. If after issuance of a certificate of
occupancy for the first Unit but prior to the issuance of a Certificate of Compliance, Developer is in
Material Default under the terms of this Agreement, including the Promissory Note and the Deed of
Trust, and fails to cure any such default pursuant to Section 13 herein, the Agency may demand
immediate payment of the Promissory Note, plus all accrued interest. The parties agree that the
remedy of specific performance is available to Agency to compel payment of the amount due. In the
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DOCS 0C\1019673 v3\22782.0047
event Developer does not repay the full Promissory Note and all accrued interest when demand for
such is made by Agency, Agency shall, at that time, have full rights under the Promissory Note and
Deed of Trust, and such other rights as may be afforded by law or in equity, to ensure repayment.
5. Development of the Prosect.
5.1 Scope of Development.
5.1.1 Requirement to Develop the Proiect. The Scope of Development attached
to this Agreement as Attachment No. 4 sets forth the overall plan for the Project and development of
the Site. The Developer shall improve the Site in the manner described in the Scope of Development
and in accordance with the Schedule of Performance and the Approved Project Plans, all as further
described below.
5.1.2 Control of Proiect Development. The Developer shall have control over the
design and layout of the Site Improvements (including height, shape and location, size of floor plans,
and special landscaping and art features), and over the special uses to be incorporated therein, subject
to the approval of the Agency and the City, pursuant to its governmental authority as entitling
agency, and subject to the provisions of this Agreement, including the design review and approval
provisions for the benefit of the Agency set forth in this Agreement which are undertaken by the
Agency in its proprietary capacity.
5.1.3 Project Development Costs. Within the time set forth in the Schedule of
Performance, the Developer shall design and construct the Project at the Developer's sole cost and
expense and without public subsidy of any kind, except as provided herein, unless otherwise agreed
in writing by the Agency in its sole discretion. Without limiting the generality of the foregoing, the
Developer hereby agrees that all costs associated with planning, designing and constructing the
Project, preparing the Site and constructing all Improvements thereon including all hard costs, soft
costs, the cost of services, fees, exactions, dedications, cost overruns, profit, overhead, consultants'
fees, legal fees, wages required to be paid to any person employed by the Developer, any Assignee,
contractor or subcontractor, Quimby Act Fees ("Development Costs"), shall be the responsibility of
the Developer without any cost or liability to the Agency, except as provided in Section 4 herein.
5.1.4 Compliance with Applicable Law and Governmental Requirements. The
Project shall be consistent with the Scope of Development and shall be developed and maintained in
accordance with this Agreement and all applicable laws and Governmental Requirements, including
the Approved Project Plans.
6. Timing and Conditions of Proiect Development.
6.1 Schedule of Performance. Attached hereto as Attachment No. 6 is a Schedule of
Performance which sets forth the schedule for submissions, approvals and actions, regarding the
construction of the Improvements. The Parties acknowledge and agree that the Agency is entering
into this Agreement with the expectation that the timetable in the Schedule of Performance will be
met. Following conveyance of the Property to the Developer, the Developer shall promptly begin
and thereafter diligently prosecute to completion all steps required by the Schedule of Performance.
The Agency may, in its reasonable discretion and upon written request from the Developer, extend
the time specified in the Schedule of Performance; provided, however, that the Agency shall not
withhold its consent to reasonable extensions to deadlines in the Schedule of Performance requested
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DOCSOC\ 1019673 v3\22782.0047
by the Developer so long as the Developer is proceeding in good faith and in a commercially
reasonable matter, as determined by the Agency in its reasonable discretion, to comply with the
requirements of the Schedule of Performance and there are no circumstances applicable to or causing
the delay suffered by the Developer that would not apply to other developers attempting to complete
similar residential projects in Orange County. Any such agreed upon changes shall be within the
limitations of the Entitlements. Any such extensions shall not be deemed as amendments to this
Agreement. Any such extensions shall be evidenced by written notice from the Assistant Executive
Director or designee.
6.2 Conditions Relating to Timing and Sequencing of the Development of the
Proiect. The following is an express condition precedent to the right of the Developer to proceed
with development of the Project: Prior to issuance of the first grading permit (other than stockpiling)
for the Project, the Developer shall provide a Performance Bond meeting the requirements of this
Agreement securing its obligations to construct the Public Improvements.
7. Land Use Matters.
7.1 Entitlements. It is the responsibility of the Developer, without cost to the Agency:
(a) to obtain all land use approvals and development permits legally required by the City or any other
Governmental Authority as a condition to development of the Site and construction of the
Improvements ("Entitlements"); and (b) to assure that the design, construction, use, operation,
maintenance, repair and replacement of the Improvements is carried out in accordance with the
provisions of this Agreement, applicable Law, and the Entitlements. The Parties acknowledge that
prior to the date of this Agreement the Developer has obtained land use approvals which are
sufficient for the development of the Project.
7.2 Agreement Does Not Grant Entitlements. This Agreement does not (a) grant any
Entitlements to the Developer, (b) supersede, nullify or amend any condition which may be imposed
by the City in connection with approval of the Project, (c) guarantee to the Developer or any other
party any profits from the development of the Site, or (d) amend any City or State laws or
regulations.
7.3 Design Approval.
7.3.1 Plan Development and Cost. All plans and specifications for the Project
shall be prepared by the Developer at the Developer's sole cost and expense and subject to the
requirements set forth in this Section 7.3.
7.3.2 Preliminary Plans and Development of Further Design Stages. The
Developer has previously submitted to the City and Agency, and the City and Agency have
approved, a preliminary Site plan (the "Preliminary Plan"), which is on file with the Community
Development Department, graphically depicting the overall plan for development of the
Improvements on the Site.
7.3.3 Approved Proiect Plans. The plans approved in accordance with Section
7.3.2 (the "Approved Project Plans") shall govern development of the Improvements on the Site.
To the extent of any inconsistencies between the plans identified in the Scope of Development or the
Preliminary Plans and the Approved Project Plans, the Approved Project Plans shall govern and
control as to the development of the Site.
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DOCSOC\1019673 v3\22782.0047
7.4 Construction Covenants. With respect to construction of the Project, the Developer
hereby covenants and agrees as follows:
(a) The Developer shall maintain throughout the period of construction of
the Project sufficient equity, capital and firm binding commitments for financing necessary to (i) pay
through Completion, all costs of development, construction, marketing and sale of all the
Improvements as defined in the Scope of Development; and (ii) enable the Developer to perform and
satisfy all the covenants of the Developer contained in this Agreement. The Developer shall not
undertake such additional projects as could reasonably be expected to jeopardize the sufficiency of
such equity, capital and firm and binding commitments for the purposes expressed in the preceding
sentence.
(b) The development of the Project shall be done in a professional and
competent manner. The Developer shall perform all work required to complete the Project and
related work in accordance with all Governmental Requirements.
(c) The Developer shall be responsible for the timeliness and quality of
all work performed and materials and equipment furnished in connection with the Project, whether
the work, materials and equipment are performed and furnished by the Developer or through
subcontractors, sub -subcontractors (of all tiers) and suppliers.
(d) The Developer shall promptly cause to be removed (by way of release
bonds, if necessary) any and all mechanic's liens, stop notices and/or bonded stop notices that are
recorded and/or served by subcontractors, sub -subcontractors (of all tiers) and suppliers in
connection with the Project.
(e) The Developer shall commence the development of the Project
promptly and shall assure the completion of the development of the Project in accordance with the
projections set forth in the Schedule of Performance.
7.5 Agency Rights of Access. Representatives of the Agency shall have the reasonable
right of access to all portions of the Site, without charges or fees, at normal construction hours during
the period of construction for the purposes of this Agreement, including the inspection of the work
being performed in constructing the Improvements.
7.6 Disclaimer of Responsibility by Agency. The Agency neither undertakes nor
assumes nor will have any responsibility or duty to the Developer or to any Assignee or to any other
third party to review, inspect, supervise, pass judgment upon or inform the Developer, Assignee or
any third party of any matter in connection with the development or construction of the
Improvements, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished to the Site, any person furnishing same, or otherwise. The
Developer, any Assignee and all third parties shall rely upon its or their own judgment regarding
such matters, and any review, inspection, supervision, exercise of judgment or information supplied
to the Developer, Assignee or to any third party by the Agency in connection with such matter is for
the public purpose of redeveloping the Site, and neither the Developer nor any Assignee nor any third
party is entitled to rely thereon. The Agency shall not be responsible for any of the work of
construction, improvement or development of the Site.
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DOCSOC\ 1019673 x3\22782.0047
7.7 CC&Rs. The conditions, covenants and restrictions ("CC&Rs") prepared by
Developer for recordation against the Site shall be subject to review and reasonable approval by the
Agency. The CC&Rs shall include, at a minimum, the following provisions: (a) creation of only one
Homeowner's Association for the Project; (b) a maintenance covenant for the benefit of the Agency
as set forth in Section 12.2 or as otherwise agreed by the Agency in its resasonable discretion, and (c)
all other requirements included in the conditions of approval for the Subdivision Map for the Project.
7.8 Local, State and Federal Laws. The Developer shall carry out the construction of
the Project, including all Improvements, in conformity with all applicable laws and Governmental
Requirements, including all applicable federal and State labor laws and requirements. Claims,
including penalties assessed by Governmental Authorities, arising from or related to compliance by
the Developer or the Developer's officers, directors, employees, agents, representatives and/or
contractors in the construction of the Project arising from prevailing wage requirements imposed by
State law are Developer's sole responsibilities.
7.9 Taxes Assessments, Encumbrances and Liens. The Developer shall pay when due
and prior to delinquency all real property taxes and assessments assessed and levied on or against all
portions of the Site during the period of the Developer's ownership of the Site. The Developer shall
not place, or allow to be placed, on its interests in the Site, or any portion thereof, any Mortgage or
encumbrance or lien not authorized by this Agreement. The Developer shall remove, or shall have
removed, any levy or attachment made on its interests in the Site (or any portion thereof), or shall
assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure sale.
Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or
amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto.
8. Certificate of Compliance.
8.1 Completion: Schedule of Performance. Following the execution and delivery of
this Agreement, the Developer shall proceed diligently and in good faith to design and construct the
Project and satisfy all Conditions Precedent relating to issuance of a Certificate of Compliance when
and as required by this Agreement in accordance with the Schedule of Performance.
8.2 Issuance of Certificate of Compliance. After Completion of all construction and
development required to be undertaken by the Developer in conformity with this Agreement and ✓�
satisfaction of the Conditions Precedent set forth below, to the satisfaction of the Agency in its
reasonable discretion, the Agency shall deliver to the Developer or Assignee, as the case may be, a
Certificate of Compliance, upon written request there for by the Developer. After the recordation of
the Certificate of Compliance, any Person then owning or thereafter purchasing, leasing, or otherwise
acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition)
incur any obligation or liability under this Agreement with respect to such Improvements, except that
such Party shall continue be bound by the Indemnities in Section 9 and the covenants contained in
Sections 11 and 12 of this Agreement. Issuance of the Certificate of Compliance shall not waive any
rights or claim that the Agency may have against any party for latent or patent defects in design,
construction or similar matters under any applicable law, nor shall it be evidence of satisfaction of
any of the Developer's obligations to others, not a party to this Agreement. The Certificate of
Compliance shall be in such form as to permit it to be recorded in the Official Records.
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DOCS OC\ 1019673v3\22782.0047
8.3 Conclusive Presumption. The Certificate of Compliance shall be, and shall so state,
conclusive determination of satisfactory completion of the obligations of the Developer pursuant to
this Agreement.
8.4 Not Evidence of Satisfaction of Other Requirements. Issuance by the Agency of a
Certificate of Compliance shall not constitute evidence of compliance with or satisfaction of any
obligation of the Developer to any insurer of a Mortgage securing money loaned to finance the
Improvements, nor any part thereof. Such Certificate of Compliance is not a notice of completion as
referred to in Section 3093 of the California Civil Code.
8.5 Conditions Precedent to Issuance of Certificate of Compliance. The Agency shall
not be obligated to issue the Certificate of Compliance for the Project as a whole, unless and until
each of the following has occurred (the "Conditions Precedent"):
(a) final inspection of the Site and determination by the Agency that
the Project Improvements thereon have been Completed in conformance with this Agreement
and all Governmental Requirements;
(b) issuance of a certificate of substantial completion for the Project
by the Project Architect;
(c) issuance of the final certificate of occupancy by the City for all
condominium units within the Project;
(d) releases or waivers of all liens or rights to record liens having been
obtained from the general contractor and all subcontractors or the endorsements to their
respective Mortgagee's title insurance policies, and the statutory period for filing liens having
expired;
(e) review and approval by the Agency of the form and substance of
the CC&Rs to be recorded against the Site to govern use, maintenance and operation of the Site
by the Homeowners' Association and recordation of the CC&Rs against the Site in the Official
Records with subordination thereto by all Mortgagees of record as of the date of such
recordation; and
(f) closing with respect to the sale of each of the ten (10) Affordable
Units within the Project, and compliance with Section 12 of this Agreement.
8.6 Agency Obligations. The Agency shall not unreasonably withhold or delay issuance
of any Certificate of Compliance. If the Agency refuses or fails to issue a Certificate of Compliance
after written request from the Developer, provided each of the conditions established in Section 8.6
have been satisfied, the Agency shall within ten (10) business days of the written request, provide a
written statement which details the reasons the Agency refused or failed to issue the Certificate of
Compliance. The statement shall also contain a statement of the actions that the Developer must
take to obtain a Certificate of Compliance.
Upon recordation of the Certificate of Compliance, this Agreement shall
terminate and shall be of no further force and effect, except that:
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DOCSOC\ 1019673 v3\22782.0047
(a) the Indemnities set forth in Section 9 and the covenants in Section 11
shall survive in perpetuity; and
(b) the covenants in Section 12, Affordable Housing Covenants,
Affordable Housing Trust Deeds, Affordable Housing Promissory Notes and Affordable Housing
Option Agreements shall remain in effect for each Affordable Unit for a period of 45 years from the
date of close of escrow of said Unit to an Owner -Occupier.
9. Indemnification and Environmental Provisions.
9.1 Developer's Indemnification. As a material part of the consideration for this
Agreement, and to the maximum extent permitted by law, the Developer shall indemnify, protect,
defend, assume all responsibility for and hold harmless the Agency and its officials, employees,
contractors, representatives and agents (collectively referred to as the "Indemnified Parties"), with
counsel reasonably acceptable to the Agency, from and against any and all Claims resulting or
arising from or in any way connected with the following, provided the Developer shall not be
responsible for (and such indemnity shall not apply to) the gross negligence or willful misconduct of
the Indemnified Parties:
way;
(a) The Developer's marketing, sale or use of the Project and Site in any
(b) Any other activities of the Developer;
(c) Any plans or designs for Improvements prepared by or on behalf of
the Developer, including any errors or omissions with respect to such plans or designs;
(d) Any loss or damage to the Agency resulting from any inaccuracy in or
breach of any representation or warranty of the Developer, or resulting from any breach or default by
the Developer, under this Agreement; and
(e) Any development or construction of the Improvements by the
Developer, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished to the Site, any person furnishing the same, or otherwise.
9.2 Environmental Indemnity. As a material part of the consideration for this
Agreement, and effective as to the Site upon the Developer's acquisition of fee title thereto, the
Developer shall, to the maximum extent permitted by law, indemnify, protect, defend, assume all
responsibility for and hold harmless the Indemnified Parties from and against any and all Claims
resulting or arising from or in any way connected with the Release, threatened Release, storage,
treatment, transportation and/or disposal of any Hazardous Materials at any time during Developer's
ownership of the Site on, in, under, from, about or adjacent to any portion or portions of said lands,
regardless whether any such condition is known or unknown now or upon acquisition and regardless
whether any such condition pre-exists acquisition or is subsequently caused, created or occurring,
provided, however, that the Developer shall not be responsible for (and such indemnity shall not
apply to) the gross negligence or willful misconduct of the Indemnified Parties. This environmental
indemnity shall be included in any recorded memorandum of this Agreement against said land and
shall be binding upon successors and assigns of the Developer owning all or any part thereof in
accordance with Section 9.3.
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9.3 Duration of Indemnities. The indemnities set forth in this Section 9 shall survive
the issuance of a Certificate of Compliance and the termination of this Agreement.
9.4 Claim Response. In the event that any Environmental Agency or other third party
brings, makes, alleges, or asserts a Claim against the Developer, arising from or related to any actual,
threatened, or suspected Release of Hazardous Materials on or about the Site, including any Claim
for Investigation or Remediation on the Site, or such Environmental Agency or other third party
orders, demands, or otherwise requires that any Investigation or Remediation be conducted on the
Site, the Developer shall promptly notify the Agency in writing and shall promptly and responsibly
respond to such Claim. Further, upon receipt of such Claim, order, demand or requirement, the
Developer shall (a) take such reasonable measures, as necessary or appropriate, to reasonably
dissuade such Environmental Agency or other third party from bringing, making, alleging, or
asserting any Claim against the Agency arising from or related to any actual, threatened, or suspected
Release of Hazardous Material on or about the Site, including any Claim for Investigation or
Remediation on the Site, and (b) request that the Environmental Agency not issue any order, demand,
or requirement to the Agency under any of the Environmental Laws, or any other local, regional,
State or federal law, or seek penalties or take other punitive action against the Agency, in connection
with, arising from, or related to any actual, threatened, or suspected Release of Hazardous Material
on or about the Site, including any Investigation or Remediation on or about the Site.
9.5 Release Notification and Remedial Actions. If any Release of a Hazardous
Material is discovered on the Site and regardless of the cause, the Developer shall promptly (a)
provide written notice (or in the event of emergency, telephonic notice, followed by written notice)
of any such Release to the Agency and (b) at Developer's sole risk and expense and solely under the
name of the Developer (but without prejudice to the Developer's or the Agency's rights against any
responsible party): (i) remove, treat, and dispose of the released Hazardous Material on the Site in
compliance with all applicable Environmental Laws, or if such removal is prohibited by any
Environmental Laws, take whatever action is required by any Environmental Law; (ii) take such
other action as is necessary to have the full use and benefit of the Site as contemplated by this
Agreement; and (iii) provide the Agency with satisfactory evidence of the actions taken as required
in this Section. The Developer shall provide to the Agency, within thirty (30) days of the Agency's
request there for, a bond, letter of credit or other financial assurance evidencing to the Agency's
satisfaction that all necessary funds are readily available to pay the costs and expenses of the actions
required by this Section and to discharge any assessments or liens established against the Site as a
result of the presence of the Hazardous Material release on the Site.
10. Insurance.
10.1 Required Insurance. Without limiting the Agency's rights to indemnification, the
Developer shall procure and maintain, at its own cost and expense, and furnish or cause to be
furnished to the Agency, evidence of the following policies of insurance naming the Developer as
insured and, except for property insurance (as set forth in Section 10. 1.3) and Workers'
Compensation insurance (as set forth in Section 10.1.2), the Agency as an additional insured. All
such insurance shall be kept in force until Completion of Improvements at the Site.
10.1.1 Liability Insurance. Commencing upon Developer's acquisition of the
Property, the Developer shall maintain or cause to be maintained commercial general liability
insurance, to protect against loss from liability imposed by law for damages on account of personal
injury, including death therefrom, suffered or alleged to be suffered by any person or persons
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whomsoever on or about the Site and the business of the Developer on the Site, or in connection with
the operation thereof, resulting directly or indirectly from any acts or activities of the Developer or
anyone directly or indirectly employed or contracted with or acting for the Developer, or under its
respective control or direction, and also to protect against loss from liability imposed by law for
damages to any property of any person occurring on or about the Site, or in connection with the
operation thereof, caused directly or indirectly by or from acts or activities of the Developer or any
person acting for the Developer, or under its control or direction. Such insurance shall also provide
for and protect the Agency against incurring any legal cost in defending claims for alleged loss.
Such insurance shall be maintained in full force and effect until issuance of a Certificate of
Compliance and so long thereafter as necessary to cover any claims of damages suffered by persons
or property prior to issuance of a Certificate of Compliance for the Project, resulting from any acts or
omissions of the Developer, the Developer's employees, agents, contractors, suppliers, consultants or
other related parties in the following amounts: commercial general liability in a general aggregate
amount of not less than Two Million Dollars ($2,000,000) per occurrence and in the aggregate. The
Developer shall deliver to the Agency a certificate of insurance countersigned by an authorized agent
of the insurance carrier and Insurer endorsements evidencing such insurance coverage prior to
commencement of the Improvements and the naming of Agency and its officials, agents,
representatives and employees as additional insureds under the policy. The Insurer endorsement(s):
(1) shall name the Agency, its officials and employees as Additional Insured; (2) shall contain a
statement of obligation on the part of the carrier to notify the Agency of any cancellation or
termination of the coverage at least thirty (30) days in advance of the effective date of any such
cancellation or termination, except in the event of cancellation for nonpayment of premium which
may provide for notice of not less than ten (10) days; (3) shall provide that coverage provided
hereunder by the Developer shall be primary to, and not contribute with any insurance or
self-insurance maintained by the Agency; and (4) shall provide a waiver of subrogation for the
benefit of the Agency.
10.1.2 Workers' Compensation Insurance. Commencing upon Developer's
acquisition of the Property, the Developer shall maintain or cause to be maintained workers'
compensation insurance issued by a responsible carrier authorized under the laws of the State of
California to insure employers against liability for compensation under the workers' compensation
laws now in force in California, or any laws hereafter enacted as an amendment or supplement
thereto or in lieu thereof. Such workers' compensation insurance shall cover all persons employed by
the Developer and its contractors in connection with the Site and shall cover liability within statutory
limits for compensation under any such act aforesaid, based upon death or bodily injury claims made
by, for or on behalf of any person incurring or suffering injury or death in connection with the Site.
Notwithstanding the foregoing, the Developer may, in compliance with the laws of the State of
California and in lieu of maintaining such insurance, self -insure for workers' compensation, in which
event the Developer shall deliver to the Agency evidence that such self-insurance has been approved
by the appropriate State authorities. The Developer shall also furnish (or cause to be furnished) to the
Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for
performance of work on the Site or otherwise pursuant to this Agreement carries workers'
compensation insurance required by law.
10.1.3 Builder's All Risk Insurance. Commencing upon Developer's acquisition
of the Site and during the pendency of any construction on the Site, the Developer shall maintain or
cause to be maintained for all buildings, a builder's all-risk policy or policies of insurance against
loss or damage to the Site Improvements and all property of an insurable nature located upon the
Site, resulting from fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such
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other perils ordinarily included in special clauses of property loss coverage form policies for the full
replacement value of the Improvements. Such insurance shall be maintained in an policy amount not
less than Twenty Million Dollars ($20,000,000). As to each Unit, such insurance shall be maintained
until the close of escrow for the Developer's sale of the Unit, at which time such insurance coverage
may be terminated. The Agency and its officials, agents, representatives and employees shall be
additional insureds under the policy.
10.2 General Insurance Requirements.
10.2.1 All insurance provided under this Section 10 shall be for the benefit of the
Developer and the Agency; provided that the Agency shall not be an additionally insured party to
liability or builder's risk policies maintained by contractors and subcontractors if the Agency is an
additionally insured party under the Developer's policy for such matters. The Developer agrees to
timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure
compliance with all insurance requirements necessary for the maintenance of such insurance. Within
thirty (30) days, if practicable, but in any event prior to expiration of any such policy, copies of
renewal policies, or certificates evidencing the existence thereof, shall be submitted to the Agency.
All insurance herein provided for under this Section 10 shall be provided by insurers authorized to do
business in the State of California and with a Best's rating of A -X or better, with the exception of
workers compensation insurance from the State Compensation Fund.
10.2.2 If the Developer fails or refuses to procure and maintain insurance as required
by this Agreement, the Agency shall have the right, at the Agency's election, and upon ten (10) days
prior notice to the Developer, to procure and maintain such insurance. The premiums paid by the
Agency shall be treated as a loan, due from the Developer, to be paid on the first day of the month
following the date on which the premiums were paid. The Agency shall give prompt notice of the
payment of such premiums, stating the amounts paid and the name of the insured(s).
11. Covenants and Restrictions.
11.1 Use Covenant. The Developer covenants and agrees for itself, its successors, its
assigns and every successor in interest to the Site or any part thereof, that the Developer, its
successors and assigns shall use the Site only for those uses specified in the following documents:
this Agreement (including all attachments) and the Entitlements.
11.2 Maintenance Covenant. After the date of acquisition by the Developer of the Site,
and until the Developer's sale of the Units, the Developer and its successors and assigns shall
maintain the Site, including the Improvements on the portions of the Site under construction,
consistent with best construction industry practice.
11.3 Nondiscrimination and Euual Opportunity.
The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to the Site 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, sex,
sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the Site nor shall the Developer itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination
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or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Site.
12. Affordable Housing Unit Obligations
12.1 Affordable Unit Obligations
12.1.1 In the event that the Entitlements permit sixty-three (63) Units to be
constructed upon the Site, no fewer than ten (10) of the Units are to be available for sale to and
occupancy by persons of Very Low Income Households and Moderate Income Households (the
"Affordable Housing Units"). Of these ten (10) Affordable Housing Units a minimum of four (4)
Units shall be sold to "Very Low Income Households," and a minimum of six (6) Units shall be sold
to "Moderate Income Households." The Developer shall identify and set aside, and the Agency shall
approve in its reasonable discretion the location and other features of the Affordable Housing Units
identified on the Approved Project Plans. Each such identified Affordable Housing Unit shall be
designated for sale to a Very Low Income Household or a Moderate Income Household, as the case
may be. In the event that the Entitlements permit fewer than sixty-three (63) Units to be constructed
upon the Site, the foregoing numbers shall be adjusted in proportion to the number of permitted
Units.
12.1.2 The Developer shall only sell Affordable Housing Units to Owner -Occupiers.
The Developer shall cause each prospective Owner -Occupier to execute an applicable Affordable
Housing Promissory Note to Agency that will be secured by the Affordable Housing Deed of Trust.
The forms of the Notes and Deed of Trust are set forth in Attachments 11, 12 and 13. The amounts
of the Notes shall be as follows:
(a) For each Very Low Income Homebuyer, the amount of $189,990; and
(b) For each Moderate Income Homebuyer, the amount of $35,000.
Notwithstanding the foregoing, however, the Developer may propose
modifications to the amounts of each Note as necessary to accommodate the financial needs of
the purchasers of the Affordable Housing Units, so long as the total amount of the Notes is
unchanged, and the Agency shall not unreasonably withhold its consent to such proposed
changes. The Developer shall cause the executed Affordable Housing Promissory Note to be
delivered to Agency through escrow for the purchase of the Affordable Unit, and prior to close
of escrow, the Affordable Housing Deed of Trust shall be recorded against the Unit. The
Affordable Housing Deed of Trust shall be subordinate in priority only to the monetary lien of a
Purchase Money Deed Of Trust also recorded at the time of closed;
12.2 Covenant Re Affordable Housing Units
12.2.1 The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to an Affordable Housing Unit that, for a period terminating forty-five
(45) years from the date of the closing of the initial sale of the Unit to a member of the home buying
public: (a) Affordable Housing Units designated by the Developer as being for sale to Very Low
Income Households shall only be sold to Very Low Income Households, and (b) Affordable Housing
Units designated by the Developer as being for sale to Moderate Income Households shall only be
sold to Moderate Income Households. The Developer also covenants and agrees for itself, its
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successors, its assigns and every successor in interest to an Affordable Housing Unit, that, for a
period terminating forty-five (45) years from the date of the closing of the sale of the Unit to an
Owner -Occupier, as follows: (a) the designated Affordable Housing Units as being for sale to Very
Low Income Households shall be sold only at a price not in excess of an Affordable Housing Cost
for Very Low Income Households, and the designated Affordable Housing Units as being for sale to
Moderate Income Households shall only be sold at a price not in excess of an Affordable Housing
Cost for Moderate Income Households; and (b) the Affordable Housing Units will only be sold to
and by an eligible Household at an Affordable Housing Cost, and will only be occupied by the
purchasing Owner -Occupiers as their principal place of residence, and (c) the Affordable Housing
Units shall not be rented.
12.2.2 In order to impose upon purchasers of Affordable Housing Units the
obligations set forth above in Section 12.2.1, concurrently with the recordation of the grant deed for
the Developer's conveyance of each Affordable Unit, there shall be recorded against each Affordable
Housing Unit an "Affordable Housing Covenant," substantially in the form of the applicable
covenants attached hereto as Attachments No. 14 and 15.
12.2.3 The Developer shall cause to be included in the grant deed for each
Affordable Housing Unit (a) references to the Affordable Housing Covenant and the obligation of a
Transferee of a Unit (as defined in the Affordable Housing Covenant) to be bound by all the
obligations of Homeowner set forth in the Affordable Housing Covenant, (b) a reference to the
Affordable Housing Trust Deed, (c) a reference to the Affordable Housing Option Agreement, (d) a
reference to the Reimbursement Agreement, (e) a reference to the due on sale provisions of the
Affordable Housing Note, and (f) a covenant that will require the Transferee, and any successor or
assign of the Transferee, to include in any document Transferring (as defined in the Affordable
Housing Covenant) the Unit a reference to the Affordable Housing Covenant, the Affordable
Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement Agreement, the
due on sale provisions of the Affordable Housing Note, and the obligation of the Transferee to be
bound by the obligations set forth in the Affordable Housing Covenant, the Affordable Housing Trust
Deed, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on
sale provisions of the Affordable Housing Note.
12.2.4 In order to enable an owner of an Affordable Housing Unit to comply with
the obligations described in the Affordable Housing Covenant, the Agency shall waive the right of
the Agency to cause the Affordable Housing Note secured by the Unit to be due and payable and the
right of the Agency to exercise its option to purchase set forth in the Affordable Housing Option
Agreement, provided that all of the following occur: (a) the Unit is sold to an Owner -Occupier and
not for rent; (b) the Unit is sold at a price not in excess of the then appropriate Affordable Housing
Cost for the Unit; (c) the owner who intends to sell the Unit and all of that owner's predecessors in
interest have fully complied with the Affordable Housing Covenant; (d) the purchaser agrees to be
bound by the Affordable Housing Covenant, the Affordable Housing Option Agreement and the
Reimbursement Agreement; (e) the purchaser agrees to increase the amount of the Affordable
Housing Note as provided in this Section, (f) the City receives a title policy, in an amount equal to
the amount then due on the Affordable Housing Note as increased as provided in this Section,
insuring the Affordable Housing Note Trust Deed as a monetary lien of second priority subordinate
in priority among monetary liens only to the monetary lien of any purchase money deed of trust
recorded at the time of closing of the sale which deed of trust shall secure an amount not in excess of
the then fair market value of the Unit less the amount of the Affordable Housing Note increased as
provided in this Section, and (g) the Agency is reimbursed for its costs related to the transaction. The
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amount due on the Affordable Housing Note secured by the Affordable Housing Unit being sold
shall be increased by the amount by which the fair market value of the Unit at the time of the closing
of the sale is in excess of the sum of (x) the amount of principal and interest then payable on the
Affordable Housing Note secured by the Unit and (y) the Affordable Housing Cost of such Unit as of
the time of the closing of the sale. Except for such increase in the amount of the Affordable Housing
Note, the Affordable Housing Note, the Affordable Housing Trust Deed the Reimbursement
Agreement and the Affordable Housing Option Agreement shall remain in full force and effect.
12.2.5 The Agency and the Developer hereby agree that the provisions of this
Agreement relating to the Affordable Housing Covenant are entered into in order to achieve a
stabilized community of Owner -Occupied Affordable Units and to enable the Agency and its
successors and assigns to enforce the Affordable Housing Covenant, that it is the intention of the
Agency and the Developer that the Agency and its successors and assigns be empowered to enforce
the covenants contained in the Affordable Housing Covenant, that the Affordable Housing Covenant
does empower the Agency and its successors and assigns, and the City of Tustin, to enforce the
covenants contained in the Affordable Housing Covenant, and that the Affordable Housing Covenant
should be so construed and interpreted. The parties further intend that the Developer shall be
released from any responsibility for enforcement of the Affordable Housing Covenant with respect to
any Affordable Housing Unit which Developer sells in accordance with the requirements of this
Section 12.
12.3 Compliance with Health and Safety Code. The Agency intends that the provisions
of this Agreement relating to Affordable Housing Units are entered into in order to comply with
Health and Safety Code Sections 33413, 33334.3, and 33334.14 and that such provisions fully satisfy
the requirements of such code sections.
13. Potential and Material Defaults.
13.1 Potential Defaults. Except as otherwise provided in this Agreement, in the event
either Party (the "Defaulting Party") fails to perform, or delays in the performance of, any
obligation, in whole or in part, required to be performed by the Defaulting Party as provided in this
Agreement (a "Potential Default"), the other Party (the "Injured Party") may give written notice of
such Potential Default to the Defaulting Party, which notice shall state the particulars of the Potential
Default. The Agency and the Developer agree to cooperate in good faith and meet and confer
regarding such default.
13.2 Material Defaults.
13.2.1 A Potential Default under Section 13.1 shall become a "Material Default" in
the event the Potential Default is not cured within thirty (30) days of receipt of written notice of such
Potential Default from the Injured Party; provided that if such cure cannot be reasonably
accomplished within such period, then within ninety (90) days after receiving written notice of the
Potential Default, but only if the Defaulting Party has commenced such cure within such period and
diligently pursues such cure to completion, or within such longer period of time as may be expressly
provided in this Agreement with respect to the Potential Default. The time periods set forth above to
cure a Potential Default may be extended by Force Majeure Delays. Following written notice and
failure to cure within the time periods set forth above, each Potential Default shall become a Material
Default that shall be deemed to have occurred upon the expiration of the applicable cure period.
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13.3 Certain Agency Remedies.
13.3.1 In the event the Developer is in Material Default, in addition to whatever
other rights the Agency may have in law or at equity, or as otherwise provided in this Agreement, the
Agency may do any or all of the following:
(a) The Agency may seek to specifically enforce the obligations of the
Developer.
(b) The Agency may terminate this Agreement with respect to all, or any
portion of the Site.
13.3.2 Failure or delay in giving notice of a Potential Default shall not constitute a
waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided
in this Agreement, any failures or delays by either Party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays
by either Party in asserting any of its rights and remedies shall not deprive either Party of its right to
institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
14. Failure to Timely Pay Amounts Due. Notwithstanding any other provision of this
Agreement, if a Party fails to pay timely any sum required to be paid pursuant to this Agreement, and
the Injured Party gives the Defaulting Party written notice of such nonpayment, such nonpayment
shall be a Potential Default. The Defaulting Party shall have a period of fifteen (15) calendar days
after such notice is received, or deemed to have been received, within which to cure the Potential
Default by making the required payment; the period to cure such Potential Default shall not be
extended by Force Majeure Delays. In the event a Potential Default for nonpayment is not cured
within said fifteen (15) calendar day period, the Potential Default shall become a Material Default
that shall be deemed to have occurred upon the expiration of the cure period. Notwithstanding the
foregoing, and provided that notice of the Potential Default is provided the Defaulting Party, if any
payment (other than the payment of any portion of the Purchase Price) is not received by the Injured
Party with fifteen (15) calendar days following the notice of Potential Default, then in addition to any
other remedies conferred upon the Injured Party pursuant to this Agreement, a late charge of ten
percent (10%) of the amount due and unpaid will be added to the delinquent amount to compensate
the Injured Party for the expense of handling the delinquency.
15. GENERAL PROVISIONS.
15.1 Consent to Jurisdiction. The Parties hereto agree that all actions or proceedings
arising in connection with this Agreement shall be tried and litigated exclusively in the Municipal or
Superior Court of the County of Orange, State of California, in any other appropriate court of that
county, or in the United States District Court for the Central District of California. This choice of
venue is intended by the Parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between or among the Parties with respect to or arising out of this Agreement
in any jurisdiction other than that specified in this section. Each Party hereby waives any right that it
may have to assert the doctrine forum non conveniens or similar doctrine or to object to venue with
respect to any proceeding brought in accordance with this section, and stipulates that the state and
federal courts located in the County of Orange, State of California, shall have in personam
jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy or
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proceeding arising out of this Agreement. Each Party hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as contemplated by this Section
15_1 by means of registered or certified mail, return receipt requested, postage prepaid, to its address
for the giving of notices as set forth in this Agreement, or in the manner set forth in Section 15.7 of
this Agreement pertaining to notice. Any final judgment rendered against a Party in any action or
proceeding shall be conclusive as to the subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.
15.2 Lesal Fees and Costs. If any Party to this Agreement institutes any action, suit,
counterclaim, appeal, arbitration or mediation for any relief against another Party, declaratory or
otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or
with respect to any inaccuracies or material omissions in connection with any of the covenants,
representations or warranties on the part of the other Party to this Agreement, then the Prevailing
Party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover
of and from the other Party all costs and expenses of the Action, including reasonable attorneys' fees
and costs (at the Prevailing Party's attorneys' then -prevailing rates as increased from time to time by
the giving of advanced written notice by such counsel to such Party) incurred in bringing and
prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a
"Decision") granted therein, all of which shall be deemed to have accrued on the commencement of
such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision
entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees
and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of
reasonable attorneys' fees and costs upon the request of either Party. Any judgment or order entered
in any final judgment shall contain a specific provision providing for the recovery of all costs and
expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Costs")
incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph,
Costs shall include in addition to Costs incurred in prosecution or defense of the underlying action,
reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a)
post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy,
debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any
order or judgment. "Prevailing Party" within the meaning of this Section 15.2 includes a Party who
agrees to dismiss an Action in consideration for the other Party's payment of the amounts allegedly
due or performance of the covenants allegedly breached, or obtains substantially the relief sought by
such Party.
15.3 Modifications or Amendments. No amendment, change, modification or
supplement to this Agreement shall be valid and binding on any of the Parties unless it is represented
in writing and signed by each of the Parties hereto.
15.4 Applicable Law. This Agreement shall be governed by, interpreted under, construed
and enforced in accordance with the laws of the State of California, irrespective of California's
choice -of -law principles.
15.5 Further Assurances. Each of the Parties hereto shall execute and deliver at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any and
all acts and things reasonably necessary or appropriate in connection with the performance of their
respective obligations hereunder in order to carry out the intent and purposes of this Agreement.
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15.6 Riehts and Remedies are Cumulative. Except with respect to rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are
cumulative, and the exercise by either Party of one or more 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 Party.
