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AMENDED AND RESTATED PROMISSORY NOTE
SECURED BY CONSTRUCTION DEED OF TRUST
$1,200,000 ___________, 20261998
Corona, California
FOR VALUE RECEIVED, the undersigned, NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA a California nonprofit public benefit corporation (previously known as THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION), (“Maker”), jointly and severally promise to pay to the CITY OF CORONA
HOUSING AUTHORITY, AS SUCCESSOR-IN-INTEREST TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF CORONA, a public body, corporate and politic (“Holder”), or order, at 250 East Rincon, Suite 107, Corona, CA 91719, Attn: Director of Housing and Development (or at such other place as Holder may specify from time to time in writing), the principal sum of One Million Two Hundred Thousand Dollars ($1,200,000), or the aggregate unpaid principal amount of all Advances made by Holder to the undersigned from time to time and remaining outstanding on the Maturity Date, whichever is less, together with interest on any principal amounts remaining unpaid from time to time from August 1, 1999 (“Interest Date”) until payment in full, to be calculated as set forth below.
1. All capitalized terms used in this Note, unless otherwise defined, will have the respective meanings specified in the First Amendment to the Affordable Housing Agreement dated as of the same date as this Note entered into between Maker and Holder (“Loan Agreement”). In addition, as used in this Note, the following terms will have the following meanings:
“Advance” will mean a disbursement of Loan Proceeds by Holder. “Business Day” means any day other than Saturday, Sunday, or public holiday or the equivalent for banks generally under the laws of California. Whenever any payment to be made under this Note is stated to be due on a day other than a Business Day, that payment may be made on the next succeeding Business Day, and the extension of time will in that case be included in the computation of payment of interest. However, if the extension would cause the payment to be made in a new calendar month, that payment will be made on the next preceding Business Day, and interest will be payable for the shorter period.
“Maturity Date” means January 31, 2000 December 31, 2078, or any earlier date on which the indebtedness evidenced by this Note is due pursuant to the terms of any Loan Document, as defined herein.
“Net Operating Income” has the meaning set forth in the Operation and Maintenance Agreement.
“Operation and Maintenance Agreement” means that certain Corona West Apartments Operation and Maintenance Agreement by and between Maker and Holder, or their respective predecessors in interest, dated June 1, 1996, and recorded in the Official Records on October 13, Formatted: Font: Bold
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1996, as Instrument No. 218507, as amended by that certain unrecorded First Amendment to Operation and Maintenance Agreement Corona West Apartments dated as of January 31, 2011 and that certain unrecorded Second Amendment to Operation and Maintenance Agreement Corona West Apartments dated substantially concurrently herewith. “Project” means that certain apartment complex commonly known as the “Corona West Del Rey Apartments” (formerly known as “Corona West Apartments”), located at 1148 D Street (leasing business address); 204 -340 Isabella Way (formerly 204-340 Garfield Avenue) and 204- 345 Magdalena Cricle (formerly 204-345 Grant Avenue), Corona, California 92882, which is an apartment building containing 160 affordable housing dwelling units. “Chase Loan” has the meaning set forth in Section I. of that certain unrecorded Second Amendment to Operation and Maintenance Agreement (Corona Del Rey) dated substantially concurrently herewith.
2. On From the Interest Date to the later of March 17, 2026 or the date the Chase Loan is funded and provided to the Borrower (the “New Interest Date”), all Advances will bear interest on the unpaid principal amount until repaid at a rate equal to 15 percent (15%) per annum (“Interest Rate”). Commencing on the New Interest Date, all Advances will bear interest on the unpaid principal amount until repaid at a rate equal to three percent (3%) simple interest per annum. Maker will make monthly payments of interest commencing on September 1, 1999. The entire balance of principal and accrued interest will be due on the Maturity Date. All payments will be applied first to payment of any costs, fees, late charges, or other charges due under this Note or under any other Loan Document, then to accrued interest, and then to the principal balance. Interest will be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder are payable in lawful money of the United States of America in same day funds. The parties agree that the Interest Rate represents reasonable sums considering all of the circumstances existing on the date of this Note, including, without implied limitation, that Holder is not charging interest on the Advances until August 1, 1999, and represents a fair and reasonable estimate of the costs and damages that Holder will incur by foregoing interest until August 1, 1999. The parties further agree that proof of actual costs and damages would be costly or inconvenient.
