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JOINT MEETING: GLENDALE CITY COUNCIL AND GLENDALE HOUSING AUTHORITY
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AUGUST 12, 2025
ROLL CALL
-
2:00 PM
-
Report of the City Clerk of the City Council and Housing Authority, re: Posting of Agenda.
The Agenda for the Tuesday, August 12, 2025 joint public meeting of the City Council and Housing Authority was posted on August 8, 2025, on the Bulletin Board outside City Hall.
1 TYPED 8/8/2025 4:15:33 PM
08 12 25
CC HA
A
JOINT PUBLIC MEETING
of the City Council and Housing Authority is hereby called to meet at
2:00 PM
on
Tuesday, August 12, 2025
, in the Council Chamber, 613 E. Broadway,
2nd Floor, Glendale, CA 91206 to consider the following item(s) of business, to wit;
1. Community Development, re:
Approval to Assign New Borrower / Lessee of Metro
Loma Apartments, an Affordable Housing Project Located at 328 Mira Loma Avenue, and Appropriate Additional Affordable Housing Funds
1. Housing Authority Motion Authorizing Executive Director to Execute Amendments to Ground Lease and Affordable Housing Agreement and Related Documents;
2. Housing Authority Motion Authorizing Executive Director to Execute New Loan Documents;
3. City Council Resolution of Appropriation in the Amount of $465,600; and
4. City Council Motion Authorizing Release of Funds
ADJOURNMENT
2 TYPED 8/8/2025 4:15:33 PM
08 12 25
CC HA
1 25-87993
CITY OF GLENDALE, CALIFORNIA
REPORT TO THE JOINT MEETING: GLENDALE CITY COUNCIL AND
GLENDALE HOUSING AUTHORITY
AGENDA ITEM
Report: Approval to Assign New Borrower / Lessee of Metro Loma Apartments, an Affordable Housing Project Located at 328 Mira Loma Avenue, and Appropriate Additional Affordable Housing Funds.
1. Housing Authority Motion Authorizing Executive Director to Execute Amendments to Ground Lease and Affordable Housing Agreement and Related Documents;
2. Housing Authority Motion Authorizing Executive Director to Execute New Loan Documents;
3. City Council Resolution of Appropriation in the Amount of $465,600; and
4. City Council Motion Authorizing Release of Funds.
COUNCIL ACTION
Item Type: Action Item
Approved for August 12, 2025 calendar
EXECUTIVE SUMMARY
Metro Loma, LP ceased making payments to the first lender, California Community Reinvestment Corporation (CCRC), in November, 2024. This action led to a default on the loan and a foreclosure process was initiated. To avoid foreclosure, on May 20 th, the Housing Authority authorized staff to purchase the note from CCRC.
Housing staff has been working with staff from The Los Angeles County Development Authority (LACDA) to address Metro Loma’s financial feasibility by funding reserves and immediate repairs, restructuring loans and terms to the Affordable Housing Agreement and related documents, and in the selection of a new borrower / lessee and property management company.
In order to complete the transfer from Metro Loma, LP to Linc Housing’s newly formed Linc 328 Mira Loma LLC, the responsibility of borrower / lessee, the Housing Authority’s Affordable Housing Agreement (AHA) and related documents, and the ground lease will require amendments. Additionally, two new loans will also need to be executed to guarantee the repayment of the Housing Authority’s additional funding. 3 of 169
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Previously, the Housing Authority appropriated funds for immediate repairs to Metro Loma called out in the property conditions report. The additional dollars address repairs called out for over the next four years. Housing staff believes the developer fee of $300,000 is appropriate for the size and scope of the project and risk in the assumption of responsibility of a troubled asset.
If approved, Housing staff anticipates this will be the final action needed from the City Council and Housing Authority to transfer responsibilities of Metro Loma, LP to Linc Housing’s newly created entity, Linc 328 Mira Loma LLC and restore Metro Loma to a well maintained and financially feasible affordable housing project.
RECOMMENDATION
That the Housing Authority authorize the Executive Director to execute amendments to the AHA, Ground Lease, and related documents and execute new loans for the transfer of Metro Loma to Linc 328 Mira Loma LLC. Also, that the City Council adopt a Resolution of Appropriation in the amount of $465,600 from the City’s Permanent Local Housing Allocation (PLHA) fund.
ANALYSIS
Metro Loma is an affordable rental housing, tax credit project for lower income families located at 328 Mira Loma Avenue. The development consists of 44 units: 1 one-bedroom, 29 two-bedroom, and 13 three-bedroom units, along with one manager’s unit (the Project). Rents are targeted at households earning 30% to 60% of Area Median Income (AMI).
The Project has been in service since 2009. The Glendale Housing Authority (GHA) owns the land and leases the Property to Metro Loma, LP. Previously the GHA held two residual receipts loans totaling $5,037,355, currently in second lien position. LACDA holds a residual receipts loan in third position totaling $1,472,000. The first mortgage was held by CCRC, with a current loan balance of approximately $1.5 million. The Housing Authority now owns that note.
Housing and LACDA staff negotiated and executed an Option to Purchase Agreement with Metro Loma, LP to purchase their rights as borrower / lessee of Metro Loma for $100.
This agreement provides a commitment from Metro Loma, LP along with the current property management company, to continue to manage Metro Loma and remain in place as borrower / lessee and manager through August 15, 2025, to allow Housing and LACDA staff time to identify a new borrower / lessee.
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On May 20, 2025, the City Council and the Housing Authority authorized staff to acquire the note held by CCRC in order to avoid foreclosure of Metro Loma. The note was purchased on June 16, 2025. Concurrently, Housing and LACDA staff have been working to identify and secure a new developer / management company to assume the role and responsibilities of borrower / lessee and manager. Given the urgency, there was no time to do an open solicitation of developers. Instead, staff reached out to developers with recent experience in Glendale with a proven track record. After meeting with several developers, Linc Housing emerged as the best fit to assume the role of borrower / lessee and National CORE as the property management company.
Housing and LACDA staff recommend Linc Housing (Co-developer of Vista Grande Court and 515 Pioneer Drive) be selected as the new borrower / lessee and National CORE (also Co-developer of Vista Grande Court and 515 Pioneer Drive) the new management company.
The additional funding of $600,000 addresses additional repairs of $300,000 and a developer fee of $300,000. Previously, Glendale appropriated funds for immediate repairs called out for in a property condition report. However, Linc Housing rightfully pointed out that the same report also called for an additional $299,780 in repairs needed in years 1-
4. Given staff projections of negative cash flow in the first four years, staff believes it is necessary to appropriate the funds to cover these costs now.
The $300,000 developer fee (called out as Transaction Fee) will go to Linc Housing in exchange for assuming the risk and responsibility of borrower / lessee of a troubled asset.
Housing and LACDA staff agree that this is an appropriate size fee.
GHA’s proposed contribution is the prorata share of the current loans held by Glendale and LACDA. Glendale’s current loans equal $5,037,355 versus LACDA’s loan of $1,472,000. Based on this, Glendale’s prorata share of the additional $600,000 is 77.6%, or $465,600 and LACDA’s prorate share is 22.4%, or $134,400.
The chart below details both GHA and LACDA’s total financial contribution to Metro Loma, including the additional $600,000 currently requested from both LACDA and Glendale.
Total Glendale LACDA
100.00% 77.60% 22.40%
CCRC Loan Purchase $1,527,014 $1,527,014
PNA Reserve $540,000 $232,800 $307,200
Transition Reserve $100,000 $100,000
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Replacement Reserve $110,000 $85,360.00 $24,640.00
Operating Reserve - General $27,500 $21,340.00 $6,160.00 Operating Reserve - Expected
Deficit $160,000 $45,949.00 $114,051.00
Transaction Fee $350,000 $271,600.00 $78,400.00
Closing Costs & Contingency $40,500 $31,428.00 $9,072.00 Total $2,855,014 $2,215,491 $639,523
Glendale’s prorata share of funds ($465,600) would come from the City’s Permanent Local Housing Allocation fund. These funds can only be used for affordable housing projects and programs for lower income households.
In order to effectuate the transfer from Metro Loma LP to Linc 328 Mira Loma, LLC, and to restore Metro Loma as a financially feasible and well-maintained affordable housing project, staff is proposing the following changes to the Ground Lease, Affordable Housing Agreement (AHA) and related documents, as well as two new loans and a restructure of the loan previously owned by CCRC. Specific changes include:
The original ground lease, dated January, 2007, has a term of 99 years. Staff recommends this term remain in place with the original execution date, leaving approximately 80.5 years before expiration.
The original affordability covenant term was 55 years, which would have resulted in a market rate project of approximately 40 years. Staff recommends the affordability covenants remain in place during the entire term of the ground lease, similar to recent affordable housing projects in Glendale. The original affordability restrictions were based on both Low and Moderate Income Housing Asset Funds (LMIHAF) and 9% Tax Credit rents set by the Tax Credit Allocation Committee (TCAC). LMIHAF or State HCD rents, have historically been more restrictive than TCAC rents which are tied to HUD rent restrictions. AB 846 allows agencies to restrict rents to TCAC rents when a project is considered a troubled asset for 3 or more years and is being provided additional funds after January 2025. Staff recommends restricting rents to TCAC rents to allow for an increase in rents to those high and over-income residents at Metro Loma. CCRC’s loan, which the Housing Authority now owns, is a standard, amortized 6 of 169
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loan with monthly principal and interest payments. Those payments represented nearly 70% of the negative cash flow in previous years. Staff proposes to convert this loan into a residual receipts loan similar to the way Glendale structures other loans to affordable housing projects in its portfolio in order to assist in the financial feasibility of Metro Loma.
Two additional loans from Glendale Housing Authority must also be executed in order to secure the additional funds Glendale has committed as well as the additional $465,600 staff is recommending. One loan, an Affordable Housing Trust Fund loan will be in the amount of $1,749,891. The second loan will be a Permanent Local Housing Allocation fund loan in the amount of $465,600. Staff proposes both loans be structured as residual receipts loans with simple interest of 3%.
One additional consideration staff requests from the Glendale Housing Authority is approval to give preference to over housed households (those that are below Glendale’s occupancy standards) and households that are rent burdened (paying more than 30% of income towards rent) to lease more appropriate size and income targeted units at Pioneer Village, whose tenant selection plan is currently being drafted.
With the approval of the transfer from Metro Loma LP to Linc 328 Mira Loma LLC the rights and responsibilities of borrower / lessee and transfer of current management responsibilities to National CORE, as well as the additional funding from Glendale of $465,600, staff believes this is the final action needed by the City Council and Housing Authority to ensure Metro Loma is restored to a financially feasible and well-maintained affordable housing project. Staff believes the final transfer can occur by or before September 15, 2025.
STAKEHOLDERS/OUTREACH
Not applicable at this time
FISCAL IMPACT
Approval of this action will cost $465,600 which was not included in the FY 2024-25 budget. Staff is proposing the use of the Permanent Local Housing Allocation fund balance as outlined below. This funding is designated for affordable housing purposes, including the preservation of affordable housing. As this is a local source of funds, there is no mandate for additional restrictions or affordability covenants. 7 of 169
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Requesting Appropriation
Amount From (Account
String)
To (Account String) Funding Source
$465,600 24214-2280-CDD-
0000
43112-2280-CDD-
0020-P0000
Permanent Local
Housing
Allocation Fund
ENVIRONMENTAL REVIEW (CEQA/NEPA)
The action of appropriating funding to attempt to preserve affordability of the already- existing Project is exempt from further environmental review under the California Environmental Quality Act ("CEQA") pursuant to Title 14 of the California Code of Regulations ("CEQA Guidelines") for all of the following reasons: 1) the activity will not result in a direct or reasonably foreseeable indirect physical change to the environment under CEQA Guidelines Section 15060(c)(2) because the Project is already built, the funding will go to curing monetary and routine maintenance/repair loan defaults, and any maintenance or repair work will undergo independent CEQA review at the time if/when such repairs are proposed; 2) the activity is not a project under CEQA Guidelines Section 15060(c)(3) and 15378(b)(4) because it constitutes the creation of government funding mechanisms or other governmental fiscal activity that does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment; and 3) the activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment, and here, it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment per CEQA Guidelines Section 15061(b)(3).
CAMPAIGN DISCLOSURE
Campaign Finance Disclosure Statement is attached as Exhibit 1.
ALTERNATIVES TO STAFF RECOMMENDATION
1. Reject the appropriation of funding and transfer of responsibility of borrower / lessee and direct staff to seek an alternative borrower / lessee and management team with different terms.
2. The City Council and Housing Authority may consider any other alternative not proposed by staff.
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ADMINISTRATIVE ACTION
Submitted by:
Bradley Calvert, Director of Community Development
Prepared by:
Michael Fortney, Deputy Director of Community Development/ Housing Peter Zovak, Assistant Director of Community Development Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
Exhibit 1: Campaign Finance Disclosure
Exhibit 2: Draft Agreements & Loan Documents
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MOTION
Moved by Housing Authority Member ____________________________, seconded by Housing Authority Member ___________________________ that the Executive Director, or his designee, is hereby authorized to execute amendments to the existing ground lease, the existing affordable housing agreement, and other such related existing documents/agreements pertaining to Metro Loma Apartments, an affordable rental housing project located at 328 Mira Loma Avenue (“Agreements”), in order to make changes to such Agreements as outlined in the Joint Report to Council and Housing Authority dated August 12, 2025 from the Director of Community Development and to effectuate the transfer to and/or assignment of a new borrower/lessee from Metro Loma, LP to Linc Housing’s newly created entity, Linc 328 Mira Loma LLC. Further, the Executive Director, or his designee, is hereby authorized to execute any and all documents related to said Agreements, including all exhibits and/or attachments to said Agreements that are necessary to effectuate the intent of the Agreements, to effectuate the transfer to and/or assignment of a new borrower/lessee of Metro Loma Apartments, Linc 328 Mira Loma LLC. Said Agreements shall be subject to approval as to form by the City Attorney.
Vote as follows:
Ayes:
Noes:
Absent:
Abstain:
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MOTION
Moved by Housing Authority Member ____________________________, seconded by Housing Authority Member ___________________________ that the Executive Director, or his designee, is hereby authorized to enter into those certain loan agreements (“Loan Agreements”) identified and outlined in the Joint Report to Council and Housing Authority dated August 12, 2025 from the Director of Community Development (“Report”) in order to effectuate the loan to the new borrower/lessee (Linc Housing’s newly created entity, Linc 328 Mira Loma LLC) of Metro Loma Apartments, an affordable rental housing project located at 328 Mira Loma Avenue. Further, the Executive Director, or his designee, is hereby authorized to execute any and all documents related to said Loan Agreements, including all exhibits and/or attachments to said Loan Agreements that are necessary to effectuate the intent of the Loan Agreements, to loan the funds identified in the Report to the new borrower/lessee of Metro Loma Apartments, Linc 328 Mira Loma LLC. Said Loan Agreements and related documents shall be subject to approval as to form by the City Attorney.
Vote as follows:
Ayes:
Noes:
Absent:
Abstain:
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RESOLUTIONNO.
RESOLUTIONOFTHECOUNCILOFTHECITYOFGLENDALE
MAKINGANAPPROPRIATION
BEITRESOLVEDBYTHECOUNCILOFTHECITYOFGLENDALE:
SECTION1:Thatthesumof$465,600isherebyappropriatedand/ortransferredfromthefollowing accountstothefollowingaccounts:
ACCOUNTSDESCRIPTIONFROMTO
24214-2280-CDD-0000Lowandmoderatehousing,PermanentLocal$465,600 HousingAllocationFund,Community
DevelopmentDepartment
43112-2280-CDD-0020-P0000DirectAssistance,PermanentLocalHousing$465,600 AllocationFund,CommunityDevelopment
Department,Projects
ToappropriatefundingforanagreementwithanewBorrower/Lesseefor328MiraLomaAvenue.
SECTION2:TheDirectorofFinanceisauthorizedtomakesuchotherrevisions,individualappropriation line-items,changesinsummaries,fundtotals,grandtotals,andotherportionsofthebudgetdocumentas necessarytoreflectandimplementthechangesspecifiedinthisresolution.
SECTION3:TheCityClerkshallcertifytotheadoptionofthisResolution.
Adoptedthisdayof
________________
2025.
Mayor
ATTEST:
CITYOFGLENDALE
DATE08/06/2025
___________________________
APPROVEDASTOFINANCIAL
CityClerkPROVISIONFOR$465,600
DirectorofFinance
STATEOFCALIFORNIA)
COUNTYOFLOSANGELES)SS
CITYOFGLENDALE)
I,SuzieAbajian,CityClerkoftheCityofGlendale,doherebycertifythattheforegoingResolution No.wasadoptedbytheCounciloftheCityofGlendale,California,ataregularmeetingheldon the__________dayof
________________,
2025,andthatthesamewasadoptedbythefollowingvote:
Ayes:
Noes:
Absent:
Abstain:
CityClerk
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MOTION
Moved by Council Member ____________________________, seconded by Council Member ___________________________, that following the appropriation of $465,600 from the City’s Permanent Local Housing Allocation (PLHA) fund in support of the transfer/assignment of Metro Loma Apartments, an affordable housing project located at 328 Mira Loma Avenue, to a new borrower/lessee (Linc Housing’s newly created entity, Linc 328 Mira Loma LLC), as outlined in the Joint Report to Council and Housing Authority dated August 12, 2025 from the Director of Community Development, said funds may be released upon terms and conditions acceptable to and approved by the City Manager and City Attorney.
Vote as follows:
Ayes:
Noes:
Absent:
Abstain:
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8.5.25 Assignment and Assumption Agreement and Consent
(328 Mira Loma Avenue)
ASSIGNMENT AND ASSUMPTION AGREEMENT AND CONSENT
(328 Mira Loma Avenue)
This Assignment and Assumption Agreement and Consent (“Agreement”), dated as of __________________________, 2025, for reference purposes only, is entered into by and among the Housing Authority of the City of Glendale, a public body corporate and politic (“Authority”), Metro Loma, a California limited partnership (“Metro Loma”), Linc 328 Mira Loma LLC , a California limited liability company (“Linc”), with reference to the following facts:
Recitals
A. Authority is the fee title owner of certain real property located at 328 Mira Loma Avenue, City of Glendale, California (“Property”). Metro Loma and Authority have entered into that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement”). The Affordable Housing Agreement is incorporated herein by this reference. Affordable Housing Agreement, as used herein shall mean, refer to, and include the Affor dable Housing Agreement, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference). Any capitalized term not otherwise defined herein shall have the mean ing ascribed to it in the Affordable Housing Agreement.
B. In connection with and in furtherance of the Affordable Housing Agreement, Authority (as “Landlord” therein) and Metro Loma (as “Lessee” therein) entered into that certain unrecorded Lease Agreement dated on or about February 14, 2007, as may be amended or modified from time to time (the “Lease”), wherein Authority ground leased the Property to Metro Loma for the operation and management of a 44 unit affordable housing project (the “Project”). A Memorandum of Lease was recorded in the Official Records of Los Angeles County (“ Official Records ”) on February 15, 2007, as Instrument No. 20070330423, as may be amended or modified from time to time (“ Memorandum of Lease”).
C. In furtherance of the Affordable Housing Agreement, Authority made two loans to Metro Loma as follows (collectively, the “Original Authority Loans”): (i) a loan in the original principal amount of $3,237,355, which is evidenced by a promissory note dated on or about February 14, 2007, as may be amended or modified from time to time (the “Authority LMIHF Note”), and secured by a leasehold deed of trust on the Property dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as may be amended or modified from time to time (the “Authority LMIHF Deed of Trust”), as both were modified by that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as may be amended or 15 of 169
8.5.25 Assignment and Assumption Agreement and Consent
(328 Mira Loma Avenue)
modified from time to time (“Original Authority Loans Modification Agreement”); and (ii) a loan in the original principal amount of $1,800,000 which is evidenced by a promissory note dated March 19, 2008, as may be amended or modified from time to time (the “Authority HOME Note”) and secured by a leasehold deed of trust on the Property dated March 19, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496198, as may be amended or modified from time to time (the “Authority HOME Deed of Trust”).
D. In furtherance of the Affordable Housing Agreement , Authority and Metro Loma also entered into (i) that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as may be amended or modified from time to time ( “HOME Agreement”), and (ii) that certain Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, and as may be further amended or modified from time to time (“Covenant Agreement”).