15.7 Notices. Demands and Communications between the Parties. All notices,
demands, consents, requests and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed conclusively to have been duly given (a) when
hand delivered to the other Party; (b) three (3) Business Days after such notice has been sent by
United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the
other Party as set forth below; (c) the next Business Day after such notice has been deposited with a
national overnight delivery service reasonably approved by the Parties (Federal Express, United
Parcel Service and U.S. Postal Service are deemed approved by the Parties), postage prepaid,
addressed to the Party to whom notice is being sent as set forth below with next -business -day
delivery guaranteed, provided that the sending Party receives a confirmation of delivery from the
delivery service provider; or (d) when received by the recipient Party when sent by facsimile
transmission or email at the number or email address set forth below (provided, however, that notices
given by facsimile or email shall not be effective unless either (i) a duplicate copy of such notice is
promptly sent by any method permitted under this Section 15.7 other than by facsimile or email; or
(ii) the receiving Party delivers a written confirmation of receipt for such notice either by facsimile,
email or any other method permitted under this Section. Any notice given by facsimile or email shall
be deemed received on the next business day if such notice is received after 5:00 p.m. (recipient's
time) or on a Saturday, Sunday or national holiday. Unless otherwise provided in writing, all notices
hereunder shall be addressed as follows:
If to the Agency: Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, CA 92780
Attention: Executive Director
and Assistant Executive Director
With a copy to: City Attorney
City of Tustin
Woodruff Spradlin & Smart
701 S. Parker Street, Suite 8000
Orange, CA 92868-4760
Attention: Lois E. Jeffrey, Esq.
If to the Developer: Olson Urban Housing, LLC
3020 Old Ranch Parkway, Suite 400
Seal Beach, California 90740-2751
Attention:
With a copy to Kay Chandler, General Counsel
Any Party may by written notice to the other Party in the manner specified
herein change the address to which notices to such Party shall be delivered.
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15.8 Force Maieure Delay.
15.8.1 The term "Force Majeure Delay" shall mean the occurrence of any one or
more of the following events (provided such event is beyond the control of a Party and beyond the
control of such Party's contractors and consultants and are not due to an act or omission of the Party
claiming Force Majeure Delay or any consultant, contractor or other Person for whom such Party
may be contractually or legally responsible) which directly, materially and adversely affect (a) the
ability of the claiming Party to meet its obligations under this Agreement, including the deadlines
imposed by the Schedule of Performance or (b) the ability of the Developer to Complete the Project,
and which events (or the effect of which events) could not have been avoided by due diligence and
use of reasonable efforts by the Party claiming Force Majeure Delay:
(a) An epidemic, blockade, rebellion, war, act of terrorism, insurrection,
strike, lock -out, riot, act of sabotage, civil commotion, act of a public enemy, freight embargo, or
lack of transportation;
(b) Unusually severe weather;
(c) Reasonably unforeseeable Site conditions, including the presence of
Hazardous Materials;
(d) Fire, an earthquake equal to or greater than 4.5 on the Richter scale or
other casualty causing physical destruction or damage;
(e) Potential Default or Material Default by the other Party;
(f) Any lawsuit seeking to restrain, enjoin, challenge or delay
construction of the Project, which is vigorously defended by the Party and which is finally
determined in a manner which restricts the ability of a Party to perform its material obligations
hereunder or which is pending for more than one (1) year after the Effective Date, and which the
Assistant Executive Director or designee reasonably determines is the cause of any Party's inability
to perform its material obligations hereunder despite the best efforts of such Party to do so;
(g) The passage of a referendum or initiative that results in the inability
of any Party to perform its material obligations hereunder; and
(h) Any change in Governmental Regulation or adoption of any new
Governmental Regulation which is materially inconsistent with Governmental Regulations in effect
as of the Effective Date (subject to the exclusion set forth in clause (ii) below.
15.8.2 The term "Force Majeure Delay" shall be limited to the matters listed above
and specifically excludes from its definition the following matters which might otherwise be
considered Force Majeure Delay:
(a) The suspension, termination, interruption, denial or failure to obtain
or non -renewal of any Entitlement, permit, license, consent, authorization or approval which is
necessary for the development of the Project, except for any such matter resulting from a lawsuit or
referendum as described in subsections (f) or above;
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(b) Any change in a Government Regulation which was proposed or was
otherwise reasonably foreseeable at the Effective Date;
(c) Failure of the Developer to perform any obligation to be performed
by the Developer hereunder as the result of adverse changes in the financial condition of Developer;
(d) Failure of the Developer to provide any Performance Bond required
by this Agreement when due or to submit evidence of financing of the Project or to perform any
obligation to be performed by the Developer hereunder as the result of adverse changes in the market
conditions affecting the development, sale or lease of any part of the Site unless the Developer
demonstrates to the satisfaction of the Assistant Executive Director or designee in its sole discretion
that (x) the Developer was unable to obtain such Performance Bonds and/or financing despite
making best efforts to do so, and (y) such Performance Bonds and financing are unavailable on terms
which are commercially feasible because of generally applicable economic conditions affecting the
credit market which then exist and which are materially worse than the conditions which prevail as of
the Effective Date.
(e) Failure to submit documentation as and when required by Sections
2.2, 2.3 or 2_7, as applicable;
(f) Failure to acquire, maintain and submit evidence of insurance policies
as required by Section 11; and
(g) Failure to execute documents.
15.8.3 If any Party (the "First Party") believes that an extension of time is due to it
due to Force Majeure Delay, it may apply to the other Party (the "Second Party") in writing within
thirty (30) calendar days from the date upon which the First Party becomes aware of Force Majeure
Delay, describing the event, its cause, when and how the First Party obtained knowledge, the date the
event commenced and the estimated delay resulting there from. The extension for Force Majeure
Delay shall be granted or denied in the Second Party's reasonable discretion. If the Second Party's
decision with respect to such request is disputed by the First Party, the matter shall be resolved in
accordance with Section 15.1. An extension of time for Force Majeure Delay shall be on a day for
day basis for the period of the delay and shall commence to run from the time of the commencement
of the cause, if notice by the First Party is sent to the Second Party in accordance with the provisions
of this Section. If the First Party fails to notify the Second Party in writing of its request for Force
Majeure Delay within the thirty (30) calendar days specified above, there shall be no extension for
Force Majeure Delay.
15.9 Conflict of Interest. No appointed or elected official or employee of the Agency
shall have any personal interest, direct or indirect, in this Agreement nor shall any official or
employee participate in any decision relating to the Agreement which affects his interests or the
interests of any corporation, partnership, or association in which he is directly or indirectly interested.
The 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.
15.10 Non -liability of Agency Officials and Employees. No elected or appointed official,
representative, employee, agent, consultant, legal counsel or employee of the Agency shall be
personally liable to the Developer, or any successor in interest in the event of any default or breach
27
DOC S OC\ 1019673 v3\22782.0047
by the Agency for any amount which may become due to the Developer or successor or on any
obligation under the terms of this Agreement.
15.11 Inspection of Books and Records. The Agency shall have the right at all reasonable
times, upon ten (10) days written notice, to inspect the books and records of the Developer pertaining
to the Site as pertinent to the purposes of this Agreement. The Developer shall also have the right at
all reasonable times to inspect the books and records of the Agency, upon ten (10) days written
notice, pertaining to the Site as pertinent to the purposes of this Agreement.
15.12 Approvals.
(a) Except as otherwise expressly provided in this Agreement, approvals
required of the Agency or the Developer in this Agreement, including the Attachments hereto, shall
not be unreasonably withheld, conditioned or delayed.
(b) Any matter required by this Agreement to be submitted to the Agency
shall be deemed submitted upon the submittal to the Assistant Executive Director or designee.
(c) Except where the terms of this Agreement or State law expressly
require the approval of a matter or the taking of any action by the Agency, any matter to be approved
by the Agency shall be deemed approved, and any matter to be taken by the Agency shall be deemed
taken, upon the written approval by the Assistant Executive Director or designee.
15.13 Real Estate Commissions.
15.13.1 The Agency shall not be liable for any real estate commissions, brokerage
fees or finders fees which may arise from this Agreement. The Developer represents that it has
engaged no broker, agent or finder in connection with this Agreement or the transactions identified
herein. The Developer hereby agrees to indemnify and hold the Agency and its elected and
appointed officials, employees and representatives harmless from any losses and liabilities arising
from or in any way related to any claim by any broker, agent, or finder retained by the Developer
regarding this Agreement or development of the Project or the transactions identified herein or the
purchase of the Site.
15.13.2 The Agency represents that it has engaged no broker, agent, or finder in
connection with this Agreement or the transactions identified herein.
15.14 Date and Delivery of Agreement. Notwithstanding anything to the contrary
contained in this Agreement, the Parties intend that this Agreement shall be deemed effective,
executed and delivered for all purposes under this Agreement and for the calculation of any statutory
time periods based on the date an agreement between the Parties is effective, executed and/or
delivered, as of the Effective Date.
15.15 Survival of Covenants, Representation and Warranties. The covenants,
representations and warranties specified in this Agreement shall survive any investigation made by
any Party hereto and the closing of the of the transactions contemplated hereby.
15.16 Construction and Interpretation of Agreement.
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DOCSOC\ 1019673 v3\22782.0047
(a) The language in all parts of this Agreement shall in all cases be
construed simply, as a whole and in accordance with its fair meaning and not strictly for or against
any Party. The Parties hereto acknowledge and agree that this Agreement has been prepared jointly
by the Parties and has been the subject of arm's length and careful negotiation over a considerable
period of time, that each Party has been given the opportunity to independently review this
Agreement with legal counsel, and that each Party has the requisite experience and sophistication to
understand, interpret, and agree to the particular language of the provisions hereof. Accordingly, in
the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this
Agreement shall not be interpreted or construed against the Party preparing it; instead other rules of
interpretation and construction shall be utilized. The provisions of California Civil Code Section
1654 are specifically waived by each Party hereto.
(b) If any term or provision of this Agreement, the deletion of which
would not adversely affect the receipt of any material benefit by any Party hereunder, shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby and each other term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. It is the intention of the Parties hereto that in lieu
of each clause or provision of this Agreement that is illegal, invalid, or unenforceable, there be added
as a part of this Agreement an enforceable clause or provision as similar in terms to such illegal,
invalid, or unenforceable clause or provision as may be possible.
(c) The inclusion in Section 1 of this Agreement of any matters or facts
shall be conclusive proof of the truthfulness thereof.
(d) The captions of the sections and subsections herein are inserted solely
for convenience and under no circumstances are they or any of them to be treated or construed as part
of this instrument.
(e) References in this instrument and in the Attachments hereto to "this
Agreement mean, refer to and include this instrument as well as any riders, exhibits, addenda and
Attachments hereto (which are hereby incorporated herein by this reference) and all other documents
expressly incorporated by reference in this instrument. Any references to any covenant, conditions,
obligation and/or undertaking "herein," "hereunder," or "pursuant hereto') (or language of like
import) shall mean, refer to and include the covenants, obligations and undertakings existing
pursuant to this instrument and any riders, exhibits, addenda and Attachments or other documents
affixed to or expressly incorporated by reference in this instrument.
(f) As used in this Agreement and as the context may require, the
singular includes the plural and vice versa and the masculine gender includes the feminine and vice
versa.
(g) As used in this Agreement the words "include" and "including" mean
respectively "include, without limitation" and "including, without limitation".
15.17 Time of Essence. Time is of the essence with respect to all provisions of this
Agreement in which a definite time for performance is specified; provided, however, that the
foregoing shall not be construed to limit or deprive a Party of the benefits of any grace period
provided for in this Agreement.
29
DOCSOCA1019673v3\22782.0047
15.18 Fees and Other Expenses. Except as otherwise provided herein, each of the Parties
hereto shall pay its own fees and expenses, including attorneys' fees and costs, in connection with
negotiation and preparation of this Agreement.
15.19 No Partnership. Nothing contained in this Agreement shall be deemed or construed
to create a partnership, joint venture or any other relationship between the Parties hereto other than
lender and borrower according to the provisions contained herein, or cause the Agency to be
responsible in any way for the debts or obligations of the Developer.
15.20 Compliance with Law. The Developer agrees to comply with all the requirements
now in force, or which may thereafter be in force, of all municipal, county, state and federal
authorities, pertaining to the Site and the Improvements as well as operations conducted thereon. The
judgment of any court of competent jurisdiction or the admission of the Developer in any action or
proceeding against it, whether the Agency is a party thereto or not, that the Developer has violated
any such ordinance or statute in the use of the Site and/or the Improvements shall be conclusive of
that fact as between the Agency and the Developer.
15.21 Binding Effect. This Agreement and the terms, provisions, promises, covenants and
conditions hereof shall be binding upon and shall inure to the benefit of the Parties hereto and their
respective heirs, legal representatives, successors and assigns.
15.22 No Third Party Beneficiaries. This Agreement has been made and entered into
solely for the benefit of the Parties to this Agreement and their respective successors and permitted
assigns. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the Parties to it and their respective successors and
permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligation or
liability of any third persons to any Parties to this Agreement.
15.23 Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts
shall, together, constitute and shall be one and the same instrument. This Agreement shall not be
effective until the execution and delivery by the Parties of at least one set of counterparts. The
Parties agree to recognize execution of this Agreement by facsimile signatures; provided, however,
that such execution by facsimile shall not be effective unless a manually executed copy of the
signature page is promptly sent by United States, postage prepaid, and such manually signed page is
actually received by the other Party within ten (10) days of its execution. The Parties hereby
authorize each other to detach and combine original signature pages and consolidate them into a
single identical original. Any one of such completely executed counterparts shall be sufficient proof
of this Agreement.
15.24 Authority of Signatories to Agreement. Each person executing this Agreement
represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver
this Agreement on behalf of the Parties for which execution is made. Each Party represents and
warrants to the other that the execution of this Agreement and the performance of such Party's
obligations hereunder have been duly authorized and that the agreement is a valid and legal
agreement binding on such Party and enforceable in accordance with its terms.
15.25 Entire Agreement, Waivers and Amendments.
30
DOCSOC\1019673 v3\22782.0047
(a) This Agreement is executed in five (5) duplicate originals, each of
which is deemed to be an original.
(b) This Agreement, including the Attachments hereto, together with any
related documents referred to herein constitute the entire agreement between or among the Parties
with respect to the subject matter hereof. This Agreement supersedes and replaces any and all prior
agreements, proposed agreements, negotiations and communications, oral or written, and contains the
entire agreement between the Parties as to the subject matter hereof and any and all prior agreements,
understandings or representations are hereby terminated and canceled in their entirety. Each Party
hereby acknowledges that no other Party hereto, nor its agents or attorneys, have made any promises,
representations or warranties whatsoever, expressed or implied, not contained herein, to induce such
Party to execute this Agreement, and each Party acknowledges that it has not executed this
Agreement in reliance on any such promise, representation or warranty not contained herein.
(c) No waiver of any provision or consent to any action under this
Agreement shall constitute a waiver of any other provision or consent to any other action, whether or
not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a Party
to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver
given by a Party shall be null and void if the Party requesting such waiver has not provided a full and
complete disclosure of all material facts relevant to the waiver requested. All waivers of the
provisions of this Agreement must be in writing and signed by the appropriate authorities of the
Agency or the Developer and all amendments hereto must be in writing and signed by the
appropriate authorities of the Agency and the Developer. Any amendment to the Agreement shall
require the approval of the Agency.
15.26 Approval Procedures. This Agreement, when executed by the Developer and
delivered to the Agency, will then be scheduled for a public meeting before the Agency Board. This
Agreement must be authorized, executed and delivered by the Agency within sixty (60) days after
date of signature by the Developer or the Developer shall have the authority to withdraw its offer to
enter into this Agreement upon written notice to the Agency. The Effective Date of this Agreement
shall be the date when this Agreement has been executed by the Agency and delivered to the
Developer, which shall be the date first set forth above.
15.27 Memorandum of Agreement. At the time of acquisition of the Site, the Developer
shall cause the recordation of a memorandum of this Agreement in substantially the form and
substance of the Memorandum attached hereto as Attachment No. 3 (the "Memorandum of
Agreement") against the Site.
IN WITNESS WHEREOF, the Agency and the Developer have signed this
Agreement as of the date first set forth above.
AGENCY:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY
Dated:
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DOCS OC\ 1019673 v3\22782.0047
William A. Huston, Executive Director
APPROVED AS TO FORM
Lois E. Jeffrey, Agency Counsel
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DOCSOC\ 1019673 v3\22782.0047
DEVELOPER:
OLSON URBAN HOUSING, LLC, a Delaware
Limited liability Company
By: The Olson Company, a California
corporation, its Managing Member
Dated:
33
DOCS OC\1019673 v3\22782.0047
By:
Its:
By:
Its:
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF THE SITE
Attachment No. 1
DOCS00l 019784 v3\22782.0047
ATTACHMENT NO. 2
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following capitalized terms shall have the following meanings:
"Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to a Moderate
Income Household shall mean a price that does not exceed the Affordable Housing Cost for Moderate
Income Households. "Affordable Housing Cost" for a unit designated to be sold to a Very Low Income
Household shall mean a price that does not exceed the Affordable Housing Cost for Very Low Income
Households. The Affordable Housing Cost for an Affordable Housing Unit shall be calculated as of the
date of sale or resale of the Unit.
"Affordable Housing Cost for Moderate Income Households" shall mean a cost per Unit for
Moderate Income Households as more particularly defined in Health and Safety Code Section
50052.5(b)(4) and as generally described herein as a price per Unit calculated as follows: Annual
Affordable Housing Cost for Moderate Income Households shall not be less than twenty-eight percent
(28%) of the gross annual income of the household, nor exceed the product of thirty-five percent (35%)
times one hundred ten percent (110%) of the annual Orange County Median Income, adjusted for family
size appropriate for the Unit. Notwithstanding the foregoing, in accordance with Health and Safety Code
Section 50052.5(b)(4), the Agency has determined and hereby agrees that, for a Moderate Income
Household with annual gross income that exceeds one hundred ten percent (110%) of the annual Orange
County Median Income, adjusted for family size, no maximum cap shall be placed upon the annual
payments. [Shouldn't this provide for 35% times the purchaser's actual income?]
"Affordable Housing Cost for Very Low Income Households" means the cost per Unit for Very
Low Income Households as more particularly defined in Health and Safety Code Section 50052.5(b)(2)
and as generally described herein as a price per Unit which results in Monthly Housing Costs for the
purchaser which shall not exceed one -twelfth of thirty percent (30%) times fifty percent (50%) of the
annual Orange County Median Income, adjusted for family size appropriate for the Unit.
"Affordable Housing Covenant" shall mean a covenant substantially in the form attached hereto
as Attachment Nos. 14 or 15 to be recorded against the title to the Affordable Housing Unit.
"Affordable Housing Option Agreement" shall mean the agreement that gives the Agency an
option to purchase the Affordable Housing Unit which shall be exercisable in the event that (a) an owner of
a Unit conveys all, or substantially all of the Owner's interest in the Unit, or (b) the owner of a Unit is in
breach of the owner's obligations in the Affordable Housing Covenant.
"Affordable Housing Promissory Note" shall have the meaning set forth in Section 12.1.2.
"Affordable Housing Trust Deed" shall mean an Affordable Housing Deed of Trust With
Assignment of Rents in the form attached hereto as Attachment No. 13 securing the obligation of the
Affordable Housing Homeowner and its successors and assigns to comply fully with the applicable
Attachment No. 2-1
DOCSOC\ 1019784v3\22782.0047
Affordable Housing Covenant, including its Exhibits, the Reimbursement Agreement, the Affordable
Housing Promissory Note, and the provisions of Section 12.
"Affordable Housing Unit" shall mean the ten (10) Units identified by the Developer and
approved by the Agency for sale at an Affordable Housing Cost to Moderate Income Households, or an
Affordable Housing Cost for Very Low Income Households.
"Agency" shall have the meaning set forth in Section 1.4.1.
"Agency Title Policy" shall mean any title insurance policy obtained by the City from the Title
Company in connection with this Agreement.
""ALTA " shall mean an American Land Title Association form of title insurance policy.
"Approved Project Plans" shall have the meaning set forth in Section 7.3.3.
"Assignee" shall mean any Person to whom or to which the Developer assigns its interests in this
Agreement, the Site, the Improvements thereon or any portion thereof.
"Assistant Executive Director" shall mean Ms. Christine Shingleton, or her successor.
"Business Day(s)" shall mean any day on which Tustin City Hall is open for business.
"CEQA" shall mean the California Environmental Quality Act and implementing regulations and
guidelines, contained in Cal. Public Resources Code Section 21000 et seq., and Cal. Code of Regulations,
title 14, Section 15000 et seq.
"Certificate of Compliance" shall have the meaning set forth in Section 8.1.
"City" shall mean the City of Tustin.
"City Code" shall mean the Tustin City Code for the City of Tustin, California, as the same may be
amended from time to time.
"City Hall" shall mean the seat of government for the City of Tustin and the Tustin Community
Redevelopment Agency, located at 300 Centennial Way, Tustin, California.
"Claim" or "Claims" shall mean any and all claims, actions, causes of action, demands, orders, or
other means of seeking or recovering losses, damages, liabilities, costs, expenses (including attorneys' fees,
fees of expert witnesses, and consultants' and court and litigation costs), costs and expenses attributable to
compliance with judicial and regulatory orders and requirements, fines, penalties, liens, taxes, or any type
of compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen.
Attachment No. 2-2
DOCSOC\ 1019784v3\22782.0047
"Common Area Improvements" shall mean all amenities of the Project to be available for and
used in common by the owners of all Units on the Site.
"Common Areas" shall mean the Common Area Improvements and the land upon which such
improvements are located.
"Community Development Department" shall mean the Community Development Department
of the City of Tustin, California.
"Complete" and "Completion" shall mean, with respect to the Project, the point in time when all
of the following shall have occurred: (1) to the extent a certificate of occupancy is required with respect to
construction of the Improvements required under this Agreement, issuance of a certificate of occupancy by
the City; (2) recordation of a Notice of Completion by the Developer, its Assignee or such Party's
contractor; (3) certification by the Project Architect that the Improvements (with the exception of minor
"punch list" items) have been completed in a good and workmanlike manner and substantially in
accordance with the approved plans and specifications; and (4) any mechanic's liens that have been
recorded or stop notices that have been delivered have been paid, settled or otherwise extinguished,
discharged, released, waived, bonded around or insured against.
"Conditions Precedent" or "Condition Precedent" shall mean all conditions precedent to the
Agency's issuance of a Certificate of Compliance, as set forth in Section 8.5.
"Consumer Price Index" shall mean the Consumer Price Index - all Urban Consumers. Los
Angeles -Orange County -Riverside, California, published by the Bureau of Labor Statistics, or such
comparable index as may be reasonably acceptable to the City.
"Defaulting Party" shall mean a Party to this Agreement who is either in Potential Default or in
Material Default.
"Developer" shall have the meaning set forth in Section 1.4.2.
"Development Permits" shall include any conditional use permit, Site Plan, grading permit,
foundation permit, construction permit, building permit or other permit type as may be necessary pursuant
to the Tustin City Code.
"Due Diligence Information" shall mean any and all information or documentation furnished to
the Developer by the Agency, or its elected and appointed officials, employees, agents, attorneys, affiliates,
representatives, contractors, successors or assigns.
"Effective Date" shall have the meaning set forth in the introduction.
"Entitlements" shall have the meaning set forth in Section 7.1.
Attachment No. 2-3
DOCSOC\ 1019784v3\22782.0047
"Environmental Agency" shall mean the United States Environmental Protection Agency; the
California Environmental Protection Agency and all of its sub -entities, including any Regional Water
Quality Control Board, the State Water Resources Control Board, the Department of Toxic Substances
Control, the South Coast Air Quality Management District, and the California Air Resources Board; the
City; any Fire Department or Health Department with jurisdiction over the Developer Property; and/or any
other federal, state, regional or local governmental agency or entity that has or asserts jurisdiction over
Hazardous Substance Releases or the presence, use, storage, transfer, manufacture, licensing, reporting,
permitting, analysis, disposal or treatment of Hazardous Materials in, on, under, about, or affecting the
Project.
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances, rules,
regulations, requirements, orders, directives, guidelines, or permit conditions, in existence as of the
Effective Date or as later enacted, promulgated, issued, modified or adopted, regulating or relating to
Hazardous Materials, and all applicable judicial, administrative and regulatory decrees, judgments and
orders and common law, including those relating to industrial hygiene, public safety, human health, or
protection of the environment, or the reporting, licensing, permitting, use, presence, transfer, treatment,
analysis, generation, manufacture, storage, discharge, Release, disposal, transportation, Investigation or
Remediation of Hazardous Materials. Environmental Laws shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et seq.) ("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S. C. Section
6901 et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et
seq.); the Toxic Substances Control Act, as amended, (15 U.S.C. Section 2601 et seq.); the Hazardous
Substances Account Act (Chapter 6.8 of the California Health and Safety Code Section 25300 et seq.);
Chapter 6.5 commencing with Section 25100 (Hazardous Waste Control) and Chapter 6.7 commencing
with Section 25280 (Underground Storage of Hazardous Substances) of the California Health and Safety
Code; and the California Water Code, Sections 13000 et seq.
"Force Majeure Delay" shall have the meaning set forth in Section 15.8.
"General Plan" shall mean the most current general plan for the City of Tustin.
"Governmental Authority" shall mean any and all federal, state, county, municipal and local
governmental and quasi -governmental bodies and authorities (including the United States of America, the
State of California and any political subdivision, public corporation, district, joint powers authority or other
political or public entity) or departments thereof having or exercising jurisdiction over the Parties, the
Project, or the Site, as the context indicates.
"Governmental Requirements" shall mean all laws, statutes, codes, ordinances, rules, regulations,
standards, conditions, guidelines and other requirements issued by any Governmental Authority having
jurisdiction over the Parties, the Project, or the Site, or any component thereof.
"Hazardous Materials" shall mean and include the following:
Attachment No. 2-4
DOCSOC\ 1019784v3\22782.0047
(a) "Hazardous Substance", "Hazardous Material', "Hazardous Waste", or "Toxic
Substance" under the Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. subsection 9601, et se ., the Hazardous Materials Transportation Act, 49 U.S.C. subsection
5101, et seq., or the Resource Conservation and Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a "Restricted
Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California Health and Safety
Code, or is listed or identified pursuant to subsection 25140 or 44321 of the California Health and Safety
Code;
(c) "Hazardous Material', "Hazardous Substance", "Hazardous Waste", "Toxic
Air Contaminant", or "Medical Waste" under subsections 25281, 25316, 25501, 25501.1, 117690 or
39655 of the California Health and Safety Code;
(d) "Oil' or a "Hazardous Substance" listed or identified pursuant to Section 311 of
the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any other hydro carbonic
substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous Waste", or an
"Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California Code of Regulations;
(f) Listed by the State of California as a chemical known by the State to cause cancer or
reproductive toxicity pursuant to Section 25249.9(8) of the California Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more other
substances, chemical compounds, or mixtures damages or threatens to damage, health, safety, or the
environment, or is required by any law or public agency to be remediated, including remediation which
such law or public agency requires in order for the property to be put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the guidelines
set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether or not the
presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. subsection 136 et seq.;
0) Asbestos, PCBs and other substances regulated under the Toxic Substances Control
Act, 15 U.S.C. subsection 2601 et seg.;
(k) Any radioactive material including any "source material', "special nuclear
material', "by-product material', "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel' or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et sea., the Nuclear
Attachment No. 2-5
DOCSOC\ 1019784v3\22782.0047
Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California Radiation Control
Law, California Health and Safety Code subsection 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C. subsection 651,
et seq., or the California Occupational Safety and Health Act, California Labor Code subsection 6300 et
seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S. C. subsection 7401 et seq. or pursuant
to Division 26 of the California Health and Safety Code.
"Household" shall mean all persons residing in a Unit.
"Indemnified Parties" shall have the meaning set forth in Section 9.1.
"Injured Party" shall mean the Party to this Agreement other than the Party which is in Potential
Default or in Material Default.
"Investigation(s)" shall mean any observation, inquiry, examination, sampling, monitoring,
analysis, exploration, research, inspection, canvassing, questioning, and/or surveying of or concerning the
Property or any adjacent or affected properties, including the air, soil, surface water, and groundwater, and
the surrounding population or properties, or any of them, to characterize or evaluate the nature, extent or
impact of Hazardous Materials.
"Lot(s)" shall mean the subdivided portions of a Parcel that are conveyed with a Unit or Units as
reflected in an approved and recorded Final Map, that are conveyed and intended for sale to individual
Owner -Occupiers.
"Material Default" or "Event of Default" shall mean the state a Party to this Agreement is in
after proper notice is provided of a Potential Default and the appropriate cure period, if any, has lapsed, all
as provided in this Agreement
"Memorandum of Agreement" shall mean a Memorandum of this Agreement substantially in the
form and substance of the memorandum attached to the Agreement as Attachment No. 3.
"Moderate Income Household" shall mean a Household composed of persons and families whose
gross income does not exceed the qualifying limits for moderate income families set forth in Health and
Safety Code Section 50093.
"Mortgage" shall mean any indenture of mortgage or deed of trust, bond, grant of taxable or tax
exempt funds from a governmental agency or other security interest and the documents governing a
sale-leaseback transaction, together with all loan documents related thereto.
Attachment No. 2-6
DOCSOC\ l 019784v3\22782.0047
"Mortgagee" shall means any mortgagee, beneficiary under any deed of trust, trustee of bonds,
governmental agency which is a grantor of funds, and, with respect to any Parcel which is the subject of a
sale-leaseback transaction, the Person acquiring fee title.
"Mortgagor" shall mean the mortgagor or trustor under a Mortgage (or lessee, in the case of a
sale-leaseback transaction).
"Notice of Completion" shall mean the notice of completion filed by the Developer after the
Completion of each Unit, pursuant to California Civil Code Section 3093.
"Official Records" shall mean the records of the office of the County Recorder for Orange County,
California.
"Orange County Median Income" shall mean the median income of all households in Orange
County, California, as established by official annual publication of the Federal Department of Housing and
Urban Development as released by the State Department of Housing and Community Development.
"Owner -Occupied" shall mean a Unit that is owned and occupied by the fee owner of such Unit.
"Owner -Occupier" shall mean a person or persons who will own in fee and occupy, for residential
purposes, an individual Unit.
"Ownership Transfer" shall mean the transfer, sale, assignment, ground lease, gift, hypothecation,
mortgage, pledge or encumbrance, or other similar conveyance of the Developer's interests in this
Agreement, the Site or the Improvements thereon, or any portion thereof or interest therein, whether
voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; the granting of any
Mortgage and/or the execution of any installment land sale contract or similar instrument affecting all or a
portion of the Site or the Improvements thereon; and shall also include a Transfer of Control of the
Developer, or any conversion of the Developer to an entity form other than that of the Developer at the
time of execution of this Agreement.
"Ownership Transferee" shall mean any Person to which an Ownership Transfer is made,
including any Mortgagee or Permitted Mortgagee.
"Party" shall mean either of the Agency or the Developer, individually.
"Parties" shall mean Agency and the Developer, collectively.
"Permitted Mortgage" shall mean any indenture of mortgage or deed of trust, bonds, grant of
taxable or tax-exempt funds from a governmental agency or other conveyance of a security interest in a
Parcel(s), to a Permitted Mortgagee or the conveyance of such Parcel to the Permitted Mortgagee or its
assignee or purchaser in connection with a foreclosure or a deed in lieu of foreclosure, which satisfies all
of the criteria set forth in Section 2.7 of this Agreement.
Attachment No. 2-7
DOCSOC\ 1019784v3\22782.0047
"Permitted Mortgage Loan" shall mean the obligations secured by a Permitted Mortgage.
"Permitted Mortgagee" shall mean a Mortgagee meeting the criteria set forth in Section 2.7 and
accordingly entitled to the Permitted Mortgagee protections provided by this Agreement.
"Permitted Transfer" shall mean any Transfer that is permitted or authorized by Section 2.
'Person' shall mean an individual, partnership, limited partnership, trust, estate, association,
corporation, limited liability company, joint venture, firm, joint stock company, unincorporated
association, Governmental Authority, governmental agency or other entity, domestic or foreign.
"Potential Default" shall mean the state of being potentially in Material Default, as further defined
in Section 13.1.
"Preliminary Plan(s)" shall have the meaning set forth in Section 7.3.2.
"Project" shall mean the development of the condominium complex and related improvements on
the Site, as provided in this Agreement and the Scope of Development.
"Project Architect" shall mean the architect or engineer, as applicable, designated in writing by
the Developer for a particular product type or improvement.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
migrating, disposing, or dumping into the environment.
"Remediate" or "Remediation' shall mean any response or remedial action as defined under
Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as defined under
comparable state and local laws, and any other cleanup, removal, containment, abatement, recycling,
transfer, monitoring, storage, treatment, disposal, closure, restoration or other mitigation or remediation of
Hazardous Materials or Releases required by any Environmental Agency or within the purview of any
Environmental Laws.
"Schedule of Performance" shall mean the document attached as Attachment No. 6 to this
Agreement, setting forth the dates and time periods for submissions, approvals and actions, including the
construction of the Improvements.
"Scope of Development" shall mean the description of the Project attached as Attachment No. 4.
"Site" shall have the meaning set forth in Section 1.1.1.
"Site Improvements" or "Improvements" shall mean all of the buildings, structures, landscaping
and other improvements, other than the Public Improvements, to be constructed or installed on the Site,
consistent with the Approved Project Plans and the Entitlements.
Attachment No. 2-8
DOCSOCU 019784v3\22782.0047
"State" shall mean the State of California.
"Subdivision Map" shall mean any tentative or final map for the Site approved by the City in
accordance with the Subdivision Map Act and the City Municipal Code.
"Subdivision Map Act" shall mean the California Subdivision Map Act as codified in Cal.
Government Code Section 66410 et seq.
"Title Company" shall mean First American Title Insurance Company, or such other title company
mutually agreed upon by the Parties.
"Transfer" shall have the meaning set forth in Section 2.2.
Attachment No. 2-9
DOC SOC\ 1019784v3\22782.0047
ATTACHMENT NO.3
RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Christine A. Shingleton
No fee for recording requested pursuant to Government Code Sections 6103 and 27383
MEMORANDUM OF AFFORDABLE HOUSING ASSISTANCE AGREEMENT
THIS MEMORANDUM OF AFFORDABLE HOUSING ASSISTANCE AGREEMENT
("Memorandum of Agreement") is made as of , 2004 by and between the
TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a State agency organized for local purposes
(Health and Safety Code Section 33000 et. seq.) (the "Agency"), and OLSON URBAN HOUSING LLC,
a Delaware limited liability company (the "Developer") to confirm that the Agency and the Developer
have entered into that certain Affordable Housing Assistance Agreement dated as of February _, 2004
(the "Agreement") affecting the real property described below. The Agency and the Developer are
sometimes referred to herein individually as a "Party" and collectively as the "Parties." Initially capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the
Agreement.
1. Property Affected by the Agreement. The following described land is subject to the terms,
covenants, conditions and restrictions set forth in the Agreement effective as to such land upon the date of
acquisition thereof by the Developer:
1.1 The "Site" consisting as of the date hereof of that certain property located at 14522 Newport
Avenue, in the City of Tustin, County of Orange, State of California. The Site is more particularly
described on Attachment 1, attached hereto, and incorporated herein by this reference.
1.2 This Memorandum of Agreement has been executed and shall be recorded immediately
following the recordation of a Deed to Developer for the Site and the Agreement and this Memorandum of
Agreement shall each be binding upon the Site in accordance with its terms.
2. Effect of Agreement. The Agreement imposes certain obligations, agreements, covenants,
conditions and restrictions with respect to the Site and Developer's acquisition, development, use,
operation and ultimate disposition thereof, that run with the land as further set forth below, including,
without limitation:
Attachment No. 3-1
D0CS0C\ 1019784v3\22782.0047
(a) certain restrictions on transfer, conveyance and/or assignment of the Agreement
and/or the Site, whether voluntary or involuntary, contained in Section 2.2 of the Agreement, that terminate
upon execution and recordation by the Agency of the Certificate of Compliance;
(b) certain restrictions on Mortgages, contained in Section 2.7 of the Agreement, that
terminate upon execution and recordation by the Agency of the Certificate of Compliance;
(c) the indemnification and environmental provisions in Section 9 of the Agreement,
that remain in effect in perpetuity;
(e) the non-discrimination covenants contained in Section 11.3 of the Agreement that
remain in effect in perpetuity;
(f) the affordable housing covenants contained in Section 12 of the Agreement, that
remain in effect for the period specified below;
Effect on Mortgages; Right To Encumber.
Notwithstanding any other provision of the Agreement, the Developer shall have the right to
encumber the fee title to all or portions of the Site owned by it with a Permitted Mortgage made by a
Permitted Mortgagee subject to compliance with the terms, conditions and limitations set forth in Section
2.7 of the Agreement and Mortgages complying with the terms of said section and entered into by
Developer with Permitted Mortgagees shall be deemed to be "Permitted Mortgages".
4. Certificate of Compliance.
Upon the Developer's satisfaction of the conditions set forth in Section 8 of the Agreement with
respect to a Certificate of Compliance, the Agency shall furnish the Developer with the appropriate
Certificate of Compliance in recordable form upon written request there for by the Developer. Such
Certificate of Compliance shall be binding upon the parties to this Memorandum of Agreement, their
successors and assigns, and shall be deemed the Agency's conclusive determination of satisfactory
Completion of the Improvements covered by such Certificate of Compliance and compliance with all other
conditions required by the Agreement, subject only to such continuing terms of the Agreement and/or
obligations of the Developer as are set forth therein.
Attachment No. 3-2
DOCSOC\1019784v3\22782.0047
5. Agreement and Memorandum of Agreement Run With the Land.
The Agreement and this Memorandum of Agreement, including, without limitation, the provisions
recited and set forth above, and all other obligations, agreements, covenants, conditions and restrictions set
forth in the Agreement and this Memorandum of Agreement, are hereby agreed by the Developer and the
Agency to be covenants running with the land and enforceable as equitable servitudes against the Site, and
are hereby declared to be and shall be binding upon the Site and the Developer and the successors and
assigns of the Developer owning all or any portion of the Site for the benefit of the Agency.
6. Acknowledgement and Assumption by Developer.
By acceptance of a deed to the Site, the Developer hereby acknowledges and assumes all
responsibilities placed upon the Developer under the terms of the Agreement.