2. 3. Commencing on the New Interest Date and continuing each year thereafter until the Maturity Date, a portion of the Net Operating Income from the Project shall be paid to Holder and applied to pay down the amounts due and owing under this Note. The payments described below shall be paid to Holder no later than July 1 each year. Maker shall make repayments of the outstanding principal and accrued interest, if any, equal to fifty percent (50%) of the Net Operating Income from the Project as repayment of amounts due and owing under this Note. Such annual payments shall be accompanied by the Maker’s report of the Net Operating Income and any other documentation reasonably requested by Holder to substantiate the Maker’s determination of the Net Operating Income. All payments made hereunder shall be credited first to any accrued but Formatted: Strikethrough
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unpaid interest (if applicable), then to current interest due and owing and lastly to principal.
Interest not paid current each year shall be added to and thereafter be considered additional principal due hereunder. Notwithstanding the foregoing, the entire outstanding balance of principal and any interest owing under this Note shall be due and payable on the Maturity Date.
3. Maker will pay to Holder an amount equal to the entire outstanding principal balance of this Note, together with all accrued and unpaid interest, on the Maturity Date.
4. This Note is secured by, among other things, the Construction Deed of Trust with Assignment of Rents and Security for a Portion of Net Income of the same date as this Note, executed by Maker, as trustor, in favor of Holder, as beneficiary (“Deed of Trust”), and encumbering the real property described in the Deed of Trust (“Property”). The holder of this Note will be entitled to the benefits of the security provided by the Deed of Trust and will have the right to enforce the covenants and agreements of Maker contained in the Deed of Trust. The Note and Deed of Trust are collectively and individually referred to as “Loan Document.”
5. From and after the Maturity Date, or an earlier date on which all sums owing under this Note become due by acceleration or otherwise, all sums owing under this Note also will bear interest until paid in full at a rate equal to 15 percent (15%) per annum (“Default Rate”). All payments made above shall be applied first to accrued interest, if any, and thereafter to reduction of principal. The parties agree that the Default Rate on overdue payments represents reasonable sums considering all of the circumstances existing on the date of this Note, including, without limitation, that Holder is not charging interest on principal which is timely paid, and represents a fair and reasonable estimate of the costs and damages that Holder will incur by reason of the late payment. The parties further agree that proof of actual damages would be costly or inconvenient.
Acceptance of any charge shall not constitute a waiver of the default with respect to the overdue amount, and shall not prevent Holder from exercising any of the other rights and remedies available to Holder. The foregoing shall not be construed as obligating the Holder to accept any payment after its due date.
Maker is composed of sophisticated business people and hereby waive, to the maximum extent permitted by law, the provisions of California Civil Code Section 2954.5 regarding the notices prerequisite to the imposition of delinquent payment charges.
6. In the event ownership of the Property, or any part thereof, becomes vested in a person or persons other than Maker, without the prior written approval of Holder, Holder may, without notice to Maker, waive such default and deal with such successor or successors in interest in the Property in the same manner as with Maker, without in any way releasing, discharging or otherwise affecting the liability of Maker, the endorser, guarantors, sureties, accommodation parties hereof and all other persons liable or to become liable for all or any part of this indebtedness. No sale or other Transfer, as defined herein, of the Property, no forbearance on the part of Holder, no extension of the time for the payment of the indebtedness or any change in the terms of this Note consented to by Holder shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of Maker and all such persons liable or to Formatted: Attachment 3, Indent: First line: 0.5", Space After: 12 pt, Tab stops: 0.5", List tab
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become liable for all or any part of this indebtedness, either in whole or in part. Any deed conveying the Property, or any part thereof, shall provide that the grantee thereunder assumes all of the grantor’s obligations under any Loan Document.
