4864-4812-1734.2
LETTER OF COMMITMENT
October 8, 2024
Maison’s Sierra Phase 2, LP
Ravello Holdings Inc.
Attn: Dilip Ram
2007 Cedar Ave.
Manhattan Beach, CA 90266
Re: Property Name and Location: Maison’s Sierra Phase 2 Plot south of West Avenue H-2 & Schamise Street
Lancaster, California 93535
Borrower: Maison’s, Sierra Phase 2, LP
Dear Mr. Ram,
This letter is a commitment (“Commitment”) by the Lancaster Housing Authority (the “Authority” or “Lender”) to Maison’s Sierra Phase 2, LP, a California limited partnership (the “Borrower”) to make a subordinated loan (the “Loan”) relating to the financing of the above-referenced multifamily property (the “Property”).
Summary of Terms
Borrower Maison’s Sierra Phase 2, LP
Property Name Maison’s Sierra Phase 2
Location Plot south of West Avenue H-2 & Schamise Street Lender Lancaster Housing Authority
Effective Date October 8, 2024
Loan $4M subordinate loan secured by Sierra Phase 2, a 100% affordable project (intended for senior housing) comprised of not fewer than 170 units.
Term 18 years-Balloon payment due on the earliest to occur of:
1. 18th anniversary of agreement execution (2042+/-).
2. Change of ownership of the Project or Property.
3. Refinance of the CDLAC loan.
Interest Rate 3.81% Interest Rate (paid through residual receipts per below). 4864-4812-1734.2
Payments Payments shall be made (on no less than an annual basis) by Borrower to Lender in an amount equal to “City Loan RR” (as defined below) which shall be applied first to any accrued interest, then current interest.
“City Loan RR” shall be the lesser of (1) an amount equal to 50% of “residual receipts” (which is defined as cash flow from the property after payment of certain defined property related costs which shall expressly exclude any payments to Ravello Holdings (or its controlled affiliates)) and (2) all accrued and current interest remaining outstanding on the Loan. To the extent the City Loan RR amount is insufficient to pay the then due and payable interest, such interest shall accrue until sufficient City Loan RR is available to pay, and shall accrue interest compounded annually.
Closing City subordinate loan funding simultaneous with the closing of the purchase of the land for Sierra phase 2 (“COE”), approximately Q1, 2025.
Subordination City agrees to subordination to CDLAC (or successor lender to CDLAC) loan on terms and conditions to be memorialized in final loan documents
Conditions to Funding 1. Loan Agreement, Promissory Note, Subordination Agreement and other loan documents in form and
substance reasonably required by Lender (the “Loan
Documents”) and approved by Authority Counsel and the
Authority Board
2. LIHTC funding
3. Lender’s ALTA Policy
Hydrogen Borrower shall collaborate with Lender, City of Lancaster, and the First Public Hydrogen Authority (the “City Partners”) to construct the Project as a hydrogen-powered community and continue partnerships with the City Partners, including the purchase of hydrogen. This is a pilot project; Borrower commits to collaborate in good faith with the City Partners to establish a first-of-its-kind hydrogen community. As a pilot project, many details are as yet unknown. Borrower shall be required to proceed with the hydrogen-powered community elements of the project only to the extent that it is economically and functionally viable and does not cause undue delays to the project, and is approved by Borrower’s tax credit equity partner and lender, with final terms to be established in the loan documents.
Balloon Payment There shall be no waiver or reduction of the balloon payment at 4864-4812-1734.2
any point during the life of the loan. Should Borrower request a waiver or reduction, the outstanding loan amount will become immediately due and payable.
Developer Fees Operating expenses to be funded out of operating cash flow, including but not limited to expenses and management fees, are not paid to Borrower, its subsidiaries, or its parent companies.
Other than Fees that are capitalized into the construction budget (including general contracting fees and non-deferred developer fees, which non-deferred developer fee shall in no event be in excess of $2,655,050). Fees paid to Borrower or Ravello Holdings, Inc., their subsidiaries, or their parent companies, will be paid exclusively out of the Borrower’s share of residual receipts.
The preceding Summary of Terms (“Summary of Terms”) are incorporated and made part of this Commitment. Upon the satisfaction of the Conditions to Funding set forth above, the Authority will make the Loan to Borrower.
Defined and Incorporated Terms
Capitalized terms not defined in the Summary of Terms or elsewhere in this Commitment have the meanings in the Loan Documents.
The Borrower’s acceptance of this Commitment shall constitute its unconditional agreement to pay all fees and expenses incurred in connection with this Commitment and the making of the Loan, whether or not the Loan closes, including, without limitation, appraisal fees, engineering and environmental fees, survey costs, title insurance costs, and the fees and expenses of Authority counsel.
Exclusivity
The provisions of this Commitment are intended for the sole and exclusive benefit of City Partners and Borrower, and not for the benefit of or reliance by any other party.
Modifications
The provisions of this Commitment may not be waived, modified or in any way changed by implication or subsequent conduct, correspondence or otherwise, unless such waiver, modification or change is expressly stated as such and is specifically agreed to in writing by Authority and Borrower.
Merger
No statements, agreements or representations, oral or written, which may have been made to Borrower or to any employee or agent of Borrower, by any employee, representative or agent acting on Authority’s behalf, with respect to the Loan or otherwise, shall be of any force or effect except to the extent stated in this Commitment, and all prior agreements and representations made with respect to the Loan are merged in this Commitment. Notwithstanding the foregoing, and for the avoidance of doubt, the terms and conditions of that certain Disposition and Development Agreement dated May 10, 2023, together with all exhibits thereto, all as amended, remain in full force and effect.
Electronic Copies and Originals
Copies of this Commitment with emailed (Portable Document Format (PDF)) signature pages will be binding and effective as to each party and may be used in lieu of an original Commitment and in lieu of an original 4864-4812-1734.2
signature. Notwithstanding anything contained in this Commitment to the contrary regarding the procedure for acceptance of this Commitment, receipt by Authority of one executed original Commitment will be deemed to be acceptance of the Commitment by Borrower.
Use of Terms; Captions
Whenever the term “including” is used in this Commitment, such term shall mean “including, but not limited to.” The captions appearing in this Commitment are for descriptive purposes only and shall not be given substantive effect.
Governing Law
This Commitment will be governed by the laws of the State of California; the Loan Documents will be governed by the laws of the property jurisdiction.
Time of Essence
Time is of the essence with respect to Borrower's obligations under this Commitment.
Remainder of Page Intentionally Blank; Signature(s) Follow 4864-4812-1734.2
Please call the undersigned if you have any questions about this Commitment. We look forward to your acceptance of this Commitment and the delivery of the Funding Loan.
Sincerely,
Lancaster Housing Authority
Name: Trolis Niebla
Title: Executive Director
[ACCEPTANCE PAGE FOLLOWS]
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[CONTINUED FROM PREVIOUS PAGE]
AGREED AND ACCEPTED BY BORROWER
BORROWER:
MAISON’S SIERRA PHASE 2, LP, a California limited
partnership
By: AHA High Desert MGP, LLC,
a California limited liability company,
its Managing General Partner
By: Affordable Housing Access, Inc.,
a California nonprofit public benefit corporation,
its Manager
By:
Name: Vasilios Salamandrakis
Title: President
By: Ravello MODs Sierra Phase 2, LLC,
a California limited liability company,
its Administrative General Partner
By: Ravello Holdings, Inc.,
a California corporation,
its Manager
By:
Dilip K. Ram, President