AMERICAN RESCUE PLAN ACT
SUBRECIPIENT AGREEMENT
WAKELAND ENTRADA LP
[Affordable Housing Fund Loan Agreement]
THIS SUBRECIPIENT AGREEMENT ("Loan Agreement") is made and entered into this day of 2024 ("Effective Date"), by and between the CITY OF RIVERSIDE, a California charter city and municipal corporation ("City") and WAKELANI ENTRADA LP, a California limited partnership ("Subrecipient"")
RECITALS
A. The American Rescue Plan Act ("ARPA"), Public Law No. 117-2, was signed by President Joseph R. Biden on March 11, 2021, and established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, which together make up the Coronavirus State and Local Fiscal Recovery Funds ("SLFRF") program. This program is intended to provide support to State, territorial, local, and Tribal governments in responding to the economic and public health impacts of COVID-19 and in their efforts to contain impacts on their communities, residents, and businesses.
B. The City has been directly allocated Thirty-Six Million Seven Hundred Sixty-Seven Thousand Five Hundred Ninety-Four Dollars ($36,767,594) of SLFRF funds.
C. SLERF funds allocated may only be used for expenditures incurred between March 3, 2021, and December 31, 2024, in response to COVID-19, in guidance from the United States Treasury Department, including the answers to Frequently Asked Questions.
D. On February 7, 2023, the City Council approved the second expenditure plan for the ARPA funds ("Second Expenditure Plan"), wherein approximately One Million Three Hundred Eighty-Eight Thousand Seven Hundred Ninety-Seven Dollars ($1,388,797) was allocated for the Affordable Housing Fund.
E. Subrecipient has submitted a proposal to the City for the Entrada Affordable Housing Project ("Program" or "Project"). The Project is located at 1701-1757 Seventh Street, also known as Assessor Parcel No. 211-181-033. The Project will consist of a mixed use multifamily affordable housing development, having approximately eight hundred (800) square feet of community benefits space and sixty-five (65) Affordable Units, including one (1) unrestricted Manager's Unit.
Subrecipient shall operate the Project as affordable housing. The Project is eligible for expenditure of the Recovery Funds under the Uniform Guidance, "Appendix 1: Expenditure Categories." The procurement of the Project complies with both the Uniform Guidance and Procurement Code provisions.
F. The City has agreed to loan SLFRF funds to the Subrecipient in the amount of One Million Dollars ($1,000,000) for costs (the Project Costs") associated with the Program (the "Loan" and "Loan Funds").
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G. The Parties intend this Loan Agreement to set forth Subrecipient's obligations under ARPA and all other regulations pertaining to the Loan Funds.
H. Subrecipient and the Housing Authority of the City of Riverside entered into that certain Disposition and Development Agreement ("DDA") dated February 14, 2018 and the Regulatory Agreement dated February 14, 2018 and recorded on October 4, 2018 as Series No. 2018-0395776 in the Official Records of Riverside County (the "Authority Regulatory Agreement" or "Regulatory Agreement"). Subrecipient will construct and operate the Project in accordance with the applicable terms and provisions of the DDA and the Regulatory Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein, and the mutual benefits to be derived therefrom, the City and Subrecipient agree as follows:
1. SCOPE OF SERVICES. Subrecipient shall provide services as more particularly described in Exhibit "A", entitled Scope of Services ("Services"), attached and incorporated by reference, in accordance with this Loan Agreement.
2. TERM. The term of the Loan Agreement shall begin on the Effective Date and shall remain in effect until all obligations and duties under this Loan Agreement, the Deed of Trust, Promissory Note and the Authority Regulatory Agreement, as referenced herein, have been completed, unless otherwise terminated pursuant to the provisions herein.
3. LOAN FUNDS. City hereby agrees to loan to Subrecipient, and Subrecipient hereby agrees to borrow, a loan amount not to exceed One Million Dollars ($1,000,000) (the "Loan Funds or the "Loan Proceeds"). Disbursements shall be made not more often than weekly, on an as-needed basis, upon a request by Subrecipient and in compliance with the paragraph below. In connection with the Loan, the City and Subrecipient will enter into a promissory note for the benefit of the City in the principal amount of $1,000,000 (the "Promissory Note"), and a deed of trust securing the amounts owed under the Promissory Note (the "Deed of Trust"), the forms of which are attached as Exhibit F (collectively, the "Loan Documents").
Upon recording of the Deed of Trust and execution of this Loan Agreement and the Promissory Note, and the City's receipt of any evidence of insurance required by this Loan Agreement, the City will disburse proceeds of the Loan Funds in the amount identified in the invoices and supporting documentation provided as set forth in Section 3.2 herein. Following the recordation of the Deed of Trust, the remaining balance of the Loan Funds shall be made available for disbursement to the Subrecipient upon Subrecipient's satisfaction of the conditions precedent to the disbursement of the Loan Funds set forth below within thirty (30) days after receipt by the City Housing Project Manager of a written disbursement request from the Subrecipient (each, a "Disbursement Request"). The Disbursement Request shall be in a form reasonably satisfactory to the City's Housing Project Manager evidencing Subrecipient's expenditure for Program costs consistent with the Budget, shall set forth the amount of the requested disbursement of Loan Funds, and shall certify that (a) all conditions precedent to disbursement of the Loan Funds below have been and remain satisfied in all material respects and (b) no Event of Default has occurred and is continuing under the this Loan Agreement or the Promissory Note, Deed of Trust and Regulatory Agreement beyond any applicable notice and cure period
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The City shall use its best commercially reasonable efforts to wire transfer such disbursements when the Subrecipient requests disbursements by wire transfer. Concurrently with the recordation of the Deed of Trust, the Subrecipient shall cause the Stewart Title Guaranty Title Company ("Title Company"), located at 7676 Hazard Center Drive, Suite 1400, San Diego, California 92108, to issue and deliver to the City an extended ALTA lender's policy of title insurance in an amount equal to $1,000,000, together with such endorsements as requested by the City, insuring that fee simple title to the Site is vested in Subrecipient. The Title Company shall, if requested by the City, provide any extended coverage and any endorsements reasonably requested by the City (collectively, the "Additional Endorsements"). Subrecipient shall pay the cost of such title policies issued
3.1 Subordination
The City Deed of Trust shall be subordinate to the liens of the Authority Regulatory Agreement, and such exceptions to title as are approved by City in writing. In addition, City agrees to consider in good faith any other reasonable request by Subrecipient for subordination of the City Deed of Trust to other loans obtained by Subrecipient where City's interests are protected and secure. A Request for Notice of Default shall be recorded in the official records of Riverside County concurrent with any documents evidencing the subordination of the City Loan.