7. Public Documents.
The documents constituting the Agreement are public documents and may be reviewed at the
official offices of the Agency.
8. Interpretation; Notice.
This Memorandum of Agreement is prepared for recordation and notice purposes only and in no
way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any
inconsistency between the terms, conditions, provisions and covenants of this Memorandum of Agreement
and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail.
9. Attachments.
The Attachments to this Memorandum of Agreement are hereby incorporated by this reference as
though fully set forth in this Section.
IN WITNESS WHEREOF, the Agency and the Developer have signed this Memorandum of
Agreement as of the date first set forth above.
Dated:
Tustin Community Redevelopment Agency
William A. Huston, Executive Director
Attachment No. 3-3
DOCSOC\1019784v3\22782.0047
APPROVED AS TO FORM
Legal Counsel for the Agency
WOODRUFF, SPRADLIN & SMART
Lois E. Jeffrey
OLSON URBAN HOUSING, LLC, a Delaware Limited
liability Company
By: The Olson Company, a California corporation, its
Managing Member
By:
Its:
By:
Its:
Attachment No. 3-4
DOCSOC\ 1019784v3\22782.0047
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On , before me, a Notary
Public in and for said state, personally appeared
, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that
by his/her signature on the instrument, the person, or the entity upon behalf of which the person action,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
DOCSOC\1019784v3\22782.0047
ATTACHMENT NO.4
SCOPE OF DEVELOPMENT
CONDOMINIUM HOUSING PROJECT
Note: References herein to "the Agreement" mean the Affordable Housing Assistance
Agreement of which this Attachment No. 4 is a part; references to "Attachments" mean the
Attachments to the Agreement unless otherwise specified. Except as otherwise noted, all capitalized
terms defined within the Agreement and the Attachments shall retain the meanings as defined in the
Affordable Housing Assistance Agreement.
GENERAL DESCRIPTION
The Site is delineated on the Project Site Map (Attachment 1) and described in the
Legal Description (Attachment 2) to the Agreement.
II. DEVELOPER IMPROVEMENTS
A. Definition of Site Improvements
The Developer shall construct or cause to be constructed on the Site all of the Site
Improvements including any necessary public improvements set forth in this Scope of Development
or as required and approved by the Agency and City, without limitation, the Tustin Planning
Commission, and City Council.
The Site Improvements shall generally consist of the following:
1. Improvement of the Site with a 63 -unit attached residential condominium project, as
shown on the Preliminary Plans Exhibit A hereto, and pursuant to Agency approval and City
of Tustin approvals through the Tustin Planning Commission and Tustin City Council for the
following: (a) General Plan Amendment 03-001; (b) Zone Change 03-001; (c) Tentative Tract
Map No. 16506; and (d) Design Review 03-009. Resolutions of approval shall be obtained
within the times established in the Schedule of Performance Attachment 4.
2. Compliance with all "Conditions of Approval' stipulated by an applicable
governmental agency having jurisdiction, including, but not limited to, the Tustin Planning
Commission and the City approvals identified above.
B. Schedule of Performance
The Developer shall commence and complete the Site Improvements by the respective
times established therefore in the Schedule of Performance (Attachment 4).
Attachment No. 4-1
DOCS OC\ 1019784v3\22782.0047
III. DEVELOPMENT STANDARDS
The Site Improvements shall be designed and developed as a high quality for -sale
residential condominium project in which the residential units and buildings will have a first-class
architectural quality and character, both individually and in the context of the surrounding residential
community. All public spaces and project open spaces shall be designed, landscaped and developed
with the same degree of quality that reflects a high quality of life environment for the residents.
Attention shall be paid to design features which enhance pedestrian activities and
minimize mass, scale and bulk, and to the selection of color and materials. The City and Agency and
Developer will cooperate and direct their consultants, architects and/or engineers, and contractors to
cooperate so as to ensure the continuity and coordination necessary for the proper and timely
completion of the Project.
All of the Site Improvements shall conform to all applicable federal, state, and city
codes and regulations, including but not limited to federal and state labor codes and regulations, and
the requirements of the City of Tustin Codes and conditions of the Tustin Planning Commission and
Tustin City Council approvals and resolutions.
The Developer acknowledges the responsibility to obtain any approvals required by
any governmental agency, utility, or other agency, including the City, which has jurisdiction over all
or any portion of the Site Improvements. All "Conditions of Approval" stipulated by an applicable
jurisdiction shall be incorporated into the final design and noted in the construction documents by the
architects, engineer and other consultants. The Developer shall make necessary applications by such
time(s) as will be consistent with the timely commencement and completion of various portions of the
off-site and on-site improvements by respective times established therefore by the Schedule of
Performance (Attachment 4).
IV. AFFORDABILITY REQUIREMENTS
The Developer is aware that the Agency's participation in this Agreement is to
provide financial assistance to Developer to provide for the development of 10 units of affordable
housing units and to record covenants requiring such units be sold to and occupied by very low and
moderate income households at the Affordable Housing Cost as defined by the California Health and
Safety Code and in the Agreement for a period not less than forty-five (45) years from the date the
units are first sold and occupied.
To accomplish such purposes, the Developer covenants and promises to conduct
marketing and sales in a manner consistent with and in full conformance with the provisions of the
Agreement and the Restrictive Covenants executed by and between the Agency and Developer dated
as of the date of the Agreement. Specifically, Developer shall sell four (4) units to very low income
households (generally not exceeding 50% of the Area Median Income), as defined in the Agreement,
and six (6) units to moderate income households (generally not exceeding 120% of the Area Median
Income), as defined in the Agreement.
Attachment No. 4-2
DOCSOC\ 1019784v3\22782.0047
V. CHANGES TO APPROVED PLANS
If the developer desires to make any changes in the Approved Plans as defined in the
Agreement, the Developer shall submit the proposed change(s) to the Agency and City for approval.
Such proposed changes shall be reviewed in the context of the purpose of the Agreement and
applicable provision of the Tustin City Code and shall be approved or disapproved in writing by the
Agency and City.
Attachment No. 4-3
DOCSOC\ 1019784v3\22782.0047
ATTACHMENT NO.5
METHOD OF FINANCING
Note: References herein to "the Agreement" mean the Affordable Housing Assistance
Agreement of which this Attachment No. 5 is a part; references to "Attachments" mean the
Attachments to the Agreement unless otherwise specified. Except as otherwise noted, all capitalized
terms defined within the Agreement and the Attachments shall retain the meanings as defined in the
Affordable Housing Assistance Agreement.
1. PROJECT BUDGET AND FINANCING SOURCES AND DEFINITIONS
1.1. In General
The acquisition of the Site and construction of the Site Improvements is intended to
be financed as provided in this Method of Financing. (The acquisition of the Site and the
construction of the Site Improvements are collectively referred to herein as "the Project.") The
"Project Budget", which is attached hereto as Exhibit A, identifies the sources of funds and estimates
the total Project Costs (as defined in Section 1.3.4 hereto), to be Nineteen Million Nine Hundred
Ninety -Nine Thousand Nine Hundred Thirty -One Dollars ($19,999,931).
1.2. Funding sources for the total Project Costs will be generally as follows:
1.2.1. "Agency Assistance" (as defined in Section 1.3.1 herein) in the amount not to
exceed Nine Hundred Sixty -Nine Thousand Nine Hundred Sixty Dollars ($969,960);
1.2.2. "Conventional Construction Loan" (as defined in Section 1.3.2 herein) in an
amount of approximately Fifteen Million Eight Hundred Forty -Nine Thousand Nine
Hundred Thirty -One Dollars ($15,849,931);
1.2.3. "Developer Equity" (as defined in Section 1.3.3 herein) in an amount of
approximately Three Million Dollars ($3,000,000);
1.3. Definitions
1.3.1. "Agency Assistance" shall mean the amount of the Agency assistance required to be
funded by the Agency to assist the Developer for the cost of pre -development
activities and fees in connection with the Project, which shall be disbursed in
increments as follows: Affordability Assistance Loan in an amount not to exceed
Nine Hundred Sixty -Nine Thousand Nine Hundred Sixty Dollars ($969,960) to be
disbursed to Developer from the Agency's Low and Moderate Income Housing Fund
in accordance with the Agreement and the Affordability Assistance Loan Promissory
Note.
Attachment No. 5-1
DOCSOCU 019784v3\22782.0047
1.3.2 "Conventional Construction Loan" shall mean a construction loan made by a
Permitted Mortgagee ("Permitted Mortgage") to finance Project Cost as more
particularly described in Section 1.3.4 below.
1.3.3. "Developer Equity" shall mean all equity made available by the Developer to
fund Project Costs in excess of the amounts identified in Sections 1.3.1 and 1.3.2
above, including the Developer's cash contribution and any cost overruns, excluding
any proceeds from a Permitted Mortgage.
1.3.4. "Project Costs' shall mean all reasonable and necessary costs and expenses
incurred by Developer prior to the issuance of a Certificate of Compliance and solely
in connection with the acquisition, planning, design, construction, improvement,
development and equipping of the Project, which costs are enumerated in Exhibit "A"
— Project Budget.
2. DEVELOPER FUNDING
2.1 Conventional Construction Loan
Developer shall obtain a Conventional Construction Loan from a Permitted Mortgagee in
an approximate amount of $15,849,931, as described in Section 1. 1.2 above. The Conventional
Construction Loan shall be funded and disbursed as provided in the construction loan agreement
between the Developer and Permitted Mortgagee.
2.2. Developer Cash Equity
Developer shall contribute Cash Equity to fund Project Costs in excess the amounts
identified in Subsection 1.3.1 and 1.3.2 above including, but not limited to, all costs overruns in
connection with the Project.
3. AGENCY ASSISTANCE
Agency Assistance shall be in the form of a loan, which shall be evidenced by a
Promissory Note and secured by a Deed of Trust. The terms of the Note and Deed of Trust are
contained in the Agreement and the Affordability Assistance Loan Promissory Note (Attachment 9).
Subject to the satisfaction of conditions precedent as described in Section 4.4.2 of the
Agreement and in accordance with the schedule as described in the Schedule of Performance, the
Agency shall disburse the Affordability Assistance Loan in the amount of $969,960 to the
Developer to assist in land write-down in connection with the Affordable Units in the Project.
IV. GENERAL TERMS OF FINANCING DEVELOPMENT
The Developer acknowledges that the Project Costs may exceed the amounts set forth
in Exhibit "A" — Project Budget. Accordingly, Developer shall bear all costs in excess of the subtotal
amounts set forth in Exhibit "A".
Attachment No. 5-2
DOCS 0C\10197840\22782.0047
EXHIBIT A
PROJECT BUDGET
DOC S OC\I 019784v3\22782.0047
ATTACHMENT NO.6
SCHEDULE OF PERFORMANCE
CONDOMINIUM HOUSING PROJECT
NOTE: References herein to "the Agreement" mean the Affordable
Housing Assistance Agreement of which this Attachment No. 6 is a
part; references to "Attachments" mean the Attachments to the
Agreement unless otherwise specified. Except as otherwise noted, all
capitalized terms defined within the Agreement and the Attachments
shall retain the meanings as defined in the Affordable Housing
Assistance Agreement.
Action Timing
1. Execution of Agreement
A. Owner delivers executed Within 3 calendar days following action by
Agreement and Attachments to Agency. Agency on the DDA.
B. Agency executes Agreement Within 5 calendar days following Owner's
and Attachments. submission of executed Agreement and
Attachments.
C. Agency causes recordation of Within 10 calendar days following execution of
appropriate Agreement Attachments. the Agreement by Agency.
2. Land Use Approvals
A. Owner submits complete Completed
applications with related drawings and
documents to the City for all necessary land
use approvals, including zoning approvals.
B. City approves or disapproves Completed.
all necessary land use approvals.
Attachment No. 6-1
DOCS OC\1019784v3\22782.0047
3. Construction of the Site
Improvements.
A. Owner commences Within 90 calendar days following the
construction of the Site Improvements. execution of the Agreement.
B. Owner completes construction
of Site Improvements.
4. Agency Assistance.
A. Developer submits evidence of
satisfaction of conditions precedent for
funding and disbursement of Housing
Affordability Assistance Loan as described
in the Agreement.
B. City and Agency approves or
disapproves disbursement of Housing
Affordability Assistance Loan pursuant to
the Agreement.
5. Submission of Request for Certificate
of Compliance. Owner submits request
for issuance of a Certificate of Compliance
by Agency.
6. Approval and Issuance of Certificate
of Compliance. The Agency approves or
disapproves the request for issuance of a
Certificate of Compliance.
7. Recordation of Certificate of
Compliance. The Agency shall cause the
recordation of the Certificate of
Compliance in the Office of the County
Recorder of Orange County.
8. Repayment of Housing Affordability
Assistance Loan
Developer repays or assigns to
Affordable Housing Unit Homebuyers the
Housing Affordability Assistance Loan.
DOCS OC\ 1019784v3\22782.0047
Within eighteen (18) months following the
execution of the Agreement.
Within 30 calendar days following the issuance
by City of a Temporary Certificate of
Occupancy for the Project and prior to sale of
first housing unit.
Within 15 calendar days following City and
Agency's inspection of the Developer's
evidence of satisfaction of conditions
precedence for funding the Housing
Affordability Assistance Loan.
Upon completion of all Site Improvements and
satisfaction of all conditions precedent set forth
in the Agreement.
Within 15 calendar days following submission
of request for Certificate of Compliance and
satisfaction of all conditions precedent set forth
in the Agreement.
Within 5 calendar days following issuance of
Certificate of Compliance by Agency.
As a condition precedent to Agency issuance of
a Certificate of Compliance.
Attachment No. 6-2
Attachment No. 6-3
DOCSOC\ 1019784v3\22782.0047
ATTACHMENT NO.7
[Deleted]
Attachment No. 7-1
DOC S OC\ 1019784v3\22782.0047
ATTACHMENT NO. 8
[Deleted]
Attachment No. 8-1
DOCSOCV 019784v3\22782.0047
ATTACHMENT NO. 9
PROMISSORY NOTE SECURED BY DEED OF TRUST
Affordability Assistance Loan
$969,960.00 Tustin, California
, 2004
FOR VALUE RECEIVED, the undersigned OLSON URBAN HOUSING, LLC
("Developer") promises to pay to the TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a California redevelopment agency (the "Agency") or order at Tustin, California or
such other place as the Agency may designate in writing, the principal sum of NINE HUNDRED
SIXTY NINE THOUSAND, NINE HUNDRED SIXTY DOLLARS ($969,960), plus interest, on
the terms specified below.
1. Agreement. This Note is given in accordance with that certain Affordable
Housing Assistance Agreement executed by and between the Agency and the Developer of even
date herewith (the "Loan Agreement'). The obligations of the Developer under this Note shall
be subject to the terms of the Loan Agreement, and the Affordability Assistance Deed of Trust
(the "Deed of Trust') of even date herewith which secures performance under this Note.
2. Interest and Repayment.
(a) Except as provided in Sections 2(f) and 11 below, the unpaid principal
balance of the Affordability Assistance Loan shall accrue interest commencing on the date on
which the Loan proceeds are disbursed to Developer, at the rate of four percent (4%) per annum,
simple interest, to be computed on the basis of actual days elapsed and a 360 -day year.
(b) The total unpaid principal amount shall be due and payable as a balloon
payment three (3) years from the date of disbursement of the Affordability Assistance Loan
proceeds to Developer.
(c) The principal amount of the Note may be reduced and the interest thereon
cancelled to the extent that Developer causes each prospective Owner -Occupier of an Affordable
Housing Unit to execute an appropriate Promissory Note to Agency. Each such Promissory Note
shall be secured by an Affordable Housing Deed of Trust, in the form which is attached to the
Loan Agreement as Attachment 13. The principal amount of the Note that may be reduced upon
execution of an Affordable Housing Promissory Note and recordation of an Affordable Housing
Deed of Trust is set forth in the Loan Agreement in Section 4.4. Upon close of escrow for each
Affordable Housing Unit, the Agency shall provide the Developer with a partial reconveyance
for the property comprising the Affordable Unit and shall reduce the principal amount of the
Affordability Assistance Loan to Developer by the amount of the Affordable Housing
Promissory Note.
Attachment No. 9-1
DOCSOCU 019784v3\22782.0047
(d) Upon the sale of all ten (10) of the Affordable Housing Units, and
provided Developer has caused each Homebuyer to execute an Affordable Housing Promissory
Note in an amount that conforms to Section 4.4 of the Loan Agreement and each Note has been
secured by a recorded Deed of Trust for the property comprising the Unit, the Developer may
request cancellation of the Affordability Assistance Note and Reconveyance of the entire
remaining Deed of Trust. The Agency shall promptly cause such cancellation and reconveyance
to occur.
(e) To the extent other units (not Affordable Housing Units) at the Site are
sold, the Agency shall cooperate in providing partial reconveyances of the property for each such
unit from the Affordability Assistance Deed of Trust.
3. Terms of Payment. All amounts due and payable under the Note are payable at
the office of the Agency at the address provided to the Developer by the Agency, or at such other
place or places as the Agency may designate to the Developer in writing from time to time. Any
payment under this Note shall be paid in currency of the United States of America, which at the
time of payment is lawful for the payment of public and private debts and which on the
respective dates on which such payments are due shall be in immediately available funds.
4. Prepayments. Developer may prepay all or part of the principal balance and
accrued interest due under this Note without penalty subject to the conditions under the Loan
Agreement.
hereof.
5. Security. This Note is secured by the Deed of Trust described in paragraph 1
6. Waivers.
(a) Developer expressly agrees that payment of this Note or any payment due
hereunder may be extended from time to time at the Agency's sole discretion and that the
Agency may accept security in consideration for any such extension or release any security for
this Note at its sole discretion all without in any way affecting the liability of Developer.
(b) No extension of time for payment of this Note or any installment hereof
made by agreement by the Agency with any person now or hereafter liable for payment of this
Note shall operate to release, discharge, modify, change, or affect the original liability of
Developer under this Note, either in whole or in part.
(c) The obligations or Developer under this Note shall be absolute and
Developer waives any and all rights:
(i) to offset, deduct, or withhold any payments or charges due under
this Note for any reasons whatsoever;
Attachment No. 9-2
DOCS OC\1019784v3\22782.0047
(ii) of presentment for payment, demand, protest and notices of
dishonor and protest; and
(iii) of diligence in taking any action to collect any sums owing under
this Note or in proceeding against any of the rights and interests in and to properties securing
payment of this Note.
7. Attorney Fees and Costs. Developer agrees that if any amounts due under this
Note are not paid when due, to pay in addition, all costs and expenses of collection and
reasonable attorney fees paid or incurred in connection with the collection or enforcement of this
Note, whether or not suit is filed.
S. Joint and Several Obligations. This Note is the joint and several obligation of
all makers, sureties, guarantors, and endorsers, and shall be binding upon them and their
successors and assigns.
9. Deed of Trust Acceleration. This Note is secured by a Deed of Trust on the
Property (as defined in the Loan Agreement). The Deed of Trust and the Loan Agreement
provide for acceleration of the payments due under this Note in the event of default (after
expiration of any cure period) under the Deed of Trust, or Loan Agreement.
10. Prohibition against Transfer of Interest. The Developer shall not make any
sale, assignment or conveyance, or transfer in any other form, nor any further pledge,
encumbrance, or mortgaging of the Project or any part thereof or of any of its interest therein,
other than in accordance with the terms of this Note, the Loan Agreement, and the Deed of Trust.
11. Default Under Other Loan Documents and Acceleration. All covenants,
conditions, and agreements contained in this Note, the Loan Agreement, and the Deed of Trust
are hereby made a part of this Note, and the Developer agrees that the unpaid balance of the then
principal amount of this Note, together with all accrued interest thereon and charges owing,
shall, at the option of the Agency hereof, become immediately due and payable, and thereafter
until paid bear interest at the rate of ten percent (10%) per annum (the "Default Rate"),
compounded annually upon the failure of the Developer to make any payment hereunder as and
when due (after expiration of any cure period); upon the failure of the Developer to perform or
observe any other term or provision of this Note; or upon the occurrence of any Material Default
which (after the expiration of any cure period) under the terms of this Note, the Loan Agreement,
or the Deed of Trust shall entitle the Agency to exercise rights or remedies thereunder, or (b)
under the terms of this Note, the Loan Agreement, or the Deed of Trust shall entitle the Agency
to exercise rights or remedies thereunder or, if this Note, the Loan Agreement, and the Deed of
Trust shall have been fully performed by the Developer, which under the terms thereof would
have entitled the Agency hereof to exercise rights or remedies thereunder had such event
occurred prior to such full performance.
12. Definitions. Capitalized terms not defined in this Note shall have the same
meanings as defined in the Loan Agreement, the terms of which are incorporated into this Note
by this reference.
Attachment No. 9-3
DOCSOC\ 1019784v3\22782.0047
13. Governing Law. This Note shall be construed in accordance with and be
governed by the laws of the State of California.
14. Severability. If any provision of this Note shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby.
15. Time. Time is of the essence in this Note.
16. No Waiver by the Agency. No waiver of any breach, default, or failure of
condition under the terms of this Note, the Loan Agreement, or the Deed of Trust or the
obligations secured thereby shall be implied from any failure of the Agency to take, or any delay
by the Agency in taking, action with respect to such breach, default or failure, or any form of
previous waiver of any similar or unrelated breach, default or failure; and waiver of any term of
this Note, the Loan Agreement, or the Deed of Trust or any of the obligations secured thereby
must be made in writing and shall be limited to the express written terms of such waiver.
17. Amendments and Modifications. This Note may not be changed orally, but
only by an amendment in writing signed by Developer and the Agency.
IN WITNESS WHEREOF, Agency and Developer have signed this Agreement on the respective
dates set forth below.
Dated:
APPROVED AS TO FORM:
By:
Lois E. Jeffrey,
Agency Counsel
"AGENCY"
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a California community redevelopment
agency
William A. Huston, Executive Director
Attachment No. 9-4
DOCSOC\1019784v3\22782.0047
Dated:
"DEVELOPER"
OLSON URBAN HOUSING, LLC, a Delaware
Limited liability Company
By: The Olson Company, a California
corporation, its Managing Member
By:
Its:
By:
Its:
Attachment No. 9-5
DOCSOC\ 1019784x3\22782.0047
ATTACHMENT NO. 10
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 Centennial Way
Tustin, CA 92780
Attn: Assistant City Manager
INSTRUCTIONS TO COUNTY RECORDER:
Exempt from Recording Fee Per Government Code Sect. 6103
Index this document as
(1) a deed of trust and
(2) a fixture filing
DEED OF TRUST, ASSIGNMENT OF RENTS, AND SECURITY AGREEMENT
(AFFORDABILITY ASSISTANCE)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, AND SECURITY
AGREEMENT ("Deed of Trust") is made as of this _ day of ,
2004, by OLSON URBAN HOUSING, LLC, a Delaware limited liability corporation
("Trustor"), to [ ], as trustee ("Trustee"), for the benefit of TUSTIN
COMMUNITY REDEVELOPMENT AGENCY, a California redevelopment agency, as
beneficiary (`Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE AND RIGHT OF ENTRY AND POSSESSION, for the benefit and security of
Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's fee
interest in the property located in Orange County, State of California, that is described in Exhibit
A, attached hereto and incorporated herein by this reference (the "Property") and commonly
known as
Attachment No. 10-1
DOCS OC\ 1019784v3\22782.0047
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including without limiting the generality of the foregoing, all
tenements, hereditament and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings, improvements and landscaping of every kind
and description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property (sometimes collectively referred to as the
"Improvements");
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said Property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all oil, gas and mineral rights (including royalty and leasehold rights relating
thereto), all water and water rights and shares of stock relating thereto, all leases of all or any
portion of the Property entered into by Trustor as lessor or lessee, all options to purchase or lease
all or any portion of the Property, all deposits made with or other security given by Trustor to
third parties including, utility companies, the proceeds from any or all of such property,
including the Property, claims or demands with respect to the proceeds of insurance in effect
with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made
for the taking by eminent domain or by and proceeding or purchase in lieu thereof of the whole
or any part of such property; and
TOGETHER WITH all articles of personal property or fixtures now or hereafter attached
to, located on, installed in or used in and about the Property, including without limitation, all
partitions, generators, screens, boilers, furnaces, pipes, plumbing, elevators, cleaning and
sprinkler systems, fire extinguishing machinery and equipment, water tanks, heating, ventilating,
Attachment No. 10-2
DOC SOC\ 1019784v3\22782.0047
air conditioning and air cooling machinery and, equipment, gas and electric machinery and
equipment and other appliances, machinery and equipment and other fixtures of every nature, all
of which shall remain real property, and all renewals or replacements thereof or articles in
substitution therefore, whether or not the same are, or shall be attached to the Property in any
manner.
All of the foregoing, together with the Property, is herein referred to as the "Security", to
have and to hold the Security together with acquaintances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING:
(a) Payment of a just indebtedness of Trustor to Beneficiary as set forth in the Loan
Agreement (defined in Section 1.5 below) and the Note (defined in Section 1.3 below) in the
original principal amount of NINE HUNDRED SIXTY NINE THOUSAND, NINE HUNDRED
SIXTY DOLLARS ($969,960.00) until paid or canceled. Said principal and other payments
shall be due and payable as provided in the Loan Agreement and the Note. The Loan Agreement
and the Note and all their terms are incorporated herein by reference, and this conveyance shall
secure any and all extensions thereof, however evidenced; and
(b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the
terms and provisions of this Deed of Trust with interest thereon as provided herein; and
(c) Performance of every obligation, covenant or agreement of Trustor contained in this
Deed of Trust and in the Loan Agreement and Note; and
(d) All renewals, extensions, supplements and other modifications of any of the
foregoing, including without limitation modifications that are evidenced by new or additional
documents or that change the rate of interest on any obligation.
All of the foregoing obligations are referred to collectively herein as the "Obligations".
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE I
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
Attachment No. 10-3
DOCS00 1019784v3\22782.0047
Section 1. 1. The term "Debt Instrument" means any debt, loan, mortgage, deed of trust,
regulatory agreement or security instrument relating to the Property or the Security.
Section 1.2. The term "Hazardous Substance" means:
(a) any oil, flammable substance, explosive, radioactive material, hazardous
waste or substance, toxic waste or substance or any other waste, material, or pollutant that
(i) poses a hazard to the Property or to persons on the Property or
(ii) causes the Property to be in violation of any Hazardous Substance
Law;
(b) asbestos in any form;
(c) urea formaldehyde foam insulation;
(d) transformers or other equipment that contain dielectric fluid containing
levels of polychlorinated biphenyls;
(e) radon gas;
(f) any chemical, material, or substance defined as or included in the
definition of "hazardous substance," "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," or "toxic substances" or
words of similar import under any applicable local, state, or federal law or under the regulations
adopted or publications promulgated pursuant to those laws, including, but not limited to, any
Hazardous Substance Law, Code of Civil Procedure § 564, as amended from time to time, Code
of Civil Procedure § 726.5, as amended from time to time, Code of Civil Procedure §736, as
amended from time to time, and Civil Code § 2929.5, as amended from time to time;
(g) any other chemical, material, or substance, exposure to which is
prohibited, limited, or regulated by any governmental authority or which may pose a hazard to
the health and safety of the occupants of the Property or the owners or occupants of property
adjacent to or surrounding the Property, or any other person coming on the Property or any
adjacent property; and
(h) any other chemical, material, or substance that may pose a hazard to the
environment.
Section 1.3. The term "Hazardous Substance Claim" means any enforcement, cleanup,
removal, remedial, or other governmental, regulatory, or private actions, agreements, or orders
threatened, instituted, or completed pursuant to any Hazardous Substance Law together with all
Attachment No. 10-4
DOCS00l 019784v3\22782.0047
claims made or threatened by any third party against Trustor or the Property relating to damage,
contribution, cost -recovery compensation, loss, or injury resulting from the presence, release or
discharge of any Hazardous Substance.
Section 1.4. The term "Hazardous Substance Law" means any federal, state, or local
law, ordinance, regulation, or policy relating to the environment, health, and safety, any
Hazardous Substance (including, without limitation, the use, handling, transportation,
production, disposal, discharge, or storage of the substance), industrial hygiene, soil,
groundwater, and indoor and ambient air conditions or the environmental conditions on the
Property, including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 [42 USCS §§ 9601 et seq.], as amended from time to
time; the Hazardous Substances Transportation Act [49 USCS §§ 1801 et seq.], as amended from
time to time; the Resource Conservation and Recovery Act [42 USCS §§ 6901 et seq.], as
amended from time to time; the Federal Water Pollution Control Act [33 USCS §§ 1251 et seq.],
as amended from time to time; the Hazardous Substance Account Act [Health and Safety Code
§§ 25300 et seq.], as amended from time to time; the Hazardous Waste Control Law [Health and
Safety Code §§ 25100 et seq.], as amended from time to time; the Medical Waste Management
Act [Health and Safety Code §§ 25015 et seq.], as amended from time to time; and the Porter -
Cologne Water Quality Control Act [Water Code §§ 13000 et seq.], as amended from time to
time.
Section 1.5. The term "Loan Agreement" means the Affordable Housing Assistance
Agreement dated , 2004, especially Section 4.4. (The terms and
provisions of the Agreement are incorporated herein by reference.)
Section 1.6. The term "Note" means that certain Affordability Assistance Loan
Promissory Note of even date herewith executed by the Trustor, the payment of which is secured
by this deed of Trust.
Section 1.7. The term "Principal' means the aggregate of all principal and interest due
under the Note.
Section 1.8. The term "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the
environment, including continuing migration, of Hazardous Substances that goes into the soil,
Attachment No. 10-5
DOCSOC\ 1019784v3\22782.0047
surface water, or groundwater of the Property, whether or not caused by, contributed to,
permitted by, acquiesced to, or known to Trustor.
ARTICLE II
MAINTENANCE AND MODIFICATION OF
THE PROJECT AND SECURITY
Section 2.1. Maintenance, Repair and Modification.
(a) The Trustor agrees that at all times prior to full payment of the sum owed under the
Note, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Security or
cause the Security to be maintained and preserved in good condition and repair and in a prudent
and businesslike manner. The Trustor will from time to time make or cause to be made all
repairs, replacements and renewals to the Security, which are necessary or appropriate. The
Beneficiary shall have no responsibility in any of these matters or for the making of
improvements or additions to the Security.
(b) Trustor shall not remove, demolish or substantially alter any of the Improvements,
other than to make repairs in the ordinary course of business of a non-structural nature which
serve to preserve or increase the value of the Security without Beneficiary's prior written
consent, which consent shall not be unreasonably withheld so long as Trustor provides
reasonable evidence to Beneficiary that, following such demolition and restoration and/or
alteration, the Improvements shall have a fair market value at least equal to their fair market
value prior to such demolition and restoration and/or alteration; Trustor shall complete promptly
and in a good and workmanlike manner any Improvement which may now or hereafter be
constructed and promptly restore in like manner any Improvement which may be damaged or
destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed
and materials furnished therefor; Trustor shall comply with all laws, ordinances, rules,
regulations, covenants, conditions, restrictions and orders of any governmental authority now or
hereafter affecting the conduct or operation of Trustor's business or the security or any part
thereof or requiring any alteration or improvement to be made thereon; Trustor shall not commit,
suffer or permit any act to be done in, upon or to the Security or any part thereof in violation of
any such laws, ordinances, rules, regulations or orders, or any covenant, condition or restriction
now or hereafter affecting the Security; Trustor shall not commit or permit any waste or
Attachment No. 10-6
DOCSOC\ 1019784v3\22782.0047
deterioration of the Security, and shall keep and maintain abutting grounds, sidewalks, roads,
parking and landscape areas in good and neat order and repair; Trustor will not take (or fail to
take) any action, which if taken (or not so taken) would increase in any way the risk of fire or
other hazard occurring to or affecting the Security or otherwise would impair the security of
Beneficiary in the Security; Trustor shall comply with the provisions of all leases, if any,
constituting a portion of the Security; Trustor shall not abandon the Security or any portion
thereof or leave the Security unprotected, unguarded, vacant or deserted; Trustor shall not
initiate, join in or consent to any change in any zoning ordinance, general plan, specific plan,
private restrictive covenant or other public or private restriction limiting the uses which may be
made of the Security by Trustor or by the owner thereof; Trustor shall secure and maintain in full
force all permits necessary for the use, occupancy and operation of the Security; except as
otherwise prohibited or restricted by the Loan Agreement and the other instruments and
documents executed in connection with the transaction to which the Loan Agreement pertains
(the "Loan Documents"), or any of them, Trustor shall do any and all other acts which may be
reasonably necessary to protect or preserve the value of the Security and the rights of Trustee and
Beneficiary with respect thereto.
Section 2.2. Granting of Easements.
Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law.
Section 2.3. Environmental
(a) Except as disclosed in writing to, and acknowledged and accepted in writing by
Beneficiary, Trustor represents and warrants that, to the Best of Trustor's Knowledge:
(1) during the period of Trustor's ownership of the Property
A. there has been no use, generation, manufacture, storage, treatment,
disposal, discharge, Release, or threatened Release of any Hazardous Substance by any person
on or around the Property, except in the ordinary course of business and in compliance with all
applicable Hazardous Substance Laws, and
Attachment No. 10-7
DOCSOC\ 1019784v3\22782.0047
B. there have been no Hazardous Substances transported over or
through the Property, except in the ordinary course of business and in compliance with all
applicable Hazardous Substance Laws;
(2) after diligent inquiry, Trustor has no knowledge of, or reason to believe
that, there has been:
A. any use, generation, manufacture, storage, treatment, disposal,
Release, or threatened Release of any hazardous waste or substance by any prior owners or prior
occupants of the Property or by any third parties onto the Property, or
B. any actual or threatened litigation or claims of any kind by any
person relating to these matters;
(3) no Hazardous Substances in excess of permitted levels or reportable
quantities under applicable Hazardous Substance Laws are present in or about the Property or
any nearby real property that could migrate to the Property;
(4) no Release or threatened Release exists or has occurred;
(5) no underground storage tanks of any kind are or ever have been located in
or about the Property;
(6) the Property and all operations and activities at, and the use and
occupancy of, the Property comply with all applicable Hazardous Substance Laws;
(7) Trustor is now in strict compliance with, every permit, license, and
approval required by all applicable Hazardous Substance Laws for all activities and operations
at, and the use and occupancy of, the Property;
(8) to the best of Trustor's knowledge, after diligent inquiry, there are no
Hazardous Substance Claims pending or threatened with regard to Property or against Trustor;
(9) the Property has not been nor is it within 2,000 feet of any other property
designated as "hazardous waste property" or "border zone property" pursuant to Health and
Safety Code §§ 25220 et seq., and no proceedings for a determination of this designation are
pending or threatened;
(10) to the best of its knowledge after diligent inquiry, there exists no
occurrence or condition on any real property adjoining or within 2,000 feet of the Property that
would cause the Property or any part of it to be designated as "hazardous waste property" or
Attachment No. 10-8
DOCSOC\ 1019784v3\22782.0047
"border zone property" under the provisions of Health and Safety Code §§ 25220 et seq., and any
regulation adopted in accordance with that section;
(11) that the current use of the Property is the construction of a residential
housing development;
(12) any written disclosure submitted by or on behalf of Trustor to Beneficiary
concerning any Release or threatened Release, past or present compliance by Trustor or other
person of any Hazardous Substance Laws applicable to the Property, the past and present use and
occupancy of the Property, and any environmental concerns relating to the Property, was true
and complete when submitted and continues to be true and complete as of the date of this Deed
of Trust.
(b) Trustor agrees, except in the ordinary course of business and in strict compliance
with all applicable Hazardous Substance Laws, as follows:
(1) not to cause or permit the property to be used as a site for the use,
generation, manufacture, storage, treatment, Release, discharge, disposal, transportation, or
presence of any Hazardous Substance, except in the ordinary course of business and in
compliance with all applicable Hazardous Substance Laws;
(2) not to cause, contribute to, permit, or acquiesce in any Release or
threatened Release;
(3) not to change or modify the use of the Property without the prior written
consent of Beneficiary, except as provided in the Agreement;
(4) to comply with and to cause the Property and every invitee or occupant of
the Property to comply with all Hazardous Substance Laws;
(5) to immediately notify Beneficiary in writing of and to provide Beneficiary
with a reasonably detailed description of:
A. any noncompliance of the Property with any Hazardous Substance
Laws;
B. any Hazardous Substance Claim;
C. any Release or Threatened Release;
D. the discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Property that would cause the Property or any part of it to be
designated as "hazardous waste property" or "border zone property" under the provisions of
Attachment No. 10-9
DOCSOCA1019784v3\22782.0047
Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with that
section;
(6) if Trustor discovers a Release or the presence of any Hazardous Substance
on or about the Property in violation of any Hazardous Substance Law, to:
detailed description;
A. notify Beneficiary of that discovery together with a reasonably
B. engage promptly after a request by Beneficiary, a qualified
environmental engineer reasonably satisfactory to Beneficiary to investigate these matters and
prepare and submit to Beneficiary a written report containing the findings and conclusions
resulting from that investigation, all at the sole expense of Trustor, and
C. take, at Trustor's sole expense, all necessary actions to remedy,
repair, clean up, or detoxify any Release or Hazardous Substance, including, but not limited to,
any remedial action required by any Hazardous Substance Laws or any judgment, consent,
decree, settlement, or compromise in respect of any Hazardous Substance Claims, these actions
to be performed:
(i) in accordance with Hazardous Substance Laws,
(ii) in a good and proper manner,
(iii) under the supervision of a qualified environmental engineer
approved in writing by Beneficiary,
(iv) in accordance with plans and specifications for these
actions approved in writing by Beneficiary, and
(v) using licensed and insured qualified contractors approved
in writing by Beneficiary;
(7) immediately furnish to Beneficiary copies of all written communications
received by Trustor from any governmental authority or other person or given by Trustor to any
person and any other information Beneficiary may reasonably request concerning any Release,
threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance
on or about the Property in violation of any Hazardous Substance Law; and
(8) keep Beneficiary generally informed regarding any Release, threatened
Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about
the Property in violation of any Hazardous Substance Law.
