SYCR Draft: 20250703
LOAN AGREEMENT
by and between
LANCASTER HOUSING AUTHORITY
and
MAISON’S SIERRA PHASE 2, LP
i
TABLE OF CONTENTS
1. Incorporation of Recitals....................................................................................................1
2. Use of Defined Terms; Definitions.....................................................................................1
3. Representations and Warranties of Borrower......................................................................5
4. Survival of Representations and Warranties........................................................................6
5. Agreement to Borrow and Lend; Use of Proceeds...............................................................6
6. Loan Documents................................................................................................................6
7. Interest Rate.......................................................................................................................7
8. Term of the Loan................................................................................................................7
9. Prepayment........................................................................................................................7
10. Conditions Precedent to Closing.........................................................................................7
11. Borrower’s Covenants........................................................................................................8
12. Financing Acquisition of Property and Construction of Project...........................................9
12.1 Lender Approval of Financing Plan........................................................................9
12.2 Financing Sources..................................................................................................9
12.3 Required Submissions............................................................................................9
12.4 Holder Performance of Development of Project....................................................10
12.5 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure..............10
12.6 Failure of Holder to Complete Development........................................................11
12.7 Right of Lender to Cure Mortgage or Deed of Trust Default.................................11
13. Borrower’s Construction of the Project.............................................................................12
13.1 Cost of Construction; Use of Hydrogen................................................................12
13.2 Commencement of Construction...........................................................................12
13.3 Completion of Construction..................................................................................12
13.4 City and Other Governmental Agency Permits.....................................................12
13.5 Insurance..............................................................................................................12
13.6 Indemnity.............................................................................................................13
13.7 Compliance With Laws........................................................................................13
13.8 Changes in Laws..................................................................................................13
13.9 Taxes and Assessments........................................................................................13
13.10 Liens and Stop Notices.........................................................................................13
14. Project Operating Requirements.......................................................................................14
14.1 Senior Citizen Units.............................................................................................14
14.2 Income Level of Tenants......................................................................................14 ii
14.3 Income Verification..............................................................................................14
14.4 Annual Reports....................................................................................................15
14.5 Nondiscrimination................................................................................................15
14.6 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction......................................................15
14.7 Maintenance of the Property.................................................................................15
14.8 Long Term Management of the Property..............................................................16
15. Events of Default.............................................................................................................16
16. Lender Remedies Upon Event of Default..........................................................................18
17. Non-Waiver of Remedies.................................................................................................18
18. General Provisions...........................................................................................................18
18.1 Captions...............................................................................................................18
18.2 Merger.................................................................................................................18
18.3 Notices.................................................................................................................18
18.4 Modification, Waiver...........................................................................................19
18.5 Governing Law....................................................................................................19
18.6 Acquiescence Not to Constitute Waiver of Lender’s Requirements.......................19
18.7 Disclaimers by Lender..........................................................................................19
18.8 Right of Lender to Make Advances to Cure Defaults............................................20
18.9 Definitions Include Amendments.........................................................................20
18.10 Time is of the Essence..........................................................................................20
18.11 Execution in Counterparts....................................................................................20
18.12 Waiver of Consequential Damages.......................................................................20
18.13 Claims Against Lender.........................................................................................20
18.14 Severability..........................................................................................................21 Exhibit “A” Property Legal Description
Exhibit “B” Site Map
Exhibit “C” Scope of Development
Exhibit “D” Schedule of Performance
Exhibit “E” Promissory Note
Exhibit “F” Deed of Trust
Exhibit “G” Form of Residual Receipts Report
1 LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) is made as of [____], 2025 (“Effective Date”), by and between MAISON’S SIERRA PHASE 2, LP, a California limited partnership (“Borrower”), and LANCASTER HOUSING AUTHORITY, a public body, corporate and politic (“Lender”) (Borrower and Lender are each a “Party” and collectively the “Parties”).
R E C I T A L S
A. By this Agreement and in consideration of Borrower’s performance of the covenants set forth in this Agreement and otherwise subject to the terms and conditions herein, Lender desires to provide to the Borrower a loan to fund a portion of the costs associated with the construction of an at least 170 multifamily residential unit project, with the rental of all such units (excluding two (2) management units) restricted to lower income households and intended (but shall not be required) for senior citizens.
B. Lender and Borrower agree that this Loan is and shall be subject and subordinate in right of payment and lien priority to the Senior Loan (as defined in Section 18.15) pursuant to this Agreement and the Subordination Agreement (as defined herein).
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Incorporation of Recitals. The foregoing Recitals are incorporated herein and constitute a substantive part of this Agreement.
2. Use of Defined Terms; Definitions. Defined terms may be used in the singular or the plural. When used in the singular preceded by “a,” “an,” or “any,” such term shall be taken to indicate one or more members of the relevant class. When used in the plural, such term shall be taken to indicate all members of the relevant class. Capitalized terms used, but not otherwise defined, herein shall have the respective meanings set forth in the Note defined below. The following terms as used herein shall have the following meanings:
2.1 “Agreement” means this Agreement, as originally executed, or as may be hereafter supplemented or amended from time-to-time in writing.
2.2 “Annual Project Revenue” shall mean all gross income and all revenues of any kind from the Project in a calendar year, including without limitation, Rent, late charges, vending machine income, and any other revenues of whatever kind or nature from the Project, except that interest on security deposits and required reserves shall not be considered Annual Project Revenue.
2.3 “CC&Rs” means that certain Residential Declaration of Conditions, Covenants and Restrictions and Regulatory Agreement, dated as of [___], 2025, made by [Ravello Holdings, Inc.] and recorded against the Property. 2 2.4 “Closing” means the disbursement of Loan proceeds, which shall occur on the date hereof, all of the conditions set forth in Section 10 of this Agreement having been satisfied or waived.
2.5 “Closing Date” means the date of the Closing.
2.6 “Construction Lender” means Merchants Bank of Indiana, an Indiana chartered bank, and its successors and assigns.
2.7 “Construction Loan” means that certain loan in a maximum principal amount of $[33,846,000.00] 1 made by Construction Lender to Borrower pursuant to the Construction Loan Documents.
2.8 “Construction Loan Agreement” means that certain [Construction Loan Agreement], dated the date hereof, by and between Construction Lender, as lender, and Borrower, as Borrower, as amended, modified or supplemented from time to time.
2.9 “Construction Loan Documents” means the Construction Loan Agreement and each other agreement, instrument or document given by Borrower to Construction Lender from time to time to evidence the Construction Loan.
2.10 “Debt Service” means regularly scheduled payments of principal and interest made in a calendar year pursuant to the Senior Loan, but excluding payments made pursuant to the Promissory Note.
2.11 “Deed of Trust” means the deed of trust described in Section 6 of this Agreement, as originally executed or as may be hereafter supplemented or amended from time- to-time in writing.
2.12 “Default” means any event which, if it were to continue uncured, would, with notice or lapse of time or both, constitute an Event of Default (as such term is defined in Section 15 of this Agreement).
2.13 “Event of Default” is defined in Section 15.
2.14 “Governmental Authority” means any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi- governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court or administrative tribunal.
2.15 “Housing Units” means the individual apartment units within the Project to be developed and operated by Borrower.
2.16 “Improvements” means the at least 170 multifamily residential unit project, along with all appurtenant on-site and off-site improvements and all fixtures and equipment to be constructed or installed on or about the Property. 1 Note: Amount to be adjusted upon finalization.
3 2.17 “Include(s)” or “including” means including but not limited to.
2.18 “Investor” means MCI Maison’s Sierra II, L.P., an Indiana limited partnership, its successors and or assigns.
2.19 “Knowledge” means, when used to modify a representation or warranty, actual knowledge or such knowledge as a reasonable person under the circumstances should have after diligent inquiry and investigation.