E. California Community Reinvestment Corporation, a California nonprofit public benefit corporation (“ CCRC”) provided a loan to Metro Loma for financing for the Project (“Former CCRC Loan”). In connection with the Former CCRC Loan, Metro Loma and CCRC entered into a Loan Agreement dated as of June 9, 2009, as may be amended or modified from time to time (the “Former CCRC Loan Agreement”) . Pursuant to the terms and implementation of the Former CCRC Loan Agreement, Metro Loma executed a number of documents, including but not limited to, the following: (i) a Promissory Note dated as of June 30, 2009 in the original principal amount of $1,890,000, as may be amended or modified from time to time (“Former CCRC Note ”); and (ii) a Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as may be amended or modified from time to time (“Former CCRC Deed of Trust ”). The Former CCRC Loan Agreement, Former CCRC Note, Former CCRC Deed of Trust, and all other instruments and agreements executed in connection with any of the foregoing in or under which CCRC had any right, title, or interest, as all may be amended or modified from time to time may be referred to herein as “Former CCRC Loan Encumbrances.”
F. Authority acquired the Former CCRC Loan Encumbrances from CCRC pursuant to an unrecorded Mortgage Loan Sale Agreement dated as of May 27, 2025 between Authority and CCRC and in connection therewith was assigned all of CCRC’s rights and interests in the Former CCRC Loan Encumbrances . An Assignment of Deed of Trust executed by Authority (as Assignee therein) and CCRC (as Assignor therein) dated as of June 5, 2025, was recorded in the Official Records on June 27, 2025 as Instrument No. 20250431558 (“Assignment of Former CCRC Deed of Trust”). Authority is the successor beneficiary of all of CCRC’s rights, title and interest in and to the Former CCRC Loan Encumbrances. 16 of 169
8.5.25 Assignment and Assumption Agreement and Consent
(328 Mira Loma Avenue)
G. Metro Loma desires to exit the Project and in connection therewith to assign all of its right, title and interest in the Project, including without limitation the Lease, Original Authority Loans, and the Former CCRC Loan and related loan documents (collectively the “Assigned Obligations”) to Linc, and Linc desires to assume the Assigned Obligations, subject to the terms and conditions of this Agreement.
Exhibits: Exhibit 1 – List of Assigned Obligations
Exhibit 2 – Form of Second Amendment to AHA
Exhibit 3 – Form of Assignment and Assumption and Amendment to Lease Agreement
Exhibit 4 – Form of Assignment and Assumption and Second Modification of Loan Documents
Exhibit 5 – Form of Affordable Housing Trust Fund Note Exhibit 6 – Form of PLHA Note
Exhibit 7 – Form of Affordable Housing Trust Fund Deed of Trust Exhibit 8 – Form of PLHA Deed of Trust
Exhibit 9 – Form of Second Amendment to Agreement Containing Covenants
Exhibit 10 – Form of Amendment to Agreement Containing HOME Program Requirements
NOW, THEREFORE, Authority, Metro Loma and Linc (who may be individually referenced herein as “Party ” or collectively referenced herein as “Parties ”) hereby agree to the following terms and conditions, as follows:
1. Recitals. The Recitals, above, are hereby incorporated by reference into the Agreement and adopted as true by the Parties.
2. Assignment. As of the Effective Date (as defined in Section 21 below), Metro Loma hereby grants, conveys, transfers and assigns to Linc, subject to the provisions of this Agreement, all of Metro Loma’s right, title, interest, benefits, burdens, duties and obligations in, to and under all of the documents listed on Exhibit 1 (which Exhibit is attached hereto and incorporated herein by reference) (collectively referred to herein as the “Assigned Obligations”).
3. Assumption.
(a) As of the Effective Date, Linc hereby assumes and accepts, subject to the provisions of this Agreement, all of Metro Loma ’s right, title, interest, benefits, burdens, duties and obligations in, to and under the Assigned Obligations from and after the Effective Date.
Additionally, Linc agrees and confirms that it accepts title to the leasehold interest in the Property subject to the provisions of this Agreement , the Affordable Housing Agreement, the Lease, the Former CCRC Loan Agreement, and each of the Assigned Obligations, and that it shall be bound by all of the terms, conditions and covenants contained therein and herein. 17 of 169
8.5.25 Assignment and Assumption Agreement and Consent
(328 Mira Loma Avenue)
(b) As of the Effective Date, Linc shall be considered the “Owner ” as defined in the Affordable Housing Agreement, the “Borrower” as defined in the Former CCRC Loan Agreement, and the “Lessee” as defined in the Lease.
4. Authority Consent.
(a) In consideration of the foregoing assignment by Metro Loma and assumption by Linc, and upon the terms and conditions contained in this Agreement, upon the Effective Date, Authority consents to Metro Loma ’s transfer of ownership of the Project including the Original Authority Loans and the Former CCRC Loan to Linc and transfer of Metro Loma’ s leasehold interest in the Property to Linc and to the assignment by Metro Loma and assumption by Linc of the Assigned Obligations.
(b) Metro Loma and Linc each acknowledge and agree that Authority’s consent set forth in subsection (a) above is made solely for the benefit of Metro Loma as transferor and Linc as transferee and shall not be deemed, nor shall the same constitute, a waiver by Authority of any interests or rights under any of the Assigned Obligations in the event of a subsequent transfer by Linc.
5. Management Plan, Tenant Selection Plan, and Maintenance Plan . Linc acknowledges receipt of the existing Management Plan, Tenant Selection Plan, and Maintenance Plan which have been approved by the Authority with respect to the operation and management of the Project. As of the Effective Date, Linc shall assume responsibility for compl iance with the terms and conditions of the existing Management Plan , Tenant Selection Plan, and Maintenance Plan with respect to Linc’s operation and management of the Project. There shall be no change to the existing Management Plan, Tenant Selection Plan, and Maintenance Plan without the prior written approval of the Authority.
6. Second Amendment to AHA - Exhibit 2. As a pre-condition to the Authority’s consent and obligations under this Agreement, Linc shall execute a Second Amendment to Affordable Housing Agreement, substantially in the form attached hereto as Exhibit 2 (“Second Amendment to AHA”) (which Exhibit is attached hereto and incorporated herein by reference).
7. Assignment and Assumption and Amendment to Lease Agreement (Recordable) - Exhibit
3. As a pre-condition to the Authority’s consent and obligations under this Agreement, Linc shall execute an Assignment and Assumption and Amendment to Lease Agreement, substantially in the form attached hereto as Exhibit 3 (“Assignment and Assumption and Amendment to Lease Agreement”) (which Exhibit is attached hereto and incorporated herein by reference). The Assignment and Assumption and Amendment to Lease Agreement shall be recorded against either the fee title or the leasehold title to the Property (as determined by Authority).
8. Assignment and Assumption and Second Modification of Loan Documents (Recordable) - Exhibit 4. As a pre-condition to the Authority’s consent and obligations under this Agreement, 18 of 169
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Linc shall execute an Assignment and Assumption and Second Modification of Loan Documents, substantially in the form attached hereto as Exhibit 4 (“Assignment and Assumption and Second Modification of Loan Documents”) (which Exhibit is attached hereto and incorporated herein by reference). The Assignment and Assumption and Second Modification of Loan Documents shall be recorded against the leasehold title to the Property.
9. Affordable Housing Trust Fund Note (New) - Exhibit 5. As a pre -condition to the Authority’s consent and obligations under this Agreement, Linc shall execute an Affordable Housing Trust Fund Note , substantially in the form attached hereto as Exhibit 5 (“Affordable Housing Trust Fund Note ”) (which Exhibit is attached hereto and incorporated herein by reference).
10. PLHA Note (New) - Exhibit 6. As a pre -condition to the Authority’s consent and obligations under this Agreement, Linc shall execute a PLHA Note, substantially in the form attached hereto as Exhibit 6 (“PLHA Note”) (which Exhibit is attached hereto and incorporated herein by reference).
11. Affordable Housing Trust Fund Deed of Trust (New; Recordable) - Exhibit 7. As a pre- condition to the Authority’s consent and obligations under this Agreement, Linc shall execute an Affordable Housing Trust Fund Deed of Trust, substantially in the form attached hereto as Exhibit 7 (“Affordable Housing Trust Fund Deed of Trust ”) (which Exhibit is attached hereto and incorporated herein by reference). The Affordable Housing Trust Fund Deed of Trust shall be recorded against leasehold title to the Property.
12. PLHA Deed of Trust (New; Recordable) - Exhibit 8. As a pre-condition to the Authority’s consent and obligations under this Agreement, Linc shall execute a PLHA Deed of Trust , substantially in the form attached hereto as Exhibit 8 (“PLHA Deed of Trust”) (which Exhibit is attached hereto and incorporated herein by reference). The PLHA Deed of Trust shall be recorded against leasehold title to the Property.
13. Second Amendment to Agreement Containing Covenants (Recordable) - Exhibit 9. As a pre-condition to the Authority’s consent and obligations under this Agreement, Linc shall execute a Second Amendment to Agreement Containing Covenants, substantially in the form attached hereto as Exhibit 9 (“Second Amendment to Agreement Containing Covenants ”) (which Exhibit is attached hereto and incorporated herein by reference) . The Second Amendment to Agreement Containing Covenants shall be recorded against the leasehold title to the Property.
14. Amendment to Agreement Containing HOME Program Requirements - Exhibit 10. As a pre-condition to the Authority’s consent and obligations under this Agreement, Linc shall execute an Amendment to Agreement Containing HOME Program Requirements, substantially in the form attached hereto as Exhibit 10 (“Amendment to Agreement Containing HOME Program Requirements”) (which Exhibit is attached hereto and incorporated herein by reference).
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15. Amendment to Loan Agreement . As a pre -condition to the Authority’s consent and obligations under this Agreement, Linc and Authority shall execute an Amendment to Loan Agreement, in form and content acceptable to the Authority , to reflect the modification to the Former CCRC Note and Former CCRC Deed of Trust as set forth in the Assignment and Assumption and Modification of Loan Documents.
16. Assignment and Assumption and Modification of Loan Documents (Recordable). As a pre- condition to the Authority’s consent and obligations under this Agreement, Linc and Authority shall execute an Assignment and Assumption and Modification of Loan Documents , in form and content acceptable to the Authority (“ Assignment and Assumption and Modification of Loan Documents”). The Assignment and Assumption and Modification of Loan Documents shall be recorded against the leasehold title to the Property , and shall modify the Former CCRC Note as follows: change the interest rate to 3% simple annual interest rate from date of the Assignment and Assumption and Modification of Loan Documents , change the term to 55 years from the date of the Assignment and Assumption and Modification of Loan Documents, and change the repayment to residual receipts consistent with the residual receipts repayment terms of the other Authority loans.
17. Authority Conditions Precedent . The Authority’s consent and obligations under this Agreement shall be conditioned on satisfaction of all of the following conditions precedent, unless otherwise agreed to in writing by Authority in its sole and absolute discretion (collectively, the “Authority Closing Conditions”):
(a) This Agreement has been duly executed by the Parties and deposited into escrow or delivered to the Authority;
(b) The Second Amendment to AHA (Exhibit 2) has been duly executed by Linc and deposited into escrow or delivered to the Authority;
(c) The Assignment and Assumption and Amendment Lease Agreement (Exhibit 3) has been duly executed by Linc in recordable form for recordation in the Official Records;
(d) The Assignment and Assumption and Second Modification of Loan Documents (Exhibit 4) has been duly executed by Linc in recordable form for recordation in the Official Records;
(e) As may be required to effectuate the purposes of this Agreement as determined by Authority, a further amendment or modification to the Authority LMIHF Deed of Trust has been duly executed by Linc in recordable form for recordation in the Official Records;
(f) As may be required to effectuate the purposes of this Agreement as determined by Authority, a further amendment or modification to the Authority HOME Deed of 20 of 169
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Trust has been duly executed by Linc in recordable form for recordation in the Official Records;
(g) An Amendment to that certain Subordination Agreement dated as of June 30, 2009, recorded in the Official Records on August 24, 2009 as Instrument No. 20091296584, which provides seniority of all Authority affordability covenants, including the Agreement Containing Covenants (as amended) and Agreement Containing HOME Program Requirements (as amended), to all Authority loans and other liens and encumbrances, has been duly executed by Linc in recordable form for recordation in the Official Records;
(h) The new Affordable Housing Trust Fund Note (Exhibit 5) has been duly executed by Linc and deposited into escrow or delivered to the Authority;
(i) The new PLHA Note (Exhibit 6) has been duly executed by Linc and deposited into escrow or delivered to the Authority;
(j) The new Affordable Housing Trust Fund Deed of Trust (Exhibit 7) has been duly executed by Linc in recordable form for recordation in the Official Records;
(k) The new PLHA Deed of Trust (Exhibit 8) has been duly executed by Linc in recordable form for recordation in the Official Records;
(l) The Second Amendment to Agreement Containing Covenants (Exhibit 9) has been duly executed by Linc in recordable form for recordation in the Official Records;
(m) The Amendment to Agreement Containing HOME Program Requirements (Exhibit 10) has been duly executed by Linc and deposited into escrow or delivered to the Authority;
(n) The Amendment to Loan Agreement has been duly executed by Linc and deposited into escrow or delivered to the Authority;
(o) The Assignment and Assumption and Modification of Loan Documents has been duly executed by Linc in recordable form for recordation in the Official Records;
(p) As may be required to effectuate the purposes of this Agreement as determined by Authority, a further amendment or modification to the Former CCRC Deed of Trust has been duly executed by Linc in recordable form for recordation in the Official Records;
(q) A new Subordination Agreement by and among the Los Angeles County Development Authority (“LACDA”), Authority, and Linc , which provides seniority of all Authority loans to all LACDA loans and seniority of all Authority 21 of 169
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affordability covenants, including the Agreement Containing Covenants (as amended) and Agreement Containing HOME Program Requirements (as amended), to all Authority loans and LACDA loans and other liens and encumbrances, has been duly executed by LACDA and Linc in recordable form for recordation in the Official Records;
(r) As requested by Authority, a new Assignment of Rents and Leases for each the Affordable Housing Trust Fund Loan and the PLHA Loan has been duly executed by Linc in recordable form for recordation in the Official Records;
(s) A UCC-1 with respect to each the Affordable Housing Trust Fund Loan and the PLHA Loan has been submitted for recording and filing;
(t) Linc has submitted to Authority and Authority has approved all required insurance policies, certificates, and endorsements;
(u) Linc has submitted to Authority approval by CTCAC of the transfer from Metro Loma to Linc of the Project;
(v) Metro Loma has submitted to Authority all organizational documents for Metro Loma requested by Authority, including, without limitation, Partnership Agreement, filed Articles, Bylaws, and Incumbency and Authorizing Resolutions;
(w) Linc has submitted to Authority and Authority has approved all organizational documents for Linc requested by Authority, including, without limitation, Operating Agreement, filed A rticles, Bylaws, and Incumbency and Authorizing Resolutions;
(x) Linc has submitted to Authority and Authority has approved final, duly executed agreements with LACDA evidencing and securing loans provided by LACDA to Linc for the Project (collectively, “LACDA Agreements”);
(y) Linc has submitted to Authority and Authority has approved evidence of satisfaction of all closing requirements under the LACDA Agreements;
(z) Linc has submitted to Authority and Authority has approved final, duly executed agreements or documents effectuating the transfer of Metro Loma’s ownership of the Project to Linc and Metro Loma’s leasehold interest in Property to Linc (collectively, “Transfer Agreements”);
(aa) Linc has submitted to Authority and Authority has approved evidence of satisfaction of all closing requirements under the Transfer Agreements;
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(bb) Linc has submitted to Authority a final, duly executed property management agreement for the Project which has been approved by Authority as to form and content with National Core or another property manager acceptable Authority;
(cc) Linc has submitted to Authority and Authority has approved evidence of establishment of all of the Reserve accounts as required by the Covenant Agreement (as amended) and Replacement Reserve Agreement listed on Exhibit 1;
(dd) Authority has received and approved an updated preliminary report for the Property;
(ee) Authority has received and approved pro formas for title insurance policies and /or endorsements from First American Title Company or another title insurance company acceptable to Authority insuring the priority of the liens of Authority’s five (5) loans for the Project in coverage amounts and coverages as requested or required Authority in its sole and absolute discretion;
(ff) Authority has received and approved a binding commitment(s) from First American Title Company or another title insurance company acceptable to Authority for title insurance policies and /or endorsements insuring the priority of the liens of Authority’s five (5) loans for the Project in coverage amounts and coverages as requested or required Authority in its sole and absolute discretion;
(gg) Authority has approved the recording order of the documents to be recorded under this Agreement;
(hh) Authority has approved the final closing statement(s) for the closing;
(ii) All relevant parties have executed all necessary escrow instructions consistent with this Agreement;
(jj) Authority has determined there are no defaults by Linc under any agreements; and
(kk) Authority has authorized closing and recordation of the documents referenced in this Agreement.
18. Effective Date. The “Effective Date” of this Agreement shall be the date upon which both of the following have occurred: (a) recordation of all of the recordable documents listed in the Authority Closing Conditions has occurred in accordance with this Agreement as consented to by Authority following satisfaction of all of the Authority Closing Conditions ; and (b) Linc has acquired ownership of the Project and the leasehold interest in the Property.
19. Covenants, Representations, Acknowledgments, Agreement, Warranties and Certifications. Metro Loma and Linc each hereby represents, warrants, and certifies to Authority 23 of 169
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that any and all written responses and documents submitted by Metro Loma and/or Linc to Authority with regard to the assignment by Metro Loma and assumption by Linc of the Assigned Obligations are accurate, true, and correct and not misleading in any way;
20. Notice Address under Assigned Obligations. From and after the Effective Date, any notice required or permitted to be given under the Assigned Obligations to Linc shall be addressed to Linc as follows:
To Linc:
[Linc to provide notice address]
21. Additional Documents. The Parties each agree to execute and deliver any additional or supplemental documents or instructions as may be necessary or convenient to implement the terms of this Agreement and close the transaction contemplated hereby.
22. Notices. Notices, demands , and communications between the Parties shall be deemed sufficiently given if dispatched by first class mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of a “hard” copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), to the addresses of the Parties set forth below. Such written notices, demands, and communications may be sent in the same manner to such other addresses as either other P arty may from time to time designate under this Agreement. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Post al Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.
If to Authority:
Housing Authority of the City of Glendale
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attn: Executive Director
If to Metro Loma:
[Metro Loma to provide notice address]
If to Linc :
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[Linc to provide notice address]
23. Titles and Captions . Titles or captions contained herein are inserted as a matter of conveniences and for reference, and in no way define, limit, extend or describe the scope of this Agreement or any provision hereof.
24. Interpretation. No provision in this Agreement is to be interpreted for or against any Party because that Party or its legal representatives drafted such provision.
25. Waiver. No breach of any provision hereof may be waived unless in writing. Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.
26. Severance. If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from this Agreement as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Agreement.
27. Voluntary Agreement. The Parties hereto represent and declare that they carefully read this Agreement and know the contents thereof, and that they sign the same freely and voluntarily.
28. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns.
29. Governing Law. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.
30. Authority to Enter Into Agreement . The individuals executing this Agreement on behalf of each Party represent to the other Parties that such individuals are authorized to execute this Agreement on behalf of said P arty. Each Party has taken all actions required by law to approve the execution of this Agreement.
31. Counterparts. This Agreement may be executed in counterparts and when so executed, each such counterpart will constitute an original document and such counterparts will constitute one and the same agreement.
32. Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement.
33. No Third Party Beneficiaries. This Agreement is made for the sole benefit and protection of the Parties hereto, and no other person or persons shall have any right of action or right to rely hereon.
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34. Use of Electronic Signatures . The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures (including, without limitation, those using digital signature providers AdobeSign and DocuSign), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper- based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the federal Electronic Signatures in Global and National Commerce Act, the California Uniform Electronic Transactions Act (UETA), Civil Code section 1633.1 et seq., or any other state laws based on the Uniform Electronic Transactions Act, and the Parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
[remainder of page left intentionally blank]
[signatures on following pages]
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Page S - 1
IN WITNESS WHEREOF, Authority, Metro Loma, and Linc have executed this Agreement as of the date first written above.
“METRO LOMA” [CONFIRM SIGNATURE
BLOCK]
METRO LOMA, a California limited partnership
By: Metro Loma-OH, LLC, an Ohio limited
liability company
Its: Co-General Partner
By: SCDC LLC, Its Sole Member
By: __________________________
David Sebastian,
Vice President
By: Community Revitalization and
Development Corporation, a
California non profit public benefit
corporation
Its: Co-General Partner
By: ___________________________
William David Rutledge,
President
[signatures continue on following page]
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Page S - 2
“LINC” [PROVIDE SIGNATURE BLOCK]
[signatures continue on following page]
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“AUTHORITY”
THE HOUSING AUTHORITY OF THE
CITY OF GLENDALE
By: ____________________________
Roubik Golanian, P.E.