Attachment No. 10-10
DOCSOCU 019784v3\22782.0047
(c) Upon Beneficiary's reasonable belief of the existence of a past or present Release
or threatened Release not previously disclosed by Trustor in connection with the making of the
Loan or the execution of this Deed of Trust or upon Beneficiary's reasonable belief that Trustor
has failed to comply with any environmental provision of this Deed of Trust or any other Loan
Document and upon reasonable prior notice (except in the case of an emergency) to Trustor,
Beneficiary or its representatives, employees, and agents, may from time to time and at all
reasonable times (or at any time in the case of an emergency) enter and inspect the Property and
every part of it (including all samples of building materials, soil, and groundwater and all books,
records, and files of Trustor relating to the Property) and perform those acts and things that
Beneficiary deems necessary or desirable to inspect, investigate, assess, and protect the Security
of this Deed of Trust, for the purpose of determining
(1) the existence, location, nature, and magnitude of any past or present
Release or threatened Release,
(2) the presence of any Hazardous Substances on or about the Property in
violation of any Hazardous Substance Law, and
(3) the compliance by Trustor of every environmental provision of this Deed
of Trust and every other Loan Document.
In furtherance of the purposes above, without limitation of any of its other rights,
Beneficiary may:
A. obtain a court order to enforce Beneficiary's right to enter and
inspect the Property under Civil Code § 2929.5, to which the decision of Beneficiary as to
whether there exists a Release, a threatened Release, any Hazardous Substances on or about the
Property in violation of any Hazardous Substance Law, or a breach by Trustor of any
environmental provision of this Deed of Trust or any other Loan Document, will be deemed
reasonable and conclusive as between the parties; and
B. have a receiver appointed under Code of Civil Procedure § 564 to
enforce Beneficiary's right to enter and inspect the Property for the purpose set forth above.
All costs and expenses incurred by Beneficiary with respect to the audits, tests,
inspections, and examinations that Beneficiary or its agents, representatives, or employees may
conduct, including the fees of the engineers, laboratories, contractors, consultants, and attorneys,
will be paid by Trustor. All costs or expenses incurred by Trustee and Beneficiary pursuant to
Attachment No. 10-11
DOCSOC\ 1019784v3\22782.0047
this Section (including without limitation court costs, consultant's fees, and attorney fees,
whether incurred in litigation and whether before or after judgment) will bear interest at the
Agreed Rate from the date they are incurred until those sums have been paid in full. Except as
provided by law, any inspections or tests made by Beneficiary or its representatives, employees,
and agents will be for Beneficiary's purposes only and will not be construed to create any
responsibility or liability on the part of Beneficiary to Trustor or to any other person.
Beneficiary will have the right, but not the obligation, to communicate with any governmental
authority regarding any fact or reasonable belief of Beneficiary that constitutes or could
constitute a breach of any of Trustor's obligations under any environmental provision contained
in this Deed of Trust or any Loan Document.
(d) Trustor:
(1) releases and waives any future claims against Beneficiary for indemnity or
contribution in the event Trustor becomes liable for cleanup or other costs under any Hazardous
Substance Laws or under any Hazardous Substance Claim;
(2) agrees to reimburse Beneficiary, on demand, for all costs and expenses
incurred by Beneficiary in connection with any review, approval, consent, or inspection relating
to the environmental provisions in this Deed of Trust together with interest, after demand, at the
Agreed Rate; and
(3) agrees to indemnify, defend, and hold Beneficiary and Trustee harmless
from all losses, costs, claims, damages, penalties, liabilities, causes of action, judgments, court
costs, attorney fees and other legal expenses, costs of evidence of title, cost of evidence of value,
and other expenses (collectively, "Expenses"), including, but not limited to, any Expenses
incurred or accruing after the foreclosure of the lien of this Deed of Trust, which either may
suffer or incur and which directly or indirectly arises out of or is in any way connected with the
breach of any environmental provision either in this Deed of Trust or in any Loan Document or
as a consequence of any Release or threatened Release on the presence, use, generation,
manufacture, storage, disposal, transportation, Release, or threatened Release of any Hazardous
Substance on or about the Property, including the soils and groundwaters, caused or permitted by
Trustor, any prior owner or operator of the Property, any adjoining landowner or any other party,
including, without limitation, the cost of any required or necessary repair, cleanup, remedy, or
detoxification of any hazardous Substance and the preparation of any closure, remedial action, or
Attachment No. 10-12
DOCS OC\ 1019784v3\22782.0047
other required plans, whether that action is required or necessary by reason of acts or omissions
occurring prior to or following the recordation of this Deed of Trust. Trustor's obligations will
terminate as to any portion of the secured property which is sold to a homebuyer pursuant to the
requirements of the Agreement. Trustor's obligations will survive the satisfaction, release, or
cancellation of the indebtedness, the release and reconveyance or partial release and
reconveyance of this Deed of Trust, and the foreclosure of the lien of this Deed of Trust or deed
in lieu of the Deed of Trust.
(e) Trustor and Beneficiary agree that:
(1) this Section is intended as Beneficiary's written request for information
and Trustor's written response concerning the environmental condition of the Property as
provided by Code of Civil Procedure § 726.5; and
(2) each representation, warranty, covenant, or indemnity made by Trustor in
this Article or in any other provision of this Deed of Trust or any Loan Document that relates to
the environmental condition of the Property is intended by Trustor and Beneficiary to be an
"environmental provision" for purposes of Code of Civil Procedure § 736 and will survive the
payment of the indebtedness and the termination or expiration of this Deed of Trust and will not
be affected by Lender's acquisition of any interest in the Property, whether by full credit bid at
foreclosure, deed in lieu of that, or otherwise. If there is any transfer of any portion of Trustor's
interest in the Property, any successor -in -interest to Trustor agrees by its succession to that
interest that the written request made pursuant to this Article will be deemed remade to the
successor -in -interest without any further or additional action on the part of Beneficiary and that
by assuming the debt secured by this Deed of Trust or by accepting the interest of Trustor subject
to the lien of this Deed of Trust, the successor remakes each of the representations and
warranties in this Deed of Trust and agrees to be bound by each covenant in this Deed of Trust,
including, but not limited to, any indemnity provision.
(f) Even though Trustor may have provided Beneficiary with an environmental site
assessment or other environmental report together with other relevant information regarding the
environmental condition of the Property, Trustor acknowledges and agrees that Beneficiary is
not accepting the Property as security for the Loan based on that assessment, report, or
information. Rather, Beneficiary has relied on the representations and warranties of Trustor in
Attachment No. 10-13
DOCSOC\ 1019784v3\22782.0047
this Deed of Trust, and Beneficiary is not waiving any of its rights and remedies in the
environmental provisions of this Deed of Trust or any other Loan Document.
(g) Beneficiary or its agents, representatives, and employees may seek a judgment
that Trustor has breached its covenants, representations, or warranties in Article II of this Deed
of Trust or any other covenants, representations, or warranties that are deemed to be
"environmental provisions" pursuant to Code of Civil Procedure § 736 (each an "Environmental
Provision"), by commencing and maintaining an action or actions in any court of competent
jurisdiction pursuant to Code of Civil Procedure § 736, whether commenced prior to or after
foreclosure of the lien of this Deed of Trust. Beneficiary or its agents, representatives, and
employees may also seek an injunction to cause Trustor to abate any action in violation of any
Environmental Provision and may seek the recovery of all costs, damages, expenses, fees,
penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket
costs or expenses actually incurred by Beneficiary (collectively, "Environmental Costs")
incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action
required by any Hazardous Substances Law or any Hazardous Substance Claim, or which
Beneficiary believes necessary to protect the Property. It will be conclusively presumed between
Beneficiary and Trustor that all Environmental Costs incurred or advanced by Beneficiary
relating to the cleanup, remedy, or other response action of or to the Property were made by
Beneficiary in good faith. All Environmental Costs incurred by Beneficiary under this Section
(including without limitation court costs, consultant fees, and attorney fees, whether incurred in
litigation and whether before or after judgment) will bear interest at the Agreed Rate from the
date of expenditure until those sums have been paid in full. Beneficiary will be entitled to bid, at
any trustee's or foreclosure sale of the Property, the amount of the costs, expenses, and interest
in addition to the amount of other indebtedness.
(h) Beneficiary or its agents, representative, and employees may waive its lien against
the Property or any portion of it, including but not limited to the Improvements, to the extent that
the Property or any portion of the Security is found to be environmentally impaired in
accordance with Code of Civil Procedure § 726.5, and to exercise all rights and remedies of an
unsecured creditor against Trustor and all of Trustor's assets and property for the recovery of any
deficiency and Environmental Costs, including, but not limited to, seeking an attachment order
under Code of Civil Procedure § 483.010. As between Beneficiary and Trustor, for purposes of
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DOCS OCU 019784v3\22782.0047
Code of Civil Procedure § 726.5, Trustor will have the burden of proving that Trustor or any
related party (or any affiliate or agent of Trustor or any related party) was not in any way
negligent in permitting the Release or threatened Release of the Hazardous Substances.
ARTICLE III
TAXES AND INSURANCE; ADVANCES
Section 3.1. Taxes, Other Governmental Charges and Utility Charges.
(a) Trustor shall pay, at least thirty (30) days prior to delinquency, all real property taxes
and assessments, general and special, and all other charges of any kind, including without
limitation non-governmental levies or assessments such as maintenance charges, levies or other
charges resulting from covenants, conditions and restrictions affecting the Security, which are
assessed or imposed upon the Security or upon Trustor as owner or operator of the Security, or
become due and payable, and which create or may create a lien upon the Security, or any part
thereof, or upon any personal property, equipment or other facility used in the operation or
maintenance thereof (all the above collectively hereinafter referred to as "Impositions");
provided, however, that if, by law, any Imposition is payable, or may at the option of the
taxpayer be paid, in installments, Trustor may pay the same in installments (together with any
interest charged) as the same become due and before any fine, penalty or cost may be added
thereto for the nonpayment of any such installment. Notwithstanding the foregoing, Trustor
shall have the right to diligently contest, in good faith and by appropriate proceedings, the
validity of any Imposition, so long as Trustor demonstrates to Beneficiary that Trustor is
maintaining sufficient reserves for the payment of all contested liabilities and so long as the
security and value of Beneficiary's interest under this Deed of Trust are not impaired as a result
of such contest.
(b) If at any time after the date hereof there shall be assessed or imposed (i) a tax or
assessment on the Security in lieu of or in addition to the Impositions payable by Trustor
pursuant to this Section 3.1 hereof, or (ii) a license fee, tax or assessment imposed on
Beneficiary and measured by or based in whole or in part upon the amount of the outstanding
Obligations secured hereby, then all such taxes, assessments or fees shall be deemed to be
included within the term "Impositions" as defined in this Section and Trustor shall pay and
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DOCSOC\ 1019784v3\22782.0047
discharge the same as herein provided with respect to the payment of Impositions. If Trustor
fails to pay such Impositions prior to delinquency or if Trustor is prohibited by law from paying
such Impositions, Beneficiary may at its option declare all Obligations secured hereby, together
with all accrued interest thereon, immediately due and payable. Anything to the contrary herein
notwithstanding, Trustor shall have no obligation to pay any franchise, estate, inheritance,
income, excess profits or similar tax levied on Beneficiary or on the Obligations secured hereby.
(c) Trustor shall deliver to Beneficiary within thirty (30) days after the date upon which
any such Imposition is due and payable by Trustor official receipts of the appropriate taxing
authority, or other proof satisfactory to Beneficiary, evidencing the payment thereof. Trustor
shall not suffer, permit or initiate the joint assessment of any real and personal property which
may constitute all or a portion of the Security and the personal property or suffer, permit or
initiate any other procedure whereby the lien of real property taxes and the lien of personal
property taxes shall be assessed, levied or charged to the Security as a single Lien. Trustor shall
cause to be furnished to Beneficiary a tax reporting service, covering the Property, of a type and
duration, and with a company, reasonably satisfactory to Beneficiary.
(d) In the event that Trustor shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the greater of twelve percent (12%) per annum or the maximum rate permitted by law
(hereinafter the "Agreed Rate"), shall become an additional Obligation of Trustor to the
Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts.
Section 3.2. Insurance.
(a) Trustor agrees to provide insurance conforming in all respects to that required under
Section 10 of the Loan Agreement at all times until all amounts secured by this Deed of Trust
have been paid and all other Obligations secured hereunder fulfilled, and this Deed of Trust
reconveyed. All such insurance policies and coverages shall be maintained at Trustor's sole cost
and expense.
(b) All said insurance shall have attached thereto a lender's loss payable endorsement for
the benefit of Beneficiary in form satisfactory to the Beneficiary and/or shall name Beneficiary
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DOCSOC\ 1019784v3\22782.0047
as an additional insured, as Beneficiary may require, and shall contain an endorsement or
agreement by the insurer that any loss shall be payable in accordance with the terms of such
policies notwithstanding any act or negligence of Trustor or any party holding under Trustor
which might otherwise result in forfeiture of said insurance and the further agreement of the
insurer waiving all rights of setoff, counterclaim and deduction against Trustor. At Beneficiary's
option, Trustor shall furnish Beneficiary with an original of all required policies of insurance
and/or a certificate of insurance for each required policy setting forth the coverage, the limits of
liability, the deductible, if any, the name of the carrier, the policy number, and the period of
coverage, which certificates shall be executed by authorized officials of the companies issuing
such insurance, or any agents or attorneys -in -fact authorized to issue said certificates (in which
event each such certificate shall be accompanied by a notarized affidavit, agency agreement or
power of attorney evidencing the authority of the signatory to issue such certificate on behalf of
the insurer named therein), accompanied by a certificate from Trustor that the insurance satisfies
the requirements of the Loan Agreement, and that Beneficiary may conclusively rely on such
certificates. If Beneficiary consents, Trustor may provide any of the required insurance through
blanket policies carried by Trustor and covering more than one location; provided, however, all
such policies shall be in form and substance and issued by companies satisfactory to Beneficiary.
(c) At least thirty (30) days prior to the expiration of each required policy, Trustor
shall deliver to Beneficiary evidence satisfactory to Beneficiary of the payment of premium and
the renewal or replacement of such policy continuing insurance in form as required by this Deed
of Trust or the Loan Agreement. All such policies shall contain a provision that, notwithstanding
any contrary agreement between Trustor and the insurance company, such policies will not be
canceled, allowed to lapse without renewal, surrendered or materially amended (which term shall
include any reduction in the scope, or limits of coverage) without at least thirty (30) days prior
written notice to Beneficiary.
(d) In the event of foreclosure of this Deed of Trust or other transfer of title or
assignment of the Property in extinguishment, in whole or in part, of the debt secured hereby, all
right, title and interest of Trustor in and to all policies of insurance required by Section 3.2
hereof and any unearned premiums paid thereon shall, without further act, be assigned to and
shall inure to the benefit of and pass to the successor in interest to Trustor or the purchaser or
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grantee of the Property, and Trustor hereby appoints Beneficiary its lawful attorney-in-fact to
execute an assignment thereof and any other document necessary to effect such transfer.
Section 3.3. Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Loan Agreement, the
Beneficiary, after at least twenty (20) days prior notice to Trustor, may (but shall be under no
Obligation to) take out the required policies of insurance and pay the premiums on the same or
may make such repairs or replacements as are necessary and provide for payment thereof; and all
amounts so advanced therefor by the Beneficiary shall become an additional Obligation of the
Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby,
which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid,
shall bear interest from the date of the advance at the Agreed Rate.
ARTICLE IV
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1. Casualties.
Trustor shall give prompt written notice to Beneficiary upon the occurrence of casualty to
or in connection with the Security or any part thereof, whether or not covered by insurance. In
the event of such casualty Trustor hereby absolutely and unconditionally assigns to Beneficiary
all insurance proceeds which it may be entitled to receive and such proceeds shall be delivered to
and held by Beneficiary to be applied to Beneficiary's expenses in settling, prosecuting or
defending any insurance claim, and then to the restoration of any portion of the Security that has
been damaged or destroyed to the same condition, character and value as existed prior to such
damage or destruction so long as the following conditions are satisfied: (i) Trustor is not in
default hereunder, (ii) Beneficiary's security is not materially impaired, (iii) all income (from
the Security from leases or otherwise) required to pay all debt service and operating expenses of
the Security during such restoration and thereafter will be equal to or greater than the income
which was required to pay such debt service and operating expenses prior to the casualty, (iv)
Trustor evidences to the satisfaction of Beneficiary that the insurance required to be maintained
hereunder will be available to the Trustor during restoration and thereafter, (v) Beneficiary shall
have approved the plans and specifications for such restoration, which approval shall not be
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DOCSOC\ l 019784v3\22782.0047
unreasonably withheld or delayed, and (vi) in the event that in Beneficiary's sole judgment the
insurance proceeds are not sufficient to accomplish restoration, Trustor deposits with the
Beneficiary, within five days of demand by Beneficiary, the additional amounts necessary to
accomplish restoration. Proceeds disbursed for restoration will be released to Trustor in
accordance with Beneficiary's then current customary disbursement procedures. In the event
any of the conditions set forth above are not satisfied or if the insurance proceeds shall not be
applied to the restoration of the Security within thirty days after receipt of such proceeds by
Beneficiary, Beneficiary may release such proceeds to Trustor without such release being
deemed a payment of any indebtedness secured hereby, rather than apply such proceeds to the
restoration of the Security. Such application or release shall not cure or waive any default or
notice of default hereunder or invalidate any act done pursuant to such notice. If the Security is
restored at a cost less than the available insurance proceeds, then such excess proceeds shall, if
Trustor is not then in default hereunder, be paid over to Trustor. Beneficiary may commence,
appear in, defend or prosecute any assigned claim or action, and may adjust, compromise, settle
and collect all claims, proceeds and awards assigned to Beneficiary, but shall not be responsible
for any failure to collect any claim, proceeds or award, regardless of the cause of the failure.
Section 4.2. Condemnation.
Immediately upon its obtaining knowledge of the institution or the threatened institution
of any proceeding for the condemnation or other taking for public or quasi -public use of the
Security or any part thereof, or if the same be taken or damaged by reason of any public
improvement or condemnation proceeding, or in any other manner, or should Trustor receive any
notice or other information regarding such proceedings, action, taking or damage, Trustor shall
promptly notify Trustee and Beneficiary of such fact. Trustor shall then, if requested by
Beneficiary, file or defend its right thereunder and prosecute the same with due diligence to its
final disposition and shall cause any award or settlement to be paid to Beneficiary in accordance
with the provisions of the Loan Agreement. At Beneficiary's option, Beneficiary or Trustor may
be the nominal party in such proceeding but in any event Beneficiary shall be entitled, without
regard to the adequacy of its security, to participate in, appear in, prosecute and settle, jointly
with Trustor to control the same and to be represented therein by counsel of its choice, and
Trustor will deliver, or cause to be delivered, to Beneficiary such instruments as may be
requested by it from time to time to permit such participation. Trustor and Beneficiary agree to
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DOCSOC\ 1019784v3\22782.0047
act in good faith with respect to any consent, settlement, award of prosecution. If the Security or
any part thereof is taken or diminished in value, or if a consent settlement is entered, by or under
threat of such proceedings, all compensation, awards, damages, rights of action proceeds and
settlements payable to Trustor by virtue of its interest in the security shall be and hereby are
assigned, transferred and set over into Beneficiary to be held by it, in trust, subject to the lien and
security interest of this Deed of Trust. All such proceeds shall be first applied to reimburse
Trustee and Beneficiary, for all costs and expenses, including reasonable attorneys' fees,
incurred in connection with the collection of such award or settlement. Application or release of
proceeds as provided herein shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
WAUT
ADDITIONAL AGREEMENTS OF TRUSTOR
Section 5.1. Other Agreements Affecting Development.
The Trustor shall duly and punctually perform all Obligations, including but not limited
to all terms, covenants, conditions and agreements set forth in the Debt Instruments, the Loan
Agreement, the Note and any other agreement of any nature whatsoever now or hereafter
involving or affecting the Security or any part thereof.
Section 5.2. Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Material Default hereunder, and if the Beneficiary should employ
attorneys or incur other expenses for the collection of amounts due or the enforcement of
performance or observance of an obligation or agreement on the part of the Trustor in this Deed
of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable
fees of such attorneys and such other reasonable expenses so paid by the Beneficiary; and any
such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of
this Deed of Trust, and shall bear interest from the date such expenses are paid at the Agreed
Rate.
Section 5.3. Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
Section 5.4. Personal Property.
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To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixture filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement
under the California Commercial Code.
Section 5.5. Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees
to perform all acts that the Beneficiary may reasonably request so as to enable the Beneficiary to
maintain such valid perfected security interest in the Security in order to secure the payment of
the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order
to protect the security interest established pursuant to this instrument.
Section 5.6. Operation of the Security.
The Trustor agrees and covenants to operate the Security in full compliance with the
Loan Agreement and the Debt Instruments.
Section 5.7. Inspection of the Security.
The Trustor covenants and agrees that at any and all reasonable times, the Beneficiary
and its duly authorized agents, attorney's experts, engineers, accountants and representatives,
shall have the right, without payment of charges or fees, to inspect all or any portion of the
Security, including, but not limited to, the right to inspect and copy all reports and records
pertaining thereto.
Section 5.8. Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, sexual orientation, sale, marital status, national origin, ancestry or disability in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the
Trustor itself or any person claiming under or through it establish or permit any such practice or
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DOCSOCU 019784v3\22782.0047
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The
foregoing covenants shall run with the land.
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DOCS OC\ 1019784v3\22782.0047
Section 5.9. Subrogation and Waiver of Offset.
(a) Trustor waives any and all right to claim or recover against Beneficiary, its officers,
employees, agents and representatives, for loss of or damage to Trustor, the Security, Trustor's
property or the property of others under Trustor's control from any cause insured against or
required to be insured against by the provisions of this Deed of Trust; provided, however, that
this waiver of subrogation shall not be effective with respect to any policy of insurance permitted
or required by this Deed of Trust if (i) such policy prohibits, or if coverage thereunder would be
reduced as a result of, such waiver of subrogation and (ii) Trustor is unable to obtain from a
carrier issuing such insurance a policy that, by special endorsement or otherwise, permits such a
waiver of subrogation.
(b) Except as otherwise specifically provided herein, all amounts payable by Trustor
pursuant to this Deed of Trust shall be paid without notice, demand, counterclaim, setoff,
deduction or defense and without abatement, suspension, deferment, diminution or reduction,
and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or
otherwise affected (except as expressly provided herein) by reason of: (i) any damage to or
destruction of or any condemnation or similar taking of the Security or any part thereof; (ii) any
restriction or prevention of or interference by any third party with any use of the Security or any
part thereof; (iii) any title defect or encumbrance or any eviction from the Security or any part
thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary,
or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary,
or by any court, in any such proceeding; (v) any claim which Trustor has or might have against
Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any
of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing. Except as expressly provided herein,
Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement,
suspension, deferment, diminution or reduction of any sum secured hereby and payable by
Trustor.
Section 5.10. Utilities.
Trustor shall pay or cause to be paid when due all utility charges which are incurred for
the benefit of the Security or which may become a charge or lien against the Security for gas,
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DOCS OCU 019784v3\.22782.0047
electricity, water or sewer services furnished to the Security and all other assessments or charges
of a similar nature, whether public or private, affecting or related to the Security or any portion
thereof, whether or not such taxes, assessments or charges are or may become liens thereon.
Section 5.11. Actions by Beneficiary to Preserve Property.
If Trustor fails to make any payment or to do any act as and in the manner provided in
this Deed of Trust, Beneficiary and Trustee, and each of them, each in its own discretion, without
obligation to do so, without releasing Trustor from any Obligation, and subject only to the notice
and cure provisions of the Loan Agreement, may make or do the same in such manner and to
such extent as either may deem necessary to protect the security hereof. In connection therewith
(without limiting their general and other powers, whether conferred herein, in another Loan
Document or by law), Beneficiary and Trustee shall each and are hereby given the right, but not
the obligation: (i) to enter upon and take possession of the Security; (ii) to make additions,
alterations, repairs and improvements to the Security which either of them consider necessary or
proper to keep the Security in good condition and repair; (iii) to appear and participate in any
action or proceeding which may affect the security hereof or the rights or powers of Beneficiary
or Trustee; (iv) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or
debt which in the judgment of either may affect the security of this Deed of Trust or be prior or
superior hereto; and (v) in exercising such powers to pay necessary expenses, including
employment of counsel or other necessary or desirable consultants. Trustor shall reimburse
Beneficiary on demand for all costs incurred by Beneficiary in connection with actions which
Beneficiary deems advisable to protect its interest under the Loan Agreement and all such
amounts shall bear interest at the Agreed Rate following demand and be secured hereby.
Section 5.12. Transfer of Property by Trustor.
Prior to repayment of the Note, Trustor agrees that Trustor shall not sell or transfer the
Security or any interest therein or sell or transfer all or substantially all of the assets of Trustor or
any of them except as may be provided in the Loan Agreement.
Section 5.13. Additional Security.
No other security now existing, or hereafter taken, to secure the Obligations secured
hereby or the liability of any maker, surety guarantor or endorser with respect to such
Obligations, or any of them, shall be impaired or affected by the execution of this Deed of Trust;
and all additional security shall be taken, considered and held as cumulative. The taking of
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DOCS OC\ 1019784v3\22782.0047
additional security, execution of partial releases of the Security, or any extension of the time of
payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and
shall not affect or impair the liability of any maker, surety, guarantor or endorser for the payment
of said indebtedness. In the event Beneficiary at any time holds additional security for any of the
Obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at
its option, either before, concurrently, or after a sale is made hereunder.
Section 5.14. Liens.
Trustor shall pay and promptly discharge, at Trustor's cost and expense, all liens,
encumbrances and charges upon the Security, or any part thereof or interest, therein; provided,
that the existence of any mechanic's, laborer's, materialman's, supplier's or vendor's lien or
right thereto shall not constitute a violation of this Section if payment is not yet due under the
contract which is the foundation thereof. Trustor shall have the right to contest in good faith the
validity of any such lien, encumbrance or charge, provided Trustor shall first deposit with the
Beneficiary a bond or other security satisfactory to Beneficiary in such amounts as Beneficiary
shall reasonably require, but not more than one hundred fifty percent (150%) of the amount of
the claim or shall post a bond authorized by statute in lieu thereof, and provided further that
Trustor shall thereafter diligently proceed to cause such lien, encumbrance or charge to be
removed and discharged. If Trustor shall fail to remove and discharge any such lien,
encumbrance, or charge, then, in addition to any other right or remedy of Beneficiary,
Beneficiary may, but shall not be obligated to, discharge the same, without inquiring into the
validity of such lien, encumbrance or charge nor into the existence of any defense or offset
thereto, either by paying the amount claimed to be due, or by procuring the discharge of such
lien, encumbrance or charge by depositing in court a bond or the amount claimed, or otherwise
giving security for such claim, in such manner as is or may be prescribed by law. Trustor shall,
immediately upon demand therefore by Beneficiary, pay to Beneficiary an amount equal to all
costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the
foregoing right to discharge any such lien, encumbrance or charge, together with interest thereon
from the date of such expenditure at the Agreed Rate and, until paid, such sums shall be secured
hereby.
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DOCSOC\1019784v3\22782.0047
Section 5.15. Beneficiary's Powers.
Without affecting the liability of any other person liable for the payment of any
Obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon
any portion of the Security not then or theretofore released as security for the full amount of all
unpaid Obligations, Beneficiary may, from time to time and without notice, (i) release any
person so liable, (ii) extend the maturity or alter any of the terms of any such Obligation, (iii)
grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed at any
time at Beneficiary's option any parcel, portion or all of the Security, (v) take or release any other
or additional security for any Obligation herein mentioned, or (vi) make compositions or other
arrangements with debtors in relation thereto. By accepting payment or performance of any
Obligation secured by this Deed of Trust after the payment or performance thereof is due or after
the filing of notice of default and election to sell, Beneficiary shall not have thereby waived its
right to require prompt payment or performance, when due, of all other Obligations secured
hereby, or to declare a default for failure so to pay or perform, or to proceed with the sale under
any notice of default and election to sell theretofore given by Beneficiary, or with respect to any
unpaid balance of the indebtedness secured hereby. The acceptance by Beneficiary of any sum
in an amount less than the sum then due shall not constitute a waiver of the obligation of Trustor
to pay the entire sum then due. Trustor's failure to pay the entire sum then due shall continue to
be a default, notwithstanding the acceptance of partial payment, and, until the entire sum then
due shall have been paid, Beneficiary or Trustee shall at all times be entitled to declare a default
and to exercise all the remedies herein conferred, and the right to proceed with a sale under any
notice of default and election to sell shall in no way be impaired, whether or not such amounts
are received prior or subsequent to such notice. No delay or omission of Trustee or Beneficiary
in the exercise of any other right or power hereunder shall impair such right or power or any
other right or power nor shall the same be construed to be a waiver of any default or any
acquiescence therein.
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ARTICLE VI
ASSIGNMENTS OF RENTS, ISSUES AND PROFITS
Section 6.1. Assignment.
Trustor hereby absolutely, irrevocably and unconditionally assigns to Beneficiary, as
security for the Obligations, all rents, profits, deposits, royalties, income and other issues and
similar benefits derived from the Security (collectively, the "Rents"), and hereby confers upon
Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints
Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary, at any time and from
time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions,
and to sue, in its name or in the name of Trustor, for all Rents, and apply the same to the
Obligations secured hereby; provided, however, that Trustor shall have the right, as between
Trustor and Beneficiary, to collect the Rents but not more than one month in advance of the date
due unless the written approval of Beneficiary has first been obtained, with the exception of
security deposits and "first and last months' rent" collected from tenants in connection with
Trustor's ordinary leasing of residential apartments within the Property), and to retain and enjoy
the same, so long as an Event of Default shall not have occurred hereunder and be continuing.
Section 6.2. Collection Upon Default.
While any Event of Default remains uncured, Beneficiary may, at any time without
notice, either in person, by agent or by a receiver appointed by a court, and without regard to the
adequacy of any security for the Obligations hereby secured, enter upon and take possession of
the Security, or any part thereof, and, with or without taking possession of the Security or any
part thereof, in its own name sue for or otherwise collect such Rents (including those past due
and unpaid, and all prepaid Rents and all other monies which may have been or may hereafter be
deposited with Trustor by any tenant to secure the payment of any Rent or for any services
thereafter to be rendered by Trustor for any other obligation of any tenant to Trustor arising
under any lease, and Trustor agrees that, upon the occurrence of any Event or Default hereunder,
Trustor shall promptly deliver all Rents and other moneys to Beneficiary), and Beneficiary may
apply the same, less costs and expenses of operation and collection, including, without
limitation, attorneys fees, whether or not suit is brought or prosecuted to judgment, against any
indebtedness or Obligation of Trustor secured hereby, and in such order as Beneficiary may
determine notwithstanding that said indebtedness or the performance of said Obligation may not
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DOCSOC\ 1019784v3\22782.0047
then be due. The collection of Rents, or the entering upon and taking possession of the Security,
or the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done in response to such default or pursuant to such notice of
default or be deemed or construed to make Beneficiary a mortgagee -in -possession of the
Security or any portion thereof.
Section 6.3. Further Assignments.
Upon demand of Beneficiary, Trustor shall, from time to time hereafter, execute, and
deliver to Beneficiary recordable assignments of Trustor's interest in any or all leases, subleases,
contracts, rights, licenses and permits now or hereafter affecting the Security or any portion
thereof. Such assignments shall be made by instruments in form and substance satisfactory to
Beneficiary; provided, however, that no such assignment shall be construed as imposing upon
Beneficiary any obligation with respect thereto. Beneficiary may, at its option, exercise its rights
hereunder or under any such specific assignment and such exercise shall not constitute a waiver
of any right hereunder or under any such specific assignment.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default.
Each of the following shall constitute Events of Default: (1) the occurrence of an
"Event of Default" as defined in the Loan Agreement or as defined in any Debt Instrument; or
(2) the failure to make any payment or perform any of Trustor's other Obligations now or
hereafter secured by this Deed of Trust (subject to any applicable cure period).
Section 7.2. Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default, the unpaid Principal of
the Note and any other indebtedness and other Obligations secured hereby shall immediately
become due and payable without presentment, protest notice or demand, all of which are hereby
expressly waived, upon written notice by the Beneficiary to the Trustor and no omission on the
part of the Beneficiary to exercise such option when entitled to do so shall be construed as a
waiver of such right.
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Section 7.3. The Beneficiary's Right to Enter and Take Possession.
If a Material Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or proceeding, or by
a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the
Security and take possession thereof (or any part thereof) and of any of the Security, in its own
name or in the name of Trustee, and do any acts which it deems necessary or desirable to
preserve the value or marketability of the Security, or part thereof or interest therein, increase the
income therefrom or protect the security thereof and, with or without taking possession of the
Security, sue for or otherwise collect the Rents, including those past due and unpaid, and apply
the same, less costs and expenses of operation and collection including without limitation
attorneys fees, against any indebtedness secured hereby, all in such order as Beneficiary may
determine. The entering upon and taking possession of the Security the collection of such Rents
and the application thereof as aforesaid shall not cure or waive any Material Default or notice of
default hereunder or invalidate any act done in response to such Material Default or pursuant to a
notice of default, and, notwithstanding the continuance in possession of the Security, Beneficiary
shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon
occurrence of any Material Default, including the right to exercise the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of Material Default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold,
which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records
of Orange County; or
(d) Exercise all other rights and remedies provided herein, in the instruments by which
the Trustor acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the Obligations secured hereby, or
provided by law.
Section 7.4. Foreclosure by Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust,
the Loan Agreement and the Note which is secured hereby (and the deposit of which shall be
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DOCSOCU 019784v3\22782.0047
deemed to constitute evidence that the unpaid Principal amount of the Note is immediately due
and payable), and such receipts and evidence of any expenditures made that are additionally
secured hereby as Trustee may require.
(a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded,
published and delivered to Trustor such Notice of Default and Election to Sell as then required
by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Default and after
Notice of Sale having been given as required by law, sell the Security, at the time and place of
sale fixed by it in said Notice of Sale, whether as a whole or in separate lots or parcels or items
as Trustee shall deem expedient and in such order as it may determine unless specified otherwise
to the Trustor according to California Civil Code Section 2924g(b), at public auction to the
highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee
shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds
conveying the property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed or any matters of facts shall be conclusive proof of the truthfulness thereof.
Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such
sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or
purchasers.
(b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of
evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to
payment of: (1) the unpaid Principal amount of the Note; (2) all other sums then secured
hereby; and (3) the remainder, if any, to Trustor.
(c) Trustee may postpone sale of all or any portion of the Security by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale.
Section 7.5. Receiver
If a Material Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
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thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 7.6. Application of Funds After Default.
Except as otherwise herein provided, upon the occurrence of a Material Default
hereunder, Beneficiary may, at any time without notice, apply any or all sums or amounts
received and held by Beneficiary to pay insurance premiums, Impositions, or either of them, or
as Rents or income of the Security, or as insurance or condemnation proceeds, and all other sums
or amounts received by Beneficiary from or on account of Trustor or the Security, or otherwise,
against any indebtedness or Obligation of the Trustor secured hereby, in such manner and order
as Beneficiary may elect, notwithstanding that such indebtedness or the performance of such
Obligation may not yet be due. The receipt, use or application of any such sum or amount shall
not be construed to affect the maturity of any indebtedness secured by this Deed of Trust, or any
of the rights or powers of Beneficiary under the terms of the Loan Agreement, this Deed of Trust
or the Note, or any of the Obligations of Trustor or any guarantor under any other instruments or
documents now or hereafter delivered in connection with the Loan Agreement or to cure or
waive any default or notice of default under the Loan Agreement or any such instruments or
documents; or to invalidate any act of Trustee or Beneficiary.
Section 7.7. Costs of Enforcement.
If a Material Default occurs, Beneficiary and Trustee, and each of them, may employ an
attorney or attorneys to protect their rights hereunder. Trustor promises to pay to Beneficiary, on
demand, the fees and expenses of such attorneys and all other costs of enforcing the Obligations
secured hereby, including, without limitation, recording fees, the expense of a trustee, sale
guarantee, Trustee's fees and expenses, receivers fees and expenses, and all other expenses, of
whatever kind or nature, incurred by Beneficiary and Trustee, and each of them, in connection
with the enforcement of the Obligations secured hereby, whether or not such enforcement
includes the filing of a lawsuit. Until paid, such sums shall be secured hereby and shall bear
interest at the Agreed Rate.
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Section 7.8. Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.9. No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or remedy
accruing upon any Material Default shall exhaust or impair any such right, power or remedy, or
shall be construed to be a waiver of any such Material Default or acquiescence therein; and every
right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from
time to time and as often as may be deemed expeditious by the Beneficiary. No consent or
waiver, expressed or implied, by the Beneficiary to or any breach by the Trustor in the
performance of the Obligations hereunder shall be deemed or construed to be a consent to or
waiver of Obligations of the Trustor hereunder. Failure on the part of the Beneficiary to
complain of any act or failure to act or to declare a Material Default, irrespective of how long
such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or
impair any rights, power or remedies consequent on any Material Default by the Trustor.
(b) If the Beneficiary (1) grants forbearance or an extension of time for the payment of
any sums secured hereby, (2) takes other or additional security or the payment of any sums
secured hereby, (3) waives or does not exercise any right granted in the Loan Agreement, (4)
releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of
the terms, covenants, conditions or agreements in the Loan Agreement, (5) consents to the
granting of any easement or other right affecting the Security, or (6) makes or consents to any
agreement subordinating the lien hereof, any such act or omission shall not release, discharge,
modify, change or affect the original liability under this Deed of Trust, or any other obligation of
the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-
signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or
omission preclude the Beneficiary from exercising any right, power or privilege herein granted
or intended to be granted in any Material Default then made or of any subsequent Material
Default, nor, except as otherwise expressly provided in an instrument or instruments executed by
the Beneficiary shall the lien of this Deed of Trust be altered thereby.
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Section 7.10. Suits to Protect the Security.
The Beneficiary shall have power to (1) institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (2) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (3) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.11. Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount which may become due and payable
by the Trustor hereunder after such date.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Amendments.
This instrument cannot be waived, changed, discharged or terminated orally, but only by
an instrument in writing signed by Beneficiary and Trustor.
Section 8.2. Reconveyance by Trustee / Partial Reconveyance.
(a) Upon written request of Beneficiary stating that all sums secured hereby
have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and
retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey,
without warranty, the Security to Trustor, or to the person or persons legally entitled thereto.