2.20 “Laws” means, collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential authority in the applicable jurisdiction.
2.21 “Loan” means the Three Million Five Hundred Nine Thousand, Seven Hundred Fifty-Six and 67/100 Dollar ($3,509,756.67) loan made by Lender to Borrower pursuant to this Agreement.
2.22 “Loan Documents” means this Agreement, the documents and instruments listed in Section 6 of this Agreement, any documents amending, restating, replacing, extending, or otherwise modifying this Agreement and/or the documents listed in Section 6 of this Agreement, and all the documents given to Borrower from time-to-time to evidence the Loan.
2.23 “Loan Maturity Date” means [closing date + 21 years ].
2.24 “Operating Expenses” shall mean actual, reasonable and customary (for comparable high quality rental housing developments in Los Angeles County) costs, fees and expenses directly incurred, paid, and attributable to the operation, maintenance and management of the Project in a calendar year, including: painting, cleaning, repairs, alterations, landscaping, utilities, refuse removal, certificates, permits and licenses, sewer charges, real and personal property taxes, assessments, insurance, security, advertising and promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings which are not paid from the capital replacement reserve, fees and expenses of property management, fees and expenses of accountants, attorneys and other professionals, the cost of social services, repayment of any completion or operating loans made to Borrower, its successors or assigns, and other actual, reasonable and customary operating costs and capital costs which are directly incurred and paid by Borrower, but which are not paid from the operating reserve or other reserve accounts.
Operating Expenses shall not in any event include expenses not related to the operation of the Project, including without limitation, depreciation, amortization, and accrued Debt Service.
Operating Expenses shall not include any fees of any type, kind or nature 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 fees shall in no event be in excess of $2,655,050). For avoidance of doubt, fees paid to Borrower or Ravello Holdings, Inc., their subsidiaries, or their parent companies, shall not be included in Operating Expenses and shall be paid exclusively out of Borrower’s share of Residual Receipts.
4 2.25 “Partnership Agreement” is defined in the definition of Permitted Transfer.
2.26 “Permanent Lender” means Fannie Mae, a corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq., as amended.
2.27 “Permanent Loan” means that certain loan in a maximum principal amount of $23,620,000.00 made by Permanent Lender to Borrower pursuant to the Permanent Loan Documents, as contemplated by that certain Letter of Engagement for a Forward Mortgage Loan under the Federal National Mortgage Association’s Multifamily Affordable Housing Mortgage-Bond Credit Enhancement Program.
2.28 “Permanent Loan Documents” means, collectively, the agreements, instruments and other documents given by Borrower to Permanent Lender from time to time to evidence the Permanent Loan.
2.29 “Permitted Exceptions” means those exceptions identified on Exhibit H hereto.
2.30 2.
2.31 “Promissory Note” means the promissory note described in Section 6 of this Agreement, as originally executed or as may be hereafter supplemented or amended from time-to-time in writing.
2.32 “Property” means the real property described on Exhibit “A” hereto.
2.33 “Rent” shall mean the total of monthly payments by the tenants of a Housing Unit for use and occupancy for the Housing Unit and facilities associated therewith, including a reasonable allowance for utilities for an adequate level of service, as defined in section 6918 of title 25 of the California Code of Regulations.
2.34 “Reserve Deposits” shall mean any payments to an operating reserve account or capital replacement reserve account that have been approved by Senior Lender.
2.35 “Residual Receipts” shall mean Annual Project Revenue less the sum of (i) Operating Expenses, (ii) Debt Service, and (iii) Reserve Deposits; provided, however, that if such calculation results in a negative number, Residual Receipts shall be zero for that year.
2.36 “Schedule of Performance” means that certain Schedule of Performance attached hereto as Exhibit “D”, which schedule sets forth the date by which Borrower shall commence and substantially complete (subject to events of force majeure) construction of the Project, as the same may be amended, modified or supplemented from time to time in accordance with the terms of the Senior Loan and (subject to the last paragraph of Section 13) by written agreement of the Parties.
2 Note: To be replaced with the specifics. Construction Loan Agreement does not provide for permitted transfers. 5 2.37 “Scope of Development” means that certain Scope of Development attached hereto as Exhibit “C”, as the same may be amended, modified or supplemented from time to time in accordance with the terms of the Senior Loan and (subject to the last paragraph of Section 13) by written agreement of the Parties.
2.38 “Senior Lender” means the Construction Lender or the Permanent Lender, as the context may require.
2.39 “Senior Loan” means the Construction Loan or the Permanent Loan, as the context may require.
2.40 “Senior Loan Documents” means the Construction Loan Documents or the Permanent Loan Documents, as the context may require.
2.41 “Subordination Agreement” means that certain Subordination Agreement, dated the date hereof, by and between Construction Lender, Lender and Borrower, as amended, modified, supplemented or replaced from time to time.
2.42 “Transfer” shall have the meaning ascribed to such term in the Senior Loan Agreement.
3. Representations and Warranties of Borrower. To induce Lender to execute this Agreement and perform the obligations of Lender hereunder, Borrower hereby represents and warrants to Lender, as of the date hereof, that:
3.1 No litigation or proceedings are pending, or to Borrower’ knowledge are threatened in writing, against Borrower or any Member: (i) which might affect the ability of Borrower to perform its obligations pursuant to and as contemplated by the terms and provisions of this Agreement and the other Loan Documents in any material respect; or (ii) which could materially affect the operations or financial condition of Borrower.
3.2 The execution, delivery and performance of this Agreement and the other Loan Documents have not constituted (and will not, upon the giving of notice or lapse of time or both, constitute) a breach or default under any other agreement to which Borrower is a party or may be bound or affected.
3.3 This Agreement and the other Loan Documents constitute legal, valid and binding obligations of Borrower, and are enforceable against Borrower and the Property in accordance with their respective terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and limitations imposed by general principles of equity.
3.4 No brokerage fees or commissions are payable by or to any person in connection with this Agreement or the Loan to be disbursed hereunder.
3.5 No Default or Event of Default has occurred and is continuing.
3.6 No event has occurred and no circumstance exists as a result of which the information concerning Borrower or any Member that has been provided to Lender in 6 connection herewith would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading in any material respect.
3.7 Borrower shall use the Loan proceeds for the purposes described in Section 12 hereof, and for no other purpose.
4. Survival of Representations and Warranties. Borrower agrees that the representations and warranties set forth in Section 3 of this Agreement and elsewhere in this Agreement will be true at the Closing Date and shall survive the making of the Loan.
5. Agreement to Borrow and Lend; Use of Proceeds. Subject to all of the terms, covenants and conditions which are set forth herein and upon satisfaction of the Conditions Precedent set forth in Section 10, Lender hereby agrees to (a) fund to Borrower the sum of Two Million Three Hundred Nineteen Thousand Three Hundred Sixty One and 98/100 Dollars ($2,319,361.98), and (b) defer receipt of One Million One Hundred Ninety Thousand Three Hundred Ninety Four and 67/100 Dollars ($1,190,394.69) until repayment of the Loan pursuant to this Agreement, for a total loan amount of Three Million Five Hundred Nine Thousand Seven Hundred Fifty-Six and 67/100 Dollars ($3,509,756.67) (the “Loan”).
Borrower’s obligation to repay the Loan shall be evidenced by the Promissory Note and secured by the Deed of Trust encumbering the Property and Improvements. The proceeds of the Loan shall be disbursed directly to Borrower or to vendors, contractors or sub-contractors designated by Borrower upon request. Said proceeds shall be used by Borrower for the purposes described herein, and for no other purpose. Except in the case of a Permitted Transfers or any other transfer approved by Lender, all interest and principal of the Loan is due and payable upon transfer of title or sale of the Property.