The subordination by the City pursuant to this Section 3.1 shall be made in accordance with a subordination agreement in the form and substance approved by City's legal counsel which agreement shall include written commitments reasonably designed to protect the City's investment and covenants in the event of default, including, but not limited to, reasonable notice and cure rights ("Subordination Agreement").
3.2 Disbursement of Loan Proceeds
The Loan Funds shall be used to fund the costs incurred in connection with the development and construction of the residential component of the Project.
Following the recordation of the Deed of Trust, Loan Proceeds shall be made available for disbursement to the Subrecipient upon Subrecipient's satisfaction of any conditions precedent to the disbursement of the Loan; provided, that, the remaining Loan Proceeds shall be disbursed to Subrecipient not later than thirty (30) days after receipt by the City of a written disbursement request from the Subrecipient (each, a "Disbursement Request"). The Disbursement Request shall set forth the amount of the requested disbursement of Loan and shall certify that (a) all conditions precedent to disbursement of the Loan Proceeds have been and remain satisfied in all material respects and (b) no event of default has occurred and is continuing under the Loan Documents beyond any applicable notice and cure period. The City shall use its best commercially reasonable efforts to wire transfer such disbursements when the Subrecipient requests disbursements by wire transfer.
3.2.1 Retention. Except as provided herein, as to each Disbursement Request made to City for Project Costs, disbursements of City Loan Proceeds shall be made for such item in the amount of ninety percent (90%) of the costs for such item properly incurred and substantiated by Developer during the course of the Project. Upon satisfaction of any conditions, the City shall disburse Loan Proceeds in the amount of Ninety Percent (90%) of each Disbursement Request for Project Costs; provided, however, that (a) the amounts so retained on account of rough grading, wet and dry utilities, concrete foundations, and framing shall be released on a trade by trade basis, so 3 1628\11\3629568.1
long as the construction of the trade improvements has been completed substantially in accordance with any approved plans and has been fully paid for and is lien free, and (b) all work requiring inspection or certification by any governmental agency has been completed and all requisite certificates, approvals and other necessary authorizations required at such time have been obtained.
Notwithstanding the foregoing, as to each Disbursement Request made to the City for Project Costs that constitute payment of City permits and development impact fees related to the Project or the payment of "soft costs," including, but not limited to, architecture, design professional, engineering and other Project related consulting fees, disbursements of Loan Proceeds shall be made for such item in the amount of one-hundred percent (100%) of the costs for such item properly incurred and substantiated by Developer during the course of the Project.
Upon satisfaction of the conditions precedent to the disbursement of the Retention set forth herein, the proceeds shall be disbursed to Subrecipient not later than thirty (30) days after receipt by the City of a written disbursement request from the Subrecipient (the "Final Disbursement Request"). The Final Disbursement Request shall set forth the amount of the requested disbursement of Loan Proceeds and shall certify that (a) all conditions precedent to disbursement of the Loan Proceeds set forth in Section 3.3 have been and remain satisfied in all material respects. The City shall use its best commercially reasonable efforts to wire transfer such disbursement when requested by Subrecipient.
3.3 Conditions Precedent to Disbursement of the Loan Proceeds (Non- Retention).
All disbursements of Loan Proceeds shall be recorded by the City and acknowledged by Subrecipient on "Exhibit A" to the Promissory Note. The City shall authorize the disbursement of Loan Proceeds to or on behalf of Subrecipient for Project Costs only upon satisfaction of the conditions precedent set forth in this Section 3.3.
3.3.1 Execution and Delivery of Loan Documents. Subrecipient shall have executed and delivered to the City: this Loan Agreement, the Regulatory Agreement, the Promissory Note, and the Deed of Trust.
3.3.2 Evidence of Insurance. Subrecipient shall have furnished the City with proper evidence of insurance as required by the City, as set forth herein.
3.3.3 Title to Land. Subrecipient has good and marketable fee title to the Project site, 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 deeds of trust approved by the City and any other matters approved in writing by the City in its reasonable discretion.
3.3.4 Recordation of the City Deed of Trust. The City Deed of Trust shall have been recorded as a lien against the Site and subordinate only to those liens permitted pursuant to Section
3.1. 3.3.5 Title Policy. Concurrently with the recordation of the Deed of Trust, the Title Company shall issue and deliver to the City an extended ALTA lender's policy of title insurance in an amount equal to the City Loan, together with such endorsements as requested by the City, 4 1628\11\3629568.1
insuring that fee simple title to the Site is vested in Subrecipient and that the priority of the City Deed of Trust are consistent with Section 3.1. The Title Company shall provide Subrecipient with copies of such title policy. The Title Company shall, if requested by the City, provide any extended coverage and any endorsements reasonably requested by the City(collectively, the "Additional Endorsements"). The Subrecipient shall pay the cost of such title policies issued in connection with the acquisition of the Property.
3.3.6 Environmental Compliance. All federal, state and local environmental requirements applicable to the Project, including without limitation, the National Environmental Policy Act of 1969, Public Law 91-190 as amended, 42 U.S.C. Sections 4321-4347 and the California Environmental Quality Act California Public Resources Code Section 21000, et seq., have been satisfied.
3.3.7 Evidence of Eligible Project Costs. Subrecipient shall have submitted to the City paid invoices, receipts, canceled checks or other written documentation reasonably satisfactory to the City evidencing Subrecipient's expenditure for Project Costs.