(b) Upon written request of Beneficiary stating that:
(i) An Affordable Housing Deed of Trust has been recorded against
the property of an Affordable Housing Unit, Trustee shall issue a Partial Reconveyance to
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Trustor, without warranty, for the portion of the security comprising the real property of the
Affordable Housing Unit.
(ii) A prospective purchaser is in escrow for a Condominium Unit that
is not an Affordable Housing Unit, Trustee shall issue a Partial Reconveyance to Trustor, without
warranty, for the portion of the Security comprising the real property of the Condominium Unit
referenced in this (ii).
(iii) Ten (10) Affordable Housing Units have been sold and Affordable
Deeds of Trust have been recorded against the real property of each Unit, and upon surrender of
this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of
Trustee's reasonable fees, Trustee shall reconvey, without warranty, the Security to Trustor.
Section 8.3. Notices.
If at any time after the execution of this Deed of Trust it shall become necessary or
convenient for one of the parties hereto to serve any notice, demand or communication upon the
other party, such notice, demand or communication shall be in writing and shall be served
personally or by depositing the same in the registered United States mail, return receipt
requested, postage prepaid and (1) if intended for Beneficiary shall be addressed to :
Olson Urban Housing, LLC
3020 Old Ranch Parkway, Suite 400
Seal Beach, California 90740-2751
And (2) if intended for Trustors shall be addressed to:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, CA 92780-3767
Any notice, demand or communication shall be deemed given, received, made or
communicated on the date personal delivery is effected or, if mailed in the manner herein
specified, on the delivery date or date delivery is refused by the addressee, as shown on the
return receipt. Either party may change its address at any time by giving written notice of such
change to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten
(10) days prior to the date such change is desired to be effective.
Section 8.4. Successors and Joint Trustors.
All Obligations of Trustor secured by this Deed of Trust shall also apply to and bind any
permitted transferee or successors in interest. Where the terms of the Deed of Trust have the
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effect of creating an Obligation of the Trustor and a transferee, such Obligation shall be deemed
to be a joint and several Obligation of the Trustor and such transferee. Where Trustor is more
than one entity or person, all Obligations of Trustor shall be deemed to be a joint and several
Obligation of each and every entity and person comprising Trustor.
Section 8.5. Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6. Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
Section 8.7. Governing Law and Venue.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California. In the event of any legal action to enforce or interpret this Deed of Trust, the
sole and exclusive venue shall be a court of competent jurisdiction located in Orange County,
California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court,
notwithstanding Code of Civil Procedure Section 394.
Section 8.8. Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
Section 8.9. Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 8.10. Actions.
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Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11. Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Security is situated, shall be conclusive proof of proper
appointment of the successor trustee.
Section 8.12. Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceedings in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Section 8.13. Conflicts.
If any term or provision of this Deed of Trust conflicts with any term of provision of the
Loan Agreement, the term or provision of the Loan Agreement shall control to the extent of such
conflict.
Section 8.14. Statements by Trustor.
Trustor shall, at its cost, within ten (10) days after notice thereof from Beneficiary,
deliver to Beneficiary a written statement setting forth the amounts then unpaid and secured by
this Deed of Trust and stating whether any offset or defense exists against such amounts.
Section 8.15. Beneficiary Statements.
For any statement or accounting requested by Trustor or any other entitled person
pursuant to Section 2943 or Section 2954 of the California Civil Code or pursuant to any other
provision of applicable law, or for any other document or instrument furnished to Trustor by
Beneficiary, Beneficiary may charge the maximum amount permitted by law at the time of the
request therefore, or if there be no such maximum, then in accordance with Beneficiary's
customary charges therefore or the actual cost to Beneficiary therefore, whichever is greater.
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Section 8.16. Statute of Limitations.
Except insofar as now or hereafter prohibited by law, the right to plead, use or assert any
statute of limitations as a plea or defense or bar of any kind, or for any purpose, to any debt,
demand or obligation secured or to be secured hereby, or to any complaint or other pleading or
proceeding filed, instituted or maintained for the purpose of enforcing this Deed of Trust or any
rights hereunder, is hereby waived by Trustor.
Section 8.17. Trust Irrevocable; No Offset.
The Trust created hereby is irrevocable by Trustor. No offset or claim that Trustor now
has or may in the future have against Beneficiary shall relieve Trustor from paying the
indebtedness or performing any other Obligation contained herein or secured hereby.
Section 8.18. Corrections.
Trustor shall, upon request of Beneficiary, promptly correct any defect, error or omission
which may be discovered in the contents hereof or in the execution or acknowledgment hereof,
and will execute, acknowledge and deliver such further instruments and do such further acts as
may be necessary or as may be reasonably requested by Beneficiary to carry out more effectively
the purposes thereof, to subject to, the lien and security interest hereby created any of Trustor's
properties, rights or interests covered or intended to be covered hereby, or to perfect and
maintain such lien and security interest.
Section 8.19. Further Assurance.
Trustor, Beneficiary and Trustee agree to do or cause to be done such further acts and
things and to execute and deliver or to cause to be executed and delivered such additional
assignments, agreements, powers and instruments, as any of them may reasonably require or
deem advisable to keep valid and effective the charges and liens hereof, to carry into effect the
purposes of this Deed of Trust or to better assure and confirm unto any of them their rights,
powers and remedies hereunder; and, upon request by Beneficiary, shall supply evidence of
fulfillment of each of the covenants herein contained concerning which a request for such
evidence has been made.
Section 8.20 Waiver of Jury Trial.
Each party acknowledges that it is aware of and has had the advice of counsel of its
choice with respect to its rights to trial by jury, and each party, for itself and its successors and
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assigns, does hereby expressly and knowingly waive and release all such rights to trial by jury in any
action, proceeding or counterclaim brought by any party hereto against the other (and/or against its
officers, directors, employees, agents, or subsidiary or affiliated entities) on or with regard to any
matters whatsoever arising out of or in any way connected with this Deed of Trust and/or any claim
of injury or damage
l"
WAIVERS
Section 9.1. Waivers and Related Matters
(a) to the fullest extent allowed by law, Trustor hereby waives: (i) presentment, demand,
protest, notice of dishonor, notice of protest and all other notices and demands of every kind, and
all suretyship defenses of every kind that would otherwise be available in connection with this
Deed of Trust, and (ii) all rights of redemption, valuation, appraisement, stay of executive,
notice of election to mature or declare due the whole of the Obligation and marshaling in the
event of foreclosure of the liens hereby created.
(b) Trustor hereby authorizes Beneficiary, at any time and from time to time without
notice and without affecting this Deed of Trust in any way, to: (i) accept new or additional
instruments, documents, agreements, security or guaranties in connection with all or any part of
the Obligations; (ii) accept partial payments on the Obligations; and (iii) waive, release,
reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound,
compromise, liquidate and enforce all or any part of the Obligations and any security or
guaranties therefor, and apply any such security and direct the order or manner of sale thereof
and bid and purchase at any such sale.
(c) Trustor hereby waives any right to require Beneficiary to (i) proceed against any
person; (ii) proceed or exhaust any collateral held from any person; or (iii) pursue any other
remedy in Beneficiary's power. Upon the occurrence of any Event of Default, Beneficiary is
hereby expressly given the right, at its option, to proceed in the enforcement of this Deed of
Trust, independently of any other remedy or security Beneficiary may at any time hold in
connection with the Obligations, and Beneficiary shall not in any way be obligated or otherwise
required to proceed upon or against and/or exhaust any other security or remedy before
proceeding to enforce this Deed of Trust.
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(d) Trustor hereby waives any defense arising by reason of (i) any disability or other
defense of Trustor or any other person; (ii) the cessation from any cause whatsoever, other than
full payment and performance of the Obligations, of the Obligations of Trustor or any other
person; or (iii) any act or omission by Beneficiary which directly or indirectly results in or aids
in the discharge or release of Trustor, or any other person, any Obligation, or any collateral by
operation of law or otherwise.
The waivers set forth in this Article 9 shall also apply, to the fullest extent permitted by
law to all other real and/or personal property of Trustor now or hereafter assigned to Beneficiary
as security for the Obligations. Trustor warrants and agrees that each, of the waivers set forth
above are made with Trustor's full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense waived may diminish, destroy or otherwise
adversely affect rights which Trustor otherwise may have against Beneficiary or others, or
against collateral, and that under the circumstances, the waivers are reasonable and not contrary
to public policy or law. If any of the waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective to the maximum extent permitted by law.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first
above written.
Dated:
OLSON URBAN HOUSING, LLC, a Delaware
Limited liability Company
By: The Olson Company, a California
corporation, its Managing Member
By:
Its:
By:
Its:
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ATTACHMENT NO. 11
AFFORDABLE HOUSING
PROMISSORY NOTE
(Very Low Income)
200_
Tustin, California
FOR VALUE RECEIVED, the undersigned (jointly and severally "Homeowner"),
promises to pay to the order of the Tustin Community Redevelopment Agency, a public body,
corporate and politic (the "Agency"), at 300 Centennial Way, Tustin California 92780, Attention:
Assistant Executive Director, or at such other place as the holder of this Affordable Housing
Promissory Note ("Affordable Housing Promissory Note" or "Note") from time to time may
designate in writing, the principal sum of Dollars ($ ), plus
such amount that is to be added to the principal sum of this Note as provided below, together
with interest on the unpaid principal amount of this Note from time to time outstanding (the
"Interest") in lawful money of the United States of America.
RECITALS
A. Homeowner has purchased a condominium located at >
Tustin, California (the "Unit"). The Unit is part of that certain housing development known as
(the "Project").
B. Pursuant to that certain Affordable Housing Assistance Agreement (the
"Agreement") between the Agency and Olson Urban Housing LLC, a Delaware limited liability
company (the "Developer"), the Developer is required to sell certain of the homes in the Project
at an "Affordable Housing Cost for Very Low Income Households."
C. The Unit has been designated by the Developer as a Unit that is to be sold to a
Very Low Income Household.
D. Homeowner has represented to the Developer and the Agency that Homeowner
and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence
at all times during the Homeowner's ownership of the Unit, that they will not rent the Unit to
others, and that they are a Very Low Income Household.
E. In order to enable Developer to sell the Unit at an Affordable Housing Cost for
Very Low Income Households, the Agency agreed to accept as part payment of amounts owed
by the Developer to the Agency this Note executed by Homeowner in connection with
Homeowner's purchase of the Unit.
F. In order to assure the Agency that the Unit will remain an Affordable Housing
Unit for forty-five years, the Homeowner and the Developer have agreed to record against title to
the Unit an Affordable Housing Covenant (the "Affordable Housing Covenant").
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G. The payment of this Affordable Housing Promissory Note and the performance of
the Homeowner's obligations under the Affordable Housing Covenant are secured by a Deed of
Trust With Assignment of Rents of even date herewith (the "Affordable Housing Trust Deed")
encumbering the Unit.
AGREEMENT
Definition of Terms.
(a) "Affordable Housing Cost for Very Low Income Household" shall
mean a price that does not exceed the Monthly Housing Cost for Very Low Income Households,
for a family size appropriate for the Unit. The Affordable Housing Cost for the Unit shall be
calculated as of the date of sale or resale of the Unit. Household size appropriate for the Unit
means two persons for a one bedroom house, three persons for a two bedroom house, four
persons for a three bedroom house, and five persons for a four bedroom house.
(b) "Affordable Housing Covenant" shall mean the Covenant in the form
attached to the Agreement as Attachment No. 14 recorded against the title to the Unit.
(c) "Affordable Housing Trust Deed" means that certain deed of trust with
Assignment of Rents of even date herewith executed by Homeowner which encumbers the Unit
and secures the obligations of Homeowner and his or her successors and assigns as provided in
(a) the Affordable Housing Covenant, (b) the Reimbursement Agreement attached as Exhibit
"D" to the Affordable Housing Covenant, and (c) this Affordable Housing Promissory Note.
(d) "Assistant Executive Director" shall mean Ms. Christine Shingleton, or
her successor.
(e) "Agency" means the Tustin Community Redevelopment Agency, and its
successors and assigns.
(f) "Developer" means Olson Urban Housing LLC, a Delaware limited
liability company.
(g) "Interest" means the amount of interest payable on this Note computed as
provided in Sections 3 and 4.
(h) "Homeowner" means the person or persons executing this Note, and his,
her or their successors and assigns.
(i) "Note Documents" means this Note, the Affordable Housing Trust
Deed, and the Affordable Housing Covenant and Exhibits.
0) "Owner" means Homeowner and his, her or their successors and
assigns.
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(k) "Transfer" means any sale, assignment, conveyance, lease or transfer,
voluntary or involuntary, of any interest in the Unit. Without limiting the generality of the
foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation
of a life estate; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the
Unit; or (v) any voluntary or involuntary conveyance of title or possession of the Unit.
(1) Terms not otherwise defined in this Affordable Housing Promissory Note
are defined in the Affordable Housing Covenant.
2. Payments of Principal and Interest. The entire unpaid principal amount of this
Note, together with any accrued and unpaid interest and any other amounts then due under the
Affordable Housing Trust Deed, shall be due and payable forty-six (46) years from the date of
this Note (the "Maturity Date"), unless such amounts become due and payable sooner because
of acceleration, in which case they shall be due and payable in full on the date of such
acceleration.
3. Computation of Interest. There are two elements of interest that shall be payable
on this Note:
(a) The first element of interest is simple interest on the original principal amount
of this Note at the rate of five percent (5%) per annum computed from the date of this Note.
(b) The second element of interest is the amount by which the fair market
value of the Unit on the Note's Maturity Date is in excess of the sum of (i) the Affordable
Housing Cost of the Unit as of the date of this Note, (ii) the principal amount of this Note on the
Maturity Date, and (iii) interest payable according to (a) above as of the Maturity Date.
4. Increase in the Principal Amount of this Note. In the event the Homeowner
Transfers his, her or their interest in the Unit, the Agency has the right to accelerate the Maturity
Date of this Note as provided in the Affordable Housing Covenant and Affordable Housing Trust
Deed. In the event of such a Transfer and the Agency does not exercise its right to accelerate the
Maturity Date of this Note, then there shall be added to the principal amount of this Note an
amount by which the fair market value of the Unit on the date of the Transfer is in excess of the
sum of (a) the Affordable Housing Cost of the Unit as of the date of this Note, (b) the principal
amount of this Note on the date of the Transfer, and (c) interest payable as of the date of the
Transfer according to Section 3(a). Such amount shall be automatically added to the principal
amount of this Note without the need for the consent of Homeowner or a demand by the Agency.
The amount of such increase in the principal amount of this Note shall be equal to the interest
that would have been due had the Agency exercised its right to accelerate the Maturity Date as a
result of such Transfer. Notwithstanding such increase in the principal amount of this Note, the
Note Documents shall remain in full force and effect.
5. Partial Forgiveness of Amounts Payable. Notwithstanding the foregoing, in the
event that the then -owner of the Unit and all of the owner's predecessors -in -interest have fully
complied with the Affordable Housing Covenants as of the Maturity Date, the Owner of the Unit
need only pay five percent (5%) of the amount due and payable on the Maturity Date.
Attachment No. 11-3
DOCSOC\ 1019784v3\22782.0047
6: No Prepayment. The Agency desires that the Note not be prepaid in order to
assure that the Unit will only be sold at an Affordable Housing Cost for forty-five (45) years
from the initial sale of the Unit. In order to assure this result, Homeowner and the Agency agree
that this Note may not be prepaid in whole or in part at anytime prior to the Maturity Date.
7. Additional Interest. If any payment due under this Note shall become overdue for
a period longer than ten (10) days, the unpaid amount shall bear interest at the highest rate
permitted by law (the "Default Rate").
8. Events of Default and Remedies. Upon the occurrence and during the continuance
of a default under any of the Note Documents (an "Event of Default"), the Agency, at its option,
may:
(a) declare all of Homeowner's obligations under the Note Documents to be
immediately due and payable, without notice (except as provided by law); and
(b) pursue each other right, remedy and power available to it under the Note
Documents or available to it at law or in equity.
The rights, remedies and powers of the Agency, as provided in this Note and the
other Note Documents, are cumulative and concurrent, and may be pursued singly, successively
or together against Homeowner, the Unit, any guarantor of Homeowner's obligations and any
other security given at any time to secure the payment of Homeowner's obligations, all at the sole
discretion of the Agency. The Agency may resort to every other right or remedy available at law
or in equity without first exhausting the rights and remedies contained in the Note Documents,
all in the Agency's sole discretion. Failure of the Agency, for any period of time or on more than
one occasion, to exercise its option to accelerate the Maturity Date shall not constitute a waiver
of the right to exercise such right at any time during the continued existence of any Event of
Default under any of the Note Documents or in the event of any subsequent Event of Default
under this Note or any of the other Note Documents. The Agency shall not by any other
omission or act be deemed to waive any of its rights or remedies under the this Note or the other
Note Documents unless such waiver is contained in a writing signed by the Agency, and then
only to the extent specifically set forth in such writing. A waiver in connection with one event
shall not be construed as continuing or as a bar to or waiver of any right or remedy in connection
with a subsequent event.
9. Waivers and Consents. Homeowner and each endorser, guarantor, surety or
accommodation party of this Note and each other person liable or to become liable for any part
of the indebtedness evidenced by this Note, waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest and protest of this
Note, and all other notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note (except in the case of Homeowner as provided by law),
and agree that their liability shall be unconditional and without regard to the liability of any other
party and shall not be in any manner affected by any indulgence, extension of time, renewal,
waiver or modification granted or consented to by the Agency. Homeowner and each such
Attachment No. 11-4
DOCS OC\ 1019784v3\22782.0047
endorser, guarantor, surety, accommodation party and person liable or to become liable further
consent to every extension of time, renewal, waiver or modification that may be granted by the
Agency with respect to the payment or other provisions of this Note, and to the release of any
collateral given to secure the payment of amounts owing under this Note, with or without
substitution, and agree that additional makers or guarantors or endorsers may become parties to
this Note without notice to Homeowner or any other parties and without affecting the liability of
Homeowner or any other parties under this Note.
10. Due on Sale. The Affordable Housing Deed of Trust includes provisions
permitting the Agency to declare all sums secured by the Deed of Trust due and payable if an
encumbrance of or transfer of any interest in the Property occurs in violation of the encumbrance
or transfer provisions of the Affordable Housing Covenants.
11. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this
Note and the rights and liabilities of the parties to this Note shall be governed by the laws of the
State of California.
(b) Binding on Successors. This Note shall inure to the benefit of, and shall
be binding upon, the successors and assigns of each of the parties to this Note.
(c) The Agency's Costs. Homeowner shall pay all reasonable Costs incurred
by the Agency in connection with the documentation, modification, workout, collection or
enforcement of the amount evidenced by this Note (the "Loan") or any of the Note Documents
(as applicable), including probate, appellate and bankruptcy proceedings, any post judgment
proceedings to collect or enforce any judgment or order relating to the Loan or any of the Note
Documents (as applicable), and all such Costs shall bear interest at the Default Rate until paid.
For the purposes hereof "Costs" means all expenditures and expenses which may be paid or
incurred by or on behalf of the Agency including repair costs, payments to remove or protect
against liens, attorneys' fees (including fees of the Agency's inside counsel), receivers' fees,
appraisers' fees, engineers' fees, accountants' fees, independent consultants' fees (including
environmental consultants), all costs and expenses incurred in connection with any of the
foregoing, the Agency's out-of-pocket costs and expenses related to any audit or inspection of the
Unit, outlays for documentary and expert evidence, stamp taxes, publication costs, and costs
(which may be estimates as to items to be expended after entry of an order or judgment) for
procuring all such abstracts of title, title searches and examination, title insurance policies, and
similar data and assurances with respect to title as the Agency may deem reasonably necessary
either to prosecute any action or to evidence to bidders at any sale of the Unit the true condition
of the title to, or the value of, the Unit. Further, all "Costs" shall include such other costs,
expenses and fees as may be incurred by the Agency in the protection of the Property and the
maintenance of the lien of the Affordable Housing Deed of Trust, including, attorneys' fees,
expenses and costs in any litigation or proceeding affecting the Affordable Housing Deed of
Trust, this Note, the other Note Documents, the Unit, including probate, appellate, and
bankruptcy proceedings, and any post judgment proceedings to collect or enforce any judgment
Attachment No. 11-5
DOCSOCU 019784v3\22782.0047
or order relating to this Note, the Affordable Housing Deed of Trust or the other Note
Documents, to obtain any court order or the appointment of a receiver to enforce the Agency's
rights pursuant to Section 564 of the California Code of Civil Procedure and/or Section 2929.5 of
the California Civil Code or in preparation for the commencement or defense of any action or
proceeding, shall be immediately due and payable to the Agency, with interest thereon at the
Default Rate. This provision is separate and several, and shall survive the merger of this
provision into any judgment.
(d) Entire Aereement. This Note and the other Note Documents constitute
the entire agreement and understanding between and among the parties in respect of the subject
matter of such agreements and supersede all prior agreements and understandings with respect to
such subject matter, whether oral or written.
(e) Waivers. Waiver by the Agency of any term, covenant or condition
under this Note or the other Note Documents, or of any default by Homeowner under this Note
or the other Note Documents, or any failure by the Agency to insist upon strict performance by
Homeowner of any term, covenant or condition contained in this Note or the other Note
Documents, shall be effective or binding on the Agency only if made in writing by the Agency;
no such wavier shall be implied from any omission by the Agency to take action with respect to
any such term, covenant, condition or default. No express written waiver by the Agency of any
term, covenant, condition or default shall affect any other term, covenant, condition or default or
cover any other time period than the application of any such term, covenant or condition to the
matter as to which a waiver has been given or the default or time period specified in such express
waiver. This Note may be amended only by an instrument in writing signed by Homeowner and
the Agency.
(f) Severability. If any part of this Note is declared invalid for any reason,
such shall not affect the validity of the rest of the Note. The other parts of this Note shall remain
in effect as if this Note had been executed without the invalid part. The parties declare that they
intend and desire that the remaining parts of this Note continue to be effective without any part
or parts that have been declared invalid.
(g) Lawful Rate of Interest. In no event whatsoever shall the amount of
interest paid or agreed to be paid to the Agency pursuant to this Note or any of the Note
Documents exceed the highest lawful rate of interest permissible under applicable law. If, from
any circumstances whatsoever, fulfillment of any provision of this Note and the other Note
Documents shall involve exceeding the lawful rate of interest which a court of competent
jurisdiction may deem applicable hereto ("Excess Interest"), then ipso facto, the obligation to be
fulfilled shall be reduced to the highest lawful rate of interest permissible under such law and if,
for any reason whatsoever, the Agency shall receive, as interest, an amount which would be
deemed unlawful under such applicable law, such interest shall be applied to the principal
amount of this Note (whether or not due and payable), and not to the payment of interest, or
refunded to Homeowner if all principal hereof has been paid in full. Neither Homeowner nor any
guarantor, endorser or surety nor their heirs, legal representatives, successors or assigns shall
have any action against the Agency for any damages whatsoever arising out of the payment or
collection of any such Excess Interest.
Attachment No. 11-6
DOCSOC\1019784v3\22782.0047
12. Waiver of Trial by Jury. EACH OF HOMEOWNER AND THE AGENCY WAIVES
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN
RESPECT OF OR ARISING OUT OF THIS NOTE OR THE OTHER NOTE DOCUMENTS.
Executed this day of 200_
Attachment No. 11-7
DOCS 001019784v3\22782.0047
"Homeowner"
ATTACHMENT NO. 12
AFFORDABLE HOUSING
PROMISSORY NOTE
(Moderate Income)
200_
Tustin, California
FOR VALUE RECEIVED, the undersigned (jointly and severally "Homeowner"),
promises to pay to the order of the Tustin Community Redevelopment Agency, a municipal
Agency (the "Agency"), at 300 Centennial Way, Tustin California 92780, Attention: Assistant
Executive Director, or at such other place as the holder of this Affordable Housing Promissory
Note ("Affordable Housing Promissory Note" or "Note") from time to time may designate in
writing, the principal sum of Dollars ($ ), plus such
amount that is to be added to the principal sum of this Note as provided below, together with
interest on the unpaid principal amount of this Note from time to time outstanding (the
"Interest") in lawful money of the United States of America.
RECITALS
A. Homeowner has purchased a condominium located at
Tustin, California (the "Unit"). The Unit is part of that certain housing development known as
" " (the 'Project").
B. Pursuant to that certain Affordable Housing Assistance Agreement (the
"Agreement") between the Agency and Olson Urban Housing LLC, a Delaware limited liability
company (the "Developer"), the Developer is required to sell certain of the homes in the Project
at an "Affordable Housing Cost for Moderate Income Households."
C. The Unit has been designated by the Developer as a Unit that is to be sold to a
Moderate Income Household.
D. Homeowner has represented to the Developer and the Agency that Homeowner
and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence
at all times during the Homeowner's ownership of the Unit, that they will not rent the Unit to
others, and that they are a Moderate Income Household.
E. In order to enable Developer to sell the Unit at an Affordable Housing Cost for
Moderate Income Households, the Agency agreed to accept as part payment of amounts owed by
the Developer to the Agency this Note executed by Homeowner in connection with
Homeowner's purchase of the Unit.
F. In order to assure the Agency that the Unit will remain an Affordable Housing
Unit for forty-five years, the Homeowner and the Developer have agreed to record against title to
the Unit Affordable Housing Covenant (the "Affordable Housing Covenant").
Attachment No. 12-1
DOCSOC\ 1019784v3\22782.0047
G. The payment of this Affordable Housing Promissory Note and the performance of
the Homeowner's obligations under the Affordable Housing Covenant are secured by a Deed of
Trust With Assignment of Rents of even date herewith (the "Affordable Housing Trust Deed")
encumbering the Unit.
AGREEMENT
Definition of Terms.
(a) "Affordable Housing Cost for Moderate Income Household" shall
mean a price that does not exceed the Monthly Housing Cost for a Moderate Income
Households, for a family size appropriate for the Unit. The Affordable Housing Cost for the
Unit shall be calculated as of the date of sale or resale of the Unit. Household size appropriate for
the Unit means two persons for a one bedroom house, three persons for a two bedroom house,
four persons for a three bedroom house, five persons for a four bedroom house.
(b) "Affordable Housing Covenant" shall mean the Covenant in the form
attached to the Agreement as Attachment No. 15 recorded against the title to the Unit.
(c) "Affordable Housing Trust Deed" means that certain deed of trust with
Assignment of Rents of even date herewith executed by Homeowner which encumbers the Unit
and secures the obligations of Homeowner and his or her successors and assigns as provided in
(a) the Affordable Housing Covenant, (b) the Reimbursement Agreement attached as Exhibit
"D" to the Affordable Housing Covenant, and (c) this Affordable Housing Promissory Note.
(d) "Assistant Executive Director" shall mean Ms. Christine Shingleton, or
her successor.
(e) "Agency" means the Tustin Community Redevelopment Agency, and its
successors and assigns.
(f) "Developer" means Olson Urban Housing LLC, a Delaware limited
liability company.
(g) "Interest" means the amount of interest payable on this Note computed as
provided in Sections 3 and 4.
(h) "Homeowner" means the person or persons executing this Note, and his,
her or their successors and assigns.
(i) "Note Documents" means this Note, the Affordable Housing Trust
Deed, and the Affordable Housing Covenant and Exhibits.
0) "Owner" means Homeowner and his, her or their successors and
assigns.
Attachment No. 12-2
DOCSOC\ 1019784v3\22782.0047
(k) "Transfer" means any sale, assignment, conveyance, lease or transfer,
voluntary or involuntary, of any interest in the Unit. Without limiting the generality of the
foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation
of a life estate; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the
Unit; or (v) any voluntary or involuntary conveyance of title or possession of the Unit.
(1) Terms not otherwise defined in this Affordable Housing Promissory Note
are defined in the Affordable Housing Covenant (Moderate Income).
2. Payments of Principal and Interest. The entire unpaid principal amount of this
Note, together with any accrued and unpaid interest and any other amounts then due under the
Affordable Housing Trust Deed, shall be due and payable forty-six (46) years from the date of
this Note (the "Maturity Date"), unless such amounts become due and payable sooner because
of acceleration, in which case they shall be due and payable in full on the date of such
acceleration.
3. Computation of Interest. There are two elements of interest that shall be payable
on this Note:
(a) The first element of interest is simple interest on the original principal amount
of this Note at the rate of five percent (5%) per annum computed from the date of this Note.
(b) The second element of interest is the amount by which the fair market
value of the Unit on the Note's Maturity Date is in excess of the sum of (i) the Affordable
Housing Cost of the Unit as of the date of this Note, (ii) the principal amount of this Note on the
Maturity Date, and (iii) interest payable according to (a) above as of the Maturity Date.
4. Increase in the Principal Amount of this Note. In the event the Homeowner
Transfers his, her or their interest in the Unit, the Agency has the right to accelerate the Maturity
Date of this Note as provided in the Affordable Housing Covenant and Affordable Housing Trust
Deed. In the event of such a Transfer and the Agency does not exercise its right to accelerate the
Maturity Date of this Note, then there shall be added to the principal amount of this Note an
amount by which the fair market value of the Unit on the date of the Transfer is in excess of the
sum of (a) the Affordable Housing Cost of the Unit as of the date of this Note, (b) the principal
amount of this Note on the date of the Transfer, and (c) interest payable as of the date of the
Transfer according to Section 3(a). Such amount shall be automatically added to the principal
amount of this Note without the need for the consent of Homeowner or a demand by the Agency.
The amount of such increase in the principal amount of this Note shall be equal to the interest
that would have been due had the Agency exercised its right to accelerate the Maturity Date as a
result of such Transfer. Notwithstanding such increase in the principal amount of this Note, the
Note Documents shall remain in full force and effect.
5. Partial Forgiveness of Amounts Payable. Notwithstanding the foregoing, in the
event that the then -owner of the Unit and all of the owner's predecessors -in -interest have fully
Attachment No. 12-3
DOCSOC\ 1019784v3\22782.0047
complied with the Affordable Housing Covenants as of the Maturity Date, the Owner of the Unit
need only pay five percent (5%) of the amount due and payable on the Maturity Date.
6: No Prepayment. The Agency desires that the Note not be prepaid in order to
assure that the Unit will only be sold at an Affordable Housing Cost for forty-five (45) years
from the initial sale of the Unit. In order to assure this result, Homeowner and the Agency agree
that this Note may not be prepaid in whole or in part at anytime prior to the Maturity Date.
7. Additional Interest. If any payment due under this Note shall become overdue for
a period longer than ten (10) days, the unpaid amount shall bear interest at the highest rate
permitted by law (the "Default Rate").
8. Events of Default and Remedies. Upon the occurrence and during the continuance
of a default under any of the Note Documents (an "Event of Default"), the Agency, at its option,
may:
(a) declare all of Homeowner's obligations under the Note Documents to be
immediately due and payable, without notice (except as provided by law); and
(b) pursue each other right, remedy and power available to it under the Note
Documents or available to it at law or in equity.
The rights, remedies and powers of the Agency, as provided in this Note and the
other Note Documents, are cumulative and concurrent, and may be pursued singly, successively
or together against Homeowner, the Unit, any guarantor of Homeowner's obligations and any
other security given at any time to secure the payment of Homeowner's obligations, all at the sole
discretion of the Agency. The Agency may resort to every other right or remedy available at law
or in equity without first exhausting the rights and remedies contained in the Note Documents,
all in the Agency's sole discretion. Failure of the Agency, for any period of time or on more than
one occasion, to exercise its option to accelerate the Maturity Date shall not constitute a waiver
of the right to exercise such right at any time during the continued existence of any Event of
Default under any of the Note Documents or in the event of any subsequent Event of Default
under this Note or any of the other Note Documents. The Agency shall not by any other
omission or act be deemed to waive any of its rights or remedies under the this Note or the other
Note Documents unless such waiver is contained in a writing signed by the Agency, and then
only to the extent specifically set forth in such writing. A waiver in connection with one event
shall not be construed as continuing or as a bar to or waiver of any right or remedy in connection
with a subsequent event.
9. Waivers and Consents. Homeowner and each endorser, guarantor, surety or
accommodation party of this Note and each other person liable or to become liable for any part
of the indebtedness evidenced by this Note, waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest and protest of this
Note, and all other notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note (except in the case of Homeowner as provided by law),
and agree that their liability shall be unconditional and without regard to the liability of any other
Attachment No. 12-4
DOCS OC\ 1019784v3\22782.0047
party and shall not be in any manner affected by any indulgence, extension of time, renewal,
waiver or modification granted or consented to by the Agency. Homeowner and each such
endorser, guarantor, surety, accommodation party and person liable or to become liable further
consent to every extension of time, renewal, waiver or modification that may be granted by the
Agency with respect to the payment or other provisions of this Note, and to the release of any
collateral given to secure the payment of amounts owing under this Note, with or without
substitution, and agree that additional makers or guarantors or endorsers may become parties to
this Note without notice to Homeowner or any other parties and without affecting the liability of
Homeowner or any other parties under this Note.
10. Due on Sale. The Affordable Housing Deed of Trust includes provisions
permitting the Agency to declare all sums secured by the Deed of Trust due and payable if an
encumbrance of or transfer of any interest in the Property occurs in violation of the encumbrance
or transfer provisions of the Affordable Housing Covenants.
11. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this
Note and the rights and liabilities of the parties to this Note shall be governed by the laws of the
State of California.
(b) Binding on Successors. This Note shall inure to the benefit of, and shall
be binding upon, the successors and assigns of each of the parties to this Note.
(c) The Agency's Costs. Homeowner shall pay all reasonable Costs incurred
by the Agency in connection with the documentation, modification, workout, collection or
enforcement of the amount evidenced by this Note (the "Loan") or any of the Note Documents
(as applicable), including probate, appellate and bankruptcy proceedings, any post judgment
proceedings to collect or enforce any judgment or order relating to the Loan or any of the Note
Documents (as applicable), and all such Costs shall bear interest at the Default Rate until paid.
For the purposes hereof "Costs" means all expenditures and expenses which may be paid or
incurred by or on behalf of the Agency including repair costs, payments to remove or protect
against liens, attorneys' fees (including fees of the Agency's inside counsel), receivers' fees,
appraisers' fees, engineers' fees, accountants' fees, independent consultants' fees (including
environmental consultants), all costs and expenses incurred in connection with any of the
foregoing, the Agency's out-of-pocket costs and expenses related to any audit or inspection of the
Unit, outlays for documentary and expert evidence, stamp taxes, publication costs, and costs
(which may be estimates as to items to be expended after entry of an order or judgment) for
procuring all such abstracts of title, title searches and examination, title insurance policies, and
similar data and assurances with respect to title as the Agency may deem reasonably necessary
either to prosecute any action or to evidence to bidders at any sale of the Unit the true condition
of the title to, or the value of, the Unit. Further, all "Costs" shall include such other costs,
expenses and fees as may be incurred by the Agency in the protection of the Property and the
maintenance of the lien of the Affordable Housing Deed of Trust, including, attorneys' fees,
expenses and costs in any litigation or proceeding affecting the Affordable Housing Deed of
Attachment No. 12-5
DOCS OC\ 1019784v3\22782.0047
Trust, this Note, the other Note Documents, the Unit, including probate, appellate, and
bankruptcy proceedings, and any post judgment proceedings to collect or enforce any judgment
or order relating to this Note, the Affordable Housing Deed of Trust or the other Note
Documents, to obtain any court order or the appointment of a receiver to enforce the Agency's
rights pursuant to Section 564 of the California Code of Civil Procedure and/or Section 2929.5 of
the California Civil Code or in preparation for the commencement or defense of any action or
proceeding, shall be immediately due and payable to the Agency, with interest thereon at the
Default Rate. This provision is separate and several, and shall survive the merger of this
provision into any judgment.
(d) Entire Agreement. This Note and the other Note Documents constitute
the entire agreement and understanding between and among the parties in respect of the subject
matter of such agreements and supersede all prior agreements and understandings with respect to
such subject matter, whether oral or written.
(e) Waivers. Waiver by the Agency of any term, covenant or condition
under this Note or the other Note Documents, or of any default by Homeowner under this Note
or the other Note Documents, or any failure by the Agency to insist upon strict performance by
Homeowner of any term, covenant or condition contained in this Note or the other Note
Documents, shall be effective or binding on the Agency only if made in writing by the Agency;
no such wavier shall be implied from any omission by the Agency to take action with respect to
any such term, covenant, condition or default. No express written waiver by the Agency of any
term, covenant, condition or default shall affect any other term, covenant, condition or default or
cover any other time period than the application of any such term, covenant or condition to the
matter as to which a waiver has been given or the default or time period specified in such express
waiver. This Note may be amended only by an instrument in writing signed by Homeowner and
the Agency.
(f) Severability. If any part of this Note is declared invalid for any reason,
such shall not affect the validity of the rest of the Note. The other parts of this Note shall remain
in effect as if this Note had been executed without the invalid part. The parties declare that they
intend and desire that the remaining parts of this Note continue to be effective without any part
or parts that have been declared invalid.
(g) Lawful Rate of Interest. In no event whatsoever shall the amount of
interest paid or agreed to be paid to the Agency pursuant to this Note or any of the Note
Documents exceed the highest lawful rate of interest permissible under applicable law. If, from
any circumstances whatsoever, fulfillment of any provision of this Note and the other Note
Documents shall involve exceeding the lawful rate of interest which a court of competent
jurisdiction may deem applicable hereto ("Excess Interest"), then ipso facto, the obligation to be
fulfilled shall be reduced to the highest lawful rate of interest permissible under such law and if,
for any reason whatsoever, the Agency shall receive, as interest, an amount which would be
deemed unlawful under such applicable law, such interest shall be applied to the principal
amount of this Note (whether or not due and payable), and not to the payment of interest, or
refunded to Homeowner if all principal hereof has been paid in full. Neither Homeowner nor any
guarantor, endorser or surety nor their heirs, legal representatives, successors or assigns shall
Attachment No. 12-6
DOCSOC\1019784v3\22782.0047
have any action against the Agency for any damages whatsoever arising out of the payment or
collection of any such Excess Interest.
12. Waiver of Trial by Jury. EACH OF HOMEOWNER AND THE AGENCY WAIVES
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN
RESPECT OF OR ARISING OUT OF THIS NOTE OR THE OTHER NOTE DOCUMENTS.