6. Loan Documents. In consideration of Lender’s entry into this Agreement and Lender’s agreement to make the Loan, Borrower agrees that it will, in sufficient time for review by Lender and its counsel prior to the Closing Date, execute and deliver or cause to be executed and delivered to Lender the following documents and instruments in form and substance acceptable to Lender:
6.1 A promissory note from Borrower payable to the order of Lender in the original principal amount of Three Million Five Hundred Nine Thousand Seven Hundred Fifty-Six and 67/100 Dollars ($3,509,756.67)in substantially the form attached hereto as Exhibit “E” (“Promissory Note”);
6.2 A deed of trust encumbering the Property and Improvements that secures Borrower’s obligations under this Agreement and the Promissory Note in substantially the form attached hereto as Exhibit “F” (“Deed of Trust”).
6.3 Such other papers and documents as may be required by this Agreement or as Lender may reasonably require.
7 7. Interest Rate. The Loan will bear interest for the period and at the rate set forth in the Promissory Note.
8. Term of the Loan. The unpaid principal balance, all accrued and unpaid interest and all other sums due and payable under the Promissory Note or other Loan Documents, if not sooner paid, shall be paid in full on the Loan Maturity Date. Borrower covenants that, if the Permanent Loan is repaid in full prior to the Loan Maturity Date stated herein, then Borrower shall repay the Loan in full on the date on which the Permanent Loan is repaid.
9. Prepayment. Borrower shall have the right to make prepayments of the Loan in whole or in part, without payment of any premium or penalty, at any time prior to the Loan Maturity Date.
10. Conditions Precedent to Closing. Borrower agrees that Borrower will perform and satisfy all of the following conditions precedent before Closing, and Borrower agrees that Lender’s obligation to disburse the proceeds of the Loan is conditioned upon the following:
10.1 Execution and Delivery of Documents. Borrower shall have executed and delivered to Lender the Promissory Note, Deed of Trust, and any other documents and instruments in connection with the Loan as may be reasonably required to be executed and delivered by Borrower to evidence the intentions of the Parties.
10.2 Recordation. The escrow holder selected by Borrower and reasonable accepted by Lender is prepared to record the Deed of Trust against the Property in the proper recording order pursuant to escrow instructions approved by Lender, at the time of the first disbursement of any of the proceeds of Loan.
10.3 Title to Land. Lender shall be satisfied that upon the disbursement of the Loan, Borrower will have good and marketable fee title to the Property, and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever, other than liens for current real property taxes and assessments not yet due and payable, the lien of the Senior Loan to which the Loan shall be subject and subordinate, the Permitted Exceptions, and any other matters specifically approved in writing by Lender.
10.4 No Default. There shall exist no condition, event or act which would constitute an Event of Default (as hereinafter defined) hereunder or which, with the giving of notice or the passage of time, or both, would constitute an Event of Default.
10.5 Representations and Warranties. All representations and warranties of Borrower herein contained shall be true and correct as of the Closing in all material respects.
Borrower shall have furnished to Lender the following in sufficient time for review by Lender and its counsel prior to the Closing Date, all of which shall be in form and substance satisfactory to Lender and its counsel:
(a) Evidence satisfactory to Lender that the Loan is authorized and that the individuals executing this Agreement and the other Loan Documents on behalf of 8 Borrower have been duly authorized by all appropriate action to execute and deliver this Agreement and the Loan Documents on behalf of Borrower. (b) A copy of the organizational documents for Borrower.
10.6 Borrower shall have complied with all other applicable requirements of this Agreement.
11. Borrower’s Covenants. Borrower further covenants and agrees as follows:
11.1 Lender’s Attorney’s Fees and Expenses. If at any time hereafter prior to repayment of the Loan in full, Lender employs counsel for advice or other representation (whether or not any suit has been or shall be filed and whether or not other legal proceedings have been or shall be instituted and, if such suit is filed or legal proceedings instituted, through all administrative, trial, and appellate levels) with respect to the Loan, this Agreement or any of the Loan Documents, or to enforce any rights of Lender, or any obligations of Borrower, or any other person, firm or corporation which may be obligated to Lender by virtue of this Agreement or any other agreement, instrument or document heretofore or hereafter delivered to Lender by or for the benefit of Borrower, or to negotiate any proposed restructuring of the Loan, then, in any such event, all of the attorney’s reasonable fees and expenses arising from such services, and all reasonable expenses, costs and charges reasonably incurred and relating thereto, shall be paid by Borrower within 10 business days of written demand by Lender and if Borrower fails to pay such fees, costs and expenses, payment thereof by Lender shall be deemed to constitute additional indebtedness evidenced by the Note and the other Loan Documents (even if the total amount of indebtedness would exceed the face amount of the Note).
11.2 Documents of Further Assurance. Borrower shall, from time-to-time, upon Lender’s request, execute, deliver, record and furnish, or cause to be executed, delivered, recorded and furnished, such documents as Lender may reasonably deem necessary or desirable to: (a) correct any errors of a typographical nature or inconsistencies which may be contained in any of the Loan Documents; and (b) consummate fully the transaction contemplated under this Agreement, provided the same do not materially diminish the rights or materially increase the obligations of Borrower under the Loan Documents.
11.3 Indemnification. Borrower shall indemnify, defend and hold Lender, and its elected officials, officers, directors, employees, and agents harmless from and against all actual third-party claims for injury, damage, loss, costs (including attorney’s and expert witness fees and costs) and liability of any and every kind to any persons or property by reason of: (i) any action or negligent omission by, or matter which is the obligation of, Borrower hereunder or in connection herewith, and (ii) any breach of any representation or warranty or failure to fulfill any obligations of Borrower under this Agreement or any other Loan Document (except to the extent any such claim is caused by the negligence or misconduct of Lender or any of its elected officials, officers, directors, employees or agents).
11.4 Compliance with Laws. Borrower shall promptly comply with all applicable Laws of any Governmental Authority having jurisdiction over Borrower. 9 11.5 Organizational Documents. Without the prior written consent of Lender (which consent shall not be unreasonably withheld, conditioned or delayed), Borrower shall not permit or suffer any amendment or modification of Borrower’s organizational documents (except to the extent any such amendments or modifications (y) do not affect adversely the rights of Lender under the Loan Documents, or (z) are entered into to effectuate a Permitted Transfer).
11.6 Lost Note. Borrower shall, if the Note is mutilated, destroyed, lost, or stolen, promptly deliver to Lender, in substitution therefor, a new promissory note containing the same terms and conditions as the Note with a notation thereon of the unpaid principal and accrued and unpaid interest (and in any such case Lender shall execute and deliver to Borrower with a customary lost note affidavit and indemnity in form and substance satisfactory to Borrower).
12. Financing Acquisition of Property and Construction of Project.
12.1 Lender Approval of Financing Plan. On or prior to the date hereof Borrower submitted to Lender and Lender approved the Financing Plan, which plan contains:
(i) an acquisition and development budget for the Project, (ii) a sources and uses analysis for the period of the development of the Project, including an analysis of the additional subsidized financing which is necessary from other public bodies, (iii) a sources and uses analysis from the date of the origination of the permanent loan, if any, including an analysis of the additional subsidized financing which is necessary from other public entities, (iv) an operating budget for the Project, including without limitation an operating reserve fund and capital replacement reserve fund and (v) a description of all material underlying assumptions for each of the above in reasonable detail. Borrower shall also submit to Lender any revisions to the Financing Plan, which revisions (if and only if the same would have an adverse impact on Lender) shall be subject to Lender’s approval (which approval shall not be unreasonably withheld, conditioned or delayed).