7. Upon the occurrence of any of the following, an Event of Default shall be deemed to have occurred and the Holder may, at Holder’s option, declare the unpaid balance of this Note, including interest, if any, thereon, to be immediately due and payable, and the same shall forthwith become due and payable:
7.1 Maker shall fail to make any payment under this Note when due; or
7.2 There shall occur an “Event of Default” under and as defined in any Loan Document; or
7.3 Maker shall (i) become insolvent or unable to pay Maker’s debts generally as they mature, (ii) suspend business, (iii) make a general assignment for the benefit of creditors, (iv) admit in writing Maker’s inability to pay Maker’s debts generally as they mature, (v) file or have filed against it a petition in bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar relief under the Federal bankruptcy laws or under any other applicable law of the United States of America or any state thereof, or (vi) consent to the appointment of a trustee or receiver for it or for a substantial part of Maker’s property; or
7.4 Any order, judgement or decree shall be entered appointing, without Maker’s consent, a trustee or receiver for it or for a substantial part of Maker’s property; or
7.5 A judgment against Maker for the payment of money totaling in excess of $10,000 shall be outstanding for a period of sixty (60) days without a stay of execution thereof, or a bond or undertaking having been posted pursuant to Code of Civil Procedure §995.010, et seq.; or
7.6 The holder of any senior or junior encumbrance on the real and/or personal property collateral encumbered by the Deed of Trust shall institute foreclosure or other proceedings for the enforcement of its remedies thereunder; or
7.7 Maker shall sell, contract to sell, give an option to purchase, transfer, convey, encumber, or alienate (collectively, “Transfer”) the Property, as defined herein, or any interest in the Property, or permits or suffers Maker’s title, or any interest in the Property, to be divested, sold, transferred or otherwise conveyed, whether voluntarily or involuntarily, or if title to the Property or any interest in the Property be subject to any lien or charge, voluntary or involuntarily, contractual or statutory, without the prior written consent of Holder being first had and obtained.
This provision shall apply to each and every sale, transfer or conveyance, regardless of whether or not Holder has consented to, or waived, Holder’s right hereunder, whether by action or nonaction, in connection with any previous sale, transfer, or conveyance, whether one or more.
Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to Maker under the Federal Bankruptcy Code, this Note and all interest and other -5-
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amounts due hereon shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker.
The Holder may exercise Holder’s option to accelerate after any Event of Default, regardless of any prior forbearance.
8. Maker agrees to indemnify Holder and to hold Holder and Holder’s successors and assigns harmless from and against any and all claims, demands, costs, liabilities and obligations of any kind or nature arising out of any default hereunder, including, without limitation, all costs of collection, including reasonable attorneys’ fees and all costs of suit, in the event the unpaid principal sum of this Note and/or any interest thereon is not paid when due.
9. It is the intention of Maker and Holder to conform strictly to the usury laws now or hereafter enforced in the State of California, and any interest payable under this Note or any of the other documents to be executed by Maker in connection with the loan made or to be made hereunder, shall be subject to reduction to the amount not in excess of the maximum nonusurious amount allowed under the usury laws of California as now or hereafter construed by the courts having jurisdiction over such matters. In the event the maturity of this Note is accelerated by reason of any provision of this Note or by reason of an election by Holder resulting from any default (or an event permitting acceleration), under this Note or any other instrument given to secure the payment hereof, or otherwise, then earned interest may never include more than the maximum amount permitted by law, computed from the date hereof until payment, and any interest in excess of the maximum amount permitted by law shall be canceled automatically and, if theretofore paid, shall at the option of the Holder either be rebated to Maker or be credited on the principal amount of this Note or if all principal has been repaid then the excess shall be rebated to Maker. The aggregate of all interest (whether designated as interest, service charges, points, or otherwise) contracted for, chargeable, or receivable under this Note or any other document executed in connection herewith shall under no circumstances exceed the maximum legal rate upon the unpaid principal balance of this Note remaining unpaid from time to time. In the event such interest does exceed the maximum legal rate, such excess shall be canceled automatically and if theretofore paid, rebated to the undersigned or credited on the principal amount of this Note, or if the Note has been repaid, then such excess shall be rebated to Maker.
10. Maker acknowledges and agrees that Maker shall not have any rights whatsoever to set-off against amounts due hereunder or otherwise due Holder any amount or obligation due Maker or claimed to be due Maker from Holder.
11. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other persons or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable.
12. This Note shall bind Maker and Maker’s successors and assigns and the benefits hereof shall inure to Holder and Holder’s successors and assigns. -6-
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13. The validity, interpretation and performance of this Note shall be governed by and construed in accordance with the laws of the State of California.