3.3.8 No Default. There shall exist no condition, event or act which would constitute an Event of Default by Subrecipient under this Loan Agreement, the DDA or the Authority Regulatory Agreement or which, upon the giving of notice or the passage of time, or both, would constitute an Event of Default by Subrecipient.
3.4 Conditions Precedent to Disbursement of Retention.
Upon satisfaction or waiver of the conditions precedent set forth below, as reasonably determined by the City, City shall disburse the Retention. No disbursement of the Loan Proceeds shall be made for the Retention until all of the following conditions precedent have been satisfied (as determined by City in its reasonable discretion) or waived:
3.4.1 Compliance With Previous Conditions. Developer shall be in compliance with the conditions precedent to disbursement of the Loan Proceeds set forth in Section 3.3.
3.4.2 Completion of Construction. The construction of the Project shall be complete.
The construction of the Project shall be considered complete for purposes of this Loan Agreement only when (a) the construction of the Improvements for the Project have been completed substantially in accordance with the approved Plans and has been fully paid for, or will be fully paid for upon reimbursement of the retention and is lien free, all work requiring inspection or certification by any governmental agency has been completed and all requisite certificates, approvals and other necessary authorizations have been obtained (including, without limitation, temporary certificate(s) of occupancy for the Improvements which shall be subject only to conditions reasonably acceptable to the City, and (c) streets and off site utilities located within or pertaining to the Project have been completed to the reasonable satisfaction of all applicable authorities.
(a) Any portion of the Project requiring inspection or certification by any governmental agency shall have been inspected and certified as complete, a final certificate of occupancy shall have been issued covering the Project and all other necessary approvals, licenses, exemptions and other authorizations of governmental agencies shall have been duly obtained. 5 1628\11\3629568.1
(b) At least one of the following shall have occurred
(1) 35 days shall have passed since the recording of a valid notice of completion for the construction of the Project and no mechanic's or materialman's lien shall be outstanding; or (ii) 95 days shall have passed since actual completion of the construction of the Project and no mechanic's or materialman's lien shall be outstanding; or (11i) City shall be satisfied that no mechanic's or materialman's lien will impair its interest in the Site, City hereby agrees to consider that a CLTA Form No. 101.1 Endorsement to the Title Policy, in form and substance reasonably satisfactory to the City, may satisfy the requirement of this subparagraph (iii).
(c) City shall be reasonably satisfied that the Project was completed in accordance with all applicable Governmental Regulations in all material respects, including, without limitation, all laws described in any applicable Prevailing Wage Clause. (d) All requirements for release of retention set forth in this Loan Agreement have been met.
(e) City\. has issued and Subrecipient has recorded a Release of Construction Covenants.
NOTICES.
(a) Any notices provided for, or required, to be given hereunder shall be in writing and shall be personally served or given by mail. Any notice given by mail shall be deemed given when deposited in the United States Mail, certified and postage prepaid, addressed to the party to be served as follows:
City Subrecipient
City of Riverside Wakeland Entrada, L.P
Attn: Housing and Human Services Attn: Rebecca Louie
Director 1230 Columbia Street, Suite 950
3900 Main Street, 5th Floor San Diego, CA 92101
Riverside, California 92522
(b) Notwithstanding any provision to the contrary in the Loan Documents, City hereby agrees that the City will send copy of any notice to the Subrecipients investor limited partner at the address below:
WF Affordable Housing LLC
550 S. Tryon Street
23"d Floor, MAC D1086-239
Charlotte, NC 28202-4200
Attention: Director of Asset Management
[email protected]
[email protected]
[email protected]
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5. AVAILABILITY OF LOAN FUNDS. City's disbursement of the Loan Funds to Subrecipient is contingent upon the allocation funds to the City under ARPA. In the event of funding reduction, including elimination, the City may reduce the Loan Funds as a whole or as to cost category, and may, at its sole discretion, limit Subrecipient's authority to commit and spend Loan Funds, and may restrict Subrecipient's use of both its uncommitted and its unspent Loan Funds. Any such change shall be reflected by written amendment to this Loan Agreement pursuant to Section
7.5. Notwithstanding the foregoing, the City may also terminate this Loan Agreement pursuant to Section 7.6 of this Loan Agreement.
6. COMPLIANCE. By executing this Loan Agreement, Subrecipient hereby certifies that it will adhere to and comply with the same obligations to the City that the City has undertaken with the State, including adherence to all federal requirements, pursuant to its application and certifications for any funding related to ARPA, including but not limited to the following, as they may be applicable:
A The ARPA Final Rule and guidelines set forth by the US Department of the Treasury, which is attached hereto as Exhibit "D" and incorporated herein by reference.
B. Sections 602 and 603 of the Social Security Act, as added by Section 9901 of ARPA (Subtitle M of Title IX of Public Law 117-2), which amends Title VI of the Social Security Act (42 U.S.C. 801 et seq.)
C. Office of Management and Budget (OMB) Circulars, as applicable:
OMB Circular A-21 (Cost Principles for Educational Institutions); OMB Circular A-87 (Cost Principles for State, Local, and Indian Tribal Governments); OMB Circular A-102 (Grants and Cooperative Agreements with State and Local Governments); Common Rule, Subpart C for public agencies or OMB Circular A-110 (Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other NonProfit Organizations); OMB Circular A-122 (Cost Principles for Non-Profit Organizations); OMB Circular A-133 (Audits of States, Local Governments, and Non-Profit Organizations.
D. Single Audit Act (31 USC Sec. 7501 et seq.), OMB Circular A-133 (as stated above) and any administrative regulation or field memoranda implementing the Act, including related provisions of the Uniform Guidance, 2 C.F.R. § 200.303 regarding internal controls, 8§ 200.330 through 200.332 regarding subrecipient monitoring and management, and subpart F regarding audit requirements, and the Catalog of Federal Domestic Assistance (CFDA) 21.019.
E. Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and implementing regulations issued at 24 CFR Part I; Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) as amended; Executive Order 11246, as amended by Executive Orders 11375 and 12086, and implementing regulations at 41 CFR Chapter 60; Executive Order 11063, as amended by Executive Order 12259, and implementing regulations at 24 CFR Part 107.
F. Section 504 of the Rehabilitation Act of 1973 (P.L. 93-112), as amended, and implementing regulations.
The Age Discrimination Act of 1975 (P.L. 94-135), as amended, and implementing regulations.
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H. The Federal Accounting and Transparency Act of 2006 (P.L. 109- 282), as amended by Section 6202(a) of P.L. 110-252.
Subrecipient shall be solely responsible, expressly or impliedly, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, labor laws and standards, and the City does not make any representations, either legally or financially, as to the applicability or non-applicability of any federal, state or local laws to the project or any part thereof, either onsite or offsite. Subrecipient expressly, knowingly and voluntarily acknowledges and agrees that the City has not previously represented to Subrecipient or to any representative, agent or affiliate of Subrecipient, or any subcontractors) that any work and construction undertaken pursuant to this Loan Agreement is or is not subject to Section 1720 of the Labor Code or the Davis Bacon Act (P.L. 71-798).
GENERAL CONDITIONS.
7.1. Subrecipient as Independent Contractor. In the performance of this Loan Agreement, Subrecipient, and Subrecipient's employees, subcontractors and agents, shall act in an independent capacity as independent contractors, and not as officers or employees of the City.
Subrecipient acknowledges and agrees that the City has no obligation to pay or withhold state or federal taxes or to provide workers' compensation or unemployment insurance to Subrecipient, or to Subrecipient's employees, subcontractors and agents. This Loan Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. Subrecipient shall be responsible for any and all taxes that apply to Subrecipient as an employer.
Subrecipient shall determine the method, details, and means by which it provides Services. Subrecipient shall be responsible to the City only for the requirements and results specified in this Loan Agreement, and, except as expressly provided in this Loan Agreement, shall not be subjected to the City's control with respect to the physical action or activities of Subrecipient in fulfillment of this Loan Agreement. If in the performance of this Loan Agreement, any third persons are employed by Subrecipient, such persons shall be entirely and exclusively under the direction, supervision, and control of Subrecipient. All terms of employment, including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirements of law, shall be determined by Subrecipient.
7.2. Indemnity. Except as to the sole negligence or willful misconduct of the City, Subrecipient shall defend, indemnify, and hold the City, and its officers, employees and agents, harmless from any and all loss, damage, claim for damage, liability, expense or cost, including attorneys' fees, which arises out of or is in any way connected with the Program or the performance of the Services under this Loan Agreement by Subrecipient or any of its employees, agents or subcontractors, and from all claims by Subrecipient's employees, subcontractors and agents for compensation for services rendered to Subrecipient in the performance of this Loan Agreement, notwithstanding that the City may have benefitted from their services. This indemnification provision shall apply to any acts or omissions, on the part of Subrecipient or of Subrecipient's employees, subcontractors or agents, except to the extent caused by Subrecipient's or Subrecipient's employees' willful misconduct or negligent conduct, whether active or passive, Subrecipient understands and agrees that it shall defend the City from any claim even if it appears to be without merit. 8 1628\1113629568.1
Subrecipient shall also defend, indemnify, and hold the City harmless from any loss, damage, or attorneys' fees incurred because of any claim by any person or entity, including the State of California, except to the extent caused by Subrecipient's or Subrecipient's employees' willful misconduct or negligent conduct, whether active or passive.
Parties also expressly agree that any payment, attorneys' fees, cost, or expense that the City incurs, or makes to or on behalf of an injured employee under the City's self- administered workers' compensation, is included as a loss, expense or cost for the purposes of this Section, and that this Section shall survive the expiration or early termination of the Loan Agreement.
7.3. Insurance.
7.3.1. General Provisions. Prior to the City's execution of this Loan Agreement, Subrecipient shall provide satisfactory evidence of, and shall thereafter maintain during the term of this Loan Agreement, such insurance policies and coverages in the types, limits, forms and ratings required herein. The rating and required insurance policies and coverages may be modified in writing by the City's Risk Manager or City Attorney, or a designee, unless such modification is prohibited by law.
7.3.2. Limitations. These minimum amounts of coverage shall not constitute any limitation or cap on Subrecipient's indemnification obligations under Section 8.2 hereof.
7.3.3. Ratings. Any insurance policy or coverage provided by Subrecipient or subcontractors as required by this Loan Agreement shall be deemed inadequate and a material breach of this Loan Agreement, unless such policy or coverage is issued by insurance companies authorized to transact insurance business in the State of California with a policy holder's rating of A or higher and a Financial Class of VII or higher.
7.3.4. Cancellation. The policies shall not be canceled unless thirty (30) days prior written notification of intended cancellation has been given to the City by certified or registered mail, postage prepaid.
7.3.5. Adequacy. City, its officers, employees and agents make no representation that the types or limits of insurance specified to be carried by Subrecipient pursuant to this Loan Agreement are adequate to protect Subrecipient. If Subrecipient believes that any required insurance coverage is inadequate, Subrecipient will obtain such additional insurance coverage, as Subrecipient deems adequate, at Subrecipient's sole expense.
7.3.6. Workers' Compensation Insurance. By executing this Loan Agreement, Subrecipient represents that Subrecipient is aware of and will comply with Section 3700 of the Labor Code of the State of California requiring every employer to be insured against liability for workers' compensation, or to undertake self-insurance before commencing any of the work.
Subrecipient shall carry the insurance or provide for self-insurance required by California law to protect said Subrecipient from claims under the Workers' Compensation Act. Prior to the City's execution of this Loan Agreement, Subrecipient shall file with City either (1) a certificate of insurance showing that such insurance is in effect, or that Subrecipient is self-insured for such coverage, or (2) a certified statement that Subrecipient has no employees, and acknowledging that if Subrecipient does employ any person, the necessary certificate of insurance will immediately be filed 9 1628\1 113629568.1
with the City. Any certificate filed with the City shall provide that the City will be given at least ten (10) days prior written notice before modification or cancellation thereof.