12.2 Financing Sources. Upon completion of construction of the Project, Borrower shall perform a final reconciliation of the total sources of permanent financing and the costs of development of the Project (the “Reconciliation”), which Reconciliation shall be audited by Borrower’s accountants. If the Reconciliation determines that the total sources of permanent financing for the Project (including long-term permanent debt and equity) exceed the total cost of acquisition of the Property and development of the Project, the amount of any such excess shall be applied to the outstanding principal balance of the Loan to the extent the same is available after payment of any amounts due under the Senior Loan.
12.3 Required Submissions. On or prior to the date hereof Borrower submitted to Lender and Lender approved each of the following documents as evidence of financing:
(a) A copy of all loan commitment(s) obtained by Borrower from one or more financial institutions for the mortgage loan or loans for construction and permanent financing for the Project, subject to such lenders’ reasonable, customary and normal conditions and terms.
10 (b) A copy of applications to and financing approvals with respect to any affordable housing subsidy program(s) from which Borrower has applied to obtain financial subsidies.
(c) Such other documentation reasonably requested by Lender as evidence of other sources of capital, all of which together are sufficient to demonstrate that Borrower has adequate funds, together with the proceeds of any other financing to acquire the Property and develop the Project.
12.4 Holder Performance of Development of Project. The holder of any mortgage or deed of trust authorized by this Agreement, including without limitation the Senior Lender, shall not be obligated by the provisions of this Agreement to perform the development of the Project or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder.
12.5 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Borrower as provided herein, whenever Lender may deliver any notice or demand to Borrower with respect to any breach or default by the Borrower hereunder or under any other Loan Document, Lender shall at the same time deliver to the Investor of the Borrower and to each holder of record of any mortgage or deed of trust authorized by this Agreement, including without limitation the Senior Lender, a copy of such notice or demand. Each such holder and the Investor of the Borrower shall (insofar as the rights granted by Lender are concerned) have the right, but not the obligation, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage; provided, however, that, in the case of a non-monetary Event of Default that is not reasonably susceptible to cure within such 30-day period, such holder and/or Investor shall have such additional time as is reasonably needed to effectuate a cure of such Event of Default, provided such holder and/or Investor has promptly commenced efforts to cure such Event of Default and thereafter pursue such cure with diligence. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the development of the Project, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed Borrower's obligations to Lender by written agreement reasonably satisfactory to Lender. The holder, in that event, must agree to complete, or cause to be completed by a party which is reasonably acceptable to the Lender, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates. It is understood that a holder (or assignee approved by the Lender) shall be deemed to have satisfied the thirty (30) day time limit set forth above for commencing to cure or remedy a Borrower default which requires title and/or possession of the Project (or portion thereof), if and to the extent any such holder (or assignee approved by the Lender) has within such thirty (30) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default.
12.6 [Intentionally omitted].
12.7 [Intentionally omitted].
11 13. Borrower’s Construction of the Project. Borrower agrees to construct the Improvements on the Property with commercially reasonable diligence and care in accordance with this Section 13, the Scope of Development, the plans and specifications, applicable laws, and regulations.
13.1 Cost of Construction. Except for the proceeds of the Loan, the cost of the construction of the Project and any additional costs of completing the construction of the Project shall be the sole responsibility of Borrower. Borrower shall collaborate with Lender, City of Lancaster, and the First Public Hydrogen Authority (collectively, “City Partners”) to construct the Project as a hydrogen-powered community and continue partnerships with the City Partners, including the purchase of hydrogen. Borrower shall collaborate in good faith with the City Partners to establish a first-of-its-kind hydrogen community, to the extent 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. Notwithstanding anything herein to the contrary, once the Scope of Development, and the plans and specifications for the Project, have been approved by Lender, Borrower shall be deemed to have satisfied its obligations regarding the potential construction of the Project as a hydrogen-powered community, including without limitation under this Section 13.1.
13.2 Commencement of Construction. Borrower hereby covenants and agrees to use commercially reasonable efforts to ensure (subject to events of force majeure) the commencement of construction of the Improvements by the date specified in the Schedule of Performance.
13.3 Completion of Construction. Borrower hereby covenants and shall cause to be diligently prosecuted to completion, the construction of the Improvements and to use commercially reasonable efforts to cause (subject to events of force majeure) the completion of such construction work (it being agreed that the construction work shall be deemed to be complete when certificates of occupancy have been issued permitting occupancy of all of the Housing Units).
13.4 City and Other Governmental Agency Permits. Before commencement of the construction of the Improvements, Borrower shall, at its own expense, secure or cause to be secured any and all permits which may be required by any other governmental agency with jurisdiction over such construction, including, without limitation, building permits. It is understood that Borrower is obligated to submit to the City final drawings with final corrections to obtain such permits.
13.5 Insurance. Upon completion of construction of the Improvement, Borrower shall maintain, until Borrower has repaid the Loan in full (including any accrued interest), an all-risk property insurance policy insuring the multifamily housing project in an amount equal to the full replacement value of the real property, together with flood insurance in conformance with the Flood Disaster Protection Act, for the portion of the Property located in a flood zone. The policy shall contain a statement of obligation on behalf of the carrier to notify Lender of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination.
Borrower shall transmit a copy of the certificate of insurance to Lender within thirty (30) days of the Effective Date of this Agreement, and Borrower shall annually transmit to Lender a copy of the certificate of insurance, signed by an authorized agent of the insurance carrier setting 12 forth the general provisions of coverage. The copy of the certificate of insurance shall be transmitted to Lender at the address set forth in this Agreement. Any certificate of insurance must be in a form, content, and with companies customary for a multifamily housing project in the nature of the Project and otherwise reasonably acceptable to Lender. Notwithstanding anything herein to the contrary, provided Borrower is named as a loss payee under all property damage and liability insurance policies maintained by Borrower with respect to the Property.
13.6 Indemnity. Borrower shall, at its expense, defend, indemnify, and hold harmless the Lender and the City and their respective officials, officers, agents, employees and representatives from any and all actual losses, liabilities, claims, lawsuits, causes of action, judgments, settlements, court costs, attorneys' fees, and other legal expenses, costs of evidence of title, costs of evidence of value, and other damages of whatsoever nature arising out of any third-party claim arising out of, in connection with, or relating in any manner to any act or omission of Borrower or its agents, employees, contractors or subcontractors of any tier, or employees thereof, in connection with or arising from Borrower’s performance or nonperformance of its obligations under this Agreement, or the construction of the Improvements on the Property, except for any and all losses, liabilities, claims, lawsuits, causes of action, judgments, settlements, court costs, attorneys' fees, and other legal expenses, costs of evidence of title, costs of evidence of value and/or other damages of whatsoever nature to the extent caused by the negligence or misconduct of the Lender, City or any of their respective officials, officers, agents, employees, contractors or representatives.
13.7 Compliance With Laws. Borrower shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, the provisions of Labor Code Section 1720 et seq. relating to prevailing wages as to which Lender makes no representations and all applicable laws and regulations pertaining to disabled and handicapped access requirements, including without limitation (to the extent applicable) the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq. Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the Fair Housing Act, 42 U.S.C. Section 3601, et seq.
13.8 Changes in Laws. Notwithstanding anything herein to the contrary, Lender shall not be responsible for any costs imposed upon Borrower pursuant to any changes in governmental requirements made after the date of this Agreement which impose additional requirements upon Borrower solely as a result of Borrower’s advance of the proceeds of the Loan to Borrower or Lender’s imposition of affordable housing requirements, including, without limitation, any requirement for the payment of prevailing wages with respect to the construction of the Improvements and off-site improvements.
13.9 Taxes and Assessments. Borrower shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Property, subject to the Borrower’s right to contest in good faith any such taxes. Borrower shall remove or have removed any levy or attachment made on any of the Property or any part thereof, or assure the satisfaction thereof within a reasonable time upon Borrower acquiring knowledge thereof.