Executed this day of 200_
"Homeowner"
Attachment No. 12-7
DOCSOC\ 1019784v3\22782.0047
ATTACHMENT NO. 13
RECORDING REQUESTED BY:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 CENTENNIAL WAY
TUSTIN, CA 92780-3767
WHEN RECORDED MAIL TO:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 CENTENNIAL WAY
TUSTIN, CA 92780-3767
ATTENTION: ASSISTANT EXECUTIVE DIRECTOR
[SPACE ABOVE LINE FOR RECORDER'S USE ONLY]
AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF RENTS
This AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF
RENTS, made , 200 , between
herein called TRUSTOR, whose address is
and , herein called TRUSTEE, and TUSTIN
COMMUNITY REDEVELOPMENT AGENCY, herein called BENEFICIARY,
WITNESSETH: That Trustor grants, transfers and assigns to Trustee in trust, with
power of sale, that property in the City of Tustin, County of Orange, State of California,
described as:
See Exhibit "A" attached hereto
Together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits for the purpose of securing
(1) the payment of the sum of $ , with interest thereon according to the terms
of a promissory note of even date herewith ("Note") made by Trustor payable to the order of
Beneficiary, and extensions or renewals thereof,
Attachment No. 13-1
DOCS 0C\1019784v3\22792.0047
(2) payment of any sums advanced on behalf of Trustor according to the terms of a
reimbursement agreement of even date herewith ('Reimbursement Agreement") made by
Trustor and Beneficiary, and extensions and renewals thereof,
(3) the performance of each agreement and obligation of Trustor according to the terms
of an affordable housing covenant of even date herewith ("Affordable Housing Covenant")
made by Trustor in favor of Beneficiary, and extensions and renewals thereof,
(4) the performance of each agreement of Trustor incorporated by reference or contained
herein, and
(5) payment of additional sums and interest thereon which may hereafter be loaned to
Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that
they are secured by this Deed of Trust.
A. To protect the security of this Deed of Trust, Trustor agrees:
1) To keep said property in good condition and repair, not to remove or
demolish any building thereon; to complete or restore promptly and in good and workmanlike
manner any building which may be constructed, damaged or destroyed thereon and to pay when
due all claims for labor performed and materials furnished therefore, to comply with all laws
affecting said property or requiring any alterations or improvements to be made thereon, not to
commit or permit waste thereof; not to commit, suffer or permit any act upon said property in
violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonable necessary, the specific enumerations
herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory
to and with loss payable to Beneficiary. The amount collected under any fire or other insurance
policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part
thereof may be released to Trustor. Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and
expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in such
action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by
Beneficiary to foreclose this Deed.
4) To pay, at least ten days before delinquency all taxes and assessments
affecting said property, including assessments on appurtenant water stock; when due, all
encumbrances, charges and liens, with interest, on said property or any part thereof, which
appear to be prior or superior hereto; all costs, fees and expenses of the Trust.
Attachment No. 13-2
DOCSOC\ 1019784v3\22782.0047
Should Trustor fail to make any payment or to do any act as herein provided, the Beneficiary or
Trustee, but without obligation so to do and without notice to or demand upon Trustor and
without releasing Trustor from any obligation hereof, may, make or do the same in such manner
or to such extent as either may deem necessary to protect the security thereof, Beneficiary or
Trustee being authorized to enter upon said property for such purposes; appear in and defend any
action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien
which in the judgment of either appears to be prior or superior hereto; and, in exercising any
such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees.
5) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in
effect at the date hereof; and to pay for any statement provided for by law at the date hereof
regarding the obligation secured hereby any amount demanded by the Beneficiary no to exceed
the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
1) That any award of damages in connection with any condemnation for
public use of or injury to said property or any party thereof is hereby assigned and shall be paid
to Beneficiary who may apply or release such moneys received by him in the same manner and
with the same effect as about provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive his right either to require prompt payment when due of all other sums
so secured or to declare default for failure so to pay.
3) That at any time or from time to time, without liability therefore and
without notice, upon written request of Beneficiary and presentation of this Deed, or a copy
thereof; and without affecting the personal liability of any person for payment of the
indebtedness secured hereby. Trustee may: reconvey any part of said property; consent to the
making of any map or plat thereof; join in granting any easement thereon, or join in any
extension agreement or any agreement subordinating the lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of the Deed, or a copy thereof; and upon payment of
its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals
in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.
The Grantee in such reconveyance may be described as "the person persons legally entitled
thereto."
5) That as additional security, Trustor hereby gives to and confers upon
Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the
rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance of any agreement
hereunder, to collect and retain such rents, issues and profits as they become due and payable.
Attachment No. 13-3
DOCSOC\ 1019784v3\22782.0047
Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or
by a receiver to be appointed by a court, and without regard to the adequacy of any security for
the indebtedness hereby secured, enter upon and take possession of said property or any part
thereof; in his own name sue for or otherwise collect such rents, issues, and profits, including
those past due and unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in
such order as Beneficiary may determine. The entering upon and taking possession of said
property, the collection of such rents, issues and profits and the application thereof as aforesaid,
shall not cure or waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured
hereby or in performance of any agreement hereunder (including, without limitation, any default
under the Note, Reimbursement Agreement or Affordable Housing Covenant), Beneficiary may
declare all sums secured hereby immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written notice of default and of election to
cause to be sold said property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed and all documents evidencing expenditures
secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as then required by
law, Trustee, without demand on Trustor, shall sell said property at the time and place affixed by
it in said notice of sale, either as a whole or in separate parcels, and in such order as it may
determine, at public auction to the highest bidder for cash. in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of said property by public
announcement at such time and place of sale, and from time to time thereafter may postpone
such sale by public announcement at the time fixed by the preceding postponement. Trustee shall
deliver to such purchaser its deed conveying the property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of
sale to payment of all sums expended under the terms hereof, not then repaid, with accrued
interest at the amount allowed by law in effect at the date hereof; all other sums then secured
hereby; and the remainder, if any, to the person or persons legally entitled thereto.
7) Beneficiary, or any successor in interest to any obligation secured hereby,
may from time to time, by instrument in writing, substitute a successor or successors to any
Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and
duly acknowledged and recorded in the office of the recorder of the county or counties where
said property is situated shall be conclusive proof of proper substitution of such successor
Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all
its title, estate, rights, powers and duties. Said instrument must contain the name of the original
Attachment No. 13-4
DOCS00l 019784v3\22782.0047
Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and
the name and address of the new Trustee.
8) That this Deed applies to, inures to the benefit of; and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors successors and assign. In this
Deed, whenever the context so requires, the masculine gender includes the feminine and/or
neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any
party hereto of pending sale under any other Deed of Trust or of any action or proceeding in
which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
10) All capitalized terms used herein which are not defined shall have the
meaning ascribed to such terms under the Affordable Housing Covenant. Trustor agrees for itself
and its successors and assigns, and every successor to Trustor's interest in said property, or any
part thereof, to abide by the terms of the Affordable Housing Covenant during the Affordability
Period, including, without limitation, that:
(a) Said property shall not be Transferred except to Permitted
Transferees in accordance with the requirements of Section 4 of the Affordable Housing
Covenant; and
(b) Said property shall be subject to (i) the Further Encumbrance
limitations set forth under Section 5(c) of the Affordable Housing Covenant, and (ii) the terms
and conditions of the Reimbursement Agreement and the Option Agreement.
The undersigned Trustor requests that a copy of any notice of default and of any notice of sale
hereunder be mailed to him at his address hereinbefore set forth.
Signature of Trustor Signature of Trustor
C
Attachment No. 13-5
DOCSOC\ 1019784v3\22782.0047
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On , before me, a
Notary Public in and for said state, personally appeared I
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person action, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
DOCS 0C\1019784v3\22782.0047
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
TO , TRUSTEE:
The undersigned is entitled to the indebtedness secured by the foregoing Deed of Trust.
Said indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are
hereby requested and directed, on payment to you of any sums owing to you under the terms of
said Deed of Trust, to cancel any evidences of indebtedness secured by said Deed of Trust
delivered to you herewith, together with the said Deed of Trust, and to reconvey, without
warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by
you under the same.
Dated
Please mail Deed of Trust and Reconveyance to:
Do not lose or destroy this Deed of Trust or the evidences of indebtedness its secures. They must
be delivered to the Trustee for cancellation before reconveyance will be made.
DOCS 001019784v3\22782.0047
ATTACHMENT NO. 14
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Tustin Community Redevelopment Agency )
300 Centennial Way )
Tustin, California )
Attention: Assistant Executive Director )
Exempt From Recording Fee Pursuant to Government Code Section 27383
AFFORDABLE HOUSING COVENANT
(Very Low Income)
THIS AFFORDABLE HOUSING COVENANT (this "Covenant") is made as of
, 200_, by (tne
"Homeowner") in favor of the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state
agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000 et.
seq. (together with its successors and assigns, the "Agency").
RECITALS
A. Homeowner has purchased a condominium located at
, Tustin, California, as such real property is more particularly described in
Exhibit "A" attached hereto (the "Unit"). The Unit is part of that certain housing development
known as " " (the "Project").
B. Pursuant to that certain Affordable Housing Assistance Agreement between the
Agency and Olson Urban Housing, LLC, a Delaware Limited Liability Company (the "Developer"),
a memorandum of which has been recorded in the Official Records of the County of Orange, the
Developer is required to sell certain of the homes in the Project to "Very Low Income Households"
at an "Affordable Housing Cost for Very Low Income Households".
C. The Unit has been designated by the Developer as a Unit that is to be sold to a Very
Low Income Household.
D. Homeowner has represented to the Developer and the Agency that Homeowner and
Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at all
times during the Homeowner's ownership of the Unit, that they will not rent the Unit to others, and
that they are a Very Low Income Household.
E. In order to enable Developer to sell the Unit to a Very Low Income Household, the
Agency agreed to accept as part payment of amounts owed by the Developer to the Agency a
promissory note executed by Homeowner (the "Affordable Housing Note") in connection with
Homeowner's purchase of the Unit. The Affordable Housing Note is, or shall be, secured by the
Affordable Housing Trust Deed.
Attachment No. 14-1
DOCSOCU 019784v3\22782.0047
F. Pursuant to Health and Safety Code Section 33334.3, this Covenant shall run with the
land and shall be enforceable, against Homeowner and successors in interest, by the Agency or the
Community.
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
1. DEFINITIONS.
"Affordability Period" means that period of time commencing upon the Date of this
Covenant and terminating on the forty-fifth (45`h) anniversary of such date.
"Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to, and
occupied by, a Very Low Income Household shall mean a price that does not exceed the
Affordable Monthly Housing Cost for a family size appropriate for the Unit for Very Low
Income Households. The Affordable Housing Cost for an Affordable Housing Unit shall be
calculated as of the date of sale or resale of the Unit. For purposes of this Covenant, "family size
appropriate for the Unit" means two persons for a one bedroom house, three persons for a two
bedroom house, four persons for a three bedroom house, five persons for a four bedroom house,
etc.
"Affordable Housing Cost for Very Low Income Households" means the cost per Unit for
Very Low Income Households as more particularly defined in Health and Safety Code
Section 50052.5(b)(2) and as generally described herein as a price per Unit which results in Monthly
Housing Costs for the purchaser which shall not exceed one -twelfth of thirty percent (30%) times
fifty percent (50%) of the annual Orange County Median Income, adjusted for family size
appropriate for the Unit.
"Affordable Housing Note" means that promissory note executed by Homeowner as part
of Homeowner's purchase of the Unit from the Developer. The principal amount of the
Affordable Housing Note is an amount not in excess of the difference between an amount to be
identified as of the date of purchase and the Affordable Housing Cost for Very Low Income
Households as of the date of purchase.
"Affordable Housing Option Agreement" means the agreement attached hereto as
Exhibit "E,", that provides an option to purchase in favor of the Agency as provided in Section 71
which option shall be exercisable in the event that the Homeowner of a Unit is in breach of the
Homeowner's obligations in this Covenant or in the event the due date of the Affordable
Housing Note is accelerated as the result of a Transfer by the Homeowner.
"Affordable Housing Trust Deed" means that certain deed of trust executed by
Homeowner which encumbers the Unit and secures the obligations of Homeowner and his or her
successors and assigns as provided in (a) this Covenant, (b) the Reimbursement Agreement
attached hereto as Exhibit "D", and (c) the Affordable Housing Note.
"Agency" means the Tustin Community Redevelopment Agency, and the Agency's
successors and assigns.
Attachment No. 14-2
DOCSOC\ 101978443\22782.0047
"City" means the City of Tustin, and the City's successors and assigns.
"Community" means the City of Tustin (Health and Safety Code Section 33002)
"County" means the County of Orange, California.
"Covenant" means this Affordable Housing Covenant.
"Date of this Covenant" means the date in the first paragraph of this Covenant.
"Default" means the failure of a party to perform any action or covenant required by this
Covenant within the time periods provided herein following notice and opportunity to cure.
"Developer" means Olson Urban Housing, LLC, a Delaware Limited Liability Company.
"First Lien" means the lien of a purchase money Lender which secures the obligations of the
Homeowner to repay amounts owed to the Lender.
"Homeowner" means the person or persons set forth in the first paragraph of this Covenant,
and his, her or their successors and assigns.
"Household" means all persons residing in a Unit.
"Legal Description" means the legal description of the Unit which is attached hereto as
Exhibit "A".
"Lender" means an institution making a purchase money loan to the Homeowner for the
purchase of the Unit.
"Monthly Housing Cost" means, for a Very Low Income Household purchasing the Unit, all
of the following associated with the Unit, estimated or known as of the date of the proposed sale of
the Unit: (i) principal and interest payments on a fixed interest rate mortgage loan, and any loan
insurance fees associated therewith; (ii) property taxes and assessments; (iii) fire and casualty
insurance covering replacement value of property improvements; (iv) any homeowner association
fees; and (v) a reasonable utility allowance. Monthly housing cost of a purchaser shall be an average
of estimated costs for the next twelve (12) month period.
"Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as
Exhibit `B".
"Permitted Transfer" means any Transfer which is permitted pursuant to Section 4 hereof.
"Permitted Transferee" means a Transferee from the Homeowner or from any Permitted
Transferee who acquires ownership of the Unit in full compliance with Section 4 hereof.
"Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4
hereof.
"Project" means that certain housing development in which the Unit is located.
Attachment No. 14-3
DOCSOC\1019784v3\22782.0047
"Reimbursement Agreement" means the Reimbursement Agreement to be executed by the
Homeowner in favor of the Agency, in the form attached hereto as Exhibit "E".
"Request for Notice" means the Request for Notice under Civil Code Section 2924b attached
hereto as Exhibit "C".
"Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or
involuntary, of any interest in the Unit. Without limiting the generality of the foregoing, Transfer
shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii) the
creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary
conveyance of the Unit.
"Transferee" shall mean any natural person or entity who obtains ownership rights in the
Unit pursuant to a Transfer.
"Unit" means that certain real property located at the street address set forth in Recital A and
legally described in the Legal Description.
"Very Low Income Household" a Household occupied by persons and families whose gross
income does not exceed the qualifying limits for very low income families set forth in Health and
Safety Code Section 50105.
2. COVENANT RE SALES OF UNIT. Homeowner covenants and agrees that,
during the Affordability Period, each subsequent resale of the Unit by the then -Homeowner
thereof shall be to a Very Low Income Household, at an Affordable Housing Cost for Very Low
Income Households. Homeowner further covenants and agrees that, during the Affordability
Period, each Homeowner shall abide by and be bound by all the obligations of Homeowner set
forth in this Covenant. Homeowner agrees that the obligations of Homeowner set forth in this
Covenant shall be secured by the Affordable Housing Trust Deed recorded concurrently with the
recordation of this Covenant.
HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF
HOMEOWNER UNDERSTAND THAT THE DETERMINATION OF THE
AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF A
PROPOSED SALE OR OTHER TRANSFER, TAKING INTO CONSIDERATION
PREVAILING INTEREST RATES, THE OFFERED TERMS OF SALE, THE
ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER
FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE
TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR
MARKET VALUE OF THE SAME OR OTHER SIMILAR REAL PROPERTY WHICH
IS NOT ENCUMBERED BY THIS COVENANT. HOMEOWNER AND EACH
SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES
THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY
OBJECTIVE OF THE AGENCY AND THIS COVENANT IS TO PROVIDE HOUSING
TO VERY LOW INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST.
Attachment No. 14-4
DOCSOC\ 1019784v3\22782.0047
Homeowner's Initials
3. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO
THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants to the
Developer and the Agency that the financial and other information which Homeowner has
provided to the Developer and the Agency with respect to Homeowner's income and the
purchase price of the Unit was true and correct at the time such information was provided, and
remains true and correct as of the date of this Covenant.
4. PERMITTED TRANSFERS OF THE UNIT.
a. Notice Required for a Transfer. During the Affordability Period, the
Unit, and any interest therein, shall not be Transferred by the Homeowner except with the
express written consent of the Agency, which consent shall be given only if the Transfer is in
strict compliance with the provisions of this Section 4. During the Affordability Period, in the
event the then -Homeowner of the Unit desires to Transfer the Unit, then prior to the Transfer
such Homeowner shall notify the Agency by delivering a Notice of Intent to Transfer to the
Agency. Agency hereby agrees to permit Transfers of the Unit to proposed Transferees
("Permitted Transferees") provided the Transfer satisfies all of the following conditions:
i. Notice to Agency. The Homeowner shall send the Notice of Intent
to Transfer to the Agency at the address set forth in Section 22 hereof. The Notice of Intent to
Transfer shall identify the proposed Transferee, certify that to the best knowledge of the
Homeowner the Transferee is a Very Low Income Household, certify that the sales price is no
more than an Affordable Housing Cost for Very Low Income Households, and shall include
copies of the sales contract, the grant deed or other document that is proposed to be used to
effectuate the Transfer, copies of documents verifying that the proposed Transferee is a Very
Low Income Household (including, but not limited to, documents verifying the income of the
proposed Transferee) and all other material documents related to the proposed Transfer.
ii. Qualification of Proposed Transferee. The proposed Transferee
shall provide and certify to the Agency such information as the Agency may request related to
the proposed Transfer in the form provided by the Agency, including without limitation: the
Social Security Number of the proposed Transferee; copies of the federal income tax returns
filed by the proposed Transferee for the prior two (2) calendar years; copies of the two most
current wage earning statements of the proposed Transferee; a certification as to the income and
family size of the proposed Transferee; the purchase price the Proposed Transferee intends to
pay for the Unit; and a current appraisal reflecting the fair market value of the Unit on the
assumption that the Unit is free from the restrictions provided for in this Covenant. The
proposed Transferee shall also submit to the Agency an agreement by the Transferee to assume
the obligations of a Homeowner of the Unit as set forth in this Covenant in such form as the
Agency may request.
iii. Certificates from Parties. The Homeowner and proposed
Transferee each shall certify in writing, in a form acceptable to the Agency, that the Transfer
shall be closed in accordance with, and only with, the terms of the sales contract and other
Attachment No. 14-5
DOCSOC\ 1019784v3\22782.0047
documents submitted to and approved by the Agency and that all consideration delivered by the
proposed Transferee to Homeowner has been fully disclosed to the Agency. The written
certificate shall also include a provision that in the event a Transfer is made in violation of the
terms of this Covenant or false or misleading statements are made in any documents or
certificate submitted to the Agency for its approval of the Transfer, the Agency shall have the
right to file an action at law or in equity to make the parties terminate and/or rescind the sales
contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed
and become final as between Homeowner and its transferee.
iv. Agreement to Assume the Obligations of This Covenant. The
grant deed or other document effectuating the Transfer of the Unit shall include the following:
(a) references to this Covenant and the obligation of the Transferee to be bound by all the
obligations of Homeowner set forth in this Covenant, (b) a reference to the Affordable Housing
Trust Deed, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the
due on sale provisions of the Affordable Housing Note, (e) a reference to the Reimbursement
Agreement and (f) a covenant that will require the Transferee, and any successor or assign of the
Transferee, to include in any document Transferring the Unit a reference to this Covenant, the
Affordable Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement
Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the
Transferee to be bound by the obligations set forth in this Covenant, the Affordable Housing
Trust Deed, the Affordable Housing Option Agreement, the Reimbursement Agreement and the
due on sale provisions of the Affordable Housing Note.
V. Agreement to Increase Amount due on the Affordable Housing
Note. The Transferee must agree to increase the amount of the Affordable Housing Note to the
amount by which the fair market value of the Unit at the time of the closing of the Transfer is in
excess of the sum of the Affordable Housing Cost of such Unit as of the date of the closing of the
Transfer. Any interest that has accrued on the Affordable Housing Note as of the date of the
closing of the Transfer shall be deemed to be included in the increased principal amount of the
Affordable Housing Note, and interest shall begin accruing on the increased principal amount of
the Affordable Housing Note as of the date of the closing of the Transfer at the rate provided in
the Affordable Housing Note. Except for such increase in the principal amount of the Affordable
Housing Note and the reduction to zero of accrued interest due on the Affordable Housing Note,
the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing
Option Agreement and the Reimbursement Agreement shall remain in full force and effect.
vi. The Agency's Title Policy. The Agency must receive a title
policy, in an amount equal to the amount then due on the Affordable Housing Note as increased
as provided in this Section 4, insuring the Affordable Housing Trust Deed as a monetary lien of
second priority, i.e., subordinate in priority among monetary liens only to the monetary lien of
any First Lien recorded at the time of sale which First Lien shall secure an amount not in excess
of the then Affordable Housing Cost of the Unit.
Attachment No. 14-6
DOCSOC\1019784v3\22782.0047
vii. Spousal Transfers. Notwithstanding the foregoing provisions of
Section 4(a)(vi), in the event of a transfer to a spouse in a dissolution proceeding, the Agency
shall not require a new title policy, nor shall the Agency require reimbursement for its costs.
b. Notice of Prohibited Transfer. Within fifteen (15) calendar days after
the receipt by the Agency of the notices, documents and agreements referred to in Section 4(a),
the Agency shall determine and give notice to the Homeowner as to whether the proposed
Transfer is a Permitted Transfer or Prohibited Transfer. In the event that the proposed Transfer
is a Prohibited Transfer, such notice to the Homeowner shall specify why the Transfer is a
Prohibited Transfer. If the violation is not corrected to the satisfaction of the Agency within ten
(10) calendar days after the date of the notice, or within such further time as the Agency
determines is necessary to correct the violation, the Agency may declare a Default under this
Covenant. Upon the declaration of a Default, the Agency may apply to a court of competent
jurisdiction for specific performance of this Covenant, for an injunction prohibiting a proposed
sale or Transfer in violation of this Covenant, for a declaration that the Prohibited Transfer is
void, or for any such other relief as may be appropriate.
C. Delivery of Documents After the Closing. Upon the close of the
proposed Transfer, the transferor and the Transferee, as applicable, shall provide the Agency
with a copy of the final sales contract, settlement statement, escrow instructions, all certificates
required by this Section 4 and any other documents which the Agency may reasonably request.
d. Financings on Transfer. This Section 4 shall not prohibit the
encumbering of title for the sole purpose of securing financing of the purchase price of the Unit
upon a Transfer thereof; however, any such financing (i) must be a First Lien, (ii) must not be in
excess of the Affordable Housing Cost of such Unit as of date of the financing, and (iii) must be
in compliance with the Affordable Housing Trust Deed.
5. ENCUMBRANCES.
a. Subordination. The provisions of this Covenant, the Affordable Housing
Note, the Affordable Housing Trust Deed and the Affordable Housing Option Agreement and the
Reimbursement Agreement shall be subordinate to any First Lien on the Unit that secures the
payment of a principal amount that is not in excess, as of the time the First Lien is recorded
against the Unit, of the Affordable Housing Cost of the Unit. The Agency shall execute such
written instruments for the subordination of its rights under this Covenant, the Affordable
Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement
and the Reimbursement Agreement, as may reasonably be requested by the Lender. The
Agency's agreement to so subordinate its rights is subject to agreement in writing by the Lender
providing the Agency the following rights:
i. The Agency shall have the right, during the cure periods which
apply to the Homeowner pursuant to the First Lien documents and any cure period which may
apply to the Agency under applicable law, to cure the Homeowner's Default relative to the First
Lien; and
Attachment No. 14-7
DOCSOC\ 1019784v3\22782.0047
ii. After a Default on any of the First Lien documents but prior to a
foreclosure sale or deed in lieu assignment of the Unit, the Agency shall have the right to take
title to the Unit and cure the Default relative to the First Lien documents, without the holder of
the First Lien exercising any right it might otherwise have to accelerate the obligations secured
by the First Lien by reason of such title transfer, so long as the Agency promptly cures any such
Default upon taking title to the Unit.
b. Request for Notice of Default. The Agency may cause a Request for
Notice to be recorded on the Unit subsequent to the recordation of the First Lien deed of trust or
mortgage requesting a statutory notice of Default as set forth in California Civil Code
Section 2924b.
C. Further Encumbrances Prohibited. Homeowner agrees that he or she
shall not record or cause or permit the recordation of any deed of trust, mortgage, lien or other
instrument creating a security interest in or to the Unit (a "Further Encumbrance") other than a
First Lien, the Affordable Housing Trust Deed and the Affordable Housing Option Agreement.
6. REIMBURSEMENT AGREEMENT. Homeowner covenants and agrees to
pay timely any and all amounts due and payable on the obligations secured by the First Lien. At
the time of the close of escrow with respect to any Transfer, each Homeowner shall enter into a
Reimbursement Agreement, in the form attached hereto as Exhibit "D", which provides that the
Agency may make payments to cure a Default or delinquency of any obligation secured by the
First Lien, on the condition that the Homeowner agrees to reimburse the Agency for any
payments made to cure such Default or delinquency. The Homeowner's repayment obligations
pursuant to the Reimbursement Agreement shall be secured by the Affordable Housing Trust
Deed.
7. OPTION TO ACQUIRE UNIT UPON DEFAULT OF OBLIGATIONS
UNDER THIS COVENANT. At the time of the close of escrow with respect to any Transfer,
each Homeowner shall enter into an Option Agreement, in the form attached hereto as
Exhibit "E", which grants to Agency an option to purchase the Unit in the event that the
Homeowner is in Default of any of his or her obligations under this Covenant.
8. USES. Homeowner covenants and agrees to devote, use and maintain the Unit in
accordance with this Covenant. All uses conducted on the Unit, including, without limitation, all
activities undertaken by the Homeowner pursuant to this Covenant, shall conform to all
applicable provisions of the Tustin Municipal Code, and the recorded documents pertaining to
and running with the Unit.
9. NONDISCRIMINATION COVENANTS.
a. Homeowner covenants by and for himself or herself, and any successors in
interest, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the Unit, nor shall the Homeowner or any person claiming under or through him or her establish
Attachment No. 14-8
DOCSOC\ I019784v3\22782.0047
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 Unit. The foregoing covenants shall run with the land.
b. Redevelopment Law,• Form of Nondiscrimination and Nonsegrel4ation
Clauses.
Homeowner shall refrain from restricting the sale of the property on the
basis of the race, color, creed, religion, sex, sexual orientation, marital status, national origin or
ancestry of any person. All deeds, leases or contracts shall contain or be subject to substantially
the following non-discrimination or non -segregation clauses:
i. In deeds: "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed,
nor shall the grantee itself or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
land herein conveyed. The foregoing covenants shall run with the land."
ii. In leases: "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this lease is made
and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of persons, on
account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or
ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of
the land herein leased, nor shall lessee itself, or any person claiming under or through it,
establish or permit such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or
vendees in the land herein leased."
In contracts: "There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land, nor shall the transferee 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 land.
10. MAINTENANCE OF UNIT. Homeowner shall maintain the improvements and
landscaping on the Unit in a manner consistent with community standards which will uphold the
value of the Unit, in accordance with the Tustin Municipal Code. Homeowner also agrees to
comply with all applicable federal, state and local laws.
Attachment No. 14-9
DOCSOC\1019784v3\22782.0047
11. OCCUPANCY STANDARDS. The Unit shall be used as the principal residence
of Homeowner and Homeowner's family and for no other purpose. Homeowner shall not enter
into an agreement for the rental or lease of the Unit, and Homeowner shall not otherwise rent or
lease the Unit. The maximum occupancy of the Unit shall not exceed three persons if the Unit is
a one bedroom home, five persons if the Unit is a two bedroom home, or seven persons if the
Unit is a three bedroom home. The Agency may grant a temporary waiver of the above
requirements for good cause, in the Agency's sole and absolute discretion. Homeowner shall,
commencing upon the first anniversary of the date of this Covenant first set forth above and on
each succeeding anniversary thereafter, submit to the Agency an affidavit of occupancy in the
form provided by the Agency.
12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS
COVENANT.
a. In General. The covenants established in this Covenant shall, without
regard to technical classification and designation, be binding upon the Unit against which it is
recorded and the Homeowner thereof and its successors and/or assigns owning all or any interest
therein, (a) for the benefit and in favor of the Agency, its successors and assigns and (b) for the
benefit of the property described on Exhibit "A" to this Covenant, and the Agency, as the owner
thereof and its successors and assigns owning all, or any portion of such property. The
covenants contained in this Covenant shall remain in effect for the periods of time specified
herein. The covenants against discrimination shall remain in effect in perpetuity. The Agency is
deemed the beneficiary of the terms and provisions of this Covenant and of the covenants
running with the land, for and in its own rights and for the purposes of protecting the interests of
the community and other parties, public or private, in whose favor and for whose benefit this
Covenant and the covenants running with the land have been provided. This Covenant and the
covenants herein shall run in favor of the Agency, without regard to whether the Agency has
been, remains or is an Homeowner of any land or interest therein in the Unit or in the Project
Area. The Agency shall have the right, if the Covenant or 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 it or any other beneficiaries of this
Covenant and covenants may be entitled.
b. Notice of Default. Failure or delay by Homeowner to perform any term
or provision of this Covenant which is not cured within thirty (30) days after receipt of notice
from the Agency constitutes a Default under this Covenant; provided, however, if such Default is
of the nature requiring more than thirty (30) days to cure, Homeowner may avoid Default
hereunder by immediately commencing to cure within such thirty (30) day period, and thereafter
diligently pursuing such cure to completion. Failure or delay in giving notice by the Agency shall
not constitute a waiver of any Default, nor shall it change the time of Default.
C. Agency's Remedies. Upon the declaration of a Default, the Agency may
(i) apply to a court of competent jurisdiction for specific performance, for an injunction
prohibiting any act or omission in violation of this Covenant, or for any such other relief as may
be appropriate, (ii) exercise the Agency's rights under the Affordable Housing Trust Deed,
Attachment No. 14-10
DOCSOC\ 1019784v3\22782.0047
including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and
remedies permitted under applicable law.
d. Prohibited Transfers Void. Any attempt by the Homeowner to make a
Prohibited Transfer of title to or any interest in the Unit in violation of this Covenant shall be
voidable by Agency.
13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless
the Agency and its officers, officials, agents, employees, representatives, and volunteers from
and against any loss, liability, claim, or judgment relating in any manner to the Homeowner's use
of the Unit or Homeowner's violation of this Covenant. The Homeowner shall remain fully
obligated for the payment of taxes, liens and assessments related to the Unit. There shall be no
reduction in taxes for Homeowner, nor any transfer of responsibility to the Agency to make such
payments, by virtue of this Covenant.
14. INSURANCE. Homeowner shall maintain, during the term of this Covenant, an
all-risk property insurance policy insuring the Unit in an amount equal to the full replacement
value of the structures on the Unit. The policy shall contain a statement of obligation on behalf
of the carrier to notify the Agency of any material change, cancellation or termination of
coverage at least thirty (30) days in advance of the effective date of such material change,
cancellation or termination. Homeowner shall transmit a copy of the certificate of insurance to
the Agency within thirty (30) days of the effective date of this Covenant, and Homeowner shall
annually transmit to the Agency a copy of the certificate of insurance, signed by an authorized
agent of the insurance carrier setting forth the general provisions of coverage. The copy of the
certificate of insurance shall be transmitted to the Agency at the address set forth in Section 22
hereof. Any certificate of insurance must be in a form, content and with companies approved by
the Agency.
15. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions
of this Covenant in which a definite time for performance is specified; provided, however, that
the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use
period provided for in this Covenant.
16. NO WAIVER. No waiver of any provision or consent to any action under this
Covenant shall constitute a waiver of any other provision or consent to any other action, whether
or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a
party to provide a waiver in the future except to the extent specifically set forth in writing. Any
waiver given by a party shall be null and void if the party requesting such waiver has not
provided a full and complete disclosure of all material facts relevant to the waiver requested.
17. FURTHER ASSURANCES. Homeowner shall execute any further documents
consistent with the terms of this Covenant, including documents in recordable form, as the
Agency shall from time to time find necessary or appropriate to effectuate its purposes in
entering into this Covenant.
Attachment No. 14-11
DOCS001019784v3\22782.0047
18. GOVERNING LAW. Homeowner hereby agrees to comply with all ordinances,
rules and regulations of the Agency. Nothing in this Covenant is intended to be, nor shall it be
deemed to be, a waiver of any Agency ordinance, rule or regulation. This Covenant shall be
governed by the laws of the State of California. Any legal action brought under this Covenant
must be instituted in the Superior Court of the County of Orange, State of California, or in the
Federal District Court in the Central District of California.
19. AMENDMENT OF COVENANT. No modification, rescission, waiver, release
or amendment of any provision of this Covenant shall be made except by a written agreement
executed by Homeowner and the Agency.
20. AGENCY MAY ASSIGN. The Agency may, at its option, assign its rights
hereunder without obtaining the consent of the Homeowner.
21. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shall
Homeowner assign or transfer any portion of this Covenant without the prior express written
consent of the Agency, which consent shall be given by the Agency only in the event that the
Agency determines the Transfer fully complies with Section 4. This section shall not affect or
diminish the Agency's right to assign all or any portion of its rights hereunder.
22. NOTICES. All notices, demands, consents, requests and other communications
required or permitted to be given under this Covenant shall be in writing and shall be deemed
conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3)
business days after such notice has been sent by United States mail via certified mail, return
receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the
next business day after such notice has been deposited with a national overnight delivery service
reasonably approved by the parties (Federal Express and Airborne Express are deemed approved
by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth
below with next -business -day delivery guaranteed, provided that the sending party receives a
confirmation of delivery from the delivery service provider. Unless otherwise provided in
writing, all notices hereunder shall be addressed as follows:
To Homeowner:
To Agency:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Executive Director
and Attention: Assistant Executive Director
Attachment No. 14-12
DOCSOC\1019784v3\22782.0047
Either party may change its address for notice by giving written notice thereof to the other
party.
23. ATTORNEYS' FEES AND COSTS. If any party to this Covenant institutes
any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another
party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to
declare rights hereunder or with respect to any inaccuracies or material omissions in connection
with any of the covenants, representations or warranties on the part of the other party to this
Agreement, then the prevailing party in such Action, whether by arbitration or final judgment,
shall be entitled to have and recover of and from the other party all costs and expenses of the
Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then -
prevailing rates as increased from time to time by the giving of advanced written notice by such
counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any
judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall
be deemed to have accrued on the commencement of such Action and shall be paid whether or
not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a
specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing
such Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs
upon the request of either party. Any judgment or order entered in any final judgment shall
contain a specific provision providing for the recovery of all costs and expenses of suit, including
reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing,
perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include,
without limitation, in addition to Costs incurred in prosecution or defense of the underlying
action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the
following: (a) postjudgment motions and collection actions; (b) contempt proceedings;
(c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy
litigation; and (f) appeals of any order or judgment. "Prevailing party" within the meaning of
this section includes, without limitation, a party who agrees to dismiss an Action in consideration
for the other party's payment of the amounts allegedly due or performance of the covenants
allegedly breached, or obtains substantially the relief sought by such party.
24. ENTIRE AGREEMENT. This Covenant, together with all attachments hereto,
constitutes the entire understanding and agreement of the parties. This Covenant integrates all of
the terms and conditions mentioned herein or incidental thereto, and supersedes all prior
negotiations, discussions and previous agreements between the Agency and the Homeowner
concerning all or any part of the subject matter of this Covenant.
25. SEVERABILITY. So long as the material bargain of the parties may be
preserved, any provision of this Covenant that is deemed to be illegal, invalid or unenforceable
by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the
invalidity or unenforceability of such provision and shall be deemed stricken from this Covenant.
Any stricken provision shall not affect the legality, enforceability or validity of the remainder of
this Covenant. If any provision or part thereof of this Covenant is stricken in accordance with
the provisions of this Section, then the stricken provision shall be replaced, to the extent possible,
with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken
Attachment No. 14-13
DOCS001019784v3\22782.0047
provision as is legally possible. Any such invalidity or unenforceability of any provision in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
26. COUNTERPARTS. This Covenant may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This Covenant
shall not be effective until the execution and delivery by the parties of at least one set of
counterparts. The parties hereunder authorize each other to detach and combine original
signature pages and consolidate them into a single identical original. Any one of such
completely executed counterparts shall be sufficient proof of this Covenant.
27. EXHIBITS. Each of the exhibits referenced in this Covenant and attached hereto is
incorporated into this Covenant by this reference as though fully set forth in this Section.
IN WITNESS WHEREOF, the parties have executed this Covenant as of the date set forth
above.
HOMEOWNER:
By:
Printed Name:
By:
Printed Name:
Attachment No. 14-14
DOCSOC\ 1019784x3\22782.0047
AGENCY:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a State agency activated by the Tustin
City Council pursuant to Health and Safety Code
Section 33000 et seq.
Executive Director
APPROVED AS TO FORM
AGENCY LEGAL COUNSEL
Attachment No. 14-15
DOCSOC\ 1019784v3\22782.0047
STATE OF CALIFORNIA )
ss.
COUNTY OF )
102
Notary Public,
personally appeared
, before me,
(Print Name of Notary Public)
❑ personally known to me
-or-
F-1 proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature Of Notary
DOC SOC\ 1019784v3\22782.0047
EXHIBIT "A"
LEGAL DESCRIPTION OF UNIT
[To Be Inserted]
DOCS OC\1019784v3\22782.0047
EXHIBIT `B"
NOTICE OF INTENT TO TRANSFER
NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE
PROPERTY.
From:
To: Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attn: Assistant Executive Director
Re:
Tustin, California (the "Unit")
("Homeowner")
(street address)
Circle appropriate words: Homeowner desires to [sell, convey, transfer by inheritance or
devise, lease, gift, otherwise transfer] the Unit.