Executive Director
APPROVED AS TO FORM AND LEGALITY:
MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority
By: _____________________________
Michael J. Garcia
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By: ______________________________
Susan Apy
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Exhibit 1
List of Assigned Obligations
EXHIBIT 1
LIST OF ASSIGNED OBLIGATIONS
1. Affordable Housing Agreement and Agreement to Lease Real Property by and between Authority and Metro Loma dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, and as may be further amended or modified from time to time. Affordable Housing Agreement, as used herein shall mean, refer to, and include the Affordable Housing Agreement, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference).
2. Lease Agreement by and between Authority and Metro Loma dated on or about February 14, 2007, as may be amended or modified from time to time
3. Memorandum of Lease by and between Authority and Metro Loma recorded in the Official Records on February 15, 2007, as Instrument No. 20070330423, as may be amended or modified from time to time
4. Promissory Note (LMIHF) executed by Metro Loma for the benefit of Authority in the original principal amount of $3,237,355 dated on or about February 14, 2007, as may be amended or modified from time to time
5. Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) (LMIHF) executed by Metro Loma for the benefit of Authority dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as may be amended or modified from time to time
6. Assignment of Rents and Leases (LMIHF) executed by Metro Loma for the benefit of Authority dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330428, as may be amended or modified from time to time
7. Assignment of Agreements executed by Metro Loma for the benefit of Authority dated February 5, 2007, as may be amended or modified from time to time
8. Environmental Indemnity executed by Metro Loma for the benefit of Authority in favor of the Authority in connection with the Affordable Housing Agreement and Agreement to Lease Real Property, as may be amended or modified from time to time 30 of 169
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Exhibit 1
List of Assigned Obligations
9. Low and Moderate Income Housing Fund Loan Modification Agreement by and between Authority and Metro Loma dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as may be amended or modified from time to time
10. Promissory Note (HOME) executed by Metro Loma for the benefit of Authority in the original principal amount of $1,800,000 dated on or about March 19, 2008, as may be amended or modified from time to time
11. Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) (HOME) executed by Metro Loma for the benefit of Authority dated March 19, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496198, as may be amended or modified from time to time
12. Agreement Containing HOME Program Requirements by and between Authority and Metro Loma dated March 21, 2008, as may be amended or modified from time to time
13. Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants by and between Authority and Metro Loma recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, and as may be further amended or modified from time to time
14. Subordination Agreement by and among CCRC, Authority, and Metro Loma dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009, as Instrument No. 20091296584, as may be amended or modified from time to time
15. Loan Agreement (Former CCRC Loan Agreement) by and between CCRC and Metro Loma dated as of June 9, 2009, as may be amended or modified from time to time , as assigned to Authority. CCRC’s right, title and interest in the Loan Agreement have been assigned to Authority
16. Promissory Note (Former CCRC Note) executed by Metro Loma for the benefit of CCRC dated as of June 30, 2009 in the original principal amount of $1,890,000, as may be amended or modified from time to time, as assigned to Authority. CCRC’s right, title and interest in the Promissory Note have been assigned to Authority 31 of 169
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Exhibit 1
List of Assigned Obligations
17. Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Former CCRC Deed of Trust) executed by Metro Loma for the benefit of CCRC dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as may be amended or modified from time to time , as assigned to Authority. CCRC’s right, title and interest in the Deed of Trust have been assigned to Authority
18. Environmental Indemnity dated as of June 30, 2009, executed by Metro Loma in favor of CCRC, as may be amended or modified from time to time, as assigned to Authority.
CCRC’s right, title and interest in the Environmental Indemnity have been assigned to Authority
19. Replacement Reserve Agreement dated as of June 30, 2009, executed by Metro Loma and CCRC, as may be amended or modified from time to time, as assigned to Authority.
CCRC’s right, title and interest in the Replacement Reserve Agreement have been assigned to Authority
20. All other instruments and agreements executed in connection with any of the foregoing documents in or under which Metro Loma has any right, title or interest
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Exhibit 2
EXHIBIT 2
FORM OF SECOND AMENDMENT TO AHA
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SECOND AMENDMENT TO
AFFORDABLE HOUSING AGREEMENT
(328 Mira Loma Avenue)
This SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT (this “Amendment”) is dated as of _________________, 2025, between the HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body corporate and politic (“Authority”) and Linc 328 Mira Loma LLC, a California limited liability company (“Owner”), who agree as follows:
URECITALSU
A. Authority and METRO LOMA, a California limited partnership (“ Partnership”) have entered into that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement”) with respect to that certain real property owned by Authority in the City of Glendale and described in the Affordable Housing Agreement as the “Property”.
B. Authority and Partnership have heretofore entered into that certain Lease Agreement dated on or about February 14, 2007, as amended by that certain Assignment and Assumption and Amendment to Lease Agreement dated on or about the date hereof and recorded in the Official Records of Los Angeles County (“Official Records”) on or about the date hereof, as may be amended or modified from time to time (the “Lease”), pursuant to which Authority leased the Property to Partnership on the terms and conditions stated therein.
C. Pursuant to the Affordable Housing Agreement , and to assist in providing housing within the City of Glendale that is affordable to persons and families of very low , low and moderate income, the Authority has provided a loan to Partnership in the original principal amount of $5,037,355, using Low and Moderate Income Housing Funds (“LMIHF Loan”) in accordance with California Health and Safety Code Section 33334.2 UetU Useq.U, which loan is evidenced by a promissory note dated on or about February 14, 2007, as amended by that that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197 (“Loan Modification Agreement”), as further amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof (“ Second Loan Modification Agreement ”), and as may be further amended or modified from time to time (the “LMIHF Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated February 14, 2007 , and recorded in the 34 of 169
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Official Records on February 15, 2007, as Instrument No. 20070330426, as amended by the Loan Modification Agreement, as further amended by the Second Loan Modification Agreement, and as may be further amended or modified from time to time (the “LMIHF Deed of Trust”).
D. Through the First Amendment to Affordable Housing Agreement and the Loan Modification Agreement, the Authority and Partnership modified the Authority financial assistance so as to reduce the principal amount of the LMIHF Loan by $1,800,000 to $3,237,355, to provide a loan from the Authority to the Partnership in the original principal amount of $1,800,000, using funds derived from the HUD HOME Program ( “HOME Loan”), to amend the rate of interest to be applied to the LMIHF Loan , to clarify the priorities of the HOME Loan and the LMIHF Loan and to amend certain of the other terms and conditions of the Authority Documents as provided therein. The HOME Loan is evidenced by a promissory note dated on or about March 19, 2008 , as amended by the Second Loan Modification Agreement, as may be further amended or modified from time to time (the “HOME Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated February 14, 2007, and recorded in the Official Records on March 24, 2008 , as Instrument No. 20080496198, as amended by the Second Loan Modification Agreement, as may be further amended or modified from time to time (the “HOME Deed of Trust”).
E. In furtherance of the Affordable Housing Agreement, Authority and Partnership also entered into (i) that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time (“ HOME Agreement”), and (ii) that certain Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on Febr uary 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, as further amended by that certain Second Amendment to Agreement Containing Covenants dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time (“Covenant Agreement”).
F. California Community Reinvestment Corporation, a California nonprofit public benefit corporation (“ CCRC”) provided a loan to Partnership for financing for the Project (“Former CCRC Loan ”). In connection with the Former CCRC Loan, Partnership and CCRC entered into a Loan Agreement dated as of June 9, 2009, as amended by that certain Amendment to Loan Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (the “ Former CCRC Loan Agreement ”).
Pursuant to the ter ms and implementation of the Former CCRC Loan Agreement, 35 of 169
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Partnership executed a number of documents, including but not limited to, the following:
(i) a Promissory Note dated as of June 30, 2009 in the original principal amount of $1,890,000, amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof (“Loan Modification Agreement to Former CCRC Loan Agreement”), and as may be further amended or modified from time to time (“Former CCRC Note”); and (ii) a Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as amended by the Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof, and as may be further amended or modified from time to time (“ Former CCRC Deed of Trust ”). The Former CCRC Loan Agreement, Former CCRC Note, Former CCRC Deed of Trust, and al l other instruments and agreements executed in connection with any of the foregoing in or under which CCRC had any right, title, or interest, as all may be amended or modified from time to time may be referred to herein as “Former CCRC Loan Encumbrances.”
G. Authority acquired the Former CCRC Loan Encumbrances from CCRC pursuant to an unrecorded Mortgage Loan Sale Agreement dated as of May 27, 2025 between Authority and CCRC and in connection therewith was assigned all of CCRC’s rights and interests in the Fo rmer CCRC Loan Encumbrances. An Assignment of Deed of Trust executed by Authority (as Assignee therein) and CCRC (as Assignor therein) dated as of June 5, 2025, was recorded in the Official Records on June 27, 2025 as Instrument No. 20250431558 (“Assignment of Former CCRC Deed of Trust”). Authority is the successor beneficiary of all of CCRC’s rights, title and interest in and to the Former CCRC Loan Encumbrances.
H. Owner has acquired the Project and Partnership’s leasehold interest in the Property pursuant to that certain _______________________ dated as of __________________________, 202 5, a nd Partnership has assigned to Owner all of Partnership’s right, title, interest, benefits, burdens, duties and obligations in, to and under the Affordable Housing Agreement , the Lease, the LMIHF Loan, the HOME Loan, the Former CCRC Loan Agreement, the Former CCRC Loan, the Covenant Agreement, the HOME Agreement, and related documents (collectively referred to herein as the “Authority/CCRC Documents”) pursuant to that certain unrecorded Assignment and Assumption Agreement and Consent dated as of __________________________, 2025 , as may be amended or modified from time to time (“Assignment and Assumption Agreement”). As such, Owner is the successor -in-interest to Partnership with respect to the Project and the Authority/CCRC Documents.
I. Authority and Owner desire to enter into this Amendment (a) to modify the Authority financial assistance by providing additional funding in the form of two new loans from 36 of 169
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Authority to Owner with respect to the Project – namely, a new loan from the City’s Affordable Housing Trust Funds in the original principal amount of $ 1,749,891 (“Affordable Housing Trust Fund Loan ”), and a new loan from the Permanent Local Housing Allocation (“PLHA”) fund in the original principal amount of $465,600 (“PLHA Loan”); (b) to amend the rate of interest to be applied to the LMIHF Loan and HOME Loan to match the rate of interest of the two new loans; (c) to amend the repayment term to be applied to the LMIHF Loan and HOME Loan to match the repayment term of the two new loans; (d) to make the term of the Affordable Housing Agreement match the term of the Lease; (e) to provide for additional funding to the Project from other sources ; (f) to modify the affordability covenants in the Covenant Agreement and the HOME Agreement; (g) to modify terms in the Lease to permit the ongoing feasibility of the Project; and (h) to amend certain of the other terms and conditions of the Authority Documents as provided herein.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND
FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE AUTHORITY AND OWNER HEREBY AMEND THE AUTHORITY DOCUMENTS AS FOLLOWS:
UTERMS
1. UDefined Terms U. Capitalized terms not otherwise defined herein shall bear the respective meanings set forth in the Affordable Housing Agreement.
2. Owner. After the date of this Amendment, “Owner” or “Partnership” under the Affordable Housing Agreement shall mean Linc 328 Mira Loma LLC, a California limited liability company. The address of Owner for purposes of receiving notices pursuant to th e Affordable Housing Agreement shall be: [Linc to provide address]
3. Restricted Period. After the date of this Amendment, the definition of “Restricted Period” in Section 1.2 of the Affordable Housing Agreement shall be replaced in its entirety with the following revised definition: ‘“Restricted Period” shall mean the longest feasible time , but not less than the term of the Lease which is ninety-nine (99) years after the issuance of the permanent certificate of occupancy for the Improvements, which was issued on December 23, 2008.”
4. Transfers. A new subsection h. is hereby added to Section 1.7 of the Affordable Housing Agreement to read as follows: “Without limiting any of the foregoing, any Transfer that results in any change in ownership, change in entity type, admittance of any general or limited partners, any new debt, or other capital event shall require Authority prior written approval. Such approval will not be unreasonably withheld. In granting any such approval Authority and Owner 37 of 169
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must agree on the use of any proceeds from an new debt or other capital event . Authority will approve uses of any such proceeds to cover any necessary capital needs of the Project as reasonably determined by Authority, to fully capitalize the Operating Reserve and Replacement Reserve, to repay any general partner loans to the Project which have been pre-approved in writing by Authority, and to pay any allowed fees as determined by Authority.”
5. LMIHF Loan and HOME Loan ModificationU. The LMIHF Note, the LMIHF Deed of Trust, the HOME Note, and the HOME Deed of Trust are hereby amended as set forth in the Assignment and Assumption and Second Modification of Loan Documents substantially in the form attached to t he Assignment and Assumption as Exhibit 4. Following approval of this Amendment and execution of the Assignment and Assumption and Second Modification of Loan Documents by Owner, the Authority Executive Director or designee is authorized to execute and record the Assignment and Assumption and Second Modification of Loan Documents in the Official Records.
6. UAffordable Housing Trust Fund Note and Affordable Housing Trust Fund Deed of Trust. Owner agrees to execute the Affordable Housing Trust Fund Promissory Note substantially in the form attached to the Assignment and Assumption as Exhibit 5 evidencing the Authority’s loan of the Affordable Housing Trust Funds (“Affordable Housing Trust Fund Note ”) and the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) substantially in the form attached to the Assignment and Assumption as Exhibit 7 (the “Affordable Housing Trust Fund Deed of Trust”) securing the Affordable Housing Trust Fund Note. Following approval of this Amendment and execution of the Affordable Housing Trust Fund Note and the Affordable Housing Trust Fund Deed of Trust by Owner, the Authority Executive Director or designee is authorized to record the Affordable Housing Trust Fund Deed of Trust in the Official Records.
7. PLHAPLHA Note and PLHA Deed of Trust . Owner agrees to execute the PLHA Promissory Note substantially in the form attached to the Assignment and Assumption as Exhibit 6 evidencing the Authority’s loan of the PLHA Funds (“PLHA Note”) and the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) substantially in the form attached to t he Assignment and Assumption as Exhibit 8 (the “PLHA Deed of Trust”) securing the PLHA Note. Following approval of this Amendment and execution of the PLHA Note and the PLHA Deed of Trust by Owner, the Authority Executive Director or designee is authorized to record the PLHA Deed of Trust in the Official Records.
8. Lease. Owner agrees to execute the Assignment and Assumption and Amendment to Lease Agreement substantially in the form attached to t he Assignment and Assumption as Exhibit 3 modifying certain terms of the Lease . Following approval of this Amendment and execution of the Assignment and Assumption and Amendment to Lease Agreement by Owner, the Authority Executive Director or designee is authorized to execute and record the Assignment and Assumption and Amendment to Lease Agreement in the Official Records. 38 of 169
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9. Subordination. Authority affordability covenants, including the Covenant Agreement (as amended) and the HOME Agreement (as amended) , shall be and remain senior to the LMIHF Loan, the HOME Loan, the Affordable Housing Trust Fund Loan, the PLHA Loan, the Former CCRC Loan, and all other financing or other liens and encumbrances. The Executive Director of the Authority or designee may, without any further action of the Authority Board, execute on behalf of the Authority new Subordination Agreement s or modify existing Subordination Agreements to provide th is lien priority and to retain lien priority between the LMIHF Loan, the HOME Loan, the Affordable Housing Trust Fund Loan, and the PLHA Loan and other leasehold financing.
10. Amendment to Covenant Agreement. The Covenant Agreement is hereby amended as set forth in the Second Amendment to Agreement Containing Covenants substantially in the form attached to t he Assignment and Assumption as Exhibit 9. Following approval of this Amendment and execution of the Second Amendment to Agreement Containing Covenants by Owner, the Authority Executive Director or designee is authorized to execute and record the Second Amendment to Agreement Containing Covenants in the Official Records.
11. Amendment to HOME Agreement. The HOME Agreement is hereby amended as set forth in the Amendment to Agreement Containing HOME Program Requirements substantially in the form attached to the Assignment and Assumption as Exhibit 10. Following approval of this Amendment and execution of the Amendment to Agreement Containing HOME Program Requirements by Owner, the Authority Executive Director or designee is authorized to execute the Amendment to Agreement Containing HOME Program Requirements.
12. Escrow and Title Fees and CostsU. Authority shall be responsible for any up to 77.6% of any Escrow and Title Fees and Costs associated with the implementation of this Amendment.
13. Owner’s Representations and Warranties . As an inducement to Authority to enter into this Amendment and consent to Owner’s purchase of the Project, Owner hereby represents and warrants to Authority, which representations and warranties are true and correct as of the date of this Amendment and which shall survive the closing of the sale of the Project:
a. Owner has the legal power, right and authority to enter into this Amendment and the instruments referenced herein, and to consummate the transactions contemplated hereby;
b. This Amendment and all documents required hereby to be executed by Owner are, and shall be, valid, legally binding obligations of and enforceable against Owner in accordance with their terms, subject only to applicable debtor relief laws or equitable principles affectin g or limiting the rights of contracting parties generally;
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c. There is no charter, bylaw, or capital stock provision of Owner, and no provision of any indenture, instrument, or agreement, written or oral, to which Owner is a party or which governs the actions of Owner or which is otherwise binding upon Owner or Owner’s property, nor is there any statute, rule or regulation, or any judgment, decree, or order of any court or agency binding on Owner or Owner’s property which would be contravened by the execution, delivery or performance of this Amendment or any documents required hereby to be executed by Owner;
d. There is no action, suit, or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending, or, to the knowledge of Owner, threatened against or affecting Owner, or any properties or rights of Owner, which, if adversely determined, would materially impair the right of Owner to execute or perform its obligations under this Amendment or any documents required hereby to be executed by Owner, or would materially adversely affect the financial condition of Owner;
e. Neither the execution and delivery of this Amendment and documents referenced herein, nor the incurrence of the obligations set forth herein, nor the consummation of the transactions herein contemplated, nor compliance with the terms of this Amendment and the documents referenced herein conflict with or result in the material 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 tru st, loan, partnership agreement, lease or other agreements or instruments to which Owner is a party;
f. To the best of Owner’s knowledge, there are no pending, threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity, in which Owner or an Affiliate is, or to the best of Owner’s knowledge will be, a party, including , but not limited to, judicial, municipal or administrative proceedings in eminent domain, unlawful detainer or tenant evictions, collections, alleged building code, health and safety or zoning violations, employment discrimination or unfair labor practi ces, breach of contract, or workers’ compensation, personal injuries or property damages; and
g. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Owner, nor are any of such proceedings contemplated by Owner.
14. Original Documents Remain in Effect . Except as expressly set forth herein, all terms and provisions of the Affordable Housing Agreement, Lease, Covenant Agreement, Home Agreement, LMIHF Note, LMIHF Deed of Trust, HOME Note, and HOME Deed of Trust shall remain in full force and effect.
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15. Additional Documents . The parties each agree to execute and deliver any additional or supplemental documents or instructions as may be necessary or convenient to implement the terms of this Amendment and close the transaction contemplated hereby.
16. Titles and Captions. Titles or captions contained herein are inserted as a matter of conveniences and for reference, and in no way define, limit, extend or describe the scope of this Amendment or any provision hereof.
17. Interpretation. No provision in this Amendment is to be interpreted for or against any party because that party or its legal representatives drafted such provision.
18. Waiver. No breach of any provision hereof may be waived unless in writing.
Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.
19. Severance. If any provision of this Amendment is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from this Amendment as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Amendment.
20. Voluntary Agreement. The parties hereto represent and declare that they carefully read this Amendment and know the contents thereof, and that they sign the same freely and voluntarily.
21. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.
22. Governing Law. This Amendment shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.
23. Counterparts. This Amendment may be executed in counterparts and when so executed, each such counterpart will constitute an original document and such counterparts will constitute one and the same agreement.
24. Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Amendment.
25. No Third Party Beneficiaries . This Amendment is made for the sole benefit and protection of the parties hereto, and no other person or persons shall have any right of action or right to rely hereon.
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26. Use of Electronic Signatures . The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment or any document to be signed in connection with this Amendment shall be deemed to include electronic signatures (including, without limitation, those using digital signature providers AdobeSign and DocuSign), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper- based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the federal Electronic Signatures in Global and National Commerce Act, the California Uniform Electronic Transactions Act (UETA), Civil Code section 1633.1 et seq., or any other state laws based on the Uniform Electronic Transactions Act, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
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“LINC” [PROVIDE SIGNATURE BLOCK]
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“AUTHORITY”
THE HOUSING AUTHORITY OF THE
CITY OF GLENDALE
By: ____________________________
Roubik Golanian, P.E.