13.10 Liens and Stop Notices. Borrower shall not allow to be placed on the Property or any part thereof any lien or stop notice other than the lien(s) in connection with the 13 construction and permanent financing of the Project. If a claim of a lien or stop notice is given or recorded affecting the Improvements, Borrower shall within thirty (30) days of the earlier of Lender’s written demand and Borrower acquiring knowledge thereof:
(a) pay and discharge the same; or
(b) effect the release thereof by arranging a surety bond in sufficient form and amount, or otherwise, and in any such case providing Lender with reasonable evidence of such release; or
(c) provide to Lender such alternate assurance which Lender deems, in its reasonable discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Lender from the effect of such lien or bonded stop notice.
Notwithstanding anything to the contrary herein, any amendment or change to the Schedule of Performance, the Scope of Development, the plans and specifications for the construction of the Project, the acquisition and development budget for the Project or the operating budget for the Project shall be deemed to have been approved by Lender if (i) the same required the approval of the Senior Lender and the Senior Lender has approved the same, or (ii) the approval of the Senior Lender is not required under the Senior Loan Documents; provided, however, that, notwithstanding the foregoing, Lender’s written consent shall be required for any amendment or change to the Schedule of Performance, the Scope of Development, the plans and specifications for the construction of the Project, or (other than an increase of the budget that is or will be funded by Borrower or other source of funding that is subordinate to the Loan) the acquisition and development budget for the Project arising on or after the Closing Date that would have a material effect on (v) the date by which construction of the Improvements will be substantially complete, (w) the number of Housing Units, the Housing Unit mix and/or the type and/or size of the Housing Units to be constructed, (x) the business or operations of Borrower taken as a whole, (y) the ability of Borrower to pay and perform its obligations under the Loan Documents, or (z) the validity or enforceability of the Loan Documents. To the extent the approval of Lender is required hereunder, Lender hereby expressly delegates to its Executive Director the authority to approve any such matter.
14. Project Operating Requirements.
14.1 Affordability Units. Borrower shall restrict occupancy to, and rent at Affordable Rents all of the Housing Units (but two reserved for manager units) to lower income households. Units are intended (but shall not be required) for “Senior Citizens” and otherwise to other “Qualified Permanent Residents” (as those terms are or may be defined in section 51.3 of the California Civil Code) or as permitted under the CC&Rs.
14.2 CC&Rs. From and after completion of the construction of the Property until the expiration of the Affordability Period as defined in the CC&Rs, Borrower shall not cause a default or breach under the terms of the CC&Rs.
15. Events of Default. The occurrence of any one or more of the following shall constitute an “Event of Default,” as such term is used herein:
15.1 If Borrower fails to repay principal under the Note when due at maturity;
14 15.2 If Borrower defaults in the performance of any of its other covenants, agreements and obligations under this Agreement involving the payment of money and fails to cure such default within five (5) days of receipt of written notice thereof from Lender;
15.3 If Borrower defaults in the performance of any of its nonmonetary covenants, agreements and obligations under this Agreement and fails to cure such default within thirty (30) days after written notice thereof from Lender except that if such default is susceptible of cure but cannot reasonably be cured within said thirty (30) days, it shall not constitute an Event of Default if Borrower promptly commences the cure of such default and diligently and continuously pursues such cure to completion with completion occurring not later than ninety (90) days after the initial notice of default from Lender;
15.4 If at any time or times hereafter any representation or warranty (including the representations and warranties of Borrower set forth in this Agreement), statement, report or certificate now or hereafter made by Borrower, is not true and correct in any material respect;
15.5 If all or substantially all of the assets of Borrower are attached, seized, or are levied upon, or come into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors, and the same is not vacated, stayed, dismissed, set aside or otherwise remedied within sixty (60) days after the occurrence thereof;
15.6 If a notice of lien, levy or assessment is filed of record by any Governmental Authority with respect to all or any part of the property of Borrower, which could materially affect the performance of the obligations of Borrower hereunder or under the other Loan Documents, as the case may be, or if any proceeding is filed or commenced seeking to enjoin, restrain or in any way prevent Borrower from conducting all or a substantial part of its business affairs and Borrower fails to vacate, stay, dismiss, set aside or remedy the same within thirty (30) days after the occurrence thereof;
15.7 If Borrower fails, within ten (10) business days after Lender’s written request therefor, to pay Lender any amount by which the indebtedness under this Agreement may, at any time, exceed the face amount of the Note (except as otherwise provided herein);
15.8 If any petition is filed by or against Borrower under the United States Bankruptcy Code or any similar state or federal Law, whether now or hereafter existing (and, in the case of involuntary proceedings, failure to cause the same to be vacated, stayed or set aside within sixty (60) days after filing);
15.9 [Intentionally omitted];
15.10 Any default (beyond any applicable notice and cure periods thereunder) declared by any lender under any loan document related to any loans, other than the Loan, secured by a deed of trust on the Property shall act to accelerate automatically, without the need for any action or notice by Lender, the indebtedness evidenced by the Note;
15.11 If any assignment, pledge, encumbrance, transfer, option to purchase, hypothecation, conveyance, divestment, or other disposition of all or any portion of the Property is made in violation of this Agreement, whether directly or indirectly, whether 15 voluntarily or involuntarily or by operation of law (it being agreed, for the avoidance of doubt, that neither a Permitted Transfer nor any other transfer approved by Lender shall be an assignment, pledge, encumbrance, transfer, hypothecation or other disposition in violation of this Agreement);
15.12 From and after completion of the construction of the Property until the expiration of the Affordability Period as defined in the CC&Rs, Borrower shall cause a default or breach under the terms of the CC&Rs (beyond any applicable cure period thereunder); and
15.13 Any request by Borrower that Lender waive, forgive, or otherwise accept as full payment any amount less than the unpaid principal balance, all accrued and unpaid interest and all other sums due and payable under the Promissory Note or other Loan Documents shall act to accelerate automatically, without the need for any action or notice by Lender, the indebtedness evidenced by the Note.
16. Lender Remedies Upon Event of Default. Upon the occurrence of any Event of Default, Lender shall, in addition to all remedies conferred upon Lender by law and by the terms of the Note and the other Loan Documents, have the right but not the obligation to pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that all such remedies shall be cumulative and that no such remedy shall be to the exclusion of any other:
16.1 Take any action whatever which, in Lender’s sole judgment, is necessary or appropriate to fulfill the covenants, agreements and obligations of Borrower under this Agreement and the Loan Documents;
16.2 Declare the Note to be immediately due and payable without notice to Borrower;
16.3 Use and apply any monies deposited by Borrower with Lender, regardless of the purpose for which the same was deposited, to cure any such default or to apply on account of any indebtedness under this Agreement which is due and owing to Lender; and
16.4 Exercise or pursue any other right or remedy permitted under this Agreement or any of the Loan Documents or conferred upon Lender by operation of Law.
17. Non-Waiver of Remedies. No waiver of any breach or default hereunder shall constitute or be construed as a waiver by Lender of any subsequent breach or default or of any breach or default of any other provision of this Agreement.
18. General Provisions.
18.1 Captions. The captions and headings of various Sections of this Agreement and Exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way, the scope or intent of the provisions hereof.
18.2 Merger. This Agreement and the Loan Documents and instruments delivered in connection herewith, as may be amended from time-to-time in writing, constitute 16 the entire agreement of the parties with respect to the Loan, and all prior discussions, negotiations and document drafts are merged herein and therein. Neither Lender nor any employee of Lender has made or is authorized to make any representation or agreement upon which Borrower may rely unless such matter is made for the benefit of Borrower and is in writing signed by an authorized officer of Lender. Borrower agrees that it has not and will not rely on any custom or practice of Lender, or on any course of dealing with Lender, in connection with the Loan unless such matters are set forth in this Agreement or the Loan Documents or in an instrument made for the benefit of Borrower and in a writing signed by an authorized officer of Lender.