7.3.7. Commercial General Liability. Prior to the City's execution of this Loan Agreement, Subrecipient shall obtain, and shall thereafter maintain during the term of this Loan Agreement, commercial general liability insurance as required to insure Subrecipient against damages for personal injury, including accidental death, as well as from claims for property damage, which may arise from or which may concern operations by anyone directly or indirectly employed by, connected with, or acting for or on behalf of Subrecipient. City, and its officers, employees and agents, shall be named as additional insureds under Subrecipient's insurance policies.
Subrecipient's commercial general liability insurance policy shall cover both bodily injury (including death and property damage (including, but not limited to, premises operations liability, products completed operations liability, independent contractor's liability, personal injury liability, and contractual liability) in an amount not less than $1,000,000 per occurrence and a general aggregate limit in the amount of not less than $2,000,000.
Prior to the City's execution of this Loan Agreement, copies of insurance policies or original certificates and additional insured endorsements evidencing the coverage required by this Loan Agreement, for both commercial general and automobile liability insurance, shall be filed with the City and shall include the City and its officers, employees and agents, as additional insureds. Said policies shall be in the usual form of commercial general and automobile liability insurance policies, but shall include the following provisions:
It is agreed that the City of Riverside, and its officers, employees and agents, are added as additional insureds under this policy, solely for work done by and on behalf of the named insured for the City of Riverside.
7.3.8. Subcontractors' Insurance. Subrecipient shall require all of its subcontractors to carry insurance, in an amount sufficient to cover the risk of injury, damage or loss, which may be caused by the subcontractors' scope of work and activities provided in furtherance of this Loan Agreement, including, but without limitation, the following coverages: Workers' Compensation, Commercial General Liability, Errors and Omissions, and Automobile liability. Upon the City's request, Subrecipient shall provide the City with satisfactory evidence that subcontractors have obtained insurance policies and coverages required by this section.
7.3.9. Commercial Automobile Insurance. Subrecipient is required to provide commercial automobile liability insurance for this Loan Agreement with the exception being those subrecipients that do not require the use of an automobile to meet program requirements as detailed in the Scope of Work.
If Subrecipient does not require the use of an automobile to meet program requirements in the Scope of Work, Subrecipient must complete a Certification Regarding Automobile Usage and Receipt of Grant Funding from City of Riverside.
If Subrecipient requires the use of an automobile or must drive to meet program requirements in the Scope of Work, Subrecipient must submit insurance certificates acceptable to the City that meet the following requirements): Subrecipient's automobile liability policy shall cover both bodily injury and property damage in an amount not less than $1,000,000 10 1628\11\3629568.1
per occurrence and an aggregate limit of not less than $1,000,000. All of Subrecipient's automobile and/or commercial general liability insurance policies shall cover all vehicles used in connection with Subrecipient's performance of this Loan Agreement, which vehicles shall include, but are not limited to, Subrecipient owned vehicles, Subrecipient leased vehicles, Subrecipient's employee vehicles, non-Subrecipient owned vehicles and hired vehicles. City, and its officers, employees and agents, shall be named as additional insureds under the Subrecipient's automobile insurance policy.
7.4. Personnel. Subrecipient shall furnish all personnel necessary to perform the Services and shall be responsible for their performance and compensation. Subrecipient recognizes that the qualifications and experience of the personnel to be used are vital to professional and timely completion of the Services. The key personnel listed in Exhibit "C" attached hereto and incorporated herein by this reference and assigned to perform portions of the Services shall remain assigned through completion of the Services, unless otherwise mutually agreed by the parties in writing, or caused by hardship or resignation in which case substitutes shall be subject to the City's approval.
7.5. Amendment. This Loan Agreement may only be amended in writing by mutual agreement between the City and Subrecipient.
7.6. Termination.
7.6.1. For Cause. City may terminate this Loan Agreement immediately if Subrecipient materially fails to comply with any terms of this Loan Agreement, including but not limited to:
A. Failure to comply with any of the rules, regulations or provisions referred to herein, or such statutes, regulations, executive orders, and policies or directives as may become applicable at any time;
Failure, for any reason, to fulfill in a timely and proper manner its obligations under this Loan Agreement, the DDA and/or the Authority Regulatory Agreement; C. Improper use of Loan Funds provided under this Loan Agreement; and
D. Submission of reports that are incorrect or incomplete in any material respect.
7.6.2. For Cause - Additional Remedies. If Subrecipient materially fails to comply with any term of this Loan Agreement, as set forth in subsection 7.6.1 herein, the City, in addition to immediate termination, may also take any one or more of the following actions as appropriate in the circumstances:
A. Temporarily withhold Loan Funds pending correction of the deficiency by Subrecipient;
B. Disallow all or part of the cost of the activity or action not in compliance;
Withhold further Loan Funds for the Program; and
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D. Take other remedies that may be legally available.
7.6.3. Availability of Loan Funds. Should the Loan Funds change pursuant to Section 5 of this Loan Agreement, the City may suspend the operation of this Loan Agreement upon three (3) days written notice to Subrecipient of its intention to so act.
7.7. Costs Following Termination. Costs of Subrecipient resulting from obligations incurred by the Subrecipient during a suspension or after termination of this Loan Agreement are not allowed unless the City expressly authorizes them in writing in connection with any notice of suspension or termination. Other Subrecipient costs during suspension or after termination which are necessary and not reasonably avoidable are allowed if: (a) the costs resulted from obligations which were properly incurred by Subrecipient before the effective date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are non- cancellable; and (b) the costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect.