Executive Director
APPROVED AS TO FORM AND LEGALITY:
MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority
By: _____________________________
Michael J. Garcia
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By: ______________________________
Susan Apy
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Exhibit 3
EXHIBIT 3
FORM OF ASSIGNMENT AND ASSUMPTION AND AMENDMENT
TO LEASE AGREEMENT
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
HOUSING AUTHORITY OF
THE CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attn: Director of Housing
and Community Development
FREE RECORDING REQUESTED
(Gov’t Code Section 27383)
ASSIGNMENT AND ASSUMPTION AND AMENDMENT
TO LEASE AGREEMENT
(328 Mira Loma Avenue)
This Assignment and Assumption and Amendment to Lease Agreement (“ Agreement”), dated as of __________________________, 2025, for reference purposes only, is entered into by and between the Housing Authority of the City of Glendale, a public body corporate and politic (“Authority”), and Linc 328 Mira Loma LLC, a California limited liability company (“Lessee”).
Recitals
A. Authority is the fee title owner of certain real property located at 328 Mira Loma Avenue, City of Glendale, California (“Property”). Metro Loma, a California limited partnership (“Metro Loma”) and Authority have entered into that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 2 1, 2008, as amended by that certain Second Amendment to Affordable Housing Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement”).
B. In connection with and in furtherance of the Affordable Housing Agreement, Authority (as “Landlord” therein) and Metro Loma (as “Lessee” therein) entered into that certain unrecorded Lease Agreement dated on or about February 14, 2007, as may be amended or modified from time to time (the “Lease”), wherein Authority ground leased the Property to Metro Loma for the operation and management of a 44 unit affordable housing project (the “Project”). A Memorandum of Lease was recorded in the Official Records of Los Angeles County (“ Official Records ”) on February 15, 2007, as Instrument No. 20070330423, as may be amended or modified from time to time (“ Memorandum of Lease”).
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C. Lessee has acquired the Project and Metro Loma ’s leasehold interest in the Property pursuant to that certain _______________________ dated as of __________________________, 2025, and Metro Loma has assigned to Lessee all of Metro Loma’s right, title, interest, benefits, burdens, duties and obligations in, to and under the Affordable Housing Agreement, the Lease, and related documents (collectively referred to herein as the “Authority/CCRC Documents ”) pursuant to that certain unrecorded Assignment and Assumption Agreement and Consent dated as of __________________________, 2025, as may be amended or modified from time to time (“Assignment and Assumption Agreement ”). As such, Lessee is the successor -in- interest to Metro Loma with respect to the Project and the Authority/CCRC Documents.
NOW, THEREFORE, in consideration of the mutual covenants and upon the conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Authority and Lessee hereby agree as follows:
1. Lessee. After the date of this Agreement, “Lessee” or “Partnership” under the Lease shall mean Linc 328 Mira Loma LLC, a California limited liability company. Lessee agrees to be bound by the Lease and hereby assumes all payments and other obligations of Metro Loma arising or accruing on or after the date hereof under the Lease. The address of Lessee for purposes of receiving notices pursuant to the Lease shall be:
[Linc to provide address]
2. Term. The parties confirm that the permanent certificate of occupancy for the Improvements was issued on December 23, 2008, and the Initial Term ends December 23, 2107.
3. Option. Section 2.3.5 of the Lease, Option to Terminate Lease Prior to Expiration of Term, and all references to Section 2.3.5 are hereby deleted in their entirety.
4. Affordability Requirements. A new Section 2.5.6 is hereby added to the Lease to read as follows:
“2.5.6 Affordability Requirements.
(a) Maximum Incomes. Lessee covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that Lessee, its successors and assignees shall use the Property exclusively to provide affordable housing for a wide range of persons and families of Very Low Income and Low and Moderate Income, subject to all of the terms and conditions of Agreement Containing Covenants, except for one three-bedroom unit designated as the management unit for the on -site manager. The remaining 43 units shall be allocated as follows:
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(1) Thirty-two (32) units shall be rented exclusively to households meeting the fifty percent (50%) income limit under Tax Credit regulations, consisting of the following: (a) two (2) one -bedroom units; (b) twenty-two (22) two-bedroom units; and (c) eight (8) three-bedroom units.
(2) Eleven (11) units shall be rented exclusively to households meeting the sixty percent (60%) income limit under Tax Credit regulations, consisting of the following: (a) six (6) two-bedroom units; and (b) five (5) three-bedroom units.
(b) Maximum Rents.
(1) The maximum rents, including a reasonable utility allowance for utilities and services (excluding telephone) to be paid by households will be the maximum rent for the applicable income level under Tax Credit regulations.
(2) This affordability requirement will continue in effect for the Term of this Lease.
(3) Failure to comply with the affordability requirements of this Lease following notice from the Authority and an opportunity to cure such failure is an event of default under the terms of this Lease.
(c) Lessee shall comply with the terms and conditions of the Agreement Containing Covenants, as it may be amended from time to time.
(d) The affordability requirements set forth in this Section will continue in full force and effect for the full Term of this Lease, whether or not the Agreement Containing Covenants continues to be an encumbrance on the Property. Lessee will submit to Authority on an annual basis the report required by Health and Safety Code section 33418. The annual report will include for each residential unit the rental rate and the income and family size of the occupants. The income information will be supplied by the occupants in a certified statement on a form provided by Authority. Lessee will provide for the submission of such information in its lease or occupancy agreements for the units.”
5. Titles and Captions . Titles or captions contained herein are inserted as a matter of conveniences and for reference, and in no way define, limit, extend or describe the scope of this Agreement or any provision hereof.
6. Interpretation. No provision in this Agreement is to be interpreted for or against any Party because that Party or its legal representatives drafted such provision.
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7. Waiver. No breach of any provision hereof may be waived unless in writing. Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.
8. Severance. If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from this Agreement as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Agreement.
9. Voluntary Agreement. The Parties hereto represent and declare that they carefully read this Agreement and know the contents thereof, and that they sign the same freely and voluntarily.
10. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns.
11. Governing Law. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.
12. Authority to Enter Into Agreement . The individuals executing this Agreement on behalf of each P arty represent to the other Parties that such individuals are authorized to execute this Agreement on behalf of said P arty. Each Party has taken all actions required by law to approve the execution of this Agreement.
13. Counterparts. This Agreement may be executed in counterparts and when so executed, each such counterpart will constitute an original document and such counterparts will constitute one and the same agreement.
14. Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement.
15. No Third Party Beneficiaries. This Agreement is made for the sole benefit and protection of the Parties hereto, and no other person or persons shall have any right of action or right to rely hereon.
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IN WITNESS WHEREOF, Authority and Lessee have executed this Agreement as of the date first written above.
“LESSEE” [PROVIDE SIGNATURE BLOCK]
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“AUTHORITY”
THE HOUSING AUTHORITY OF THE
CITY OF GLENDALE
By: ____________________________
Roubik Golanian, P.E.
Executive Director
APPROVED AS TO FORM AND LEGALITY:
MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority
By: _____________________________
Michael J. Garcia
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By: ______________________________
Susan Apy
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STATE OF CALIFORNIA )
)
COUNTY OF )
On , before me, ,
a Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 52 of 169
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Exhibit 4
EXHIBIT 4
FORM OF ASSIGNMENT AND ASSUMPTION AND SECOND MODIFICATION
OF LOAN DOCUMENTS
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
HOUSING AUTHORITY OF THE
CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attn: Director of Housing
and Community Development
SPACE ABOVE THIS LINE FOR RECORDER’S USE
FREE RECORDING REQUESTED
(Gov’t Code Section 27383)
ASSIGNMENT AND ASSUMPTION AND SECOND MODIFICATION
OF LOAN DOCUMENTS
(328 Mira Loma Avenue)
This ASSIGNMENT AND ASSUMPTION AND SECOND MODIFICATION OF LOAN DOCUMENTS (this “Modification”) is made as of ___________________, 2025 by Linc 328 Mira Loma LLC, a California limited liability company (hereinafter referred to as “Borrower ”) (whose address is _______________________________) and the HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body corporate and politic (hereinafter called “Beneficiary”), whose address is 141 North Glendale Avenue, Suite 202, Glendale, California 91206, with reference to the following:
A. Authority and METRO LOMA, a California limited partnership (“Metro Loma), have entered into that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, as further amended by that certain Second Amendment to Affordable Housing Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement ”) with respect to that certain real property ow ned by Authority in the City of Glendale and described in the Affordable Housing Agreement as the “Property”.
B. Authority and Metro Loma have heretofore entered into that certain Lease Agreement dated on or about February 14, 2007, as amended by that certain Assignment and Assumption and Amendment to Lease Agreement dated on or about the date hereof and recorded in the Official Records of Los Angeles County (“Official Records”) on or about the date hereof, as may be amended or modified from time to time (the “Lease”), pursuant 54 of 169
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to which Authority leased the Property to Metro Loma on the terms and conditions stated therein.
C. Pursuant to the Affordable Housing Agreement, and to assist in providing housing within the City of Glendale that is affordable to persons and families of very low, low and moderate income, the Authority has provided a loan to Metro Loma in the original principal amount of $5,037,355, using Low and Moderate Income Housing Funds (“ Authority LMIHF Loan”) in accordance with California Health and Safety Code Section 33334.2 UetU
Useq.U, which loan is evidenced by a promissory note dated on or about February 14, 2007, as amended by that that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197 (“Loan Modification Agreement”), and as may be further amended or modified from time to time (the “Authority LMIHF Loan Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as amended by the Loan Modification Agreement, and as may be further amended or modified from time to time (the “Authority LMIHF Loan Deed of Trust”).
D. Through the First Amendment to Affordable Housing Agreement and the Loan Modification Agreement, the Authority and Metro Loma modified the Authority financial assistance so as to reduce the principal amount of the LMIHF Loan by $1,800,000 to $3,237,355, to provide a loan from the Authority to the Metro Loma in the original principal amount of $1,800,000, using funds derived from the HUD HOME Program (“Authority HOME Loan”), to amend the rate of interest to be applied to the LMIHF Loan, to clarify the pri orities of the HOME Loan and the LMIHF Loan and to amend certain of the other terms and conditions of the Authority Documents as provided therein.
The HOME Loan is evidenced by a promissory note dated on or about March 19, 2008, as may be amended or modified from time to time (the “Authority HOME Loan Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated February 14, 2007, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496198, as may be amended or modified from time to time (the “Authority HOME Loan Deed of Trust”).
E. In furtherance of the Affordable Housing Agreement, Authority and Metro Loma also entered into (i) that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time (“ HOME Agreement”), and (ii) that certain Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on F ebruary 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument 55 of 169
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No. 20080496196 of the Official Records, as further amended by that certain Second Amendment to Agreement Containing Covenants dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time (“Covenant Agreement”).
F. California Community Reinvestment Corporation, a California nonprofit public benefit corporation (“ CCRC”) provided a loan to Metro Loma for financing for the Project (“Former CCRC Loan” or “Senior Loan” or “Permanent Loan”). In connection with the Former CCRC Loan, Metro Loma and CCRC entered into a Loan Agreement dated as of June 9, 2009, as amended by that certain Amendment to Loan Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (the “Former CCRC Loan Agreement” or “Senior Loan Agreement”). Pursuant to the terms and implementation of the Former CCRC Loan Agreement, Metro Loma executed a number of documents, including but not limited to, the following: (i) a Promissory Note dated as of June 30, 2009 in the original principal amount of $1,890,000, amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof (“Loan Modification Agreement to Former CCRC Loan Agreement”), and as may be further amended or modified from time to time (“Former CCRC Note” or “Senior Loan Note”); and (ii) a Leasehold Deed of Trust, Assignment of Leases and Rents, Secur ity Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as amended by the Loan Modification Agreement to Former CCRC Loan Agreement, and as may be further amended or modified from time to time (“Former CCRC Deed of Trust ” or “Senior Loan Deed of Trust” or “Permanent Loan Deed of Trust” ). The Former CCRC Loan Agreement, Former CCRC Note, Former CCRC Deed of Trust, and all other instruments and agreements executed in connection with any of the foregoing in or under which CCRC had any right, title, or interest, as all may be amended or modified from time to time may be referred to herein as “Former CCRC Loan Encumbrances.”
G. Borrower has acquired the Project and Metro Loma’s leasehold interest in the Property pursuant to that certain _______________________ dated as of __________________________, 2025, and Metro Loma has assigned to Borrower all of Metro Lomas ’s right, title, interest, benefits, burdens, duties and obligations in, to and under the Affordable Housing Agreement, the Lease, the Authority LMIHF Loan, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority HOME Loan, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Covenant Agreement, the HOME Agreement, the Senior Loan Agreement, the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and related documents (collectively referred to herein as the “Authority/CCRC Documents ”) pursuant to that certain unrecorded Assignment and Assumption Agreement and Consent dated as of __________________________, 2025, as may be amended or modified from time to time 56 of 169
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(“Assignment and Assumption Agreement ”). As such, Borrower is the successor -in- interest to Metro Loma with respect to the Project and the Authority/CCRC Documents.
H. Authority acquired the Former CCRC Loan Encumbrances from CCRC pursuant to an unrecorded Mortgage Loan Sale Agreement dated as of May 27, 2025 between Authority and CCRC and in connection therewith was assigned all of CCRC’s rights and interests in the Former CCRC Loan Encumbrances. An Assignment of Deed of Trust executed by Authority (as Assignee therein) and CCRC (as Assignor therein) dated as of June 5, 2025, was recorded in the Official Records on June 27, 2025 as Instrument No. 20250431558 (“Assignment of Former CCRC Deed of Trust”). Authority is the successor beneficiary of all of CCRC’s rights, title and interest in and to the Former CCRC Loan Encumbrances, and is now the “Senior Lender” or “Permanent Lender” referenced in the Authority/CCRC Documents and the holder of the “Senior Loan Note” or “Permanent Loan Note.”
I. In connection with the Property, the Authority is modifying its financial assistance to Borrower to provide additional funding in the form of two new loans from Authority to Borrower with respect to the Project . The first new loan is from the City’s Affordable Housing Trust Funds in the original principal amount of $1,749,891 (“ Authority Affordable Housing Trust Fund Loan”), and is evidenced by a promissory note dated on or about the date hereof, as may be amended or modified from time to time (the “Authority Affordable Housing Trust Fund Loan Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated on or about the date hereof and recorded in the Official Records concurrently herewith, as may be amended or modified from time to time (the “Authority Affordable Housing Trust Fund Loan Deed of Trust ”). The second new loan is new loan from the Permanent Local Housing Allocation (“PLHA ”) fund in the original principal amount of $465,600 (“ Authority PLHA Loan ”), and is evidenced by a promissory note dated on or about the date hereof, as may be amended or modified from time to time (the “ Authority PLHA Loan Note”) and secured by a leasehold deed of trust on the leasehold interest in the Property dated on or about the date hereof and recorded in the Official Records concurrently herewith, as may be amended or modified from time to time (the “Authority PLHA Loan Deed of Trust”).
J. Authority and Borrower now wish to modify the terms of the Authority LMIHF Loan, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority HOME Loan, the Authority HOME Loan Note, and the Authority HOME Loan Deed of Trust, in the manner set forth in this Modification.
NOW, WHEREFORE, Authority and Borrower hereby agree that the Authority LMIHF Loan, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority HOME Loan, the Authority HOME Loan Note, and the Authority HOME Loan Deed of Trust are amended as follows:
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1. Borrower/Trustor. After the date of this Modification, “Borrower” and “Trustor” under the Authority LMIHF Loan, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority HOME Loan, the Authority HOME Loan Note, and the Authority HOME Loan Deed of Trust shall mean Linc 328 Mira Loma LLC, a California limited liability company. The address of Borrower/Trustor for purposes of receiving notices pursuant to the Authority LMIHF Loan, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority HOME Loan, the Authority HOME Loan Note, and the Authority HOME Loan Deed of Trust shall be: [Linc to provide address]
2. Definition of Operating Expenses . The definition of “Operating Expenses” in Paragraph 1 each the Authority LMIHF Loan Note and the Authority HOME Loan Note is hereby modified to delete section 1 in its entirety, which reads “Principal and interest and all periodic fees and costs attributable to the Permanent Loan;” and replace it with “[intentionally omitted].”
3. Authority LMIHF Loan Interest Rate. The Authority LMIHF Loan Note shall bear simple interest at the annual rate of three percent (3%) beginning upon the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents. Paragraph 5 of the Authority LMIHF Loan Note is deleted and replaced in its entirety with the following:
“5. This Note shall bear simple interest at the rate of six and one-half percent (6.5%), which shall begin to accrue upon disbursement. From and after the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents, this Note shall bear simple interest at the annual rate of three percent (3%), which shall begin to accrue upon the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents.”
4. Authority HOME Loan Interest Rate. The Authority HOME Loan Note shall bear simple interest at the annual rate of three percent (3%) beginning upon the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents. Paragraph 5 of the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“5. This Note shall bear interest at the rate of five and sixty five one- hundredths percent (5.65%) compounded annually, which shall begin to accrue upon disbursement . From and after the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents, this Note shall bear simple interest at the annual rate of three percent (3%), which shall begin to accrue upon the date of recordation of the Assignment and Assumption and Second Modification of Loan Documents.”
5. The following definitions are added to both Paragraph 1 of each of the Authority LMIHF Loan Note and Paragraph 1 of the Authority HOME Loan Note:
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‘“Authority Affordable Housing Trust Fund Loan” shall mean the loan from the Authority to Borrower, in the amount of $1,749,891, secured by the Authority Affordable Housing Trust Fund Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is fourth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, the lien of the Authority HOME Loan Deed of Trust, and the lien of the Authority LMIHF Loan Deed of Trust. “Authority Affordable Housing Trust Fund Loan Deed of Trust” shall mean the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records of the Los Angeles County Recorder’s Office on or about the date hereof, which secures the Authority Affordable Housing Trust Fund Loan Note and the Authority Affordable Housing Trust Fund Loan evidenced hereby , as may be amended or modified from time to time.
“Authority Affordable Housing Trust Fund Loan Note ” shall mean the Promissory Note dated on or about the date hereof evidencing the Authority Affordable Housing Trust Fund Loan, as may be amended or modified from time to time.
“Authority PLHA Loan” shall mean the loan from the Authority to Borrower, in the amount of $465,600, secured by the Authority PLHA Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is fifth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, the lien of the Authority HOME Loan Deed of Trust, the lien of the Authority LMIHF Loan Deed of Trust, and the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust.
“Authority PLHA Loan Deed of Trust ” shall mean the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records of the Los Angeles County Recorder’s Office on or about the date hereof, which secures the Authority PLHA Loan Note and the Authority PLHA Loan evidenced hereby, as may be amended or modified from time to time.
“Authority PLHA Loan Note” shall mean the Promissory Note dated on or about the date hereof evidencing the Authority PLHA Loan, as may be amended or modified from time to time.
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“LACDA Loan” shall mean a residual receipts loan to Borrower from Los Angeles County Development Authority (“ LACDA”), which shall be subject to terms and conditions that are approved by the Authority Executive Director or designee.
“LACDA Loan Deed of Trust” shall mean the deed of trust on the leasehold interest in the Property which secures the LACDA Loan, as may be amended or modified from time to time.
“Senior Loan Note” shall mean that certain residual receipts promissory note dated as of June 30, 2009 in the original principal amount of $1,890,000 executed by Borrower in favor of CCRC evidencing the Senior Loan, as amended by that certain Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time, which evidences the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in- interest as beneficiary thereunder.”
6. The following definitions are deleted and replaced in their entirety in both the Authority LMIHF Loan Note and the Authority HOME Loan Note:
‘“Affordable Housing Agreement ” shall mean that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, as further amended by that certain Second Amendment to Affordable Housing Agreement dated on or about the date hereof, and as may be further amended or modified from time to time.”
“Agreement Containing Covenants ” shall mean that certain Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, as further amended by that certain Second Amendment to Agreement Containing Covenants dated on or about the date hereof and recorded in the Official Recor ds concurrently herewith, and as may be further amended or modified from time to time.
“Authority HOME Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded 60 of 169
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in the Official Records on March 24, 2008, as Instrument No. 20080496198, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time to time, which secures the Authority HOME Loan Note.
“Authority HOME Loan Note” shall mean that certain promissory note dated on or about March 19, 2008, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be amended or modified from time to time. “Authority LMIHF Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as amended by that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time, which secures the Authority LMIHF Loan Note.
“Authority LMIHF Loan Note ” shall mean that certain promissory note dated on or about February 14, 2007, as amended by that that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time.
“Authority Loan” shall mean the loans from the Authority to Borrower for the Project from time to time, which include the Senior Loan, Authority LMIHF Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan , secured by the Senior Loan Deed of Trust, Authority LMIHF Loan Deed of Trust, the Authority HOME Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Deed of Trust, and the Authority the Authority PLHA 61 of 169
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Loan, respectively, and the other Authority Loan Documents. “Authority Loan Documents” shall mean the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Agreement Containing Covenants, the Agreement Containing HOME Program Requirements, the Assignment of Rents, the Assignment of Agreements, the Environmental Indemnity and each and every UCC-1 Financing Statem ent filed or recorded with respect to the foregoing.