18.3 Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing, addressed as follows and shall be deemed to have been properly given if hand delivered, if sent by reputable overnight courier (effective the business day following delivery to such courier) or if mailed (effective upon the later of two business days after mailing or actual receipt) by United States registered or certified mail, postage prepaid, return receipt requested:
To Lender: Lancaster Housing Authority
44933 Fern Avenue
Lancaster, California 93534
Attn: Executive Director
Copy To: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Allison E. Burns
To Borrower: Maison’s Sierra Phase 2, LP
c/o Ravello Holdings, Inc.
2007 Cedar Avenue
Manhattan Beach, CA 90266
Attention: Phil Ram
Copy to:
The Hornbaker Law Firm, LLC
745 Fifth Avenue, Suite 500
New York, New York 10151
And to:
MCI Maison’s Sierra II, L.P.
c/o Merchants Capital Investments, LLC
410 Monon Boulevard
Carmel, Indiana 46032
Attention: Asset Management
Email: [email protected]
17 or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Notices given in any other fashion shall be deemed effective only upon receipt.
18.4 Modification, Waiver. No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge or change is sought.
18.5 Governing Law. This agreement shall be governed by and construed under the laws of the State of California.
18.6 Acquiescence Not to Constitute Waiver of Lender’s Requirements.
Each and every covenant and condition for the benefit of Lender contained in this Agreement may be waived by Lender, provided, however, that to the extent that Lender may have acquiesced in any noncompliance with any conditions precedent to the Closing or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute a waiver by Lender of such requirements with respect to any future disbursements of Loan proceeds.
18.7 Disclaimers by Lender.
(a) This Agreement is made for the sole benefit of Borrower and Lender, and no other person or persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Lender or Borrower pursuant to this Agreement. Lender shall not be liable for any debts or claims accruing in favor of any such parties against Borrower or others. Borrower shall not be an agent of Lender for any purpose. Except as expressly set forth in the Loan Documents, Lender is not and shall not be an agent of Borrower for any purpose. Lender, by making the Loan or any action taken pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with Borrower or fiduciary of Borrower; and
(b) By accepting or approving anything required to be observed, performed, fulfilled or given to Lender pursuant to the Loan Documents, including any certificate, statement of profit and loss or other financial statement, Lender shall not be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by Lender.
18.8 Right of Lender to Make Advances to Cure Defaults. If Borrower shall fail to perform in a timely fashion any of its covenants, agreements or obligations contained in this Agreement or any of the Loan Documents and the performance thereof constitutes an Event of Default, Lender may (but shall not be required to) perform any of such covenants, agreements and obligations.
18.9 Definitions Include Amendments. Definitions contained in this Agreement which identify agreements, including the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments and supplements thereto entered into from time-to-time to satisfy the 18 requirements of this Agreement or otherwise with the consent of Lender. Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement.
18.10 Time is of the Essence. Time is hereby declared to be of the essence of this Agreement and of every part hereof.
18.11 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
18.12 Waiver of Consequential Damages. In no event shall Lender be liable to Borrower for consequential damages, whatever the nature of a breach by Lender of its obligations under this Loan Agreement, or any of the Loan Documents, and Borrower hereby waives all claims for consequential damages.
18.13 Claims Against Lender. Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim shall have been given to Lender within six (6) months after Borrower first had knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and Lender does not remedy or cure the default, if any there be, promptly thereafter. If it is determined in any proceedings that Lender has improperly failed to grant its consent or approval, where such consent or approval is required by this Loan Agreement or any other Loan Documents, the sole remedy of Borrower shall be to obtain declaratory relief determining such withholding to have been improper, and Borrower hereby waives all claims for damages or set off against Lender resulting from any withholding of consent or approval by Lender.
18.14 Severability. The Parties intend and believe that each provision in this Agreement comports with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or provisions, in this Agreement is found by a court of law to be in violation of any applicable local, state, or federal law, statute, ordinance, administrative or judicial decision, or public policy, and if such courts declare such portion, provision, or provisions of this Agreement to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision, or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, and that the remainder of this Agreement shall be construed as if such illegal, invalid, unlawful, void, or unenforceable portion, provision, or provisions were not contained therein, and that the rights, obligations, and interests of the Parties under the remainder of this Agreement shall continue in full force and effect.
18.15 Subordination. Lender agrees that this Loan is and shall be subject and subordinate in right of payment and lien priority to (i) the Construction Loan pursuant to the Subordination Agreement (as defined herein) by and between Construction Lender and Lender and (ii) the Permanent Loan pursuant to a subordination agreement to be entered into between Lender and Permanent Lender. All of the terms and conditions of this Agreement pertaining to or affecting the Senior Loan shall inure to the benefit of the Senior Lender. If any (prospective) Senior Lender shall require (i) any modification(s) of the terms of this Agreement or the Subordination Agreement (including without limitation terms pertaining to the terms of the 19 subordination and the relative rights of Senior Lender and Lender) or (ii) a replacement subordination agreement in lieu of the Subordination Agreement, then Lender shall, at Borrower’s request, promptly execute and deliver to such Senior Lender such instruments or agreements effecting such modification(s) or replacement subordination agreement as such (prospective) Senior Lender requires, provided such modifications or replacement agreement do not materially diminish the rights of Lender or materially increase the obligations of Lender under the Loan Documents. If the context so requires, all references herein to the Construction Loan Documents and Construction Lender shall mean, respectively, the refinance loan documents pertaining to the Permanent Loan and the Permanent Lender, and all references to the Subordination Agreement shall mean, as applicable, such agreement as amended or any replacement subordination agreement between Lender and the Permanent Lender, as amended from time to time. Nothing in this Agreement shall require Lender to subordinate its rights under this Agreement or the Promissory Note to any loan, obligation, or requirement (other than the Construction Loan and Permanent Loan). For avoidance of doubt, Lender’s rights hereunder shall not be subordinate to any restructuring, refinancing or other modification of the Permanent Loan. [Signatures begin on next page.]
20 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first set forth above.
LENDER:
LANCASTER HOUSING AUTHORITY,
a public body, corporate and politic
By: ____________________________
Name: ____________________________
Its: ____________________________
BORROWER:
MAISON’S SIERRA PHASE 2, LP,
a California limited partnership
By: ____________________________
Name: ____________________________
Its: ____________________________
A-1
EXHIBIT “A”
PROPERTY LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
LOT 99 OF TRACT NO. 84221, IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1453, PAGES 1 THROUGH 12, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL INTEREST OF GRANTOR IN OIL, GAS, HYDROCARBON
SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO
DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PHASE PARCEL LYING MORE THAN 500 HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR
ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND THE
PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID
PHASE PARCEL OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE
EITHER THE SURFACE OF THE PHASE PARCEL OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES
WHATSOEVER, OR TO USE THE PHASE PARCEL IN SUCH A MANNER AS TO CREATE A
DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE PARCEL, AS RESERVED
BY LANCASTER HOUSING AUTHORITY, A PUBLIC BODY CORPORATE AND POLITIC, RECORDED MAY 10, 2024 AS INSTRUMENT NO. 20240310222, OF OFFICIAL RECORDS.
APN: 3135-001-912, APN: 3135-001-923, APN: 3135-001-925, APN: 3135-001-929, APN: 3135- 001-927 (PORTION) AND APN: 3135-001-920 (PORTION)
B-1
EXHIBIT “B”
SITE MAP
PHASE 2A ONLY
C-1
EXHIBIT “C”
SCOPE OF DEVELOPMENT
171 units of housing, consisting of 169 restricted rental units and 2 unrestricted manager's A mix of Housing Units as follows:
E-1
EXHIBIT “D”
SCHEDULE OF PERFORMANCE
Borrower shall cause construction of the Improvements to commence on or prior to the date that is 60 days following the date hereof.