7.8. Investor Limited Partner Cure Rights. The Investor Limited Partner shall have the right, but not the obligation, to cure any default of the Borrower under any of the Loan Documents within the cure periods set forth therein. Notwithstanding the foregoing, if the Investor Limited Partner elects to remove a general partner of the Borrower in connection with any such cure, then so long as the Investor Limited Partner commences proceedings and diligently proceeds to remove such general partner, the cure period shall be extended for so long as reasonably necessary for the Investor Limited Partner to remove such general partner and effectuate the cure. The "Investor Limited Partner" is WF Affordable Housing LLC, a North Carolina limited liability company, and its successors and/or assigns.
8. ADMINISTRATIVE REQUIREMENTS.
8.1. Revenue Disclosure Requirement. Subrecipient certifies that it has previously filed with the City a written statement listing all revenue received, or expected to be received, by Subrecipient from federal, state, city, or county sources, and from other governmental agencies in connection with the development of the Project, and applied or expected to offset, in whole or in part, any of the costs incurred by Subrecipient in conducting the Program. Such sources are shown in the Project Budget attached as Exhibit "B". Funds provided by the City under this Loan Agreement will not supplant other third-party funds obtained by Subrecipient to help finance the Project and that the Loan Funds will be used to cover increased development costs related to the Project. All restrictions and/or requirements provided in this Loan Agreement relative to accounting, budgeting, and reporting, apply to the Project regardless of funding sources.
8.2. Use of Loan Funds. Except as otherwise limited by this Loan Agreement, Loan Funds shall be used exclusively to cover Eligible Expenses in implementing the Program consistent with the requirements of ARPA.
8.3. Budget. Subrecipient hereby certifies and agrees that Loan Funds shall be used exclusively as described in the Budget, attached hereto as Exhibit "B". Any material deviation from the attached Budget must be approved by the City, in writing. Subrecipient shall not make expenditures that deviate from the Budget Act or from the guidance given by the United States Treasury Department, including the answers to Frequently Asked Questions. 12 1628\11\3629568.1
8.4. Changes in Loan Allocation. City reserves the right to reduce the loan allocation when the City's fiscal monitoring indicates that Subrecipient's rate of expenditure will result in unspent funds at the end of the term. Changes in the loan allocation will be done after consultation with Subrecipient. Such changes shall be incorporated into this Loan Agreement by written amendments.
8.5. Program Records. Subrecipient shall maintain financial, programmatic, statistical and other supporting records of its operations and financial activities, including but not limited to, documentation of all Loan Funds received from the City or other sources to operate the Program, documentation of expenses identified in the Budget, and any other related records as City may require from time to time. Such records shall be retained for a period five (5) years after termination of this Loan Agreement or after final disposition of all pending matters. "Pending matters" include, but are not limited to, an audit, litigation or other actions involving records.
8.6. Quarterly Reports. Subrecipient shall provide the City with quarterly reports as detailed on Exhibit "E" attached hereto and incorporated herein by reference, as well as any other reports as the City may reasonably require. Such reports shall identify the amount paid from the Loan Funds and the balance of the Loan Funds that Subrecipient has not spent.
8.7. Performance Monitoring. City will monitor the performance of Subrecipient against goals and performance standards required herein. Substandard performance as determined by the City will constitute non-compliance with this Loan Agreement. If action to correct such substandard performance is not taken by Subrecipient within a reasonable period of time after being notified by the City, termination procedures will be initiated pursuant to Section 7.6.
8.8. Recognition of City. Subrecipient shall ensure recognition of the City in providing funding for the Services provided by this Loan Agreement. All advertisements, notifications, publications, signs, brochures, and other promotional or information material shall identify the Program as being funded in part by the City of Riverside's American Recue Plan Act Allocation for response to COVID-19.
8.9. Lobbying. Subrecipient certifies to the best of its knowledge and belief that:
8.9.1. No federally appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement.
8.9.2. If any funds other than federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.
13 1628111136295681
8.9.3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into.
9. NONDISCRIMINATION. During Subrecipient's performance of this Loan Agreement, Subrecipient shall not discriminate on the grounds of race, religious creed, color, national origin, ancestry, age, physical disability, mental disability, medical condition, including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sex, genetic information, gender, gender identity, gender expression, or sexual orientation, military and veteran status, in the selection and retention of employees and subcontractors and the procurement of materials and equipment, except as provided in Section 12940 of the California Government Code. Further, Subrecipient agrees to conform to the requirements of the Americans with Disabilities Act in the performance of this Loan Agreement.
10. CONFLICT OF INTEREST. Subrecipient, for itself and on behalf of the individuals listed in Exhibit "C," represents and warrants that by the execution of this Loan Agreement, they have no interest, present or contemplated, in the Project affected by the above- described Services. Subrecipient further warrants that neither Subrecipient, nor the individuals listed in Exhibit "C" have any real property, business interests or income interests that will be affected by this project or, alternatively, that Subrecipient will file with City an affidavit disclosing any such interest.
11. COUNTERPARTS. This Loan Agreement may be signed by the Parties hereto in counterparts, each of which shall be an original but all of which together shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile or electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as though such facsimile or electronic signature page were on original thereof.
12. DEFINITIONS. All capitalized terms not otherwise defined herein shall have the same meeting as in the DDA and/or the Authority Regulatory Agreement.
13. EXHIBITS. The following exhibits attached hereto are incorporated herein to this Loan Agreement by this reference:
Exhibit "A" - Scope of Services
Exhibit "B" - Budget
Exhibit "C" - Key Personnel
Exhibit "D" - American Rescue Plan Act Final Rule
Exhibit "E" - Quarterly Reports
Exhibit "F" - Promissory Note
Exhibit "G" - Deed of Trust
[signatures on next page]
14 1628\11\3629568.1
IN WITNESS WHEREOF, the City and Subrecipient have caused this Agreement to be duly executed on the day and year first written above.
CITY OF RIVERSIDE, a California Charter city
and municipal corporation
By:
City Manager
Date:
Attest:
City Clerk
Date:
Certified as to Availability of Funds:
Bor Chie Minancial Officer Kuith
APPROVED AS TO FORM:
By: y: Susan Wha
Assistant City Attorney
WAKELAND ENTRADA LP, a California limited partnership
By: Wakeland Entrada LLC,
a California Limited Liability Company,
its Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation,
he pot Member and Manager.