Proposed Transferee:
Ages of Proposed Transferee:
Income of Proposed Transferee:
Household Size of Proposed Transferee:
Proposed Transfer Price:
If the Agency has a program to help locate a Very Low Income purchaser, does the
Homeowner want the Agency to help look for a Very Low Income purchaser to buy the Unit?
Yes: No:
Date
Signature of Homeowner
daytime telephone number of Homeowner
DOCSOC\ 1019784x3\22782.0047
EXHIBIT "C"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
SPACE AROVE. THiS LINE FOR RECORDER'S USE ONLY
Exempt from recording fees pursuant to
Government Code §27383.
Request for Notice Under Civil Code Section 2924b
In accordance with Section 2924b of the California Civil Code, request is hereby made
that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust
recorded as Instrument No. on , 200_, in Book _, Page
Official Records of Orange County, California, and describing land therein as
See Exhibit A attached hereto
executed by , as Trustor, in which
and
is named as Beneficiary,
as Trustee, be mailed to TUSTIN
COMMUNITY REDEVELOPMENT AGENCY, at 300 Centennial Way, Tustin, California 92780,
Attention: Assistant Executive Director.
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL
BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR
ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED.
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
DOCS OC\ 1019784v3\22782.0047
EXHIBIT A TO EXHIBIT C
LEGAL DESCRIPTION
(same as Exhibit A to the Covenant)
DOCSOC\ 1019784v3\22782.0047
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On
personally appeared
, before me,
(Print Name of Notary Public)
, Notary Public,
❑ personally known to me
-or-
❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature Of Notary
DOCSOC\1019784v3\22782.0047
EXHIBIT "D"
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of , 200_ (the
"Reimbursement Agreement"), is hereby entered into by and between the TUSTIN
COMMUNITY REDEVELOPMENT AGENCY, a state agency activated by the Tustin City
Council pursuant to Health and Safety Code Section 33000 et. seq. (together with its successors and
assigns, the "Agency"), and (the "Homeowner").
RECITALS
A. The Homeowner is purchasing a condominium located at , Tustin,
California (the "Unit").
B. The AQencv and the Homeowner have executed an Affordable Housing Covenant
(the "Covenant") which requires for a forty-five year period commencing
that the
Unit be sold only to Very Low Income Households at an affordable housing cost, which may result
in purchase prices which are substantially less than the current fair market value of the Unit.
C. The Homeowner is obtaining a purchase money loan (the "Loan") from a private
lender (the "Lender") for a portion of the costs of acquisition of the Unit which loan shall be secured
by a First Lien (as defined in the Covenant) against the Unit. A description of the Loan is set forth in
Exhibit "I" hereto, which is incorporated herein.
D. The Homeowner may Transfer his, her or their interests in the Unit to a Permitted
Transferee who may in turn obtain a First Lien purchase money loan from an institutional lender
for a portion of the costs of acquisition of the Unit. This subsequent lender and loan are also
hereinafter referred to as the "Lender" and the "Loan".
E. Pursuant to the Covenant, the Agency has the right to acquire the Unit in the event,
among other things, that it becomes subject to a foreclosure proceeding, and the Agency has the right
to make payments to cure a Default or delinquency on the Loan.
F. The right to make payments to cure a Default or delinquency on the Loan will be of
benefit to the Agency by allowing the Agency to prevent the foreclosure of the Unit, which will
prevent the possible early termination of the Covenant.
G. The Agency's right to make payments to cure a Default or delinquency on the Loan
will also be of benefit to the Homeowner, by allowing the Homeowner to retain ownership of the
Unit and to avoid foreclosure.
H. The Agency desires to obtain the authority to make payments to cure a Default or
delinquency on the Loan, on the condition that the Homeowner agrees to reimburse the Agency for
any payments made to cure a Default or delinquency on the Loan. In order to induce the Agency to
obtain the authority to make payments to cure a Default or delinquency on the Loan, the Homeowner
is willing to agree to reimburse the Agency for any payments made to cure a Loan Default or
delinquency. The Homeowner understands and acknowledges that the Agency would not make
Exhibit "D"-1
DOCS OC\1019784v3\22782.0047
payments to cure a Loan Default or delinquency but for the Homeowner's agreement to make such
reimbursements to the Agency, as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed by and between the parties hereto as follows:
1. Cure of Loan Default. The Agency hereby has the right, but not the obligation, to
make payments to the Lender to fully or partially cure any Default or delinquency in payments of the
Loan.
2. Reimbursement Obligation of Homeowner. The Homeowner hereby agrees to
reimburse the Agency for any and all payments made by the Agency to fully or partially cure any
Default or delinquency in payments of the Loan. Such payments shall be made within thirty (30)
days after written demand is made therefor from the Agency to the Homeowner. The Agency may
make such written demand to the Homeowner at any time after making such payments. If such
written demand is made by personal delivery of such demand given to the Homeowner, or left at the
Unit, such demand shall be deemed given immediately upon such delivery. If such written demand
is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given
one business day after deposit of the written demand with the overnight delivery service. If such
written demand is made by registered or certified U.S. Mail, such demand shall be deemed given
three business days after deposit of the written demand with the U.S. Postal Service.
3. Security for Reimbursement. The obligation of the Homeowner to make the
reimbursement payments to the Agency required under Section 2 shall be secured by the Affordable
Housing Deed of Trust which shall encumber the Homeowner's fee title to the Unit. Such deed of
trust shall be executed by the Homeowner and shall be recorded in the official records of Orange
County, California, at the time Homeowner acquires title to the Unit. The Homeowner consents to
recordation of such deed of trust in the official records of Orange County, California. The
Affordable Housing Deed of Trust shall secure all amounts due from the Homeowner and/or his, her
or their successors and assigns as provided in this Reimbursement Agreement.
4. Notice of Default and Delinquency. The Homeowner agrees to deliver to the
Agency a copy of any notice of Default or delinquency in repayment of the Loan which Homeowner
receives from or on behalf of the Lender. Such notices shall be delivered to the Agency within five
(5) days of Homeowner's receipt of such notice from the Lender.
5. Waivers.
(a) The Homeowner expressly agrees that any payment due hereunder may be
extended from time to time at the Agency's sole and absolute discretion and that the Agency may
accept security in consideration for any such extension or release any security for this
Reimbursement Agreement at its sole discretion all without in any way affecting the liability of the
Homeowner.
(b) No extension of time for payment of the amounts due pursuant to this
Reimbursement Agreement made by agreement by the Agency with any person now or hereafter
liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify,
change or affect the original liability of the Homeowner under this Reimbursement Agreement, either
in whole or in part.
Exhibit "D"-2
DOCSOC\1019784v3\22782.0047
(c) The obligations of the Homeowner under this Reimbursement Agreement
shall be absolute and the Homeowner waives any and all rights to offset, deduct or withhold any
payments or charges due under this Reimbursement Agreement for any reasons whatsoever.
(d) The Homeowner waives presentment, demand, notice of protest and
nonpayment, notice of Default or delinquency, notice of acceleration, notice of costs, expenses or
leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of
the rights of interests in or to properties securing of this Reimbursement Agreement, and the benefit
of any exemption under any homestead exemption laws, if applicable.
(e) No previous waiver and no failure or delay by the Agency in acting with
respect to the terms of this Reimbursement Agreement shall constitute a waiver of any breach,
Default, or failure or condition under this Reimbursement Agreement. A waiver of any term of this
Reimbursement Agreement must be made in writing and shall be limited to the express written terms
of such waiver.
6. Attorneys' Fees and Costs. The Homeowner agrees that if any amounts due under
this Reimbursement Agreement are not paid when due, the Homeowner shall pay, in addition, all
costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with
the collection or enforcement of this Reimbursement Agreement, whether or not suit is filed. The
Homeowner further agrees that the provisions of Section 23 of the Covenant regarding attorneys fees
and costs shall be equally applicable to this Reimbursement Agreement.
7. Miscellaneous.
a. Term of Agreement. This Reimbursement Agreement shall take effect upon
the date set forth in the first paragraph hereof and shall terminate concurrently with the termination
of the Covenant.
b. Successor is Deemed Included in All References to Predecessor.
Whenever in this Reimbursement Agreement either the Homeowner or the Agency is named or
referred to, such reference shall be deemed to include the successors or assigns thereof, and all the
covenants and agreements in this Reimbursement Agreement contained by or on behalf of the
Homeowner or the Agency shall bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
C. Amendment. No modification, rescission, waiver, release or amendment of
any provision of this Covenant shall be made except by a written agreement executed by Homeowner
and the Agency.
d. Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed to have been received in the manner and to the addresses set
forth in Section 22 of the Covenant.
e. Further Assurances and Corrective Instruments. Homeowner shall
execute any further documents consistent with the terms of this Covenant, including documents in
recordable form, as the Agency shall from time to time find necessary or appropriate to effectuate its
purposes in entering into this Covenant.
Exhibit "D"-3
DOCSOC\ 1019784v3\22782.0047
f. Execution in Counterparts. This Reimbursement Agreement may be
executed in two or more separate counterparts, each of which, when so executed, shall be deemed to
be an original. Such counterparts shall, together, constitute and shall be one and the same
instrument. This Agreement shall not be effective until the execution and delivery by the parties of
at least one set of counterparts. The parties hereunder authorize each other to detach and combine
original signature pages and consolidate them into a single identical original. Any one of such
completely executed counterparts shall be sufficient proof of this Agreement.
g. Applicable Law. This Reimbursement Agreement shall be governed by and
construed in accordance with the laws of the State of California.
h. Captions. The captions or headings in this Reimbursement Agreement are
for convenience only and in no way define, limit or describe the scope or intent of any provisions of
this Reimbursement Agreement.
i. Definition of Terms. Terms not otherwise defined in this
Reimbursement Agreement are defined in the Covenant.
IN WITNESS WHEREOF, the Homeowner and the Agency have duly executed this
Reimbursement Agreement, all as of the date first above written.
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY:
Bv:
Name:
Title: Executive Director
HOMEOWNER:
Name:
Name:
Exhibit "D"-4
DOCS001019784x3\22782.0047
EXHIBIT "I" TO EXHIBIT D
Name of Homeowner:
Address of
Name of Lender:
Amount of Loan:
DOCSOC\ 1019784v3\22782.0047
EXHIBIT "E"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Tustin Community Redevelopment Agency Agency
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
This document is exempt from the payment of a recording
fee pursuant to Government Code Section 27383.
AFFORDABLE HOUSING OPTION AGREEMENT
THIS AFFORDABLE HOUSING OPTION AGREEMENT ("Option Agreement") is
entered into as of 200_, by and between the TUSTIN COMMUNITY
REDEVELOPMENT AGENCY, a state agency activated by the Tustin City Council pursuant to
Health and Safety Code Section 33000 et. seq. (together with its successors and assigns, the
"Agency"), and (the "Homeowner").
RECITALS
A. Homeowner has purchased a condominium located at , Tustin,
California, as such real property is more particularly described in Exhibit "A" attached hereto and
incorporated herein (the "Unit").
B. In order to assist Homeowner in the purchase of the Unit, the Agency agreed to
accept as part payment of amounts owed by the Developer to the Agency a promissory note executed
by Homeowner (the "Affordable Housing Note") in connection with Homeowner's purchase of the
Unit.
C. Homeowner and the Agency have entered into an Affordable Housing Covenant
dated concurrently herewith (the "Covenant"). Under the terms of the Covenant, the parties have
agreed that for a forty-five year period commencing the Unit shall be sold only
to Very Low Income Households at an Affordable Housing Cost for Very Low Income Households
and that the Unit may be sold or otherwise transferred only as provided in Section 4 of the Covenant.
D. Pursuant to Section 7 of the Covenant, the Homeowner has agreed to grant to the
Agency an option to purchase the Unit in the event Homeowner is in Default of any of his, her or
their obligations set forth in the Covenant.
E. Homeowner desires to grant to Agency an option to purchase the Unit on the terms
and conditions set forth hereinbelow. For purposes of this Option Agreement, "Unit" shall also be
deemed to include any and all improvements located on the real property.
NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and
conditions contained herein, the parties hereto agree as follows:
Exhibit "E"-1
DOCS001019784v3\22782.0047
1. Grant of Option.
(a) Homeowner grants to Agency an option (the "Option") to purchase the Unit
on the terms and conditions set forth in this Option Agreement. The Option may be exercised
only (i) upon the occurrence of an event of Default under the Covenant, or (ii) the due date of the
Affordable Housing Note is accelerated because of a transfer by the Owner of title to the Unit.
(b) The purchase price payable by the Agency to the Homeowner for the Unit
shall be the Affordable Housing Cost of the Unit for Very Low Income Households (as defined
in the Covenant), as of the date of the close of escrow for the Agency's acquisition of the Unit
(the "Option Price"). Homeowner agrees that this Option may be specifically enforced.
(c) For purposes of this Option Agreement, the Affordable Housing Cost of the
Unit shall be reasonably determined the Agency by assuming (a) a 30 year, fully amortized, level
payment mortgage loan for 97% of the price of the Unit, at currently prevailing mortgage rates,
(b) the prevailing cost of mortgage insurance payments for the loan described in
subparagraph (a), but only if mortgage insurance would customarily be charged for such loan,
(c) property taxes and assessments based on the reassessment of the Unit as of the closing date of
the Agency's acquisition of the Unit, assuming the Unit is not exempt from such taxes and
assessments, (d) current homeowner's association fees, (e) the prevailing cost for fire and
casualty insurance, however, if the homeowner's association carries fire and casualty insurance
with respect to the exterior of the Unit, then no additional cost shall be assigned to fire and
casualty insurance, and (f) use of the utilities allowance established by the Orange County
Housing Authority for the size of the Unit, or if no such allowance exists at that time, then a
reasonable utilities allowance as determined by the Agency.
(d) The Option created hereby shall be irrevocable by Homeowner and shall be
binding upon the successors and assigns of Homeowner. The Agency shall have the right of
specific performance to enforce the terms of this Option Agreement.
2. Term and Consideration for Option. The term of the Option ("Option Term")
shall commence on the date of this Option Agreement, and shall expire upon the expiration or
termination of the Covenant.
3. Exercise of Option. The Option may be exercised by Agency's delivery to
Homeowner of written notice of such exercise (the "Exercise Notice"). In the event that the Agency
exercises the Option, but, prior to the sale of the Unit to the Agency, the Homeowner cures the event
that gave rise to the right of the Agency to exercise the Option, the Agency's exercise of the Option
shall be deemed revoked. The revocation of the exercise of the Option shall not terminate this
Option Agreement or preclude the Agency from subsequently exercising the Option upon a later
occurrence of an event giving rise to the right of the Agency to exercise the Option.
4. Escrow and Completion of Sale. Within five (5) days after Agency has exercised
the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow
company mutually acceptable to Agency and Homeowner for the conveyance of the Unit to the
Agency. The Option Price shall be paid by the Agency in part by cancellation of the Affordable
Housing Note and Affordable Housing Trust Deed. The Agency shall deposit in escrow not later
than one (1) business day prior to the anticipated close of escrow date the Affordable Housing Note,
to be cancelled by the escrow holder upon the closing of the Option transaction and consummation of
Exhibit "E"-2
DOCS001019784x3\22782.0047
the sale ("Close of Escrow"), and cash in an amount equal to the difference between the Option
Price and the amount then due on the Affordable Housing Note. The Agency's obligation to close
escrow shall be subject to the Agency's approval of a then -current preliminary title report and, at
Agency's option, environmental and other site testing. Any exceptions shown on such preliminary
title report created on or after the Homeowner's acquisition of the Unit shall be removed by
Homeowner at its sole expense prior to the close of escrow pursuant to this Section 4 unless such
exception(s) is (are) accepted by Agency in its reasonable discretion; provided, however, that Agency
shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters
affecting title existing on the date of Homeowner's acquisition of the Unit, (iii) liens and
encumbrances in favor of the Agency, and (iv) matters shown as printed exceptions in the standard
form CLTA Homeowner's policy of title insurance. The parties shall each be responsible for one-
half of the escrow fees, documentary transfer taxes, recording fees and any other costs and expenses
of the escrow, and the Homeowner shall be responsible for the cost of a CLTA Homeowner's policy
of title insurance. The Agency shall have thirty (30) days after exercise of the Option to enter upon
the Unit to conduct any tests, inspections, investigations, or studies of the condition of the Unit.
Homeowner shall permit the Agency access to the Unit for such purposes. The Agency shall
indemnify, defend, and hold harmless Homeowner and its officers, directors, shareholders, partners,
employees, agents, and representatives from and against all claims, liabilities, or damages, and
including expert witness fees and reasonable attorney's fees and costs, caused by Agency's activities
with respect to or arising out of such testing, inspection, or investigatory activity on the Unit. Close
of Escrow shall take place promptly after acceptance by Agency of the condition of title and the
physical and environmental condition of the Unit. Until the Close of Escrow, the terms of the
Covenant and the documents executed and recorded pursuant thereto shall remain in full force and
effect.
5. Failure to Exercise Option. If the Option is not exercised in the manner provided in
Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt
of the written request of Homeowner, Agency shall cause a quitclaim deed terminating or releasing
any and all rights Agency may have to acquire the Unit (the "Quitclaim Deed") to be recorded in the
Official Records of Orange County, California.
6. Assignment and Nomination. The Agency may, at its option, assign its rights
hereunder without obtaining the consent of the Homeowner, and the Agency may nominate
another person or entity to acquire the Unit, and the identity of such nominee shall not be subject
to the approval of the Homeowner. In no event shall Homeowner, without the prior express
written consent of the Agency, which consent shall be given by the Agency only in the event that
the Agency determines the Transfer fully complies with Section 4 of the Covenant, assign or
transfer its obligations of this Option to any person other than a Permitted Transferee as provided
in the Covenant.
7. Title. Following the date hereof, except as permitted by the Covenant, Homeowner
agrees not to cause, and shall use commercially reasonable efforts not to permit, any lien, easement,
encumbrance or other exception to title to be recorded against the Unit without Agency's prior
written approval, such approval not to be unreasonably withheld.
8. Representations and Warranties of Homeowner. Homeowner hereby represents,
warrants and covenants to Agency as follows, which representations and warranties shall survive the
exercise of the Option and the Close of Escrow:
Exhibit "E"-3
DOCSOC\1019784v3\22782.0047
(a) that this Option Agreement and the other documents to be executed by
Homeowner hereunder, upon execution and delivery thereof by Homeowner, will have been duly
entered into by Homeowner, and will constitute legal, valid and binding obligations of Homeowner;
(b) neither this Option Agreement, nor anything provided to be done under this
Option Agreement, violates or shall violate any contract, document, understanding, agreement or
instrument to which Homeowner is a party or by which it is bound; and
(c) Homeowner shall pay, prior to delinquency, any and all real property taxes and
assessments which affect the Unit.
Homeowner agrees to indemnify, protect, defend, and hold Agency and the Unit harmless from
and against any damage, claim, liability, or expense of any kind whatsoever (including, without
limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection
with any breach of the foregoing representations, warranties and covenants. Such
representations and warranties of Homeowner, shall be true and correct on and as of the date of
this Option Agreement and on and as of the date of the Close of Escrow.
9. Representations and Warranties of Agency. Agency hereby represents and
warrants and covenants to Homeowner, as follows, which representations and warranties shall
survive the Close of Escrow:
(a) that this Option Agreement and the other documents to be executed by Agency
hereunder, upon execution and delivery thereof by Agency, will have been duly entered into by
Agency, and will constitute legal, valid and binding obligations of Agency, and
(b) neither this Option Agreement, nor anything provided to be done under this
Option Agreement, violates or shall violate any contract, document, understanding, agreement or
instrument to which Agency is a party or by which it is bound.
Agency agrees to indemnify, protect, defend, and hold Homeowner and the Unit harmless from
and against any damage, claim, liability, or expense of any kind whatsoever (including, without
limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection
with any breach of the foregoing representations, warranties and covenants. Such
representations and warranties of Agency, and any other representations and warranties of
Agency contained elsewhere in this Option Agreement shall be true and correct on and as of the
date of this Option Agreement and on and as of the date of the Close of Escrow.
10. General Provisions.
10.1 Paragraph Headings. The paragraph headings used in this Option
Agreement are for purposes of convenience only. They shall not be construed to limit or extend the
meaning of any part of this Option Agreement.
10.2 Notices. All notices, demands, consents, requests and other communications
required or permitted to be given under this Agreement shall be in writing and shall be deemed
conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3)
business days after such notice has been sent by United States mail via certified mail, return receipt
requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next
business day after such notice has been deposited with a national overnight delivery service
Exhibit "E"-4
DOCSOC\ 1019784v3\22782.0047
reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by
the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below
with next -business -day delivery guaranteed, provided that the sending party receives a confirmation
of delivery from the delivery service provider. Unless otherwise provided in writing, all notices
hereunder shall be addressed as follows:
To Homeowner:
To Agency:
Tustin Community Redevelopment Agency
Tustin City Hall
300 Centennial Way
Tustin, California 92780
Attention: Executive Director
and Attention: Assistant Executive Director
with a copy to:
Woodruff Spradlin & Smart
701 S. Parker Street, Suite 8000
Orange, California 92868-4760
Attention: Lois E. Jeffrey, Esq.
10.3 Binding Effect. Subject to the provisions of Section 6, the terms, covenants
and conditions of this Option Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns and transferees.
10.4 Entire Agreement. This Option Agreement sets forth the entire agreement
between the parties hereto respecting the Option, and supersedes all prior negotiations and
agreements, written or oral, concerning or relating to the subject matter of this Option Agreement.
10.5 California Law. This Option Agreement shall be governed by the laws of
the State of California and any question arising hereunder shall be construed or determined according
to such laws.
10.6 Time of the Essence. Time is of the essence with respect to each and every
provision of this Option Agreement.
10.7 Counterparts. This Option Agreement may be executed in two or more
separate counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This Option
Agreement shall not be effective until the execution and delivery by the parties of at least one set of
counterparts. The parties hereunder authorize each other to detach and combine original signature
pages and consolidate them into a single identical original. Any one of such completely executed
counterparts shall be sufficient proof of this Option Agreement.
Exhibit "E"-5
DOCSOC\1019784v3\22782.0047
10.8 Attorneys' Fees. If any party to this Agreement institutes any action, suit,
counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or
otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or
with respect to any inaccuracies or material omissions in connection with any of the covenants,
representations or warranties on the part of the other party to this Agreement, then the prevailing
party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover
of and from the other party all costs and expenses of the Action, including, without limitation,
reasonable attorneys' fees and costs (at the prevailing party's attorneys' then -prevailing rates as
increased from time to time by the giving of advanced written notice by such counsel to such party)
incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or
award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on
the commencement of such Action and shall be paid whether or not such Action is prosecuted to a
Decision. Any Decision entered in such Action shall contain a specific provision providing for the
recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall
fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any
judgment or order entered in any final judgment shall contain a specific provision providing for the
recovery of all costs and expenses of suit, including, without limitation, reasonable attorneys' fees
and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such
judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to
Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs,
expenses and expert fees and costs incurred in the following: (a) postjudgment motions and
collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party
examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
"Prevailing party" within the meaning of this section includes, without limitation, a party who
agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly
due or performance of the covenants allegedly breached, or obtains substantially the relief sought by
such party.
10.9 Computation of Time. All periods of time referred to in this Option
Agreement shall include all Saturdays, Sundays and state or national holidays, unless the period of
time is specified as business days (which shall not include Saturdays, Sundays and state or national
holidays), provided that if the date or last date to perform any act or give any notice with respect to
this Option Agreement shall fall on a Saturday, Sunday or state or national holiday, such act or notice
may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or
state or national holiday. Time is of the essence with respect to all provisions of this Agreement in
which a definite time for performance is specified; provided, however, that the foregoing shall not be
construed to limit or deprive a party of the benefits of any grace or use period provided for in this
Agreement.
10.10 Definition of Terms. Terms not otherwise defined in this Option
Agreement are defined in the Covenant.
10.11 Further Assurances. Each of the parties hereto shall execute and deliver
at their own cost and expense, any and all additional papers, documents, or instruments, and shall
do any and all acts and things reasonably necessary or appropriate in connection with the
performance of their respective obligations hereunder in order to carry out the intent and
purposes of this Agreement.
Exhibit "E"-6
DOCSOC\ 1019784v3\22782.0047
IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto
as of the date first above written.
HOMEOWNER:
By:
Printed Name:
By:
Printed Name:
AGENCY:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a state agency activated by the Tustin City
Council pursuant to Health and Safety Code Section
33000 et. seq.
C
Exhibit "E"-7
DOCSOC\ 1019784v3\22782.0047
EXHIBIT "A" TO EXHIBIT E
LEGAL DESCRIPTION
[Same as Exhibit A to the Covenant]
DOCSOC\1019784x3\22782.0047
STATE OF CALIFORNIA
COUNTY OF
On
personally appeared
, before me.
ss.
(Print Name of Notary Public)
, Notary Public,
❑ personally known to me
-or-
❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature Of Notary
DOCS OC\ 1019784 v3\22782.0047
Signer(s) Other Than Named Above
STATE OF CALIFORNIA
COUNTY OF
On
personally appeared
, before me,
ss.
(Print Name of Notary Public)
Notary Public,
❑ personally known to me
-or-
F-1 proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
DOCS OC\ l 019784v3\22782.0047
Signer(s) Other Than Named Above
ATTACHMENT NO. 15
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California
Attention: Assistant Executive Director
Exempt From Recording Fee Pursuant to Government Code Section 27383
AFFORDABLE HOUSING COVENANT
(Moderate Income)
THIS AFFORDABLE HOUSING COVENANT (this "Covenant") is made as of
200, by (the
"Homeowner") in favor of the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state
agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000
et. seq. (together with its successors and assigns, the "Agency").
RECITALS
A. Homeowner has purchased a condominium located at
Tustin, California, as such real property is more particularly described in Exhibit "A" attached
hereto and incorporated herein (the "Unit"). The Unit is part of that certain housing development
known as 'Prospect Village" (the 'Project").
B. Pursuant to the Disposition and Development Agreement between the Agency and Olson
Urban Housing, LLC, a Delaware limited liability company (the 'Developer"), the Developer is
required to sell one unit in the Project to a "Moderate Income Household", at an "Affordable
Housing Cost for Moderate Income Households".
C. The Unit has been designated by the Developer as a Unit that is to be sold to a Moderate
Income Household.
D. Homeowner has represented to the Developer and the Agency that Homeowner and
Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at
all times during the Homeowner's ownership of the Unit, that they will not rent the Unit to
others, and that they are a Moderate Income Household.
E. In order to enable Developer to sell the Unit to a Moderate Income Household, the
Agency agreed to accept as part payment of amounts owed by the Developer to the Agency a
promissory note executed by Homeowner (the "Affordable Housing Promissory Note") in
connection with Homeowner's purchase of the Unit. The Affordable Housing Promissory Note
is, or shall be, secured by the Affordable Housing Trust Deed.
Attachment No. 15-1
DOCS001019784v3\22782.0047
F. Pursuant to Health and Safety Code Section 33334.3, this Covenant shall run with the
land and shall be enforceable, against Homeowner and successors in interest, by the Agency or the
Community.
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
1. DEFINITIONS.
"Affordability Period" means that period of time commencing upon the Date of this
Covenant and terminating on the forty fifth (45th) anniversary of such date.
"Affordable Housing Cost for Moderate Income Households" means a cost per Unit for
Moderate Income Households as more particularly defined in Health and Safety Code Section
50052.5(b)(4) and as generally described herein as a price per Unit calculated as follows:
Affordable Housing Cost for Moderate Income Households shall be a Monthly Housing Cost not
be less than one twelfth of twenty eight percent (28%) of the gross annual income of the
household, nor exceed one twelfth of the product of thirty five percent (35%) times one hundred
ten percent (110%) of the annual Orange County Median Income, adjusted for family size
appropriate for the Unit. Notwithstanding the foregoing, in accordance with Health and Safety
Code Section 50052.5(b)(4), the Agency has determined and hereby agrees that, for a Moderate
Income Household with annual gross income that exceeds one hundred ten percent (110%) of the
annual Orange County Median Income, adjusted for family size, no maximum cap shall be
placed upon the annual payments. [Shouldn't this be 35%a times the actual income of the
purchaser?]
"Affordable Housing Promissory Note" means that promissory note executed by
Homeowner as part of Homeowner's purchase of the Unit from the Developer. The principal
amount of the Affordable Housing Promissory Note is an amount not in excess of the difference
between an amount to be identified as of the date of purchase and the Affordable Housing Cost
for Moderate Income Households as of the date of purchase.
"Affordable Housing Option Agreement" means the agreement attached hereto as
Exhibit "F" that provides an option to purchase in favor of the Agency as provided in Section 7,
which option shall be exercisable in the event that the Owner of a Unit is in breach of the owner's
obligations in this Covenant or in the event the due date of the Affordable Housing Promissory
Note is accelerated as the result of a Transfer by the Owner.
"Affordable Housing Trust Deed" means that certain deed of trust executed by
Homeowner which encumbers the Unit and secures the obligations of Homeowner and his or her
successors and assigns as provided in (a) this Covenant, (b) the Reimbursement Agreement
attached hereto as Exhibit "E", and (c) the Affordable Housing Promissory Note.
"Agency" means the Tustin Community Redevelopment Agency, and the Agency's
successors and assigns.
"Community" means the City of Tustin (Health and Safety Code Section 33002)
Attachment No. 15-2
DOCS00 1019784v3\22782.0047
"County" means the County of Orange, California.
"Covenant" means this Affordable Housing Covenant.
"Date of this Covenant" means the date in the first paragraph of this Covenant,
"Default" means the failure of a party to perform any action or covenant required by this
Covenant within the time periods provided herein following notice and opportunity to cure.
"Developer" means Olson Urban Housing, LLC, a Delaware limited liability company.
"First Lien" means the lien of a purchase money Lender which secures the obligations
of the Owner to repay amounts owed to the Lender.
"Homeowner" means the person or persons set forth in the first paragraph of this
Covenant, and his, her or their successors and assigns.
"Legal Description" means the legal description of the Unit which is attached hereto as
Exhibit "A" and incorporated herein.
"Lender" means an institution making a purchase money loan to the Owner for the
purchase of the Unit.
"Moderate Income Household" means a Household occupied by persons and families
whose gross income does not exceed the qualifying limits for lower and moderate income
families set forth in Health and Safety Code Section 50093.
"Monthly Housing Cost" means, for a Moderate Income Household purchasing the Unit,
all of the following associated with the Unit, estimated or known as of the date of the proposed
sale of the Unit: (i) principal and interest payments on a fixed interest rate mortgage loan, and
any loan insurance fees associated therewith; (ii) property taxes and assessments; (iii) fire and
casualty insurance covering replacement value of property improvements; (iv) any homeowner
association fees; and (v) a reasonable utility allowance. Monthly housing cost of a purchaser
shall be an average of estimated costs for the next twelve (12) month period.
"Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as
Exhibit "B" and incorporated herein by reference.
"Owner" means Homeowner and any subsequent Transferee of the Unit.
"Permitted Transfer" means any Transfer which is permitted pursuant to Section 4
hereof.
"Permitted Transferee" means a Transferee from the Homeowner or from any Permitted
Transferee who acquires ownership of the Unit in full compliance with Section 4 hereof.
Attachment No. 15-3
DOCS00 10 197 84v3\227 82.0047
hereof.
"Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4
"Project" means that certain mixed use development in which the Unit is located.
"Reimbursement Agreement" means the Reimbursement Agreement to be executed by
the Homeowner in favor of the Agency, in the form attached hereto as Exhibit "D" and
incorporated herein.
"Request for Notice" means the Request for Notice of Default attached hereto as Exhibit
"C" and incorporated herein.
"Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or
involuntary, of any interest in the Unit. Without limiting the generality of the foregoing, Transfer
shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii)
the creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any
voluntary conveyance of the Unit, or (vi) any month to month or longer lease of the Unit.
"Transferee" shall mean any natural person or entity who obtains ownership rights in the
Unit pursuant to a Transfer.
"Unit" means that certain real property located at the street address set forth in Recital A
and legally described in the Legal Description.
2. COVENANT RE: SALES OF UNIT. Homeowner covenants and agrees that,
during the Affordability Period, each subsequent resale of the Unit by the then Owner thereof
shall be to a Moderate Income Household, at an Affordable Housing Cost for Moderate Income
Households. Homeowner further covenants and agrees that, during the Affordability Period, each
Owner shall abide by and be bound by all the obligations of Homeowner set forth in this
Covenant. Homeowner agrees that the obligations of Homeowner set forth in this Covenant shall
be secured by the Affordable Housing Trust Deed recorded concurrently with the recordation of
the Covenant.
HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER
UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST
CAN BE MADE ONLY AT THE TIME OF A PROPOSED SALE OR OTHER TRANSFER,
TAKING INTO CONSIDERATION PREVAILING INTEREST RATES, THE OFFERED
TERMS OF SALE, THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED
PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED,
AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN
THE FAIR MARKET VALUE OF THE SAME OR OTHER SIMILAR REAL PROPERTY
WHICH IS NOT ENCUMBERED BY THIS COVENANT. HOMEOWNER AND EACH
SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES THAT
AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF
THE AGENCY AND THIS COVENANT IS TO PROVIDE HOUSING TO MODERATE
INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST.
Attachment No. 15-4
DOCS OC\ 1019784v3\22782.0047
Homeowner's Initials
3. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO
THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants to the
Developer and the Agency that the financial and other information which Homeowner has
provided to the Developer and the Agency with respect to Homeowner's income and the
purchase price of the Unit was true and correct at the time such information was provided, and
remains true and correct as of the Date of this Covenant.
4. PERMITTED TRANSFERS OF THE UNIT.
a. Notice Required for a Transfer. During the Affordability Period, the
Unit, and any interest therein, shall not be Transferred by the Owner except with the express
written consent of the Agency, which consent shall be given only if the Transfer is in strict
compliance with the provisions of this Section 4. During the Affordability Period in the event
that then Owner of the Unit; desires to Transfer the Unit, prior to the Transfer the Owner shall
notify the Agency by delivering a Notice of Intent to Transfer to the Agency. Agency hereby
agrees to permit Transfers of the Unit to proposed Transferees ("Permitted Transferees")
provided the Transfer satisfies all of the following conditions:
i. Notice to Agency. The Owner shall send the Notice of Intent to
Transfer to the Agency at the address set forth in Section 22 hereof. The Notice of Intent to
Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Owner
the Transferee is a Moderate Income Household, certify that the sales price is no more than an
Affordable Housing Cost for Moderate Income Households, and shall include copies of the sales
contract, the grant deed or other document that is proposed to be used to effectuate the Transfer,
copies of documents verifying that the proposed Transferee is a Moderate Income Household
(including, but not limited to, documents verifying the income of the proposed Transferee) and
all other material documents related to the proposed Transfer.
ii. Qualification of Proposed Transferee. The proposed Transferee
shall provide and certify to the Agency with such information as the Agency may request related
to the proposed Transfer in the form provided by the Agency, including without limitation: the
Social Security Number of the proposed Transferee, copies of the federal income tax returns
filed by the proposed Transferee for prior two (2) calendar years, copies of the two most current
wage earning statements of the proposed Transferee, a certification as to the income and family
size of the proposed Transferee, the purchase price the Proposed Transferee intends to pay for
the Unit, and a current appraisal reflecting the fair market value of the Unit on the assumption
that the Unit is free from the restrictions provided for in this Covenant. The proposed Transferee
shall also submit to the Agency an agreement by the Transferee to assume the obligations of an
Owner of the Unit as set forth in this Covenant in such form as the Agency may request.
Attachment No. 15-5
DOCSOC\ 1019784v3\22782.0047
iii. Certificates from Parties. The Owner and proposed Transferee
shall each shall certify in writing, in a form acceptable to the Agency, that the Transfer shall be
closed in accordance with, and only with, the terms of the sales contract and other documents
submitted to and approved by the Agency and that all consideration delivered by the proposed
Transferee to Owner has been fully disclosed to the Agency. The written certificate shall also
include a provision that in the event a Transfer is made in violation of the terms of this Covenant
or false or misleading statements are made in any documents or certificate submitted to the
Agency for its approval of the Transfer, the Agency shall have the right to file an action at law or
in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale
void notwithstanding the fact that the Transfer may have closed and become final as between
Owner and the Transferee.
iv. Agreement to Assume the Obligations of This Covenant. The
grant deed or other document effecting the Transfer of the Unit shall include the following: (a)
references to this Covenant and the obligation of the Transferee to be bound by all the
obligations of Homeowner set forth in this Covenant, (b) a reference to the Affordable Housing
Trust Deed, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the
due on sale provisions of the Affordable Housing Promissory Note, (e) a reference to the
Reimbursement Agreement and (f) a covenant that will require the Transferee, and any successor
or assign of the Transferee, to include in any document Transferring title to the Unit a reference
to this Covenant, the Affordable Housing Trust Deed, the Affordable Housing Option
Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable
Housing Promissory Note, and the obligation of the Transferee to be bound by the obligations set
forth in this Covenant, the Affordable Housing Trust Deed, the Affordable Housing Option
Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable
Housing Promissory Note.
V. Agreement to Increase Amount due on the Affordable Housing
Promissory Note. The Transferee must agree to increase the amount of the Affordable Housing
Promissory Note to the amount by which the fair market value of the Unit at the time of the
closing of the Transfer is in excess of the sum of the Affordable Housing Cost of such Unit as of
the date of the closing of the Transfer. Any interest that has accrued on the Affordable Housing
Promissory Note as of the date of the closing of the Transfer shall be deemed to be included in
the increased principal amount of the note, and interest shall begin accruing on the increased
principal amount of the note as of the date of the closing of the Transfer at the rate provided in
the note. Except for such increase in the principal amount of the Affordable Housing Promissory
Note and the reduction to zero of accrued interest due on the note, the Affordable Housing
Promissory Note, the Affordable Housing Trust Deed, the Affordable Housing Option
Agreement and the Reimbursement Agreement shall remain in full force and effect.
vi. The Agency's Title Policy. The Agency must receive a title
policy, in an amount equal to the amount then due on the Affordable Housing Promissory Note
as increased as provided in this Section 4. insuring the Affordable Housing Trust Deed as a
monetary lien of second priority, i.e., subordinate in priority among monetary liens only to the
monetary lien of any purchase money deed of trust recorded at the time of sale which deed of
trust shall secure an amount not in excess of the then Affordable Housing Cost of the Unit.