Borrower shall cause construction of the Improvements to be substantially complete on or prior to the last day of the 36th month following the Effective Date (subject to events of force majeure), as the same may be amended, modified or supplemented from time to time by mutual written agreement of the Parties and in accordance with the terms of the Senior Loan.
E-2
EXHIBIT “E”
PROMISSORY NOTE
$4,000,000.00 ___, 2025
Lancaster, California
FOR VALUE RECEIVED, MAISON’S SIERRA PHASE 2, LP, a California limited partnership (“Borrower”), promises to pay to LANCASTER HOUSING AUTHORITY, a public body, corporate and politic (“Lender”), or order, at Lender’s office at 44933 Fern Avenue, Lancaster, California 93534, or such other place as Lender may designate in writing, the sum of Three Million Five Hundred Nine Thousand Seven Hundred Fifty-Six and 67/100 Dollars ($3,509,756.67) (the “Note Amount”), in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts.
1. Agreement. This Promissory Note (“Note”) is given in accordance with that certain Loan Agreement executed by Lender and Borrower, dated as of _________, 2025 (“Agreement”). The rights and obligations of Borrower and Lender under this Note shall be governed by the Agreement and by the additional terms set forth in this Note. In the event of any inconsistencies between the terms of this Note and the terms of the Agreement or any other document related to the Note Amount, the terms of this Note shall prevail.
2. Interest. The balance of the Note Amount outstanding from time to time shall bear simple interest at the rate of 3.81% per annum (the “Note Rate”) from the date hereof through and including the date of repayment.
3. Repayment of Note Amount. Accrued interest on the Note Amount shall be paid annually in arrears out of Residual Receipts (as defined below) (from the operation of the Project for the preceding calendar year) and shall be paid by Borrower in the form of a cashier’s check which shall be delivered to Lender on or before the ninetieth (90 th) day after the end of each calendar year for the full calendar year just ended, commencing with the first full calendar year during the term of this Note occurring following the date the Project is placed in service, until the Note Amount together with all accrued and unpaid interest thereon (including any Deferred Interest (as defined below)) has been repaid in full; provided, however, that the amount of each annual payment shall be limited to the lesser of (i) the sum of (A) the amount of interest on the Note Amount that accrued during the calendar year just ended (the “Current Accrued Interest Amount”) and (B) the amount of then unpaid Accumulated Deferred Interest (if any), and (ii) one-half of Residual Receipts for the calendar year just ended. For purposes of calculating Residual Receipts, partnership management fees, deferred developer fees, or repayments on loans to Borrower’s partners shall not constitute or be included in Operating Expenses or Debt Service and shall not be deduced from Annual Project Revenue. To the extent that the Current Accrued Interest Amount is greater than one-half of Residual Receipts for a particular fiscal year, the amount of such excess is referred to herein as “Deferred Interest.” The “Accumulated Deferred Interest” shall mean, as of the date of determination, the sum of all Deferred Interest from the year just ended (if any) and all prior years (if any), less the total amount of Deferred Interest that has been paid by Borrower to Lender. Any Deferred Interest from time to time outstanding shall bear interest at the Note Rate from and after the last day of the calendar year during which such Deferred Interest arose through and including the date on which such Deferred Interest is paid in full. Any remaining portion of the Note Amount and any unpaid Accumulated Deferred Interest shall be due and payable in full on E-3
the Loan Maturity Date. Notwithstanding the foregoing, the full Note Amount may be accelerated as set forth in Section 11 hereof.
As used herein, “Residual Receipts” shall have the meaning ascribed thereto in the Agreement.
On or before ninety (90) days after the end of the Borrower’s fiscal year, of each year commencing in the year of the issuance of a certificate of occupancy for the Project, Borrower shall annually provide Lender a Residual Receipts report, in the form attached to the Agreement as Exhibit “G” and that shall describe in detail the Annual Project Revenue, Debt Service, Operating Expenses, Reserve Deposits and Residual Receipts for that year. Borrower shall also submit to Lender, on or before ninety (90) days after the end of Borrower’s fiscal year, of each year commencing in the year of the issuance of a certificate of occupancy for the Project, annual financial statements with respect to the Project that have been prepared by Borrower and reviewed by an independent certified public accountants to confirm that said financial statements present the financial position, results of operations, and cash flows of Borrower fairly and in accordance with the income tax method of accounting (or such other method of accounting used by Borrower (and reasonably acceptable to Lender) consistently applied.
4. Security. This Note is secured by a Deed of Trust (“Deed of Trust”) dated as of the same date as this Note.
5. Waivers
a.Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time at Lender’s sole discretion and that Lender may accept security in consideration for any such extension or release any security for this Note at its sole discretion all without in any way affecting the liability of Borrower. b.No extension of time for payment of this Note made by agreement by Lender with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part. c.The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reasons whatsoever.
d.Borrower waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Note, and the benefit of any exemption under any homestead exemption laws, if applicable.
e.No previous waiver and no failure or delay by Lender in acting with respect to the terms of this Note or the Deed of Trust shall constitute a waiver of any breach, default, or failure or condition under this Note, the Deed of Trust or the obligations secured thereby. A waiver of any term of this Note, the Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver.
E-4
6. Attorneys’ Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, to pay in addition, all costs and expenses of collection and reasonable attorneys’ fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed.
7. Amendments and Modifications. This Note may not be changed orally, but only by an amendment in writing signed by Borrower and by Lender.
8. Lender May Assign. Lender may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Borrower. Lender shall provide Borrower written notice of any such assignment, and Borrower shall be entitled to rely on such notice.
9. Borrower Assignment Prohibited. Except in the case of a Permitted Transfer, Borrower shall not assign or transfer any portion of this Note without the prior express written consent of Lender, which consent shall not unreasonably be withheld, conditioned or delayed.
10. Terms. Any terms not separately defined herein shall have the same meanings as set forth in the Agreement.
11. Acceleration and Other Remedies. Upon the occurrence of an Event of Default (as defined in the Agreement), Lender may, at Lender’s option by giving written notice thereof to Borrower, declare the outstanding principal amount of this Note, together with the then accrued and unpaid interest thereon (including any Accumulated Deferred Interest) and other charges hereunder, and all other sums secured by the Deed of Trust, to be due and payable immediately, and upon such declaration, such principal and interest and other sums shall immediately become and be due and payable without further demand or notice, all as further set forth in the Deed of Trust. All costs of collection, including, but not limited to, reasonable attorneys’ fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. Lender shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as Lender may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of Lender in exercising any right hereunder, under the Agreement or under the Deed of Trust shall not operate as a waiver of such right, or of any other right. No single or partial exercise of any right or remedy hereunder or under the Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of Lender’s right to either require prompt payment when due of all other sums payable hereunder or to declare an Event of Default for failure to make prompt or complete payment.
12. Intentionally omitted.
13. Successors and Assigns. Whenever “Lender” is referred to in this Note, such reference shall be deemed to include its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of Borrower, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of Lender and Lender’s successors and assigns.
E-5
14. Miscellaneous. Time is of the essence hereof. This Note shall be governed by and construed under the laws of the State of California except to the extent Federal laws preempt the laws of the State of California. Borrower irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Los Angeles or the United States District Court of the Central District of California, as Lender may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Note. Borrower also waives any objection regarding personal or in rem jurisdiction or venue.