“HOME Agreement” shall mean that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time.
“Lease” shall mean that certain Lease Agreement dated on or about February 14, 2007, as amended by that certain Assignment and Assumption and Amendment to Lease Agreement dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time to time.
“Permanent Loan Deed of Trust ” or “ Senior Loan Deed of Trust ” shall mean that certain Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as amended by that Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof, and as may be further amended or modified from time to time, which secures the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in-interest as beneficiary thereunder.
“Term” of this Note shall mean fifty -five (55) years from the date of recordation of that certain Assignment and Assumption a nd Second Modification of Loan Documents (“Second Modification of Loan Documents”) executed by Borrower and Authority and recorded in the Official Records against the leasehold interest on the Property.”
7. Paragraph 6 of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
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“6. Except in the event of a default described in Section 7 hereof, subject to Section 23 below, no payments shall be due and payable under this Note except to the extent of (a) the Authority’ s share of Residual Receipts as described in Section 8, below, and (b) any refinancing, Cost Savings or Additional Proceeds, subject to the limitations set forth in Section 10, below.
8. Paragraph 7.(b) of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“(b) if there is a default by the Borrower under the terms of the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Affordable Housing Agreement, the Lease, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the HOME Agreement, the Agreement Containing Covenants, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, or any deed of trust or other instrument securing the Senior Loan or other obligations secured by a deed of trust on the Property, which is not cured within the respective time period provided herein and therein.”
9. Paragraph 8.(b) of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“(b) The Authority’s Share of Residual Receipts to be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note will be fifty percent (50%) of Residual Receipts; provided, however, until the payment in full of the City of Industry Grant/Loan and the LACDA Loan , the Authority’s Share of Residual Receipts shall be reduced to ___________________ percent (______%) of Residual Receipts (assuming a City of Industry Grant/Loan amount of $________ and a LACDA Loan amount of $___________) or such other percentage amount such that the Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan and the City of Industry Grant/Loan and LACDA Loan share 50% of Residual Receipts on a pro rata basis. The Authority’s Share of Residual Receipts will be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note on a pro rata basis. Following the repayment in full of the City of Industry Grant/Loan and LACDA Loan, the Authority’s Share of Residual Receipts shall be 50%.”
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10. The first sentence at the beginning of Paragraph 9 of each the Authority LMIHF Loan Note and the Authority HOME Loan Note which reads: “All payments to the Authority shall be applied first to the Authority HOME Note and then to this Note” shall be deleted from both the Authority LMIHF Loan Note and the Authority HOME Loan Note. Repayment of the Authority LMIHF Loan Note and the Authority HOME Loan Note shall be made on a pro rata basis from the Authority’s Share of Residual Receipts.
11. The Authority LMIHF Loan Deed of Trust shall secure the Authority LMIHF Loan Note as amended by this Modification. This Modification will be recorded in the Official Records as a modification to the Authority LMIHF Loan Deed of Trust.
12. The Authority HOME Loan Deed of Trust shall secure the Authority HOME Loan Note as amended by this Modification. This Modification will be recorded in the Official Records as a modification to the Authority HOME Loan Deed of Trust.
13. Paragraph 15 of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“ 15. Upon the failure of Borrower to perform or observe any term or provision of, or upon the occurrence of any event of default under the terms of, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Holding Agreement, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, the holder may exercise its rights or remedies hereunder or thereunder.”
14. Paragraph 16.(a) of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“16. (a) Subject to the extensions of time set forth in Section 16, and subject to the further provisions of this Section 16, failure or delay by Borrower to perform any material term or provision of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan N ote, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, 64 of 169
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the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, constitutes a default under this Note.”
15. The first sentence of Paragraph 16.(d) of each the Authority LMIHF Loan Note and the Authority HOME Loan Note is deleted and replaced in its entirety with the following:
“16.(d) If a monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default.”
16. The first two sentences of Paragraph 16.(e) of each the Authority LMIHF Loan Note and the Authority HOME Loan Note are deleted and replaced in their entirety with the following:
“16.(e) If a non-monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower shall have such period to effect a cure prior to exercise of remedies by the Authority under the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund 65 of 169
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Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, and/ or any deed of trust securing a Senior Loan.”
17. Both the Authority LMIHF Loan Note and the Authority HOME Loan Note are amended to add a new Paragraph 23 as follows:
“23. Reserves. Borrower, its successors and assignees shall establish and maintain during the Term of this Note the following reserve accounts with respect to the Project:
(a) Replacement Reserve. Borrower shall establish and maintain a Replacement Reserve. As of the date of the Second Modification of Loan Documents, Borrower shall fund the Replacement Reserve in the amount of $110,000 and thereafter Borrower shall replenish the Replacement Reserve in the amount of $250 per unit per year, to be increased in year six and thereafter to $300 per unit per year. The Replacement Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(b) Operating Reserve . Borrower shall establish and maintain an Operating Reserve. As of the date of the Second Modification of Loan Documents, Borrower shall fund the Operating Reserve in the amount of $27,500 and thereafter Borrower shall replenish the Operating Reserve in the amount of $______ per unit per year. The Operating Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(c) Operating Deficit Reserve. Borrower shall establish and maintain an Operating Deficit Reserve. As of the date of the Second Modification of Loan Documents , Borrower shall fund the Operating Deficit Reserve in the amount of $160,000. The Operating Deficit Reserve may be drawn quarterly to cover deficits between approved financial projections and actual revenue, and reported with the Residual Receipts calculation herein. The Operating Deficit Reserve withdrawals shall not be considered income in the Residual Receipts calculation.
(d) PNA Reserve . Borrower shall establish and maintain a PNA Reserve. As of the date of the Second Modification of Loan Documents, Borrower shall fund the PNA Reserve in the amount of 66 of 169
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$540,000 to pay for current and future physical maintenance and repair needs for the Project.
(e) Transition Reserve . Borrower shall establish and maintain a Transition Reserve. As of the date of the Second Modification of Loan Documents, Borrower shall fund the Transition Reserve in the amount of $100,000. The Transition Reserve may be used for extraordinary operating shortfalls or legal costs related to the transition of rent schedules for over income residents. The Transition Reserve may be drawn quarterly as needed. The use of the Transition Reserve should be reported in the annual report to the Authority, but will not require prior approval before use.
(f) If any of the amounts in the PNA Reserve, Transition Reserve, or Operating Deficit Reserve remain unused at the beginning of the 8th year of project operations (i.e., January 1, 2034), or at the time of a capital event that requires consent of the Authority, and if Borrower cannot demonstrate a need to maintain these Reserves to cover anticipated costs, then, notwithstanding any other provision herein, these Reserves shall be used as a repayment of five (5) Authority Loans and two (2) LACDA Loans up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.
(g) Long Term Capital Needs Reserve. The PNA completed prior to the date of the Second Modification of Loan Documents projected the long term needs of the Project through Year 12 to be $1,206,377. In addition to the $540,000 PNA Reserve established the date of the Second Modification of Loan Documents , notwithstanding any other provision herein, Borrower may retain 100% of Residual Receipts in Years 2 – 12 following the Second Modification of Loan Documents (i.e., January 1, 2026 through December 31, 2038) for the sole purpose of funding a Long Term Capital Needs Reserve in an amount up to a combined total with the PNA Reserve of $1,206,377. If and to the extent any such additional Residual Receipts are not used to fund the Long Term Capital Needs Reserve, such Residual Receipts shall be required to be used to repay the five (5) Authority Loans and two (2) LACDA Loans in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project. If the Project is 67 of 169
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recapitalized using LIHTC (or other funds), the Long Term Capital Needs Reserve deposits of Residual Receipts will stop, and such Residual Receipts shall be required to be used to repay the five (5) Authority Loans and two (2) LACDA Loans up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans , unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.”
18. Documents Remains in Full Force and Effect . Except as amended hereby, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Authority LMIHF Loan Note, and the Authority LMIHF Loan Deed of Trust are each hereby ratified and reaffirmed, and continue in full force and effect.
19. Additional Documents . The parties each agree to execute and deliver any additional or supplemental documents or instructions as may be necessary or convenient to implement the terms of this Modification and close the transaction contemplated hereby.
20. Titles and Captions. Titles or captions contained herein are inserted as a matter of conveniences and for reference, and in no way define, limit, extend or describe the scope of this Modification or any provision hereof.
21. Interpretation. No provision in this Modification is to be interpreted for or against any party because that party or its legal representatives drafted such provision.
22. Waiver. No breach of any provision hereof may be waived unless in writing.
Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.
23. Severance. If any provision of this Modification is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from this Modification as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Modification.
24. Voluntary Agreement. The parties hereto represent and declare that they carefully read this Modification and know the contents thereof, and that they sign the same freely and voluntarily.
25. Binding Effect. This Modification shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.
26. Governing Law. This Modification shall be governed by, interpreted under, and 68 of 169
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construed and enforced in accordance with the laws of the State of California.
27. Counterparts. This Modification may be executed in counterparts and when so executed, each such counterpart will constitute an original document and such counterparts will constitute one and the same agreement.
28. Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Modification.
29. No Third Party Beneficiaries . This Modification is made for the sole benefit and protection of the parties hereto, and no other person or persons shall have any right of action or right to rely hereon.
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IN WITNESS WHEREOF, the Authority and the Borrower have executed this Modification as of the date first written above.
“BORROWER” [PROVIDE SIGNATURE
BLOCK]
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“AUTHORITY”
THE HOUSING AUTHORITY OF THE
CITY OF GLENDALE
By: ____________________________
Roubik Golanian, P.E.
Executive Director
APPROVED AS TO FORM AND LEGALITY:
MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority
By: _____________________________
Michael J. Garcia
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By: ______________________________
Susan Apy
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STATE OF CALIFORNIA )
)
COUNTY OF )
On , before me, ,
a Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 72 of 169
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Exhibit 5
EXHIBIT 5
FORM OF AFFORDABLE HOUSING TRUST FUND NOTE
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PROMISSORY NOTE
TO THE HOUSING AUTHORITY
OF THE CITY OF GLENDALE
[Affordable Housing Trust Fund]
3% Interest Glendale, California
$1,749,891.00 ______________, 2025
FOR VALUE RECEIVED, LINC 328 MIRA LOMA LLC, a California limited liability company (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), a public body, corporate and politic, or order, a principal amount of ONE MILLION SEVEN HUNDRED FORTY-N INE THOUSAND EIGHT HUNDRED NINETY-ONE DOLLARS ($1,749,891) (the “ Authority Affordable Housing Trust Loan ”).
This Note is given pursuant to that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, as further amended by that certain Second Amendment to Affordable Housing Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement”) and evidences the Authority Affordable Housing Trust Loan to Borrower, which provides part of the financing for that certain real property in the City of Glendale legally described in the Deed of Trust securing this Note (the “Property”). The obligation of Borrower to Authority hereunder is subject to the terms of the Affordable Housing Agreement, this Note and the following instruments, where applicable, executed and delivered by Borrower for the purpose of securing this Note: an Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records of Los Angeles County (“ Official Records”) on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, as further a mended by that certain Second Amendment to Agreement Containing Covenants dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time (collectively, the “Agreement Containing Covenants ”); a Subordinate d Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) dated on or about the date hereof, as may be amended or modified from time to time (“Authority Affordable Housing Trust Loan Deed of Trust”); an Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modi fied from time to time (collectively, the “HOME Agreement”); an Assignment of Rents and Leases dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Document No. 20070330428 (“Assignment of Rents ”); an Assignment of Agreements dated on or about February 14, 2007 (“Assignment of Agreements”); and a UCC-1 Financing Statement recorded and filed on or about 74 of 169
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the date hereof (“UCC-1”). Said documents are public records on file in the offices of Authority, and the provisions of said documents are incorporated herein by this reference. The Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. In addition, the following terms shall have the following meanings:
“Acquisition and Development Costs” shall mean costs of the acquisition of the Property and the construction of the Improvements thereon in accordance with the Affordable Housing Agreement.
“Affiliate” shall mean (1) any Person directly or indirectly controlling, controlled by or under common control with another Person; (2) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such other Person; or (3) if that other Person is an officer, director, member or partner, any company for which such Person acts in any such capacity. The term “control” as used in the immediately preceding sentence, shall mean the power to direct the management or the pow er to control election of the board of directors. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exercise or control, directly or indirectly, more than fifty percent (50%) of the voting ri ghts attributable to the controlled corporation or limited liability company, and, with respect to any individual, partnership, trust, other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direc tion of the management or policies of the controlled entity. For the purposes of this definition, any general partner shall be considered an “Affiliate” of Borrower.
“Annual Financial Statement ” shall mean the annual audited financial statement of Revenue and Operating Expenses and balance sheet for the Improvements, prepared at the Borrower’s expense, by an independent certified public accountant reasonably acceptable to the Authority, which shall form the basis for determining the Residual Receipts.
“Asset Management Fee” shall mean any fee, regardless of how it is characterized, paid to a Tax Credit Equity Investor for the purpose of managing the affairs of a Tax Credit Equity Investor.
“Authority Affordable Housing Trust Fund Loan” shall mean the loan from the Authority to Borrower, in the amount of $1,749,891, secured by the Authority Affordable Housing Trust Fund Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is fourth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, to the lien of the Authority HOME Loan Deed of Trust, and to the lien of the Authority LMIHF Loan Deed of Trust, and senior to the lien of the Authority PLHA Loan Deed 75 of 169
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of Trust.
“Authority Affordable Housing Trust Fund Loan Deed of Trust ” shall mean the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records on or about the date hereof, which secures the Authority Affordable Housing Trust Fund Loan Note and the Authority Affordable Housing Trust Fund Loan evidenced hereby as may be amended or modified from time to time.
“Authority Affordable Housing Trust Fund Loan Note” shall mean this Note dated on or about the date hereof evidencing the Authority Affordable Housing Trust Fund Loan, as may be amended or modified from time to time.
“Authority HOME Loan ” shall mean the loan from the Authority to Borrower, in the amount of $1,800,000, which is evidenced by the Authority HOME Loan Note and which is secured by the Authority HOME Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is second in priority, junior in priority to the lien of the Senior Loan Deed of Trust and senior in priority to the lien of the Authority LMIHF Loan Deed of Trust.
“Authority HOME Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496198, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time t o time, which secures the Authority HOME Loan Note.
“Authority HOME Loan Note” shall mean that certain promissory note dated on or about March 19, 2008, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time.
“Authority LMIHF Loan” shall mean the loan made by the Authority to Borrower pursuant to the Affordable Housing Agreement in the maximum amount of $3,237,355, which is evidenced by the Authority LMIHF Loan Note and which is secured by the Authority LMIHF Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is third in priority, junior in priority to the lien of the Senior Loan Deed of Trust and to the lien of the Authority HOME Loan Deed of Trust and senior to the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust and to the lien of the Authority PLHA Loan Deed of Trust.
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“Authority LMIHF Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as amended by that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that cert ain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time, which secures the Authority LMIHF Loan Note.
“Authority LMIHF Loan Note” shall mean that certain promissory note dated on or about February 14, 2007, as amended by that that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time.
“Authority Loan” shall mean the loans from the Authority to Borrower for the Project from time to time, which include the Senior Loan, Authority LMIHF Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan, secured by the Senior Loan Deed of Trust, Authority LMIHF Loan Deed of Trust, the Authority HOME Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Deed of Trust, and the Authority the Authority PLHA Loan, respectively, and the other Authority Loan Documents.
“Authority Loan Documents” shall mean the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Authority Affordable Housing T rust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Agreement Containing Covenants, the Agreement Containing HOME Program Requirements, the Assignment of Rents, the Assignment of Agreements, and each and every UCC- 1 Financing Statement filed or recorded with respect to the foregoing.
“Authority PLHA Loan” shall mean the loan from the Authority to Borrower, in the amount of $465,600, secured by the Authority PLHA Loan Deed of Trust and the other Authority Loan Documents and having a lien on leasehold interest in the Property that is fifth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, the lien of the Authority HOME Loan Deed of Trust, the lien of the Authority LMIHF Loan Deed of Trust , and the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust.
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“Authority PLHA Loan Deed of Trust ” shall mean the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records of the Los Angeles County Recorder’s Office on or about the date hereof, which secures the Authority PLHA Loan Note and the Authority PLHA Loan evidenced hereby, as may be amended or modified from time to time.
“Authority PLHA Loan Note” shall mean the Promissory Note dated on or about the date hereof evidencing the Authority PLHA Loan, as may be amended or modified from time to time.
“Authority’s Share of Residual Receipts” shall have the meaning set forth in Section 8.(b), below.
“City of Industry Grant/Loan” shall mean a grant or loan awarded to Borrower by the Los Angeles County Community Development Commission, under the City of Industry Funds Program, which shall be subject to terms and conditions that are approved by the Authority Executive Director or designee.
“City of Industry Deed of Trust” shall mean the deed of trust on the Property which secures the City of Industry Grant/Loan, as it may be amended or modified from time to time.
“Environmental Indemnit y” shall mean the indemnity in the form attached to the Affordable Housing Agreement as Attachment No. 12, which is incorporated herein by this reference.
“HOME Agreement ” shall mean that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time.
“Lease” shall mean that certain Lease Agreement dated on or about February 14, 2007, as amended by that certain Assignment and Assumption and Amendment to Lease Agreement dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time to time.
“Improvements” shall mean the 44 -unit residential development to be constructed on the Property, all as described in the Affordable Housing Agreement.
“LACDA Loan” shall mean a residual receipts loan to Borrower from the Los Angeles County Development Authority (“LACDA”), which shall be subject to terms and conditions that are approved by the Authority Executive Director or designee.
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“LACDA Loan Deed of Trust” shall mean the deed of trust on the leasehold interest in the Property which secures the LACDA Loan, as may be amended or modified from time to time.
“Low Income ” shall mean, for purposes of this Note, household income that does not exceed sixty percent (60%) of the median income for Los Angeles County, adjusted for family size appropriate for the Unit.
“Low Income Housing Tax Credits” shall mean tax credits authorized by the Tax Reform Act of 1986 and governed by Section 42 of the Internal Revenue Code.
“LMIHF” shall mean the Low and Moderate Income Housing Fund for the Central Glendale Redevelopment Project and the San Fernando Road Redevelopment Project, established and maintained by the Glendale Redevelopment Agency pursuant to California Health and Safety Code Section 33334.2 et seq.
“Net Proceeds ” shall mean the proceeds of a sale, transfer or refinancing, less the reasonable costs of the transaction.
“Occupancy Date” shall mean the date on which the City of Glendale issues a Certificate of Occupancy for the Improvements.
“Operating Expenses ” shall mean actual, reasonable and customary costs, fees and expenses directly attributable to the operation, maintenance, taxes and management of the Property that are allowable under generally acceptable accounting principles, expressly including, withou t limitation, payment of the following:
1. [intentionally omitted]
2. [intentionally omitted]
3. [intentionally omitted]
4. [intentionally omitted]
5. Credit adjustors owed to the Investor Limited Partner in accordance with the terms of the Borrower’s partnership agreement during the period prior to the withdrawal of the Investor Limited Partner from Borrower’s partnership, provided there are no other sources of capital available to Borrower for making this payment;
6. [intentionally omitted]
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7. A fee to the managing general partner, if any, of Borrower not to exceed $180 per unit per year (subject to annual adjustments not to exceed three percent (3%) per year);
8. An Asset Management Fee to the Investor Limited Partner, if any, equal to $6,500 per year (subject to annual adjustments not to exceed the annual increase in the consumer price index);
9. On-site administrative costs (including salaries and benefits);
10. Maintenance costs (including materials and labor);
11. Payment into a replacement reserve fund in the amount of $300 per unit per year;
12. Painting, cleaning, repairs and alterations;
13. Landscaping;
14. Utilities;
15. Rubbish removal;
16. Certificates, permits and licenses;
17. Sewer charges;
18. Real and personal property taxes and assessments;
19. Insurance;
20. Security;
21. Advertising, promotion and publicity;
22. Office, janitorial, cleaning and building supplies;
23. Cable television, satellite and similar facilities;
24. Recreational amenities, supplies and services;
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25. Reasonable property management fee payable to a third party property manager in an amount equal to the greater of (1) $40 per unit per month or such other reasonable amount as approved by the Authority (subject to annual adjustments not to exceed three an d one-half percent (3.5%) per year) or (2) six percent (6%) of Revenue, whichever is higher;
26. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves); and
27. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party.
Operating Expenses shall be subject to the reasonable approval of the Authority.
“Permanent Lender” shall have the same meaning as “Senior Lender.”
“Permanent Loan” shall have the same meaning as the “Senior Loan.”