14. Time is of the essence of this Note.
15. The rights or remedies of Holder, as provided in any Loan Document shall be cumulative and concurrent, and may be pursued singly, successively or together against the Property, and any other funds, property or security held by Holder for the payment hereof or otherwise, at the sole discretion of the Holder. The failure to exercise any such right or remedy shall in no event be construed as a waiver or release of such rights or remedies or of the right to exercise them at any time.
16. Maker and all other persons liable or to become liable for all or part of this indebtedness, jointly and severally waive demand, presentment for payment, notice of nonpayment, protest and notice of protest hereon, agrees that when or at any time after this Note becomes due, the Holder may, without notice, offset or charge this Note against any bank account or other account maintained by Maker with the Holder, and agrees to pay, in the Event of Default hereunder, all costs of collection, including attorneys fees, whether or not suit is commenced.
17. This Note is being executed in connection with the financing on the Property being incurred by Maker. Maker’s liability under such financing is, with limited exceptions, nonrecourse as to Maker. Maker’s liability hereunder shall be nonrecourse to the same extent as provided in the permanent loan on the Property and the documents ancillary thereto. Notwithstanding anything to the contrary contained herein, (i) Maker shall not have, and no officer or director of Maker or of any affiliate of Maker (“Maker Affiliate”) shall have any direct, indirect or derivative personal liability for the obligations of the Maker under this Note, and (ii) Holder shall not exercise any rights or institute any action against the Maker or any Maker Affiliate directly, indirectly or derivatively for the payment of any sum of money that is or may become payable under the provisions hereof (other than the right to exercise its fights under any regulatory agreement recorded in favor of the Holder and encumbering the Property and its right to seek a decree of specific performance or otherwise in the event of default under this Note). Nothing contained herein shall be deemed to impair any security interest held by the Holder in the Property or in any account established pursuant to the provisions of this Note or preclude the Holder from realizing upon any security encumbered to Holder in connection herewith.
The Holder’s obligation to pay any monetary damages arising from the Holder’s default under this Note or any Loan Document shall be strictly limited to monies available in the Holder’s low and moderate income housing fund. Under no set of circumstances shall the City of Corona’s or Holder’s general fund or other accounts become liable for damages in the event of the breach of Holder’s obligations under this Note or any Loan Document. All of Holder’s obligations under this Note or any Loan Document shall be funded only out of the Holder’s low and moderate income housing fund.
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18. IN THE EVENT OWNERSHIP OF THE PROPERTY DESCRIBED IN THE
DEED OF TRUST, OR ANY PART THEREOF, BECOMES VESTED IN A PERSON OR
PERSONS OTHER THAN MAKER, WITHOUT THE PRIOR WRITTEN APPROVAL OF
HOLDER, THIS NOTE SHALL BE DUE AND PAYABLE AND HOLDER MAY,
WITHOUT NOTICE TO MAKER, WAIVE SUCH DEFAULT AND DEAL WITH SUCH
SUCCESSOR OR SUCCESSORS IN INTEREST IN THE PROPERTY IN THE SAME
MANNER AS WITH MAKER, WITHOUT IN ANY WAY RELEASING, DISCHARGING
OR OTHERWISE AFFECTING THE LIABILITY OF MAKER, THE ENDORSER,
GUARANTORS, SURETIES, ACCOMMODATION PARTIES HEREOF AND ALL
OTHER PERSONS LIABLE OR TO BECOME LIABLE FOR ALL OR ANY PART OF THIS INDEBTEDNESS. NO SALE OF THE PROPERTY, NO FORBEARANCE ON THE
PART OF HOLDER, NO EXTENSION OF THE TIME FOR THE PAYMENT OF THE
INDEBTEDNESS OR ANY CHANGE IN THE TERMS OF THIS NOTE CONSENTED TO
BY HOLDER SHALL IN ANY WAY WHATSOEVER OPERATE TO RELEASE,
DISCHARGE, MODIFY, CHANGE OR AFFECT THE ORIGINAL LIABILITY OF
MAKER AND ALL SUCH PERSONS LIABLE OR TO BECOME LIABLE FOR ALL OR ANY PART OF THIS INDEBTEDNESS, EITHER IN WHOLE OR IN PART. ANY DEED
CONVEYING THE PROPERTY, OR ANY PART THEREOF, SHALL PROVIDE THAT THE GRANTEE THEREUNDER ASSUMES ALL OF THE GRANTOR’S
OBLIGATIONS UNDER ANY LOAN DOCUMENT.