15. Subordination. The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness evidenced by a (i) the promissory note dated as of even date herewith (“Construction Note”) in the original principal amount of up to $[33,846,000.00] (“Construction Loan”), executed by Borrower and payable to the order of Merchants Bank of Indiana, an Indiana chartered bank (“Construction Lender”), to the extent and in the manner provided in that certain Subordination Agreement dated as of even date herewith between the payee of this Note, Construction Lender and Lender (the “Construction Subordination Agreement”); and (ii) upon the repayment in full of the Construction Loan, the Amended and Restated Multifamily Note (and any schedules) (“Permanent Note”) in the original principal amount of $[23,620,000.00], executed by Borrower and payable to the order of California Municipal Finance Authority, as assigned to Fannie Mae (“Permanent Lender”) and U.S. Bank Trust Company, National Association, to the extent and in the manner provided in that certain Subordination Agreement between the payee of this Note, Permanent Lender and Lancaster Housing Authority, a public body corporate and politic (the “Permanent Subordination Agreement”). That certain Deed of Trust securing this Note (“Deed of Trust”) is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the (i) that certain Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated the date hereof, made by Borrower for the benefit of Construction Lender securing the Construction Note and the terms, covenants and conditions of the Construction Loan Agreement evidencing the terms of the Construction Note, as more fully set forth in the Construction Subordination Agreement; and (ii) upon the repayment in full of the Construction Loan, the Multifamily Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (and any exhibits) securing the Permanent Note and the terms, covenants and conditions of the Reimbursement Agreement evidencing the terms of the Permanent Note, as more fully set forth in the Permanent Subordination Agreement. The rights and remedies of Lender and each subsequent holder of this Note under the Deed of Trust are subject to the restrictions and limitations set forth in the Construction Subordination Agreement or Permanent Subordination Agreement, whichever is in effect at the time. Each subsequent holder of this Note shall be deemed, by virtue of such holder’s acquisition of the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by Lender named herein under the Construction Subordination Agreement or the Permanent Subordination Agreement, whichever is in effect at the time.
E-6
This Note shall be a nonrecourse obligation of the Borrower and is nonrecourse to the Borrower’s partners.
BORROWER:
MAISON’S SIERRA PHASE 2, LP,
a California limited partnership
By: ____________________________
Name: ____________________________
Its: ____________________________
F-1
EXHIBIT “F”
DEED OF TRUST
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Lancaster Housing Authority
44933 N. Fern Avenue
Lancaster, California 93534
Attention: Executive Director
This document is exempt from the payment of a
recording fee pursuant to Government Code Section
6103.
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This DEED OF TRUST, dated as of __________, 2025, between MAISON’S SIERRA PHASE 2, LP, a California limited partnership, herein called TRUSTOR, whose address is [trustor’s address], [trustee’s name], a California corporation, herein called TRUSTEE, and LANCASTER HOUSING AUTHORITY, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Lancaster, County of Los Angeles, State of California, described as:
See Attachment No. 1 attached hereto.
together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) Trustor’s performance of that certain Loan Agreement (“Agreement”) dated as of ___________, 2025, entered into by and between Trustor and Beneficiary, (2) Trustor’s performance of each agreement or other document attached to and incorporated in the Agreement and (3) payment of any sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely:
(continued on next page)
F-2
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Venture 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633
Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes3 as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth.
Signature of Trustor
STATE OF CALIFORNIA
COUNTY OF _______________________________
On _____________________________________ before
me, 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/here/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 ____________________________________
_______________________,
a __________________________
By: ____________________________
Name:___________________________
Title: ____________________________
(This area for official notarial seal)
3 Note: The incorporation of the covenants by reference is under review by Borrower. We think it will be helpful to chat about them as we get a little closer to closing.
F-3
(continued on next page)
F-4
DO NOT RECORD 4
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon, not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of 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 is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defeat any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
4 See footnote 2.
F-5
(3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as “the person or persons legally entitled thereto”. (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place 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 such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of trustee and of this Trust, including costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee.
F-6
(8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
(9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
DO NOT RECORDREQUEST FOR FULL RECONVEYANCE
______________________________________, TRUSTEE:
The undersigned is the legal owner and holder of the note and of all indebtedness secured by the foregoing Deed of Trust. Said note, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same.
Dated _______________________________________
________________________________________________________ ________________________________________________________ Please mail Deed of Trust,
Note and Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made.
ATTACHMENT NO. 1
PROPERTY LEGAL DESCRIPTION
[INSERT]
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.
STATE OF CALIFORNIA )
) ss.
COUNTY OF ____________ )
On _________________________________, before me, ______________________________________, Notary Public, (Print Name of 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 of Notary Public
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT Individual
Corporate Officer
________________________________________________
Title(s)
________________________________________________
Title Or Type Of Document
________________________________________________
Number Of Pages
________________________________________________
Date Of Documents
Partner(s) Limited General
Attorney-In-Fact
Trustee(s)
Guardian/Conservator
Other:______________________________________
Signer is representing:
Name Of Person(s) Or Entity(ies)
________________________________________________
________________________________________________ ________________________________________________ Signer(s) Other Than Named Above
EXHIBIT “G”
FORM OF RESIDUAL RECEIPTS REPORT
Lancaster Housing Authority
__________________ Housing Project
Residual Receipts Report
for the Year Ending______________
Date Prepared ________________
Please complete the following information and execute the certification at the bottom of this form.
Annual Project Revenue
Please report Annual Project Revenue for the year ending ________________ on the following lines:
Rent Payments (including Section 8 tenant assistance payments, if any) (1) $ Interest Income (do not include interest income from replacement and operating reserves nor interest income on tenant security deposits) (2) $ Additional Income Related to Project Operations (for example, vending machine income, tenant forfeited deposits, laundry income not paid to the residents’ association)
(3) $
Total Annual Project Revenue (Add lines 1, 2, and 3) (4) $ Operating Expenses1
Please report Operating Expenses incurred in relation to the operations of the Project for the year ending ______________, on the following lines:
Operating and Maintenance Expenses (5) $
Utilities (6) $
Property management Expenses and On-Site Staff Payroll (7) $ Administrative Expenses Incurred by Project (8) $
Property Taxes (9) $
Insurance (10) $
Other Expenses Related to Operations of the Project
Please list these expenses:
(11) $
Total Annual Operating Expenses
(Add lines 5, 6, 7, 8, 9, 10, and 11)
(12) $
Net Operating Income (Subtract Line 12 from Line 4) (13) $ 1 Do not include expense unrelated to the Project’s operations, such as depreciation, amortization, accrued principal and interest expense on deferred payment debt, or capital expenditures.
Additional Cash Flow Payments
Obligated Debt Service Payments (as approved by the Lender and other parties that may have such approval rights)
(14) $
Scheduled Deposits to Reserves (as approved by the Lender) (15) $ Additional Payment Obligations (such as partnership management fees, deferred developer fees, or repayments on loans to partners, as approved by the Lender to have priority over Residual Receipt Payment to the Lender (16) $
Total Additional Cash Flow Payments (Add lines 14, 15, and 16) (17) $ Residual Receipts for Year Ending ________________________ (Subtract Line 17 from Line 13)
(18) $
Percentage of Residual Receipts to be Paid to the Lender (as shown in the Promissory Note by and between the Lender and Borrower dated ____________________________________)
(19) %
Amount Payable to the Lender (Multiply Line 18 by Line 19) (20) $ The amount payable to the Lender listed on Line 2 is subject to payment according to the terms of the Promissory Note by and between the Lender and Borrower dated ______________________. If Line 20 is $0.00 or negative, you owe nothing to the Lender this year. If Line 20 is a positive number, remit check payable to Lancaster Housing Authority and attach to this report.
Computation of Residual Receipts
for the Year Ending ______________________
The following certification should be executed by the Executive Director or Chief Financial Officer of the Borrower, or the Managing General Partner of the Borrower.
I certify that the information provided in this form is true, accurate, and correct in all respects.
Date: ________________ By: ____________________________ Name: ____________________________
Its: ____________________________
EXHIBIT “H”
PERMITTED EXCEPTIONS
[TO BEINSERT]