“Permanent Loan Deed of Trust ” shall have the same meaning as “Senior Loan Deed of Trust.”
“Permitted Transfer” means any of the following, provided Borrower or a general partner of Borrower retains day- to-day control over management and operations of the Property and the Improvements:
a. An assignment of the Agreement and sale of all of Borrower’s interests in the Property to an Affiliate, or a sale back to Borrower;
b. A conveyance of a security interest in the Property in connection with the Permanent Loan;
c. The inclusion of equity participation by Borrower by addition of limited partners to Borrower’s partnership, or similar mechanisms , and any transfers of limited partnership interests in Borrower’s partnership;
d. The lease for occupancy of all or any part of the Improvements on the Property;
e. The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement; and
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f. In addition, the withdrawal, removal and/or replacement of a general partner of Borrower’s partnership pursuant to the terms of the Borrower’s partnership agreement, a conveyance of Borrower ’s interest in the Property and the Improvements or a transfer of limited partnership interests to the managing general partner pursuant to the right of first refusal provided to that partner in Borrower’s partnership agreement, or a conveyance of Borrower’s interest in the Property and the Improvements or a transfer of limited partnership interests to either of the two general partners pursuant to the option provided to them in Borrower’s partnership agreement, shall not constitute a default under this Note or any of the Authority Loan Documents, nor shall such actions accelerate the maturity of the Authority Affordable Housing Trust Fund Loan, provided that any required substitute general partner is reasonably acceptable to Authority and is selected with reasonable promptness.
Any transfer described in clauses a. or b. shall be subject to the reasonable approval of the Authority Executive Director or designee in accordance with the standards set forth in the respective provisions of the Affordable Housing Agreement.
“Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign.
“Property” shall mean the real property described as the “Property” in and legally described as set forth in Exhibit “A” of the Authority Deed of Trust.
“Residual Receipts ” shall mean (a) the Revenue minus (b) the Operating Expenses, calculated on a 12 -month basis minus (c) the Deferred Contractor’s Fee minus (d) the Deferred Developer’s Fee . All calculations of Residual Receipts shall be subject to verification and reasonable approval by the Authority.
“Revenue” shall mean the gross rental income from the Improvements, and any other income to the Borrower derived from the ownership, operation and management of the Property.
“Senior Loan” shall mean the permanent loan made by CCRC to Borrower in the original principal amount of $1,890,000 which is secured by the Senior Loan D eed of Trust that is senior and superior to the Authority Affordable Housing Trust Fund Loan Deed of Trust, or any other loan secured by a deed of trust or other instrument to which the Authority agrees to subordinate this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust and the other Authority Loan Documents, which loan has been assigned to Authority as CCRC’s successor’s - in-interest thereunder.
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“Senior Loan Deed of Trust” or “Permanent Loan Deed of Trust ” shall mean that certain Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument No. 20091296583, as amended by that Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof, and as may be further amended or modified from time to time, which secures the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in-interest as beneficiary thereunder.
“Senior Loan Note” shall mean that certain residual receipts promissory note dated as of June 30, 2009 in the original principal amount of $1,890,000 executed by Borrower in favor of CCRC evidencing the Senior Loan, as amended by that certain Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time , which evidences the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in-interest as beneficiary thereunder.
“Tax Credit Equity Investor ” or “Investor Limited Partner ” shall mean any Person who will be an investor limited partner in Borrower ’s limited partnership and who will purchase the Low Income Housing Tax Credits and own 99.99% interest in the Borrower.
“Term” of this Note shall mean fifty-five (55) years from the date hereof.
“Transfer” shall have the meaning set forth in Section 11 of this Note.
2. This Note evidences the obligation of the Borrower to the Authority for the repayment of the Authority Affordable Housing Trust Fund Loan. None of the funds provided pursuant to the Authority Affordable Housing Trust Fund Loan were funded directly or indirectly with any obligation the interest on which is exempt from tax under Section 103 of the Internal Revenue Code of 1986, as amended, or pursuant to any United States government federal.
3. This Note is payable at the principal office of Authority, 141 North Glendale Avenue, Glendale, California 91206, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States.
4. This Note shall be secured by the Authority Affordable Housing Trust Fund Loan Deed of Trust.
5. This Note shall bear simple interest at the annual rate of three percent (3%), which shall begin to accrue upon the date of this Note.
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6. Except in the event of a default described in Section 7 hereof, subject to Section 23 below, no payments shall be due and payable under this Note except to the extent of (a) the Authority’s share of Residual Receipts as described in Section 8, below, and (b) any refinancing, as set forth in Section 10, below.
7. The entire unpaid principal balance of this Note and any accrued but unpaid interest shall be due and payable upon the expiration of the Term hereof, or immediately upon the occurrence of either of the following:
(a) if the Property or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the Authority, except as otherwise permitted in this Note; or
(b) if there is a default by the Borrower under the terms of the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Affordable Housing Agreement, the Lease, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the HOME Agreement, the Agreement Containing Covenants, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, or any deed of trust or ot her instrument securing the Senior Loan or other obligations secured by a deed of trust on the Property, which is not cured within the respective time period provided herein and therein.
8. Prior to the expiration of the Term hereof, Borrower shall be obligated to repay the Authority Affordable Housing Trust Fund Loan exclusively from the Authority’s share of Residual Receipts, as follows:
(a) Annually, not later than the thirtieth (30
th) day of April, beginning with
April 30, 2026, Borrower shall submit to Authority an audited Annual Financial Statement for the preceding calendar year, prepared by a certified public accountant reasonably acceptable to the Authority, determining the amount of Residual Receipts, if any, generated in that year, together with payment of the Authority’s Share of such Residual Receipts. The first such Annual Financial Statement shall be for the partial year beginning on the date of this Note and ending on December 31 of that year. The Authority shall review and approve such Annual Financial Statement, or request revisions, within 30 days after receipt. In the event as the result of the Authority’s review of the statement, there is an increase in the amount of any payment due and payable to Authority (as the result, for example, of a determination that the actual amount of Residual Receipts to which the Authority is entitled exceeds the amount of A uthority’s share of Residual Receipts shown in the Annual Financial Statement submitted by Borrower), Borrower shall promptly pay to the Authority the difference, with interest, from the date on which such payment was due, at the rate of one percent (1%) over the Prime Rate announced by Bank of America, but in any event within ten (10) days of notice of such increase.
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(b) The Authority’s Share of Residual Receipts to be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note will be fifty percent (50%) of Residual Receipts; provided, however, until the payment in full of the City of Industry Grant/Loan and the LACDA Loan , the Authority’s Share of Residual Receipts shall be reduced to ___________________ percent (______%) of Residual Receipts (assuming a City of Industry Grant/Loan amount of $________ and a LACDA Loan amount of $___________) or such other percentage amount such that the Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan and the City of Industry Grant/Loan and LACDA Loan share 50% of Residual Receipts on a pro rata basis. The Authority’s Share of Residual Receipts will be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note on a pro rata basis. Following the repayment in full of the City of Industry Grant/Loan and LACDA Loan, the Authority’s Share of Residual Receipts shall be 50%.
9. All payments to the Authority shall be applied first to interest, then to reduce the principal amount owed.
10. To induce Authority to make the Authority Affordable Housing Trust Fund Loan evidenced hereby, Borrower covenants and agrees if at any time Borrower refinances the initial Permanent Loan, Borrower shall apply the net proceeds of any such refinancing in excess of the amount needed to pay in full the then-current balance of the Permanent Loan, first to pay Operating Expenses (as defined above), then fifty percent (50%) of the balance shall be paid to the Authority to pay accrued interest on, and then reduce the principal amount of the Authority Loan.
11. (a) Prior to the repayment in full of the Authority Loan, the Borrower shall not assign or attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Improvements thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the Authority, except as otherwise permitted in this Note. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Authority shall not unreasonably withhold or delay its consent. If consent should be given, any such transfer shall be subject to this Section 11, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to the provisions of subsection 11(e)(iii), below.
(b) Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill the obligations undertaken by Borrower in the Affordable Housing Agreement, the Agreement 85 of 169
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Containing Covenants, the Agreement Containing HOME Program Requirements and this Note.
Any such proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the Authority shall expressly assume all of the obligations of the Borrower under the Affordable Housing Agreement, the Agreement Containing Covenants and the Agreement Containing HOME Program Requiremen ts, and agree to be subject to all conditions and restrictions applicable to the Borrower in this Note, subject to the provisions of subsection 11(e)(iii). There shall be submitted to the Authority for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Authority its approval shall be indicated to the Borrower in writing.
(c) In the absence of specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by the Authority, shall be deemed to relieve the Borrower or any other party from any obligations under the Affordable Housing Agreement, the Agreement Containing Covenants and the Agreement Containing HOME Program Requirements.
(d) In the event of a Transfer prior to the time the Authority Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the Authority Affordable Housing Trust Fund Loan and all accrued but unpaid interest shall be immediately due and payable.
(e) (i) As used herein, “Transfer” includes the sale, transfer or conveyance of the Property, the Improvements, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or the Improvements; or the lease of all or substantially all of the Property or Improvements, except as provided in subparagraph (e)(iii) of this Section 11, below.
(ii) “Transfer” shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Borrower, or any conversion of Borrower to an entity form other than that of Borrower at the time of execution of this Note, except for the following: (A) a cumulative change in the ownership interests of any individual limited liability company member of forty -nine percent (49%) or less shall not be deemed a “Transfer” for purposes of this Note; and (B) a transfer of a portion or a majority of stock of any corporation to a trust formed in connection with a qualified employee ownership plan shall not, by itself, be deemed to constitute a change in ownership for purposes of this Note.
(iii) Notwithstanding paragraphs (i) and (ii), “Transfer” shall not include any Permitted Transfers, as defined above. In addition, the term “Transfer” shall not include the conveyance of fee title to the Authority and lease-back of the Property in accordance with the Affordable Housing Agreement.
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(f) The Authority shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder. Any disapproval shall be in writing and contain the Authority’s reasons for disapproval.
12. The Authority Affordable Housing Trust Fund Loan is funded from a share of the City’s Affordable Housing Trust Fund Program funds. Accordingly, Borrower agrees for itself, its successors and assigns, that the use of the property shall be subject to the restrictions on rent and occupancy set forth in the Agreement Containing Covenants and the Agreement Containing HOME Program Requirements.
13. Subject to the provisions and limitations of this Section 13, the obligation to repay the Authority Affordable Housing Trust Fund Loan is a nonrecourse obligation of the Borrower.
Borrower and any general partner or limited partner of Borrower shall not have any personal liability for repayment of the loan, except as provided in this Section 13. The sole recourse of Authority shall be the exercise of its rights against the Property and any related security for the Authority Affordable Housing Trust Fund Loan. Provided, however, that the foregoing shall not (a) constitute a waiver of any obligation evidenced by this Note or the Authority Affordable Housing Trust Fund Loan Deed of Trust; (b) limit the right of the Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Note and the Authority Affordable Housing Trust Fund Loan Deed of Trust or any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment shall be asked for or taken against Borrower; (c) release or impair this Note or the Authority Affordable Housing Trust Fund Loan Deed of Trust; (d) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or any other instrument securing this Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, its remedies in respect of any deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing this Note; (f) relieve Borrower of any of its obligations under any indemnity delivered by Borrower to Authority; or (g) affect in any way the validity of any guarantee or indemnity from any person of all or any of the obligations evidenced and secured by this Note and the Authority Affordable Housing Trust Fund Loan Deed of Trust. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns shall have personal liability hereunder for any deficiency judgment, but only if and to the e xtent Borrower, its principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, o r other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in 87 of 169
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respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party:
(A) any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee of Borrower, or of any member or general or limited partner of Borrower, or of any general or limited partner of such member or general or limited partner;
(B) any damages, costs and expenses incurred by Authority as a result of any misappropriation of funds provided for the payment of Acquisition and Development Costs, as described in the Affordable Housing Agreement, rents and revenues from the operation of th e Project, or proceeds of insurance policies or condemnation proceeds;
(C) any and all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity, and
(D) all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Authority shall pay Borrower’s reasonable court costs and attorneys ’ fees if Borrower is the prevailing party in any such enforcement or collection action).
14. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date un der this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust or any term or provision of either thereof.
15. Upon the failure of Borrower to perform or observe any term or provision of, or upon the occurrence of any event of default under the terms of, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Holding Agreement, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, the holder may exercise its rights or remedies hereunder or thereunder.
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16. (a) Subject to the extensions of time set forth in Section 16, and subject to the further provisions of this Section 16, failure or delay by Borrower to perform any material term or provision of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, constitutes a default under this Note.
(b) Authority shall give written notice of default to Borrower, specifying the default complained of by the Authority. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.
(c) Any failures or delays by Authority 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 Authority in asserting any of its rights and remedies shall not de prive Authority of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.
(d) If a monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default .
Borrower shall have a reasonable period of time after such notice is given within which to cure the default prior to exercise of remedies by Authority under this Note and/or the Authority Affordable Housing Trust Fund Loan Deed of Trust. In no event shall Authority be precluded from exercising remedies if its security becomes or is about to become materially impaired by any failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received.
(e) If a non-monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust , this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, 89 of 169
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the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default.
If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower shall have such period to effect a cure prior to exercise of remedies by the Authority under the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, and/ or any deed of trust securing a Senior Loan. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Authority. If Borrower fails to take corrective action or to cure the default within a reasonable time, Authority shall give Borrower and each of the general and limited partners of Borrower’s partnership written notice thereof, whereupon the limited partner, subject to the terms of the Borrower’s partnership agreement, may remove and replace the general partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. In no event shall Authority be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a defa ult or the default is not cured within one hundred eighty (180) days after the notice of default is received or deemed received.
(f) Any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional m essenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Borrower; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. Notices to the limited partner shall be sent to the following address:
[Linc to provide notice address]
17. Notwithstanding specific provisions of this Note, Borrower shall not be deemed to be in default for failure to perform any non-monetary performance hereunder where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary l abor, material or tools, delays of any contractor, sub-contractor or supplier, 90 of 169
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acts of the Authority or any other public or governmental Authority or entity, or any causes beyond the control or without the fault of the Borrower. An extension of time for any such cause (a “Force Majeure Delay”) shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by Borrower is sent to the Authority within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the Borrower delivers to the Authority written notice describing the event, its cause, when and how Borrower obtained knowledge, the date and the event com menced, and the estimated delay resulting therefrom. Borrower shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. Times of performance under this Agreement may also be extended in writing by the Authority and Borrower.
18. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations shall be completely performed and paid.
19. [intentionally omitted].
20. Subordination to Extended Low-Income Housing Commitment. Authority agrees that the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust shall be subordinate to any extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the “Extended Use Agreement”) recorded against the Project; provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under the Authority Affordable Housing Trust Fund Loan Deed of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code. The following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, shall also apply: for a period of three (3) years from the date of foreclosure, with respect to any unit that had been regulated by the Extended Use A greement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code.
Borrower acknowledges and agrees that any default, event of default, or breach (however such terms may be defined) under the Extended Use Agreement shall be an event of default under this Note and the Authority Affordable Housing Trust Fund Loan Deed of Trust and that any costs, damages or other amounts, including reasonable attorneys’ fees incurred by Authority as a result of an event of default by Borrower, and any amounts paid by Authority to cure any default under the Extended Use Agreement shall be an obligation of Borrower and become a part of the debt evidenced by this Note and secured by the Authority Affordable Housing Trust Fund Loan Deed of Trust.
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21. In any approval, consent or other determination by Authority required under this Note or any of the other Authority Loan Documents, Authority shall act reasonably and in good faith.
22. Borrower shall have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty.
23. Reserves. Borrower, i ts successors and assignees shall establish and maintain during the Term of this Note the following reserve accounts with respect to the Project:
(a) Replacement Reserve. Borrower shall establish and maintain a Replacement Reserve. As of the date of this Note, Borrower shall fund the Replacement Reserve in the amount of $110,000 and thereafter Borrower shall replenish the Replacement Reserve in the amount of $250 per unit per year, to be increased in year six and thereafter to $300 per unit per year. The Replacement Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(b) Operating Reserve . Borrower shall establish and maintain an Operating Reserve. As of the date of this Note, Borrower shall fund the Operating Reserve in the amount of $27,500 and thereafter Borrower shall replenish the Operating Reserve in the amount of $______ per unit per year. The Operating Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(c) Operating Deficit Reserve. Borrower shall establish and maintain an Operating Deficit Reserve. As of the date of this Note, Borrower shall fund the Operating Deficit Reserve in the amount of $160,000. The Operating Deficit Reserve may be drawn quarterly to cover deficits between approved financial projections and actual revenue, and reported with the Residual Receipts calculation herein. The Operating Deficit Reserve withdrawals shall not be considered income in the Residual Receipts calculation.
(d) PNA Reserve. Borrower shall establish and maintain a PNA Reserve. As of the date of this Note, Borrower shall fund the PNA Reserve in the amount of $540,000 to pay for current and future physical maintenance and repair needs for the Project.
(e) Transition Reserve. Borrower shall establish and maintain a Transition Reserve. As of the date of this Note, Borrower shall fund the Transition Reserve in the amount of $100,000. The Transition Reserve may be used for extraordinary operating shortfalls or legal costs related to the transition of rent schedules for over income residents. The Transition Reserve may be drawn quarterly as needed. The use of the Transition Reserve should be reported in the annual report to the Authority, but will not require prior approval before use.
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(f) If any of the amounts in the PNA Reserve, Transition Reserve, or Operating Deficit Reserve remain unused at the beginning of the 8th year of project operations (i.e., January 1, 2034), or at the time of a capital event that requires consent of the Authorit y, and if Borrower cannot demonstrate a need to maintain these Reserves to cover anticipated costs, then, notwithstanding any other provision herein, these Reserves shall be used as a repayment of the Authority LMIHF Loan, the Senior Loan, the Authority HO ME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/Loan, and LACDA Loan up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.
(g) Long Term Capital Needs Reserve. The PNA completed prior to the date of this Note projected the long term needs of the Project through Year 12 to be $1,206,377. In addition to the $540,000 PNA Reserve established the date of the Second Modification of Loan Documents, notwithstanding any other provision herein, Borrower may retain 100% of Residual Receipts in Years 2 – 12 following the Second Modification of Loan Documents (i.e., January 1, 2026 through December 31, 2038) for the sole purpose of funding a Long Term Capital Needs Reserve in an amount up to a combined total with the PNA Reserve of $1,206,377. If and to the extent any such additional Residual Receipts are not used to fund the Long Term Capital Needs Reserve, such Residual Receipts shall be required to be used to repay the Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/Loan, and LACDA Loan in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project. If the Project is recapitalized using LIHTC (or other funds), the Long Term Cap ital Needs Reserve deposits of Residual Receipts will stop, and such R esidual Receipts shall be required to be used to repay Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/ Loan, and LACDA Loan up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.
IN WITNESS WHEREOF Borrower has executed this Note as of the day and year set forth above.
“BORROWER” [PROVIDE SIGNATURE
BLOCK]
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Assignment and Assumption Agreement and Consent
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Exhibit 6
EXHIBIT 6
FORM OF PLHA NOTE
[behind this page]
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8.5.25 PLHA Loan Note
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PROMISSORY NOTE
TO THE HOUSING AUTHORITY
OF THE CITY OF GLENDALE
[PLHA]
3% Interest Glendale, California
$465,600.00 ______________, 2025
FOR VALUE RECEIVED, LINC 328 MIRA LOMA LLC, a California limited liability company (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), a public body, corporate and politic, or order, a principal amount of FOUR HUNDRED SIXTY-FIVE THOUSAND SIX HUNDRED DOLLARS ($ 465,600) (the “Authority PLHA Loan”). This Note is given pursuant to that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, as further amended by that certain Second Amendment to Affordable Housing Agreement dated on or about the date hereof, and as may be further amended or modified from time to time (collectively, the “Affordable Housing Agreement”) and evidences the Authority PLHA Loan to Borrower, which provides part of the financing for that certain real property in the City of Glendale legally described in the Deed of Trust securing this Note (the “Property ”). The obligation of Borrower to Authority hereunder is subject to the terms of the Affordable Housing Agreement, this Note and the following instruments, where applicable, executed and delivered by Borrower for the purpose of securing this Note: an Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records of Los Angeles County (“ Official Records ”) on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, as further amended by that certain Second Amendment to Agreement Containing Cove nants dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time (collectively, the “Agreement Containing Covenants ”); a Subordinate d Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) dated on or about the date hereof, as may be amended or modified from time to time (“Authority PLHA Loan Deed of Trust”); an Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time ( collectively, the “HOME Agreement ”); an Assignment of Rents and Leases dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Document No. 20070330428 (“Assignment of Rents ”); an Assignment of Agreements dated on or about February 14, 2007 (“Assignment of Agreements”); and a UCC-1 Financing Statement recorded and filed on or about the date hereof (“UCC-1”). Said documents are public records on file in the offices of Authority, 95 of 169
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and the provisions of said documents are incorporated herein by this reference. The Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. In addition, the following terms shall have the following meanings:
“Acquisition and Development Costs” shall mean costs of the acquisition of the Property and the construction of the Improvements thereon in accordance with the Affordable Housing Agreement.