By:
Rebecca Louie,
Chief Executive Officer
Date: 12-15:23
15 1628\07\3660623.2
EXHIBIT "A"
SCOPE OF SERVICES
Subrecipient has submitted a proposal to the City for the Entrada Affordable Housing Project ("Program' or "Project"). The Project is located at 1701 - 1757 Seventh Street, also known as Assessor Parcel No. 211-181-033. The Project will consist of a mixed use multifamily affordable housing development, having approximately eight hundred (800) square feet of community benefits space and sixty-five (65) Affordable Units, including one (1) unrestricted Manager's Unit.
Subrecipient shall operate the Project as affordable housing.
A-1
1628\11\3629568.1
EXHIBIT "B"
BUDGET
B-1
1628\1113629568.1
Sources and Uses of Financing 9% Tax Credits
Entrada
65 Units
Uses of Funding Per Unit Construction Permanent
Land Acquisition $ 45,018 2,926,181 2,926,181
Relocation 1,413 91,816 91,816
Design & Engineering 20,711 1,346,237 1,346,237
Legal/Financial/Other Consultants 3,604 220,438 234,288 Permits & Fees 27,493 1,787,019 1,787,019
Direct Construction Costs 464,895 30,218,195 30,218,195 Financing Costs 45,352 2,562,195 2,947,866
Marketing/General & Administrative 12,662 823,050 823,050 Developer Fee 33,846 880,000 2,200,000
Construction Contingency (5%) 23,206 1,508,410 1,508,410 Indirect Cost Contingency 195 12,696 12,696
Total Project Uses $ 678,396 $ 42,376,236 $ 44,095,757
Sources of Funding Per Unit Construction Permanent
9% Tax Credit Equity $ 369,194 $ 3,599,640 $ 23,997,600 Permanent Loan 57,268 3,816,253
Construction Loan 30,377,446
GP Equity 2 100 100
AHSC Loan 121,273 0 7,882,754
AHSC HRI/TRI 49,769 3,235,000 3,235,000
Accrued Interest 2,524 164,050 164,050
City Loan 61,538 4,000,000 4,000,000
Funding Gap 16,828 1,000,000 1,000,000
Total Project Costs 678,396 $ 42,376,236 $ 44,095,757
EXHIBIT "C"
KEY PERSONNEL
• Rebecca Louie, President/Chief Executive Officer
John Sugden, Project Manager
C-1
1628\1 1\3629568.1
EXHIBIT "D"
AMERICAN RESCUE PLAN ACT FINAL RULE
The link to the American Rescue Plan Act Final Rule can be found at https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf and may be amended from time to time.
D-1
1628\1 1\3629568.1
EXHIBIT "E"
QUARTERLY REPORTS
Quarterly Project and Expenditure Report Timeline
Internal Due
Report Year Quarter Period Covered Due Date
Date
2 through January 18, January 31,
1 2021 4 March 3 - December 31 2022 2022
2 2022 January 1 - March 31 April 14, 2022 April 30, 2022 3 2022 2 April 1 - June 30 July 14, 2022 July 31, 2022
October 17, October 31,
4 2022 3 July 1 - September 30 2022 2022
October 1 - December January 17, January 31,
5 2022 4 31 2023 2023
6 2023 1 January 1 - March 31 April 13, 2023 April 30, 2023 7 2023 2 April 1 - June 30 July 17, 2023 July 31,2023
October 17, October 31,
8 2023 3 July 1 - September 30 2023 2023
October 1 - December January 17, January 31,
9 2023 4 31 2024 2024
10 2024 1 January 1 - March 31 April 16, 2024 April 30, 2024 11 2024 2 April 1 - June 30 July 17, 2024 July 31, 2024 October 17, October 31,
12 2024 3 July 1 - September 30 2024 2024
October 1 - December January 16, January 31,
13 2024 4 31 2025 2025
14 2025 January 1 - March 31 April 16, 2025 April 30, 2025 15 2025 2 April 1 - June 30 July 17, 2025 July 31, 2025 October 16, October 31,
16 2025 3 July 1 - September 30 2025 2025
October 1 - December January 15, January 31,
17 2025 4 31 2026 2026
18 2026 1 January 1 - March 31 April 16, 2026 April 30, 2026 19 2026 2 April 1 - June 30 July 16, 2026 July 31, 2026 October 15, October 31,
20 2026 3 July 1 - September 30 2026 2026
October 1 - December
21 2026 4 31 March 17, 2027 March 31, 2027
E-1
1628\11\3629568.1
Annual Project and Expenditure Report Timeline
Internal Due
Report Year Period Covered Due Date
Date
1 2022 March 3, 2021 - March 31, 2022 April 14, 2022 April 30, 2022 2 2023 April 1, 2022 - March 31, 2023 April 13, 2023 April 30, 2023 3 2024 April 1, 2023 - March 31, 2024 April 16, 2024 April 30, 2024 4 2025 April 1, 2024 - March 31, 2025 April 16, 2025 April 30, 2025 5 2026 April 1, 2025 - March 31, 2026 April 16, 2026 April 30, 2026 6 2027 | April 1, 2026 - December 31, 2026 April 16, 2027 April 30, 2027 E-2
1628111136295681
EXHIBIT "F"
PROMISSORY NOTE
E-3
1628\113629568.1
PROMISSORY NOTE
(Entrada)
$1,000,000 _ 2024
Riverside, California
FOR VALUE RECEIVED, the undersigned, Wakeland Entrada LP, a California limited partnership ("Borrower"), hereby promises to pay to the order of the City Riverside, a public body, corporate and politic (together with its successors and assigns, the "City"), having an address at 3900 Main Street in the City of Riverside, California 92522, at the City's said address or at such other place or to such other person as may be designated in writing to Borrower by the City, the sum of One Million Dollars ($1,000,000.00) (the "Loan").