19. MAKER SHALL FAITHFULLY PERFORM EACH AND EVERY
COVENANT TO BE PERFORMED BY MAKER UNDER ANY LIEN OR
ENCUMBRANCE, LEASE, SUBLEASE, INSTRUMENT, DECLARATION, COVENANT,
CONDITION, RESTRICTION, LICENSE, ORDER OR OTHER AGREEMENT, WHICH
AFFECTS OR MAY AFFECT THE PROPERTY, IN LAW OR IN EQUITY, INCLUDING,
WITHOUT LIMITATION, EACH AND EVERY COVENANT TO BE PERFORMED BY
MAKER UNDER ANY MORTGAGES AND ANY AND ALL OTHER INSTRUMENTS
PERTAINING TO SUCH MORTGAGES, INCLUDING THE RESPECTIVE
OBLIGATIONS SECURED THEREBY. IN THE EVENT OF DEFAULT BY MAKER (I) IN THE PERFORMANCE OF MAKER’S OBLIGATIONS UNDER THIS NOTE, THE
DEED OF TRUST, OR THE LOAN AGREEMENT, (II) IN THE PERFORMANCE OF
ANY OTHER OBLIGATION OF MAKER TO THE HOLDER, OR (III) FAILURE TO
PERFORM ANY OF THE CONDITIONS OR COVENANTS OF THE NOTE, DEED OF
TRUST, THE LOAN AGREEMENT OR ANY SECURITY AGREEMENT GIVEN TO
SECURE SAID NOTE OR OTHER OBLIGATION OF MAKER, SUCH EVENT OF
DEFAULT MAY BE DEEMED, AT THE OPTION OF THE HOLDER, A DEFAULT IN
ALL INDEBTEDNESS DUE HOLDER AND THE WHOLE SUM OF THE PRINCIPAL
AND INTEREST OF THE DEBT EVIDENCED BY THIS NOTE AND ALL OF THE
OTHER INDEBTEDNESS DUE TO HOLDER BY MAKER SHALL, AT THE OPTION
OF THE HOLDER, BECOME DUE AND PAYABLE IMMEDIATELY, AND THE DEED
OF TRUST AND ALL OTHER SECURITY INTEREST FOR THE BENEFIT OF OR HELD BY THE HOLDER MAY BE FORECLOSED AT ONCE.
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NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA,
a California nonprofit public benefit corporation
By: _________________________________
Kevin Lim, Chief Financial Officer
THE SOUTHERN CALIFORNIA
HOUSING DEVELOPMENT
CORPORATION
By:
Jeffrey S. Burum
Executive Director
By:
Its:
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JAMIER\01200.20005\10320958.7 JAMIER\01200.20005\10320958.7 JAMIER\01200.20005\10320958.7 Formatted: Font: 9 pt
April 4, 2002
James Bigler, Director of Accounting
Southern California Housing Development Corporation
8265 Aspen Street, Suite 100
Rancho Cucamonga, CA 91730
SUBJECT: CORONA DEL REY PROMISSORY NOTE
Dear Mr. Bigler:
This letter is a follow-up to your conversations with Scott Whyte, of my staff, concerning Southern California Housing Development Corporation’s obligation to repay its Promissory Note, dated August 25, 1998, for the aggregate unpaid principal amount of all advances made pursuant to the “Additional Loan,” including accrued interest. We have engaged our attorney to review the documents governing this matter, as well as research any working files to find evidence as to whether there is clear intent for this loan not to be repaid to the Redevelopment Agency of the City of Corona. Based on their conclusions, as well as conversations with George Guayante, our position remains that the monetary obligation, as evidenced by the Promissory Note and Affordable Housing Agreement, is due and payable.
We would like to arrange a meeting to further discuss this matter. Please contact Scott Whyte, CDBG/Housing Coordinator, at (909) 736-2466 to schedule a meeting so that we can reach closure on this subject.
Sincerely,
JIM BRADLEY, Director
Redevelopment and Economic Development Department
cc: Rebecca Clark, Executive Director