“Affiliate” shall mean (1) any Person directly or indirectly controlling, controlled by or under common control with another Person; (2) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such other Person; or (3) if that other Person is an officer, director, member or partner, any company for which such Person acts in any such capacity. The term “control” as used in the immediately preceding sentence, shall mean the power to direct the management or the pow er to control election of the board of directors. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exercise or control, directly or indirectly, more than fifty percent (50%) of the voting ri ghts attributable to the controlled corporation or limited liability company, and, with respect to any individual, partnership, trust, other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direc tion of the management or policies of the controlled entity. For the purposes of this definition, any general partner shall be considered an “Affiliate” of Borrower.
“Annual Financial Statement ” shall mean the annual audited financial statement of Revenue and Operating Expenses and balance sheet for the Improvements, prepared at the Borrower’s expense, by an independent certified public accountant reasonably acceptable to the Authority, which shall form the basis for determining the Residual Receipts.
“Asset Management Fee” shall mean any fee, regardless of how it is characterized, paid to a Tax Credit Equity Investor for the purpose of managing the affairs of a Tax Credit Equity Investor.
“Authority Affordable Housing Trust Fund Loan” shall mean the loan from the Authority to Borrower, in the amount of $1,749,891, secured by the Authority Affordable Housing Trust Fund Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is fourth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, to the lien of the Authority HOME Loan Deed of Trust, and to the lien of the Authority LMIHF Loan Deed of Trust, and senior to the lien of the Authority PLHA Loan Deed of Trust.
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“Authority Affordable Housing Trust Fund Loan Deed of Trust ” shall mean the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records on or about the date hereof, which secures the Authority Affordable Housing Trust Fund Loan Note and the Authority Affordable Housing Trust Fund Loan evidenced hereby as may be amended or modified from time to time.
“Authority Affordable Housing Trust Fund Loan Note” shall mean the Promissory Note dated on or about the date hereof evidencing the Authority Affordable Housing Trust Fund Loan, as may be amended or modified from time to time.
“Authority HOME Loan ” shall mean the loan from the Authority to Borrower, in the amount of $1,800,000, which is evidenced by the Authority HOME Loan Note and which is secured by the Authority HOME Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is second in priority, junior in priority to the lien of the Senior Loan Deed of Trust and senior in priority to the lien of the Authority LMIHF Loan Deed of Trust.
“Authority HOME Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496198, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time t o time, which secures the Authority HOME Loan Note.
“Authority HOME Loan Note” shall mean that certain promissory note dated on or about March 19, 2008, as amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time.
“Authority LMIHF Loan” shall mean the loan made by the Authority to Borrower pursuant to the Affordable Housing Agreement in the maximum amount of $3,237,355, which is evidenced by the Authority LMIHF Loan Note and which is secured by the Authority LMIHF Loan Deed of Trust and the other Authority Loan Documents and having a lien on the leasehold interest in the Property that is third in priority, junior in priority to the lien of the Senior Loan Deed of Trust and to the lien of the Authority HOME Loan Deed of Trust and senior to the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust and to the lien of the Authority PLHA Loan Deed of Trust.
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“Authority LMIHF Loan Deed of Trust ” shall mean that certain Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) dated February 14, 2007, and recorded in the Official Records on February 15, 2007, as Instrument No. 20070330426, as amended by that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that cert ain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time, which secures the Authority LMIHF Loan Note.
“Authority LMIHF Loan Note” shall mean that certain promissory note dated on or about February 14, 2007, as amended by that that certain Low and Moderate Income Housing Fund Loan Modification Agreement dated March 21, 2008, and recorded in the Official Records on March 24, 2008, as Instrument No. 20080496197, as further amended by that certain Assignment and Assumption and Second Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may be further amended or modified from time to time.
“Authority Loan” shall mean the loans from the Authority to Borrower for the Project from time to time, which include the Senior Loan, Authority LMIHF Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan, secured by the Senior Loan Deed of Trust, Authority LMIHF Loan Deed of Trust, the Authority HOME Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Deed of Trust, and the Authority the Authority PLHA Loan, respectively, and the other Authority Loan Documents.
“Authority Loan Documents” shall mean the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Authority Affordable Housing T rust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Agreement Containing Covenants, the Agreement Containing HOME Program Requirements, the Assignment of Rents, the Assignment of Agreements, and each and every UCC- 1 Financing Statement filed or recorded with respect to the foregoing.
“Authority PLHA Loan” shall mean the loan from the Authority to Borrower, in the amount of $465,600, secured by the Authority PLHA Loan Deed of Trust and the other Authority Loan Documents and having a lien on leasehold interest in the Property that is fifth in priority, junior in priority to the lien of the Senior Loan Deed of Trust, the lien of the Authority HOME Loan Deed of Trust, the lien of the Authority LMIHF Loan Deed of Trust , and the lien of the Authority Affordable Housing Trust Fund Loan Deed of Trust.
“Authority PLHA Loan Deed of Trust ” shall mean the Subordinated Leasehold Deed of 98 of 169
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Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and recorded in the Official Records of the Los Angeles County Recorder’s Office on or about the date hereof, which secures the Authority PLHA Loan Note and the Authority PLHA Loan evidenced hereby, as may be amended or modified from time to time.
“Authority PLHA Loan Note ” shall mean this Note dated on or about the date hereof evidencing the Authority PLHA Loan, as may be amended or modified from time to time.
“Authority’s Share of Residual Receipts” shall have the meaning set forth in Section 8.(b), below.
“City of Industry Grant/Loan” shall mean a grant or loan awarded to Borrower by the Los Angeles County Community Development Commission, under the City of Industry Funds Program, which shall be subject to terms and conditions that are approved by the Authority Executive Director or designee.
“City of Industry Deed of Trust” shall mean the deed of trust on the Property which secures the City of Industry Grant/Loan, as it may be amended or modified from time to time.
“Environmental Indemnit y” shall mean the indemnity in the form attached to the Affordable Housing Agreement as Attachment No. 12, which is incorporated herein by this reference.
“HOME Agreement ” shall mean that certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to time.
“Lease” shall mean that certain Lease Agreement dated on or about February 14, 2007, as amended by that certain Assignment and Assumption and Amendment to Lease Agreement dated on or about the date hereof and recorded in the Official Records on or about the date hereof, as may be amended or modified from time to time.
“Improvements” shall mean the 44 -unit residential development to be constructed on the Property, all as described in the Affordable Housing Agreement.
“LACDA Loan” shall mean a residual receipts loan to Borrower from the Los Angeles County Development Authority (“LACDA”), which shall be subject to terms and conditions that are approved by the Authority Executive Director or designee.
“LACDA Loan Deed of Trust” shall mean the deed of trust on the leasehold interest in the 99 of 169
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Property which secures the LACDA Loan, as may be amended or modified from time to time.
“Low Income ” shall mean, for purposes of this Note, household income that does not exceed sixty percent (60%) of the median income for Los Angeles County, adjusted for family size appropriate for the Unit.
“Low Income Housing Tax Credits” shall mean tax credits authorized by the Tax Reform Act of 1986 and governed by Section 42 of the Internal Revenue Code.
“LMIHF” shall mean the Low and Moderate Income Housing Fund for the Central Glendale Redevelopment Project and the San Fernando Road Redevelopment Project, established and maintained by the Glendale Redevelopment Agency pursuant to California Health and Safety Code Section 33334.2 et seq.
“Net Proceeds ” shall mean the proceeds of a sale, transfer or refinancing, less the reasonable costs of the transaction.
“Occupancy Date” shall mean the date on which the City of Glendale issues a Certificate of Occupancy for the Improvements.
“Operating Expenses ” shall mean actual, reasonable and customary costs, fees and expenses directly attributable to the operation, maintenance, taxes and management of the Property that are allowable under generally acceptable accounting principles, expressly including, withou t limitation, payment of the following:
1. [intentionally omitted]
2. [intentionally omitted]
3. [intentionally omitted]
4. [intentionally omitted]
5. Credit adjustors owed to the Investor Limited Partner in accordance with the terms of the Borrower’s partnership agreement during the period prior to the withdrawal of the Investor Limited Partner from Borrower’s partnership, provided there are no other sources of capital available to Borrower for making this payment;
6. [intentionally omitted]
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7. A fee to the managing general partner, if any, of Borrower not to exceed $180 per unit per year (subject to annual adjustments not to exceed three percent (3%) per year);
8. An Asset Management Fee to the Investor Limited Partner, if any, equal to $6,500 per year (subject to annual adjustments not to exceed the annual increase in the consumer price index);
9. On-site administrative costs (including salaries and benefits);
10. Maintenance costs (including materials and labor);
11. Payment into a replacement reserve fund in the amount of $300 per unit per year;
12. Painting, cleaning, repairs and alterations;
13. Landscaping;
14. Utilities;
15. Rubbish removal;
16. Certificates, permits and licenses;
17. Sewer charges;
18. Real and personal property taxes and assessments;
19. Insurance;
20. Security;
21. Advertising, promotion and publicity;
22. Office, janitorial, cleaning and building supplies;
23. Cable television, satellite and similar facilities;
24. Recreational amenities, supplies and services;
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25. Reasonable property management fee payable to a third party property manager in an amount equal to the greater of (1) $40 per unit per month or such other reasonable amount as approved by the Authority (subject to annual adjustments not to exceed three an d one-half percent (3.5%) per year) or (2) six percent (6%) of Revenue, whichever is higher;
26. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves); and
27. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party.
Operating Expenses shall be subject to the reasonable approval of the Authority.
“Permanent Lender” shall have the same meaning as “Senior Lender.”
“Permanent Loan” shall have the same meaning as the “Senior Loan.”
“Permanent Loan Deed of Trust ” shall have the same meaning as “Senior Loan Deed of Trust.”
“Permitted Transfer” means any of the following, provided Borrower or a general partner of Borrower retains day- to-day control over management and operations of the Property and the Improvements:
a. An assignment of the Agreement and sale of all of Borrower’s interests in the Property to an Affiliate, or a sale back to Borrower;
b. A conveyance of a security interest in the Property in connection with the Permanent Loan;
c. The inclusion of equity participation by Borrower by addition of limited partners to Borrower’s partnership, or similar mechanisms , and any transfers of limited partnership interests in Borrower’s partnership;
d. The lease for occupancy of all or any part of the Improvements on the Property;
e. The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement; and
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f. In addition, the withdrawal, removal and/or replacement of a general partner of Borrower’s partnership pursuant to the terms of the Borrower’s partnership agreement, a conveyance of Borrower ’s interest in the Property and the Improvements or a transfer of limited partnership interests to the managing general partner pursuant to the right of first refusal provided to that partner in Borrower’s partnership agreement, or a conveyance of Borrower’s interest in the Property and the Improvements or a transfer of limited partnership interests to either of the two general partners pursuant to the option provided to them in Borrower’s partnership agreement, shall not constitute a default under this Note or any of the Authority Loan Documents, nor shall such actions accelerate the maturity of the Authority PLHA Loan, provided that any required substitute general partner is reasonably acceptable to Authority and is selected with reasonable promptness.
Any transfer described in clauses a. or b. shall be subject to the reasonable approval of the Authority Executive Director or designee in accordance with the standards set forth in the respective provisions of the Affordable Housing Agreement.
“Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign.
“Property” shall mean the real property described as the “Property” in and legally described as set forth in Exhibit “A” of the Authority Deed of Trust.
“Residual Receipts ” shall mean (a) the Revenue minus (b) the Operating Expenses, calculated on a 12 -month basis minus (c) the Deferred Contractor’s Fee minus (d) the Deferred Developer’s Fee . All calculations of Residual Receipts shall be subject to verification and reasonable approval by the Authority.
“Revenue” shall mean the gross rental income from the Improvements, and any other income to the Borrower derived from the ownership, operation and management of the Property.
“Senior Loan” shall mean the permanent loan made by CCRC to Borrower in the original principal amount of $1,890,000 which is secured by the Senior Loan D eed of Trust that is senior and superior to the Authority PLHA Loan Deed of Trust, or any other loan secured by a deed of trust or other instrument to which the Authority agrees to subordinate this Note, the Authority PLHA Loan Deed of Trust and the other Authority Loan Documents, which loan has been assigned to Authority as CCRC’s successor’s-in-interest thereunder.
“Senior Loan Deed of Trust” or “Permanent Loan Deed of Trust ” shall mean that certain Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 30, 2009, and recorded in the Official Records on August 24, 2009 as Instrument 103 of 169
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No. 20091296583, as amended by that Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof, and as may be further amended or modified from time to time, which secures the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in-interest as beneficiary thereunder.
“Senior Loan Note” shall mean that certain residual receipts promissory note dated as of June 30, 2009 in the original principal amount of $1,890,000 executed by Borrower in favor of CCRC evidencing the Senior Loan, as amended by that certain Assignment and Assumption and Modification of Loan Documents dated on or about the date hereof and recorded in the Official Records concurrently herewith, and as may be further amended or modified from time to time , which evidences the Senior Loan and which has been assigned to Authority as CCRC’s successor’s-in-interest as beneficiary thereunder.
“Tax Credit Equity Investor ” or “Investor Limited Partner ” shall mean any Person who will be an investor limited partner in Borrower ’s limited partnership and who will purchase the Low Income Housing Tax Credits and own 99.99% interest in the Borrower.
“Term” of this Note shall mean fifty-five (55) years from the date hereof.
“Transfer” shall have the meaning set forth in Section 11 of this Note.
2. This Note evidences the obligation of the Borrower to the Authority for the repayment of the Authority PLHA Loan. None of the funds provided pursuant to the Authority PLHA Loan were funded directly or indirectly with any obligation the interest on which is exempt from tax under Section 103 of the Internal Revenue Code of 1986, as amended, or pursuant to any United States government federal.
3. This Note is payable at the principal office of Authority, 141 North Glendale Avenue, Glendale, California 91206, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States.
4. This Note shall be secured by the Authority PLHA Loan Deed of Trust.
5. This Note shall bear simple interest at the annual rate of three percent (3%), which shall begin to accrue upon the date of this Note.
6. Except in the event of a default described in Section 7 hereof, subject to Section 23 below, no payments shall be due and payable under this Note except to the extent of (a) the Authority’s share of Residual Receipts as described in Section 8, below, and (b) any refinancing, as set forth in Section 10, below.
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7. The entire unpaid principal balance of this Note and any accrued but unpaid interest shall be due and payable upon the expiration of the Term hereof, or immediately upon the occurrence of either of the following:
(a) if the Property or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the Authority, except as otherwise permitted in this Note; or
(b) if there is a default by the Borrower under the terms of the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Affordable Housing Agreement, the Lease, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the HOME Agreement, the Agreement Containing Covenants, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, or any deed of trust or other instrument securing the Senior Loan or other obligations secured by a deed of trust on the Property, which is not cured within the respective time period provided herein and therein.
8. Prior to the expiration of the Term hereof, Borrower shall be obligated to repay the Authority PLHA Loan exclusively from the Authority’s share of Residual Receipts, as follows:
(a) Annually, not later than the thirtieth (30
th) day of April, beginning with
April 30, 2026, Borrower shall submit to Authority an audited Annual Financial Statement for the preceding calendar year, prepared by a certified public accountant reasonably acceptable to the Authority, determining the amount of Residual Receipts, if any, generated in that year, together with payment of the Authority’s Share of such Residual Receipts. The first such Annual Financial Statement shall be for the partial year beginning on the date of this Note and ending on December 31 of that year. The Authority shall review and approve such Annual Financial Statement, or request revisions, within 30 days after receipt. In the event as the result of the Authority’s review of the statement, there is an increase in the amount of any payment due and payable to Authority (as the result, for example, of a determination that the actual amount of Residual Receipts to which the Authority is entitled exceeds the amount of A uthority’s share of Residual Receipts shown in the Annual Financial Statement submitted by Borrower), Borrower shall promptly pay to the Authority the difference, with interest, from the date on which such payment was due, at the rate of one percent (1%) over the Prime Rate announced by Bank of America, but in any event within ten (10) days of notice of such increase.
(b) The Authority’s Share of Residual Receipts to be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note will be fifty percent (50%) of Residual Receipts; provided, however, until the payment in full of the City of Industry Grant/Loan and the LACDA Loan , the Authority’s Share of Residual Receipts shall be 105 of 169
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reduced to ___________________ percent (______%) of Residual Receipts (assuming a City of Industry Grant/Loan amount of $________ and a LACDA Loan amount of $___________) or such other percentage amount such that the Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, and the Authority PLHA Loan and the City of Industry Grant/Loan and LACDA Loan share 50% of Residual Receipts on a pro rata basis. The Authority’s Share of Residual Receipts will be applied to the Authority LMIHF Loan Note, the Senior Loan Note, the Authority HOME Loan Note, the Authority Affordable Housing Trust Fund Loan Note, and the Authority PLHA Loan Note on a pro rata basis. Following the repayment in full of the City of Industry Grant/Loan and LACDA Loan, the Authority’s Share of Residual Receipts shall be 50%.
9. All payments to the Authority shall be applied first to interest, then to reduce the principal amount owed.
10. To induce Authority to make the Authority PLHA Loan evidenced hereby, Borrower covenants and agrees i f at any time Borrower refinances the initial Permanent Loan, Borrower shall apply the net proceeds of any such refinancing in excess of the amount needed to pay in full the then -current balance of the Permanent Loan, first to pay Operating Expenses (as defined above), then fifty percent (50%) of the balance shall be paid to the Authority to pay accrued interest on, and then reduce the principal amount of the Authority Loan.
11. (a) Prior to the repayment in full of the Authority Loan, the Borrower shall not assign or attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Improvements thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the Authority, except as otherwise permitted in this Note. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Authority shall not unreasonably withhold or delay its consent. If consent should be given, any such transfer shall be subject to this Section 11, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to the provisions of subsection 11(e)(iii), below.
(b) Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill the obligations undertaken by Borrower in the Affordable Housing Agreement, the Agreement Containing Covenants, the Agreement Containing HOME Program Requirements and this Note.
Any such proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the Authority shall expressly assume all of the obligations of the Borrower under the Affordable Housing Agreement, the Agreement Containing Covenants and the Agreement Containing HOME Program Requirements, and agree to be subject to all conditions 106 of 169
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and restrictions applicable to the Borrower in this Note, subject to the provisions of subsection 11(e)(iii). There shall be submitted to the Authority for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Authority its approval shall be indicated to the Borrower in writing.
(c) In the absence of specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by the Authority, shall be deemed to relieve the Borrower or any other party from any obligations under the Affordable Housing Agreement, the Agreement Containing Covenants and the Agreement Containing HOME Program Requirements.
(d) In the event of a Transfer prior to the time the Authority Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the Authority PLHA Loan and all accrued but unpaid interest shall be immediately due and payable.
(e) (i) As used herein, “Transfer” includes the sale, transfer or conveyance of the Property, the Improvements, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or the Improvements; or the lease of all or substantially all of the Property or Improvements, except as provided in subparagraph (e)(iii) of this Section 11, below.
(ii) “Transfer” shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Borrower, or any conversion of Borrower to an entity form other than that of Borrower at the time of execution of this Note, except for the following: (A) a cumulative change in the ownership interests of any individual limited liability company member of forty -nine percent (49%) or less shall not be deemed a “Transfer” for purposes of this Note; and (B) a transfer of a portion or a majority of stock of any corporation to a trust formed in connection with a qualified employee ownership plan shall not, by itself, be deemed to constitute a change in ownership for purposes of this Note.
(iii) Notwithstanding paragraphs (i) and (ii), “Transfer” shall not include any Permitted Transfers, as defined above. In addition, the term “Transfer” shall not include the conveyance of fee title to the Authority and lease-back of the Property in accordance with the Affordable Housing Agreement.
(f) The Authority shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder. Any disapproval shall be in writing and contain the Authority’s reasons for disapproval.
12. The Authority PLHA Loan is funded from a share of the City’s Permanent Local Housing Allocation Program funds. Accordingly, Borrower agrees for itself, its successors and 107 of 169
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assigns, that the use of the property shall be subject to the restrictions on rent and occupancy set forth in the Agreement Containing Covenants and the Agreement Containing HOME Program Requirements.