Attachment No. 15-6
DOCSOC\ 1019784v3\22782.0047
vii. Spousal Transfers. Notwithstanding the foregoing provisions of
Sections 4(vi). In the event of a transfer to a spouse in dissolution proceeding the Agency shall
not require a new title policy [nor shall the Agency require reimbursement for its costs].
b. Notice of Prohibited Transfer. Within fifteen (15) days after the receipt
by the Agency of the notices, documents and agreements referred to in Section 4(a), the Agency
shall determine and give notice to the Owner as to whether the proposed Transfer is a Permitted
Transfer or Prohibited Transfer. In the event that the proposed Transfer is a Prohibited Transfer,
such notice to the Owner shall specify why the Transfer is a Prohibited Transfer. If the violation
is not corrected to the satisfaction of the Agency within ten (10) days after the date of the notice,
or within such further time as the Agency determines is necessary to correct the violation, the
Agency may declare a Default under this Covenant. Upon the declaration of a Default, the
Agency may apply to a court of competent jurisdiction for specific performance of this
Covenant, for an injunction prohibiting a proposed sale or Transfer in violation of this Covenant,
for a declaration that the Prohibited Transfer is void, or for any such other relief as may be
appropriate.
C. Delivery of Documents After the Closing. Upon the close of the
proposed Transfer, the transferor and the Transferee, as applicable, shall provide the Agency
with a
copy of the final sales contract, settlement statement, escrow instructions, all certificates required
by this Section 4 and any other documents which the Agency may reasonably request.
d. Refinancing. This Section 4 shall not prohibit the encumbering of title for
the sole purpose of securing financing of the purchase price of the Unit; however, any such re:
financing (i) must be a First Lien, (ii) must not be in excess of the Affordable Housing Cost of
such Unit as of the date of the refinancing, and (iii) must be in compliance with the Affordable
Housing Trust Deed.
5. ENCUMBRANCES.
a. Subordination. The provisions of this Covenant, the Affordable Housing
Note, the Affordable Housing Trust Deed and the Affordable Housing Option Agreement and the
Reimbursement Agreement shall be subordinate to any First Lien on the Unit that secures the
payment of a principal amount that is not in excess, as of the time the First Lien is recorded
against the Unit, of the Affordable Housing Cost of the Unit. The Agency shall execute such
written instruments for the subordination of its rights under this Covenant, the Affordable
Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement
and the Reimbursement Agreement, as may reasonably be requested by the Lender. The
Agency's agreement to so subordinate its rights is subject to agreement in writing by the Lender
providing the Agency the following rights:
i. The Agency shall have the right, during the cure periods which
apply to the Homeowner pursuant to the First Lien documents and any cure period which may
apply to the Agency under applicable law, to cure the Homeowner's Default relative to the First
Lien; and
Attachment No. 15-7
DOCSOC\ 1019784v3\22782.0047
ii. After a Default on any of the First Lien documents but prior to a
foreclosure sale or deed in lieu assignment of the Unit, the Agency shall have the right to take
title to the Unit and cure the Default relative to the First Lien documents, without the holder of
the First Lien exercising any right it might otherwise have to accelerate the obligations secured
by the First Lien by reason of such title transfer, so long as the Agency promptly cures any such
Default upon taking title to the Unit.
b. Request for Notice of Default. The Agency may cause a Request for
Notice to be recorded on the Unit subsequent to the recordation of the First Lien deed of trust or
mortgage requesting a statutory notice of Default as set forth in California Civil Code Section
2924b. A form of a Request for Notice is attached hereto as Exhibit "D" and incorporated herein.
C. Further Encumbrances. Homeowner agrees that he or she shall not
record or cause the recordation of any deed of trust, mortgage, lien or other instrument creating a
security interest in or to the Unit (a "Further Encumbrance") other than a First Lien, the
Affordable Housing Trust Deed and the Affordable Housing Option Agreement.
6. REIMBURSEMENT AGREEMENT. Homeowner covenants and agrees to pay
timely any and all amounts due and payable on the obligations secured by the First Lien.
Homeowner and the Agency shall enter into a Reimbursement Agreement, in the form attached
hereto as Exhibit "D" and incorporated herein, which provides that the Agency may make
payments to cure a Default or delinquency of any obligation secured by the First Lien, on the
condition that the Homeowner agrees to reimburse the Agency for any payments made to cure
such Default or delinquency. The Homeowner's repayment obligations pursuant to the
Reimbursement Agreement shall be secured by the Affordable Housing Trust Deed.
7. OPTION TO ACQUIRE UNIT UPON DEFAULT OF OBLIGATIONS
UNDER THIS COVENANT. Homeowner agrees to enter into an Option Agreement, in the
form attached hereto as Exhibit "E" and incorporated herein, which grants to Agency an option
to purchase the Unit in the event that the Homeowner is in Default of any of his or her
obligations under this Covenant.
8. USES. Homeowner covenants and agrees to devote, use and maintain the Unit in
accordance with this Covenant. All uses conducted on the Unit, including, without limitation, all
activities undertaken by the Homeowner pursuant to this Covenant, shall conform to all
applicable provisions of the Tustin Municipal Code, and the recorded documents pertaining to
and running with the Unit.
9. NONDISCRIMINATION COVENANTS. Homeowner covenants by and for
himself or herself, and any successors in interest, that there shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Unit, nor shall the Homeowner or any person claiming under or
through him or her establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Unit. The foregoing covenants shall run with the
land.
Attachment No. 15-8
DOCS0010197840\22782.0047
10. MAINTENANCE OF UNIT. Homeowner shall maintain the improvements and
landscaping on the Unit in a manner consistent with community standards which will uphold the
value of the Unit, in accordance with the Tustin Municipal Code. Homeowner also agrees to
comply with all applicable federal, state and local laws.
11. OCCUPANCY STANDARDS. The Unit shall be used as the principal residence
of Homeowner and Homeowner's family and for no other purpose. Homeowner shall not enter
into an agreement for the rental or lease of the Unit, and Homeowner shall not otherwise rent or
lease the Unit. The maximum occupancy of the Unit shall not exceed three persons if the Unit is
a one bedroom home, five persons if the Unit is a two bedroom home, or seven persons if the
Unit is a three bedroom home. The Agency may grant a temporary waiver of the above
requirements for good cause, in the Agency's sole and absolute discretion. Homeowner shall,
commencing upon the first anniversary of the date of this Covenant first set forth above and on
each succeeding anniversary thereafter, submit to the Agency an affidavit of occupancy in the
form provided by the Agency.
12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF
THESE COVENANTS.
a. In General. The covenants established herein shall, without regard to
technical classification and designation, be binding for the benefit and in favor of the Agency, its
successors and assigns, as to those covenants which are for its benefit. The covenants contained
in this Covenant shall remain in effect for the periods of time specified herein. The covenants
against discrimination shall remain in effect in perpetuity. The Agency is deemed the beneficiary
of the terms and provisions of this Covenant and of the covenants running with the land, for and
in its own rights and for the purposes of protecting the interests of the community and other
parties, public or private, in whose favor and for whose benefit this Covenant and the covenants
running with the land have been provided. This Covenant and the covenants therein shall run in
favor of the Agency, without regard to whether the Agency has been, remains or is an owner of
any land or interest therein in the Unit or in the Project Area. The Agency shall have the right, if
the Covenant or 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 it or any other beneficiaries of this Covenant and covenants may be entitled.
b. Notice of Default. Failure or delay by Homeowner to perform any term or
provision of this Covenant which is not cured within thirty (30) days after receipt of notice from
the Agency constitutes a Default under this Covenant; provided, however, if such Default is of
the nature requiring more than thirty (30) days to cure, Homeowner may avoid Default hereunder
by immediately commencing to cure within such thirty (30) day period, and thereafter diligently
pursuing such cure to completion. Failure or delay in giving notice by the Homeowner shall not
constitute a waiver of any Default, nor shall it change the time of Default.
C. Agency's Remedies. Upon the declaration of a Default, the Agency may
(i) apply to a court of competent jurisdiction for specific performance, for an injunction
prohibiting any act or omission in violation of this Covenant, or for any such other relief as may
Attachment No. 15-9
DOCSOC\ 1019784v3\22782.0047
be appropriate, (ii) exercise the Agency's rights under the Affordable Housing Trust Deed,
including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and
remedies permitted under applicable law.
d. Prohibited Transfers Void. Any attempt by the Homeowner to make a
Prohibited Transfer of title to or any interest in the Unit in violation of this Covenant shall be
voidable by Agency.
13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless
the Agency and its officers, officials, agents, employees, representatives, and volunteers from
and against any loss, liability, claim, or judgment relating in any manner to the Homeowner's use
of the Unit or Homeowner's violation of this Covenant. The Homeowner shall remain fully
obligated for the payment of taxes, liens and assessments related to the Unit. There shall be no
reduction in taxes for Homeowner, nor any transfer of responsibility to the Agency to make such
payments, by virtue of this Covenant.
14. INSURANCE. Homeowner shall maintain, during the term of this Covenant, an
all risk property insurance policy insuring the Unit in an amount equal to the full replacement
value of the structures on the Unit. The policy shall contain a statement of obligation on behalf of
the carrier to notify the Agency of any material change, cancellation or termination of coverage
at least thirty (30) days in advance of the effective date of such material change, cancellation or
termination. Homeowner shall transmit a copy of the certificate of insurance to the Agency
within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually
transmit to the Agency a copy of the certificate of insurance, signed by an authorized agent of the
insurance carrier setting forth the general provisions of coverage. The copy of the certificate of
insurance shall be transmitted to the Agency at the address set forth in Section 22 hereof. Any
certificate of insurance must be in a form, content and with companies approved by the Agency.
15. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions
of this Covenant in which a definite time for performance is specified; provided, however, that
the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use
period provided for in this Covenant.
16. NO WAIVER. No waiver of any provision or consent to any action under this
Covenant shall constitute a waiver of any other provision or consent to any other action, whether
or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a
party to provide a waiver in the future except to the extent specifically set forth in writing. Any
waiver given by a party shall be null and void if the party requesting such waiver has not
provided a full and complete disclosure of all material facts relevant to the waiver requested.
17. FURTHER ASSURANCES. Homeowner shall execute any further documents
consistent with the terms of this Covenant, including documents in recordable form, as the
Agency shall from time to time find necessary or appropriate to effectuate its purposes in
entering into this Covenant.
Attachment No. 15-10
DOCSOC\ 1019784v3\22782.0047
18. GOVERNING LAW. Homeowner hereby agrees to comply with all ordinances,
rules and regulations of the Agency. Nothing in this Covenant is intended to be, nor shall it be
deemed to be, a waiver of any Agency ordinance, rule or regulation. This Covenant shall be
governed by the laws of the State of California. Any legal action brought under this Covenant
must be instituted in the Superior Court of the County of Orange, State of California, or in the
Federal District Court in the Central District of California.
19. AMENDMENT OF COVENANT. No modification, rescission, waiver, release
or amendment of any provision of this Covenant shall be made except by a written agreement
executed by Homeowner and the Agency.
20. AGENCY MAY ASSIGN. The Agency may, at its option, assign its rights
hereunder without obtaining the consent of the Homeowner.
21. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shall Homeowner
assign or transfer any portion of this Covenant without the prior express written consent of the
Agency, which consent shall be given by the Agency only in the event that the Agency
determines the Transfer fully complies with Section 4. This section shall not affect or diminish
the Agency's right to assign all or any portion of its rights hereunder.
22. NOTICES. All notices, demands, consents, requests and other communications
required or permitted to be given under this Covenant shall be in writing and shall be deemed
conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3)
business days after such notice has been sent by United States mail via certified mail, return
receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the
next business day after such notice has been deposited with a national overnight delivery service
reasonably approved by the parties (Federal Express and Airborne Express are deemed approved
by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth
below with next business day delivery guaranteed, provided that the sending party receives a
confirmation of delivery from the delivery service provider. Unless otherwise provided in
writing, all notices hereunder shall be addressed as follows:
To Homeowner:
To Agency:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Executive Director and
Attention: Assistant Executive Director
Attachment No. 15-11
DOCS 00 1019784v3\22782.0047
Either party may change its address for notice by giving written notice thereof to the
other party.
23. ATTORNEYS' FEES AND COSTS. If any party to this Covenant institutes any
action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party,
declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare
rights hereunder or with respect to any inaccuracies or material omissions in connection with any
of the covenants, representations or warranties on the part of the other party to this Agreement,
then the prevailing party in such Action, whether by arbitration or final judgment, shall be
entitled to have and recover of and from the other party all costs and expenses of the Action,
including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then prevailing
rates as increased from time to time by the giving of advanced written notice by such counsel to
such party) incurred in bringing and prosecuting such Action and/or enforcing any judgment,
order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed
to have accrued on the commencement of such Action and shall be paid whether or not such
Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific
provision providing for the recovery of attorneys' fees and costs incurred in enforcing such
Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs upon
the request of either party. Any judgment or order entered in any final judgment shall contain a
specific provision providing for the recovery of all costs and expenses of suit, including
reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing,
perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include,
without limitation, in addition to Costs incurred in prosecution or defense of the underlying
action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the
following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c)
garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation;
and (t) appeals of any order or judgment. "Prevailing party" within the meaning of this section
includes, without limitation, a party who agrees to dismiss an Action in consideration for the
other party's payment of the amounts allegedly due or performance of the covenants allegedly
breached, or obtains substantially the relief sought by such party.
24. ENTIRE AGREEMENT. This Covenant, together with all attachments hereto,
constitutes the entire understanding and agreement of the parties. This Covenant integrates all of
the terms and conditions mentioned herein or incidental thereto, and supersedes all prior
negotiations, discussions and previous agreements between the Agency and the Homeowner
concerning all or any part of the subject matter of this Covenant.
25. SEVERABILITY. Any provision of this Covenant that is deemed to be illegal,
invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to
the extent of the invalidity or unenforceability of such provision and shall be deemed stricken
from this Covenant. Any stricken provision shall not affect the legality, enforceability or validity
of the remainder of this Covenant. If any provision or part thereof of this Covenant is stricken in
accordance with the provisions of this Section, then the stricken provision shall be replaced, to
the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and
intent to the stricken provision as is legally possible. Any such invalidity or unenforceability of
Attachment No. 15-12
DOCSOCU 019784v3\22782.0047
any provision in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
26. COUNTERPARTS. This Covenant may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This Covenant
shall not be effective until the execution and delivery by the parties of at least one set of
counterparts. The parties hereunder authorize each other to detach and combine original
signature pages and consolidate them into a single identical original. Any one of such completely
executed counterparts shall be sufficient proof of this Covenant.
IN WITNESS WHEREOF, the parties have executed this Covenant as of the date set forth
above.
HOMEOWNER:
By:_
Name:
By:_
Name:
AGENCY:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a state agency activated by the Tustin
City Council pursuant to Health and Safety Code
Section 33000 et. seq.
APPROVED AS TO FORM
By:_
Title:
AGENCY LEGAL COUNSEL
Attachment No. 15-13
DOCSOC\ 1019784v3\22782.0047
EXHIBIT "A"
LEGAL DESCRIPTION OF UNIT
[To Be Inserted]
DOCSOCV 019784v3\22782.0047
EXHIBIT "B"
NOTICE OF INTENT TO TRANSFER
NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE
PROPERTY.
From: ("Homeowner")
To: Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attn: Assistant Executive Director
Re: (street address)
Tustin, California (the "Unit")
Circle appropriate words: Homeowner desires to [sell, transfer by inheritance or devise, lease, make a
gift of, otherwise transfer] the Unit.
Proposed Transferee:
Ages of Proposed Transferee:
Income of Proposed Transferee:
Household Size of Proposed Transferee:
Proposed Transfer Price:
If the Agency has a program to help locate a Moderate Income purchaser, does the Homeowner
want the Agency to help look for a Moderate Income purchaser to buy the Unit?
Yes: No:
Date
Signature of Homeowner
daytime telephone number of Homeowner
DOCS001019784v3\22782.0047
EXHIBIT "C"
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
C➢ArF e Rn VF THTC T TNF
Exempt from recording fees pursuant to Government Code §27383.
Request for Notice Under Civil Code Section 2924b
In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice
of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No.
on , 200_, in Book _, Page _, Official
Records of Orange County, California, and describing land therein as
See Exhibit A attached hereto
Executed by as Trustor, in which is
named as Beneficiary, and as Trustee, be mailed to
TUSTIN COMMUNITY REDEVELOPMENT AGENCY, at 300 Centennial Way, Tustin, California
92780, Attention: Assistant Executive Director.
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE
SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS
CHANGES, A NEW REQUEST MUST BE RECORDED.
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
D0CS0C\ l 019784v3\22782.0047
EXHIBIT A TO EXHIBIT C
LEGAL DESCRIPTION
(Same as Exhibit A to the Covenant)
DOCS00 1019784v3\22782.0047
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On , before me, a
Notary Public in and for said state, personally appeared
, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument
and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument, the person, or the entity upon behalf of which the person action,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
DOCS001019784v3\22782.0047
EXHIBIT "D"
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of 200_
(the "Reimbursement Agreement"), is hereby entered into by and between the TUSTIN
COMMUNITY REDEVELOPMENT AGENCY (the "Agency"), and
(the "Homeowner').
RECITALS
A. The Homeowner is purchasing a condominium located at Tustin,
California (the "Unit").
B. The Agency and the Homeowner have executed an Affordable Housing Covenant (the
"Covenant") which requires that for a forty-five year period the Unit be sold only to Moderate Income
Households at an affordable housing cost, which may result in purchase prices which are substantially
less than the current fair market value of the Unit.
C. The Homeowner is obtaining a purchase money loan (the "Loan") from a private lender
(the "Lender') for a portion of the costs of acquisition of the Unit. A description of the Loan is set forth
in Exhibit "I" hereto, which is incorporated herein.
D. The Homeowner may Transfer his, her or their interests in the Unit to a Permitted
Transferee who may in turn obtain a purchase money loan from an institutional lender for a portion of the
costs of acquisition of the Unit. This subsequent lender and loan are also hereinafter referred to as the
"Lender" and the "Loan".
E. Pursuant to the Covenant, the Agency has the right to acquire the Unit in the event,
among other things, that it becomes subject to a foreclosure proceeding, and the Agency has the right
to make payments to cure a Default or delinquency on the Loan.
F. The right to make payments to cure a Default or delinquency on the Loan will be of
benefit to the Agency by allowing the Agency to prevent the foreclosure of the Unit, which will prevent
the possible early termination of the Covenant.
G. The Agency's right to make payments to cure a Default or delinquency on the Loan will
also be of benefit to the Homeowner, by allowing the Homeowner to retain ownership of the Unit and to
avoid foreclosure.
H. The Agency desires to obtain the authority to make payments to cure a Default or
delinquency on the Loan, on the condition that the Homeowner agrees to reimburse the Agency for any
payments made to cure a Default or delinquency on the Loan. In order to induce the Agency to obtain the
authority to make payments to cure a Default or delinquency on the Loan, the Homeowner is willing to
agree to reimburse the Agency for any payments made to cure a Loan Default of delinquency. The
Homeowner understands and acknowledges that the Agency would not make payments to cure a Loan
Default or delinquency but for the Homeowner's agreement to make such reimbursements to the Agency,
as provided herein.
Exhibit "D"-1
DOCSOCU 019784v3\22782.0047
NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed by and between the parties hereto as follows:
1. Cure of Loan Default. The Agency hereby has the right, but not the obligation, to make
payments to the Lender to fully or partially cure any Default or delinquency in payments of the Loan.
2. Reimbursement Obligation of Homeowner. The Homeowner hereby agrees to
reimburse the Agency for any and all payments made by the Agency to fully or partially cure any
Default or delinquency in payments of the Loan. Such payments shall be made within thirty (30) days
after written demand is made there for from the Agency to the Homeowner. The Agency may make such
written demand to the Homeowner at any time after making such payments. If such written demand is
made by personal delivery of such demand given to the Homeowner, or left at the Unit, such demand
shall be deemed given immediately upon such delivery. If such written demand is made by reliable
overnight delivery service (such as FedEx), such demand shall be deemed given one business day after
deposit of the written demand with the overnight delivery service. If such written demand is made by
registered or certified U.S. Mail, such demand shall be deemed given three business days after deposit
of the written demand with the U.S. Postal Service.
3. Security for Reimbursement. The obligation of the Homeowner to make the
reimbursement payments to the Agency required under Section 2 shall be secured by the Affordable
Housing Deed of Trust which shall encumber the Homeowner's fee title to the Unit. Such deed of trust
shall be executed by the Homeowner and shall be recorded in the official records of Orange County,
California, at the time Homeowner acquires title to the Unit. The Homeowner consents to recordation of
such deed of trust in the official records of Orange County, California. The Affordable Housing Deed of
Trust shall secure all amounts due from the Homeowner and/or his, her or their successors and assigns
as provided in this Reimbursement Agreement.
4. Notice of Default and Delinquency. The Homeowner agrees to deliver to the Agency a
copy of any notice of Default or delinquency in repayment of the Loan which Homeowner receives
from or on behalf of the Lender. Such notices shall be delivered to the Agency within five (5) days of
Homeowner's receipt of such notice from the Lender.
5. Waivers
(a) The Homeowner expressly agrees that any payment due hereunder may be
extended from time to time at the Agency's sole and absolute discretion and that the Agency may accept
security in consideration for any such extension or release any security for this Reimbursement
Agreement at its sole discretion all without in any way affecting the liability of the Homeowner.
(b) No extension of time for payment of the amounts due pursuant to this
Reimbursement Agreement made by agreement by the Agency with any person now or hereafter liable
for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or
affect the original liability of the Homeowner under this Reimbursement Agreement, either in whole or in
part.
(c) The obligations of the Homeowner under this Reimbursement Agreement shall
be absolute and the Homeowner waives any and all rights to offset, deduct or withhold any payments or
charges due under this Reimbursement Agreement for any reasons whatsoever.
Exhibit "D"-2
DOCSOC\ 1019784v3\22782.0047
(d) The Homeowner waives presentment, demand, notice of protest and nonpayment,
notice of Default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest
thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests
in or to properties securing of this Reimbursement Agreement, and the benefit of any exemption under
any homestead exemption laws, if applicable.
(e) No previous waiver and no failure or delay by the Agency in acting with respect
to the terms of this Reimbursement Agreement shall constitute a waiver of any breach, Default, or failure
or condition under this Reimbursement Agreement. A waiver of any term of this Reimbursement
Agreement must be made in writing and shall be limited to the express written terms of such waiver.
6. Attorneys' Fees and Costs. The Homeowner agrees that if any amounts due under this
Reimbursement Agreement are not paid when due, the Homeowner shall pay, in addition, all costs and
expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or
enforcement of this Reimbursement Agreement, whether or not suit is filed. The Homeowner further
agrees that the provisions of Section 2.3 of the Covenant regarding attorneys' fees and costs shall be
equally applicable to this Reimbursement Agreement.
7. Miscellaneous.
a. Term of Agreement. This Reimbursement Agreement shall take effect upon the
date set forth in the first paragraph hereof and shall terminate concurrently with the termination of the
Covenant.
b. Successor is Deemed Included in All References to Predecessor.
Whenever in this Reimbursement Agreement either the Homeowner or the Agency is
named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all
the covenants and agreements in this Reimbursement Agreement contained by or on behalf of the
Homeowner or the Agency shall bind and inure to the benefit of the respective successors and assigns
thereof whether so expressed or not.
C. Amendment. No modification, rescission, waiver, release or amendment of any
provision of this Covenant shall be made except by a written agreement executed by Homeowner and the
Agency.
d. Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed to have been received in the manner and to the addresses set forth
in Section 2.2 of the Covenant.
e. Further Assurances and Corrective Instruments. Homeowner shall execute
any further documents consistent with the terns of this Covenant, including documents in recordable
form, as the Agency shall from time to time find necessary or appropriate to effectuate its purposes in
entering into this Covenant.
f. Execution in Counterparts. This Reimbursement Agreement may be executed
in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original.
Such counterparts shall, together, constitute and shall be one and the same instrument. This Agreement
shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The
parties hereunder authorize each other to detach and combine original signature pages and consolidate
Exhibit "D"-3
DOCSOC\ 1019784v3\22782.0047
them into a single identical original. Any one of such completely executed counterparts shall be sufficient
proof of this Agreement.
g. Applicable Law. This Reimbursement Agreement shall be governed by and
construed in accordance with the laws of the State of California.
b. Captions. The captions or headings in this Reimbursement Agreement are for
convenience only and in no way define, limit or describe the scope or intent of any provisions of this
Reimbursement Agreement.
i. Definition of Terms. Terms not otherwise defined in this Reimbursement
Agreement are defined in the Covenant.
IN WITNESS WHEREOF, the Homeowner and the Agency have caused this
Reimbursement Agreement to be executed by their duly authorized respective officers, all as of the date
first above written.
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY:
By:_
Name:
HOMEOWNER:
IM
Exhibit "D"-4
DOCSOC\1019784v3\22782.0047
EXHIBIT "I" TO EXHIBIT D
Name of Homeowner:
Address of
Name of Lender:
Amount of
DOCSOC\ 1019784v3\22782.0047
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
EXHIBIT "E"
This document is exempt from the payment of a recording
fee pursuant to Government Code Section 27383.
OPTION AGREEMENT
THIS OPTION AGREEMENT is entered into as of , 200_, by and
between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state agency activated by the
Tustin City Council pursuant to Health and Safety Code Section 33000 et. seq. (the "Agency"), and
(the "Homeowner").
RECITALS
A. Homeowner has purchased a condominium located at ,
Tustin, California, as such real property is more particularly described in Exhibit "A" attached hereto and
incorporated herein (the "Unit").
B. In order to assist Homeowner in the purchase of the Unit, the Agency agreed to accept as
part payment of amounts owed by the Developer to the Agency a promissory note executed by
Homeowner (the "Affordable Housing Promissory Note") in connection with Homeowner's purchase of
the Unit.
C. Homeowner and the Agency have entered into an Affordable Housing Covenant dated
concurrently herewith (the "Covenant"). Under the terms of the Covenant, the parties have agreed that
that for a forty-five year period the Unit shall be sold only to Moderate Income Households at an
Affordable Housing Cost and that the Unit may be sold or otherwise transferred only as provided in
Section 4 of the Covenant.
D. Pursuant to Section 7 of the Covenant, the Homeowner has agreed to grant to the Agency
an option to purchase the Unit in the event Homeowner is in Default of any of his or her obligations set
forth in the Covenant.
E. Homeowner desires to grant to Agency an option to purchase the Unit on the terms and
conditions set forth herein below. For purposes of this Option Agreement, "Unit" shall also be deemed to
include any and all improvements located on the real property.
NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and
conditions contained herein, the parties hereto agree as follows:
Exhibit E-1
DOCSOC\ 1019784v3\22782.0047
1. Grant of Option.
(a) Homeowner grants to Agency an option (the "Option") to purchase the Unit on the
terms and conditions set forth in this Option Agreement. The Option may be exercised only (i) upon the
occurrence of an event of Default under the Covenant, or (ii) the due date of the Affordable Housing
Promissory Note is accelerated because of a transfer by the Owner of title to the Unit.
(b) The purchase price payable by the Agency to the Homeowner for the Unit shall be the
Affordable Housing Cost of the Unit for Moderate Income Households (as defined in the Covenant), as of
the date of the close of escrow for the Agency's acquisition of the Unit (the "Option Price").
Homeowner agrees that this Option may be specifically enforced.
(c) For purposes of this Option Agreement, the Affordable Housing Cost of the Unit shall
be reasonably determined the Agency by assuming (a) a 30 year, fully amortized, level payment mortgage
loan for 97% of the price of the Unit, at currently prevailing mortgage rates, (b) the prevailing cost of
mortgage insurance payments for the loan described in subparagraph (a), but only if mortgage insurance
would customarily be charged for such. loan, (c) property taxes and assessments based on the
reassessment of the Unit as of the closing date of the Agency's acquisition of the Unit, assuming the Unit
is not exempt from such taxes and assessments, (d) current homeowner's association fees, (e) the
prevailing cost for fire and casualty insurance, however, if the homeowner's association carries fire and
casualty insurance with respect to the exterior of the Unit, then no additional cost shall be assigned to fire
and casualty insurance, and (f) use of the utilities allowance established by the Orange County Housing
Authority for the size of the Unit, or if no such allowance exists at that time, then a reasonable utilities
allowance as determined by the Agency.
(d) The Option created hereby shall be irrevocable by Homeowner and shall be binding
upon the successors and assigns of Homeowner. The Agency shall have the right of specific performance
to enforce the terms of this Option Agreement.
2. Term and Consideration for Option. The term of the Option ("Option Term") shall
continence on the date of this Option Agreement, and shall expire upon the expiration or termination of
the Covenant.
3. Exercise of Option. The Option may be exercised by Agency's delivery to Owner of
written notice of such exercise (the "Exercise Notice"). In the event that the Agency exercises the Option,
but, prior to the sale of the Unit to the Agency, the Owner cures the event that gave rise to the right of the
Agency to exercise the Option, the Agency's exercise of the Option shall be deemed revoked. The
revocation of the exercise of the Option shall not terminate this Option Agreement or preclude the
Agency from subsequently exercising the Option upon a later occurrence of an event giving rise to the
right of the Agency to exercise the Option.
4. Escrow and Completion of Sale. Within five (5) days after Agency has exercised the
Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow
company mutually acceptable to Agency and Homeowner for the conveyance of the Unit to the Agency.
The Option Price shall be paid by the Agency in part by cancellation of the Affordable Housing
Promissory Note. The Agency shall deposit in escrow not later than one (1) business day prior to the
anticipated close of escrow date the Affordable Housing Promissory Note, to be cancelled by the escrow
holder upon the consummation of the sale, and cash in an amount equal to the difference between the
Option Price and the amount then due on the Affordable Housing Promissory Note. The Agency's
obligation to close escrow shall be subject to the Agency's approval of a then -current preliminary title
report and, at Agency's option, environmental and other Developer Parcel testing. Any exceptions shown
Exhibit E-2
DOCSOC\ 1019784v3\22782.0047
on such preliminary title report created on or after the Homeowner's acquisition of the Unit shall be
removed by Homeowner at its sole expense prior to the close of escrow pursuant to this Section 4 unless
such exception(s) is (are) accepted by Agency in its reasonable discretion; provided, however, that
Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters
affecting title existing on the date of Homeowner's acquisition of the Unit, (iii) liens and encumbrances in
favor of the Tustin Community Redevelopment Agency, and (iv) matters shown as printed exceptions in
the standard form CLTA owner's policy of title insurance. The parties shall each be responsible for
one-half of the escrow fees, documentary transfer taxes, recording fees and any other costs and expenses
of the escrow, and the Homeowner shall be responsible for the cost of a CLTA owner's policy of title
insurance. Agency shall have thirty (30) days after exercise of the Option to enter upon the Unit to
conduct any tests, inspections, investigations, or studies of the condition of the Unit. Homeowner shall
permit the Agency access to the Unit for such purposes. The Agency shall indemnify, defend, and hold
harmless Homeowner and its officers, directors, shareholders, partners, employees, agents, and
representatives from and against all claims, liabilities, or damages, and including expert witness fees and
reasonable attorney's fees and costs, caused by Agency's activities with respect to or arising out of such
testing, inspection, or investigatory activity on the Unit. Escrow shall close promptly after acceptance by
Agency of the condition of title and the physical and environmental condition of the Unit. Until the
Closing, the terms of the Covenant and the documents executed and recorded pursuant thereto shall
remain in full force and effect.
5. Failure to Exercise Option. If the Option is not exercised in the manner provided in
Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt of the
written request of Homeowner, Agency shall cause a Grant deed terminating or releasing any and all
rights Agency may have to acquire the Unit (the "Grant Deed") to be recorded in the Official Records of
Orange County, California.
6. Assignment and Nomination. The Agency may, at its option, assign its rights hereunder
without obtaining the consent of the Homeowner, and the Agency may nominate another person or entity
to acquire the Unit, and the identity of such nominee shall not be subject to the approval of the
Homeowner. In no event shall Homeowner, without the prior express written consent of the Agency,
which consent shall be given by the Agency only in the event that the Agency determines the Transfer
fully complies with Section 4 of the Covenant, assign or transfer its obligations of this Option to any
person other than a Permitted Transferee as provided in the Covenant.
7. Title. Following the date hereof, except as permitted by the Covenant, Homeowner
agrees not to cause, and shall use commercially reasonable efforts not to permit, any lien, easement,
encumbrance or other exception to title to be recorded against the Unit without Agency's prior written
approval, such approval not to be unreasonably withheld.
8. Representations and Warranties of Homeowner. Homeowner hereby represents,
warrants and covenants to Agency as follows, which representations and warranties shall survive the
exercise of the Option and the Close of Escrow:
(a) that this Option Agreement and the other documents to be executed by Homeowner
hereunder, upon execution and delivery thereof by Homeowner, will have been duly entered into by
Homeowner, and will constitute legal, valid and binding obligations of Homeowner;
(b) neither this Option Agreement, nor anything provided to be done under this Option
Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to
which Homeowner is a party or by which it is bound; and
Exhibit E-3
DOCSOCU 019784v3\22782.0047
(c) Homeowner shall pay, prior to delinquency, any and all real property taxes and
assessments which affect the Unit.
Homeowner agrees to indemnify, protect, defend, and hold Agency and the Unit harmless from and
against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation,
reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of
the foregoing representations, warranties and covenants. Such representations and warranties of
Homeowner, shall be true and correct on and as of the date of this Option Agreement and on and as of the
date of the Close of Escrow.
9. Representations and Warranties of Agency. Agency hereby represents and warrants
and covenants to Homeowner, as follows, which representations and warranties shall survive the Close of
Escrow:
(a) that this Option Agreement and the other documents to be executed by Agency
hereunder, upon execution and delivery thereof by Agency, will have been duly entered into by Agency,
and will constitute legal, valid and binding obligations of Agency, and
(b) neither this Option Agreement, nor anything provided to be done under this Option
Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to
which Agency is a party or by which it is bound.
Agency agrees to indemnify, protect, defend, and hold Homeowner and the Unit harmless from and
against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation,
reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of
the foregoing representations, warranties and covenants. Such representations and warranties of Agency,
and any other representations and warranties of Agency contained elsewhere in this Option Agreement
shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the
Close of Escrow.
10. General Provisions.
10.1 Paragraph Headings. The paragraph headings used in this Option Agreement
are for purposes of convenience only. They shall not be construed to limit or extend the meaning of any
part of this Option Agreement.
10.2 Notices. All notices, demands, consents, requests and other communications
required or permitted to be given under this Agreement shall be in writing and shall be deemed
conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business
days after such notice has been sent by United States mail via certified mail, return receipt requested,
postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such
notice has been deposited with a national overnight delivery service reasonably approved by the parties
(Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed
to the party to whom notice is being sent as set forth below with next -business -day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from the delivery service provider.
Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
Exhibit E-4
DOCSOC\ 1019784v3\22782.0047
To Homeowner:
To Agency:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
and Attention: Assistant Executive Director
with a copy to:
City Attorney
City of Tustin
Woodruff Spradlin & Smart
701 S. Parker Street, Suite 8000
Orange, California 92868-4760
Attention: Lois E. Jeffrey, Esq.
10.3 Binding Effect. Subject to the provisions of Section 6, the terms, covenants and
conditions of this Option Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and transferees.
10.4 Entire Agreement. This Option Agreement sets forth the entire agreement
between the parties hereto respecting the Option, and supersedes all prior negotiations and agreements,
written or oral, concerning or relating to the subject matter of this Option Agreement.
10.5 California Law. This Option Agreement shall be governed by the laws of the
State of California and any question arising hereunder shall be construed or determined according to such
laws.
10.6 Time of the Essence. Time is of the essence of each and every provision of this
Option Agreement.
10.7 Counterparts. This Option Agreement may be signed by the parties hereto in
duplicate counterparts which together shall constitute one and the same agreement between the parties
and shall become effective at such time as both of the parties shall have signed such counterparts.
10.8 Attorneys' Fees. If any party to this Agreement institutes any action, suit,
counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or
otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with
respect to any inaccuracies or material omissions in connection with any of the covenants, representations
or warranties on the part of the other party to this Agreement, then the prevailing party in such Action,
whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party
all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing
party's attorneys' then -prevailing rates as increased from time to time by the giving of advanced written
Exhibit E-5
DOCS OC\ 1019784v3\22782.0047
notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing
any judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be
deemed to have accrued on the commencement of such Action and shall be paid whether or not such
Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or
arbitrator shall fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any
judgment or order entered in any final judgment shall contain a specific provision providing for the
recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs
(collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of
this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or
defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs
incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c)
garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f)
appeals of any order or judgment. "Prevailing party" within the meaning of this section includes, without
limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the
amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the
relief sought by such party.
10.9 Computation of Time. All periods of time referred to in this Option Agreement
shall include all Saturdays, Sundays and state or national holidays, unless the period of time is specified
as business days (which shall not include Saturdays, Sundays and state or national holidays), provided
that if the date or last date to perform any act or give any notice with respect to this Option Agreement
shall fall on a Saturday, Sunday or state or national holiday, such act or notice may be timely performed
or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. Time is
of the essence with respect to all provisions of this Agreement in which a definite time for performance is
specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the
benefits of any grace or use period provided for in this Agreement.
10.10 Definition of Terms. Terms not otherwise defined in this Option Agreement are
defined in the Covenant.
10.11 Further Assurances. Each of the parties hereto shall execute and deliver at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any and all
acts and things reasonably necessary or appropriate in connection with the performance of their respective
obligations hereunder in order to carry out the intent and purposes of this Agreement.
IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto as
of the date first above written.
HOMEOWNER:
LM
Exhibit E-6
DOCSOC\1019784v3\22782.0047
AGENCY:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY
By:
Nal
APPROVED AS TO FORM
AGENCY LEGAL COUNSEL
Exhibit E-7
DOCSOC\1019784v3\22782.0047
EXHIBIT "A" TO EXHIBIT E
LEGAL DESCRIPTION
DOCSOCU 019784v3\22782.0047
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On , before me, a
Notary Public in and for said state, personally appeared
, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of
which the person action, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
DOCSOCU 019784v3\22782.0047
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On , before me, _
Notary Public in and for said state, personally appeared
a
, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of
which the person action, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
DOCS00 1019784v3\22782.0047