13. Subject to the provisions and limitations of this Section 13, the obligation to repay the Authority PLHA Loan is a nonrecourse obligation of the Borrower. Borrower and any general partner or limited partner of Borrower shall not have any personal liability for repayment of the loan, except as provided in this Section 13. The sole recourse of Authority shall be the exercise of its rights against the Property and any related security for the Authority PLHA Loan. Provided, however, that the foregoing shall not (a) constitute a waiver of any obligation evidenced by this Note or the Authority PLHA Loan Deed of Trust; (b) limit the right of the Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Note and the Authority PLHA Loan Deed of Trust or any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment shall be asked for or taken against Borrower; (c) release or impair this Note or the Authority PLHA Loan Deed of Trust; (d) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or any other instrument securing this Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the e xercise of, its remedies in respect of any deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing this Note; (f) relieve Borrower of any of its obligations under any indemnity delivered by Borrower to Authority; or (g) affect in any way the validity of any guarantee or indemnity from any person of all or any of the obligations evidenced and secured by this Note and the Authority PLHA Loan Deed of Trust . The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns shall have personal liability hereunder for any deficiency judgment, but only if and to the extent Borrower, its principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party:
(A) any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee 108 of 169
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of Borrower, or of any member or general or limited partner of Borrower, or of any general or limited partner of such member or general or limited partner;
(B) any damages, costs and expenses incurred by Authority as a result of any misappropriation of funds provided for the payment of Acquisition and Development Costs, as described in the Affordable Housing Agreement, rents and revenues from the operation of th e Project, or proceeds of insurance policies or condemnation proceeds;
(C) any and all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity, and
(D) all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Authority shall pay Borrower’s reasonable court costs and attorneys ’ fees if Borrower is the prevailing party in any such enforcement or collection action).
14. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date un der this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Authority PLHA Loan Deed of Trust or any term or provision of either thereof.
15. Upon the failure of Borrower to perform or observe any term or provision of, or upon the occurrence of any event of default under the terms of, the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Holding Agreement, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, the holder may exercise its rights or remedies hereunder or thereunder.
16. (a) Subject to the extensions of time set forth in Section 16, and subject to the further provisions of this Section 16, failure or delay by Borrower to perform any material term or provision of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the Agreement Containing HOME Program Requirements , the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority Affordable 109 of 169
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Housing Trust Fund Loan Deed of Trust, the Authority PLHA Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, constitutes a default under this Note.
(b) Authority shall give written notice of default to Borrower, specifying the default complained of by the Authority. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.
(c) Any failures or delays by Authority 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 Authority in asserting any of its rights and remedies shall not deprive Authority of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.
(d) If a monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default. Borrower shall have a reasonable period of time after such notice is given within which to cure the default prior to exercise of remedies by Authority under this Note and/or the Authority PLHA Loan Deed of Trust. In no event shall Authority be precluded from exercising remedies if i ts security becomes or is about to become materially impaired by any failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received.
(e) If a non-monetary event of default occurs under the terms of the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement, the Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust , this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, or any deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising any remedies hereunder or thereunder Authority shall give Borrower written notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower shall have such period to effect a cure prior to exercise of remedies by the Authority under the Authority HOME Loan Note, the Authority HOME Loan Deed of Trust, the Affordable Housing Agreement , the 110 of 169
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Agreement Containing HOME Program Requirements, the Agreement Containing Covenants, the Authority LMIHF Loan Note, the Authority LMIHF Loan Deed of Trust, this Note, the Authority Affordable Housing Trust Fund Loan Deed of Trust, the Authority Affordable Housing Trust Fund Loan Note, the Authority PLHA Loan Deed of Trust, the Senior Loan Note, and/ or any deed of trust securing a Senior Loan. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) ini tiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Authority. If Borrower fails to take corrective action or to cure the default within a reasonable time, Authority shall give Borrower and each of the general and limited partners of Borrower’s partnership written notice thereof, whereupon the limited part ner, subject to the terms of the Borrower’s partnership agreement, may remove and replace the general partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. In no event shall Authority be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the notice of default is received or deemed received.
(f) Any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional m essenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Borrower; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. Notices to the limited partner shall be sent to the following address:
[Linc to provide notice address]
17. Notwithstanding specific provisions of this Note, Borrower shall not be deemed to be in default for failure to perform any non-monetary performance hereunder where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub-contractor or supplier, acts of the Authority or any other public or governmental Authority or entity, or any causes beyond the control or without the fault of the Borrower. An extension of time for any such cause (a “Force Majeure Delay”) shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by Borrower is sent to the Authority within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the Borrower 111 of 169
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delivers to the Authority written notice describing the event, its cause, when and how Borrower obtained knowledge, the date and the event commenced, and the estimated delay resulting therefrom. Borrower shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. Times of performance under this Agreement may also be extended in writing by the Authority and Borrower.
18. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations shall be completely performed and paid.
19. [intentionally omitted].
20. Subordination to Extended Low-Income Housing Commitment. Authority agrees that the lien of the Authority PLHA Loan Deed of Trust shall be subordinate to any extended low- income housing commitment (as such term is defined in Section 42(h)(6)(B) of t he Internal Revenue Code) (the “Extended Use Agreement”) recorded against the Project; provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under the Authority PLHA Loan Deed of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code. The following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, shall also apply: for a period of three (3) years from the date of foreclosure, with respect to any unit that had been regulated by the Extended Use A greement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. Borrower acknowledges and agrees that any default, event of default, or breach (however such terms may be defined) under the Extended Use Agreement shall be an event of default under this Note and the Authority PLHA Loan Deed of Trust and that any costs, damages or other amounts, including reasonable attorneys’ fees incurred by Authority as a result of an event of default by Borrower, and any amounts paid by Authority to cure any default under the Extended Use Agreement shall be an obligation of Borrower and become a part of the debt evidenced by this Note and secured by the Authority PLHA Loan Deed of Trust.
21. In any approval, consent or other determination by Authority required under this Note or any of the other Authority Loan Documents, Authority shall act reasonably and in good faith.
22. Borrower shall have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty.
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23. Reserves. Borrower, i ts successors and assignees shall establish and maintain during the Term of this Note the following reserve accounts with respect to the Project:
(a) Replacement Reserve. Borrower shall establish and maintain a Replacement Reserve. As of the date of this Note, Borrower shall fund the Replacement Reserve in the amount of $110,000 and thereafter Borrower shall replenish the Replacement Reserve in the amount of $250 per unit per year, to be increased in year six and thereafter to $300 per unit per year. The Replacement Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(b) Operating Reserve . Borrower shall establish and maintain an Operating Reserve. As of the date of this Note, Borrower shall fund the Operating Reserve in the amount of $27,500 and thereafter Borrower shall replenish the Operating Reserve in the amount of $______ per unit per year. The Operating Reserve shall be used consistent with the Affordable Housing Agreement and the Agreement Containing Covenants.
(c) Operating Deficit Reserve. Borrower shall establish and maintain an Operating Deficit Reserve. As of the date of this Note, Borrower shall fund the Operating Deficit Reserve in the amount of $160,000. The Operating Deficit Reserve may be drawn quarterly to cover deficits between approved financial projections and actual revenue, and reported with the Residual Receipts calculation herein. The Operating Deficit Reserve withdrawals shall not be considered income in the Residual Receipts calculation.
(d) PNA Reserve. Borrower shall establish and maintain a PNA Reserve. As of the date of this Note, Borrower shall fund the PNA Reserve in the amount of $540,000 to pay for current and future physical maintenance and repair needs for the Project.
(e) Transition Reserve. Borrower shall establish and maintain a Transition Reserve. As of the date of this Note, Borrower shall fund the Transition Reserve in the amount of $100,000. The Transition Reserve may be used for extraordinary operating shortfalls or legal costs related to the transition of rent schedules for over income residents. The Transition Reserve may be drawn quarterly as needed. The use of the Transition Reserve should be reported in the annual report to the Authority, but will not require prior approval before use.
(f) If any of the amounts in the PNA Reserve, Transition Reserve, or Operating Deficit Reserve remain unused at the beginning of the 8th year of project operations (i.e., January 1, 2034), or at the time of a capital event that requires consent of the Authorit y, and if Borrower cannot demonstrate a need to maintain these Reserves to cover anticipated costs, then, notwithstanding any other provision herein, these Reserves shall be used as a repayment of the Authority LMIHF Loan, the Senior Loan, the Authority HO ME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/Loan, and 113 of 169
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LACDA Loan up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.
(g) Long Term Capital Needs Reserve. The PNA completed prior to the date of this Note projected the long term needs of the Project through Year 12 to be $1,206,377. In addition to the $540,000 PNA Reserve established the date of the Second Modification of Loan Documents, notwithstanding any other provision herein, Borrower may retain 100% of Residual Receipts in Years 2 – 12 following the Second Modification of Loan Documents (i.e., January 1, 2026 through December 31, 2038) for the sole purpose of funding a Long Term Capital Needs Reserve in an amount up to a combined total with the PNA Reserve of $1,206,377. If and to the extent any such additional Residual Receipts are not used to fund the Long Term Capital Needs Reserve, such Residual Receipts shall be required to be used to repay the Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/Loan, and LACDA Loan in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project. If the Project is recapitalized using LIHTC (or other funds), the Long Term Cap ital Needs Reserve deposits of Residual Receipts will stop, and such R esidual Receipts shall be required to be used to repay Authority LMIHF Loan, the Senior Loan, the Authority HOME Loan, the Authority Affordable Housing Trust Fund Loan, the Authority PLHA Loan, the City of Industry Grant/ Loan, and LACDA Loan up to a total of $350,000 in the same pro rata shares as set forth in Paragraph 8.(b) in this Note for those Loans, unless Authority, LACDA, and Borrower agree to some other needed use to operate and preserve the Project.
IN WITNESS WHEREOF Borrower has executed this Note as of the day and year set forth above.
“BORROWER” [PROVIDE SIGNATURE
BLOCK]
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Assignment and Assumption Agreement and Consent
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Exhibit 7
EXHIBIT 7
FORM OF AFFORDABLE HOUSING TRUST FUND DEED OF TRUST
[behind this page]
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Authority AHTF Deed of Trust
Recording Requested by and
When Recorded Mail to:
HOUSING AUTHORITY OF
THE CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attention: Director of Housing
and Community Development
Document entitled to free
recording per Government
Code Section 27383
SUBORDINATED LEASEHOLD DEED OF TRUST,
SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(328 Mira Loma Avenue)
(Affordable Housing Trust Fund)
This Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) is made as of __________________, 2025 by LINC 328 MIRA LOMA LLC, a California limited liability company (“Trustor”) (whose address is [Linc to provide address]), to ________________________________, a California corporation (“Trustee”), for the benefit of THE HOUSING AUTHORITY OF THE CITY OF GLENDALE , a public body corporate and politic (“ Beneficiary”), whose address is 141 North Glendale Avenue, Suite 202, Glendale, California 91206.
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION the following property (the “Trust Estate”):
(a) That certain real property in the City of Glendale, County of Los Angeles, State of California more particularly described in Exhibit “A” attached hereto and by this reference made a part hereof (the “Subject Property”);
(b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (the “Improvements”); 116 of 169
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(c) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the Improvements, including easements, rights -of-way and development rights (the “Appurtenances”). (The Appurtenances, together with the Subject Property and the Improvements, are hereafter referred to as the “Real Property”); (d) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation leasing or occupancy of the Trust Estate, including those past due and unpaid (the “Rents”); (e) all present and future right, title and interest of Trustor in and to all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (the “UCC”), and whether existing now or in the future) now or in the future located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownershi p, use, development, construction, ma intenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor (the “Goods,” and together with the Real Property, the “Property”); and (f) all present and future right, title and interest of Trustor in and to all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, right s and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) perm its, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) cla ims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, 117 of 169
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bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types on intangible personal property of any kind or nature, and ( ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (the “Intangibles”).
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estates described above in which a security interest may be created under the UCC (collectively, the “Personal Property ”). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary.
Trustee and Beneficiary will have, in addition to all rights and remedies provided herein, all the rights and remedies of a “secured party” under the UCC and other applicable California law.
Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Section 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURING , in such order of priority as Beneficiary may elect, the following:
(1) due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in the following:
(a) a promissory note in the original principal amount of $1,749,891, executed by Trustor of even date herewith, as may be amended or modified from time to time (the “Authority Affordable Housing Trust Fund Loan Note”); (b) that certain Affordable Housing Agreement and Agreement to Lease Real Property dated as of January 12, 2007, as amended by that certain First Amendment to Affordable Housing Agreement dated on or about March 21, 2008, and as may be further amended or modified from time to time (the “Affordable Housing Agreement”);
(c) that certain Agreement Containing Covenants dated as of February 14, 2007, and recorded in the Official Records on February 15, 2007 as Instrument No. 20070330425, as amended by that certain Amendment to Agreement Containing Covenants recorded March 24, 2008 as Instrument No. 20080496196 of the Official Records, as further amended by that certain Second Amendment to Agreement Containing Covenants dated on or about the date hereof and recorded in the Official Records on or about the date hereof, and as may b e further amended or modified from time to time (“Agreement Containing Covenants”); and
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(d) certain Agreement Containing HOME Program Requirements dated March 21, 2008, as amended by that certain Amendment to Agreement Containing HOME Program Requirements dated on or about the date hereof, and as may be further amended or modified from time to ti me (“HOME Regulatory Agreement”); and
(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $1,749,891 or so much thereof as will be advanced, evidenced by the Authority Affordable Housing Trust Fund Loan Note secured hereby, with interest, according to the terms of the Authority Affordable Housing Trust Fund Loan Note secured hereby.
The Affordable Housing Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including, without limitation, the Agreement Containing Covenants, the HOME Regulatory Agreement, and the Authority Affordable Housing Trust Fund Loan Note (collectively referred to as the “Secured Obligations”) and all of their terms are incorporated herein by reference and this conveyance will secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances evidenced by any note reciting that it is secured hereby. Each capitalized term that is not otherwise defined in this Deed of Trust has the meaning ascribed to it in the Affordable Housing Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:
1. That Trustor will pay the Note secured hereby at the time and in the manner provided therein, and perform the obligations of the Owner/Borrower/Developer as set forth in the Secured Obligations at the time and in the manner respectively provided therein;
2. That Trustor will not permit or suffer the use of any of the property for any purpose other than the uses permitted by the Affordable Housing Agreement, the Agreement Containing Covenants, and the HOME Regulatory Agreement;
3. That the Secured Obligations are incorp orated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable.
4. That all rents, profits and income from the property covered by this Deed of Trust are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured.
Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Affordable Housing Agreement. 119 of 169
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5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary will be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements constructed on the Property in accordance with the Affordable Housing Agreement insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time t o time by the Beneficiary, and all such insurance will be evidenced by standard fire and extended coverage insurance policy or policies. In no event will the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies will be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies will be deposited with the Beneficiary;
7. To pay, at least 10 days before delinquency, any taxes and assessments affecting said Property; to pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor will not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is contesting the l egality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7.
8. To keep said property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon (subject to Trustor’s right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or restrictions affecting said property; not to permit or suffer any material alteration of or addition to the buildings or improvements hereafter constructed in or upon said property without the consent of the Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent 120 of 169
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as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay his reasonable fees. Notwithstanding the foregoing, in the event of default under this Deed of Trust, the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary will specify in writing the particular records that must be maintained and the information or reports that must be submitted;
11. Beneficiary will have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary will be added to the principal sum secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Note secured hereby;
13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor, after the giving of notice and the expiration of any applicable cure period, to keep and perform all the covenants, conditions, and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Note secured hereby will at the option of the Beneficiary of this Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and maintain the property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor will not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor will , at Beneficiary’s written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure) record in the Office of the Recorder of Los Angeles County, a surety bond in an amount one -and-one-half (1½) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered by this Deed of Trust, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such 121 of 169
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municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office;
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14, Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the r ights of the beneficiary of the “ Senior Lender” (as defined in the Note which this Deed of Trust secures) , Beneficiary will be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, and will be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. Subject to the rights of the Senior Lender, all such compensatio n, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting said property, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including reasonable attorney’s fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, will be applied to the amount due under the Note secured hereby. No amount applied to the reduction of the principal will relieve the Trustor from making regular payments as required by the Note secured hereby;
18. Upon default by Trustor in making any payments provided for in the Note secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this Deed of Trust, below, 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 the Property to be sold, which notice Trustee will cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary will also deposit with Trustee this Deed of Trust , the Note and all documents evidencing expenditures secured hereby;
19. a. Prior to the repayment in full of the Authority Loan and expiration of the terms of the Agreement Containing Covenants and the HOME Regulatory Agreement, the Trustor will not assign or attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Project thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the Beneficiary, except for the Permitted Transfers described in Section 19.e.(3) below, or as otherwise permitted in the Note secured hereby. Consent 122 of 169
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to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary will not unreasonably withhold or delay its consent. If consent should be given, any such transfer will be subject to this Section 19, and any such transferee will assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to the provisions of paragraph e.(3) of this Section 19, below. b. Any such proposed transferee will have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Affordable Housing Agreement and the Authority Loan Documents. Any such proposed transferee, by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the Beneficiary will expressly assume all of the obligations of the Trustor under the Affordable Housing Agreement and the Authority Loan Documents, and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust, subject to the provisions of paragraph e.(3) of this Section 19. There will be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval will be indicated to the Trustor in writing.
c. In the absence of specific written agreement by the Beneficiary, no unauthorized Transfer, or approval thereof by the Beneficiary, will be deemed to relieve the Trustor or any other party from any obligations under the Affordable Housing Agreement or any other Authority Loan Document.
d. In the event of a Transfer without the prior written consent of the Beneficiary, prior to the time the Authority Affordable Housing Trust Fund Loan is paid in full, the net proceeds (after repayment in full of any Senior Loan and the reconveyance of the Senior Loan Deed of Trust ), will be paid to the Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the Authority Affordable Housing Trust Fund Loan.
e. (1) As used herein, “Transfer” includes the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project, except as provided in subparagraph e.(3) of this Section 19, below.
(2) “Transfer” will also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of the Affordable Housing Agreement, except that a cumulative change in ownership interest of any general partner of forty- nine percent (49%) or less will not be deemed a “transfer” for purposes of this Deed of Trust. 123 of 169
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(3) “Notwithstanding paragraphs (1) and (2), above, “Transfer” will not include any of the following Permitted Transfers:
(a) The leasing for occupancy of all or any part of the Improvements on the Property, in accordance with the Affordable Housing Agreement , the Agreement Containing Covenants, and the HOME Regulatory Agreement; or (b) The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement; f. The Beneficiary will not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder.
Any disapproval will be in writing and contain the Beneficiary’s reasons for disapproval.
20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, will sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee will deliver to the purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the Deed of any matters or facts will be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee will apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee’s fees or attorney’s fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto;
21. 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 will be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution will be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, will be conclusive proof of proper appointment of the successor trustee;
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22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention and upon payment of its fees, Trustee will reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or fact will be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto”;
24. The trust created hereby is irrevocable by Trustor;
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term “Beneficiary” will include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, an d the singular number includes the plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of T rust or of any action of proceeding in which Trustor, Beneficiary, or Trustee will be a party unless brought by Trustee;
27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the following address:
[Linc to provide notice address]
28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary.
29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the purpose of financing the acquisition, development , and construction of the I mprovements, including 44 dwelling units of affordable housing (plus one manager’s unit), and such dwelling units will be rented to and occupied exclusively by such persons as set forth in the Secured Obligations.
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30. Trustor agrees that, except as otherwise provided in the Note secured hereby, upon sale or refinancing of the Property, the entire principal balance of the debt secured by this Deed of Trust, plus any accrued but unpaid interest thereon, will at the option of Beneficiary be immediately due and payable.
31. The obligation to repay the Authority Affordable Housing Trust Fund Loan is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other party, will have any personal liability for repayment of the loan.
The sole recourse of Beneficiary will be the exercise of its rights against the Property and any related security for the Authority Affordable Housing Trust Fund Loan. Notwithstanding the foregoing, Beneficiary may recover directl y from Trustor or from any other party (other than Trustor’s Investor Limited Partner, if any):
(a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of Trustor, or of any member or general or limited partner of Trustor, or of any general or limited partner of such member or general or limited partner; (b) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the construction of the Improvements, rents and revenues from the operation of the Improvements or proceeds of insurance policies or condemnation proceeds;
(c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity, and (d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Beneficiary will pay Trustor’s reasonable court costs and attorneys’ fees if Trustor is the prevailing party in any such enforcement or collection action).
32. Notwithstanding specific provisions of this Deed of Trust, non-monetary performance hereunder will not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter, and, despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor:
War; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts of terrorism, epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental Authorit y (except acts or failure to act of the Beneficiary will not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any other causes which despite the 126 of 169
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