Purpose. The purpose of the loan evidenced by this Promissory Note the "Note") is to provide financing to be used by Borrower in connection with the acquisition and development of that certain real property located at 1701-1757 Seventh Street in the City of Riverside and known as Assessor Parcel No. 211-181-033 (the "Land'') and the construction of a mixed use multifamily, affordable housing development consisting of approximately sixty- five (65) units, including one (1) unrestricted manager's unit, to be commonly known as Entrada Apartments, of which Borrower shall own a fee interest (the "Project", together with the Land, the "Property").
2. Security. This Note is secured by that certain Deed of Trust, Fixture Filing, and Assignment of Rents executed by Borrower for the benefit of the City, dated as of even date herewith (the "Deed of Trust") and recorded against the Property in the official records of the County of Riverside (the "Official Records"). The Loan is evidenced by, among other documents, that certain American Rescue Plan Act Subrecipient Agreement (Wakeland Entrada LP (Affordable Housing Fund)) by and between the City, dated as of even date herewith (the "Loan Agreement") and encumbered by that certain Regulatory Agreement by and between the City and Borrower, dated as of even date herewith, and recorded against the Property in the Official Records substantially concurrent herewith (the "Regulatory Agreement") together with the Note, the Deed of Trust and the Loan Agreement, and the Regulatory Agreement and any other document entered into by Borrower in connection with the Loan (the "Loan Documents").
Terms of Payment.
Term. The principal of the Loan, together with all accrued interest, shall be due and payable on the earliest of: (a) fifty-five (55) years from the recordation of the Release of Construction Covenants, but in no event later than December 31, 2079; or (b) an Event of Default by Borrower, which has not been cured as provided for in the Loan Documents (the "Term").
b. Interest. The Loan shall bear simple interest at the rate of three percent (3%) per annum.
162811113572982 2 with 3572982.
1 C. Repayment. Commencing on June 1 following the closing of the permanent loan from the Department of Housing and Community Development ("HCD") for the Project, on June 1 of each calendar year thereafter through the end of the Term, Borrower shall make payments of the Loan equal to the City's Share of Residual Receipts.
Payments under this Note shall be made in lawful money of the United States of America.
Borrower shall provide the City with any documentation reasonably requested by the City to substantiate Borrower's determination of Residual Receipts.
4. Definitions. Except as otherwise noted, the following definitions shall apply for purposes of this Note.
a. "Annual Operating Expenses" means with respect to a particular calendar year the following costs reasonably and actually incurred for operation and maintenance of the Property to the extent that they are consistent with the annual operating budget for the Property approved in advance by the City, and substantiated by an annual independent audit performed by a certified public accountant using generally accepted accounting principles:
(i) property taxes and assessments imposed on the Property, if any; (ii) debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Property) on loans associated with the Property and approved by the City;
(iiii) property management fees and reimbursements, not to exceed fees and reimbursements which are standard in the industry and pursuant to a management contract approved by the City;
(iv) Asset and Partnership Management Fees. The City acknowledges that (a) the amount of the asset management fee is $8,500 beginning on October 1, 2023, and increasing at 3.0% per annum beginning on January 1, 2025, and (b) the amount of the partnership management fee is $25,000 beginning on October 1, 2023, and increasing at 3.0% per annum beginning on January 1, 2025. premiums for property damage and liability insurance; (V) utility services not paid for directly by tenants, including water, sewer, and trash collection;
(vi) maintenance and repair;
(vii) any annual license or Certificate of Occupancy fees required for operation of the Property;
(vili) security services;
(ix) advertising and marketing;
(x) fees for resident services in the annual amount approved by the City, in set forth in the annual operating budget;
162811113572982.2 with 3572982.
2 cash deposited into reserves for capital replacements of the Property in the amount of Two Hundred Fifty Dollars ($250) per unit per year, or such other higher amount required by a senior lender or investor and in the event of any conflict between this paragraph and Project lender and investor requirements, the requirements of the investor and lenders will prevail;
cash deposited into an operating reserve in an amount to be approved by the City, but with the operating reserve of at least two percent (2%) of gross rent until the operating reserve reaches the equivalent of three (3) months of Annual Operating Expenses (including debt service) for the Property, or such greater amount as approved in writing by the City; Borrower may apply all or a portion of capitalized operating reserves funded during development to satisfy this requirement and in the event of any conflict between this paragraph and Project lender and investor requirements, the requirements of the investor and lenders will prevail;
(xiii) cash deposited into any other reserve accounts as required by permanent lenders and investors;
(xiv) payment of any previously unpaid portion of the development fee (without interest) not exceeding a cumulative development fee in the maximum amount set forth in the Projections;
(XV) extraordinary operating costs specifically approved in writing by the City;
(xvi) payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves, and other ordinary and reasonable operating expenses not listed above.
(xvii) any credit adjuster payments or payments for tax liability required to be paid to Borrower limited partner under Borrower's partnership agreement.
Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Property, as determined by the accountant for the Property. "Gross Revenue" means with respect to a particular calendar year all revenue, income, receipts, and other consideration actually received from operation and leasing of the Property. Gross Revenue shall include, but not be limited to the following:
(i) all rents, fees and charges paid by tenants;
(ii) Section 8, or other rental subsidy payments received for the dwelling units;
(ili) deposits forfeited by tenants;
162811113572982.2 with 3572982
3 (iv) all cancellation fees;
(v) price index adjustments and any other rental adjustments to leases or rental agreements resulting in actual income; (vi) proceeds from vending and laundry room machines;
(vii) the proceeds of business interruption or similar insurance; Gross Revenue does not include tenants' security deposits, loan proceeds, capital contributions, or similar advances. Gross revenue also does not include casualty or condemnation proceeds, income received for the purposes of completing the Project, or funding received for providing social services to residents.
(viii) "City's Share of Residual Receipts" shall mean the City's Pro Rata Share of the Lenders' Share of Residual Receipts. The Pro Rata Share shall be determined by calculating the percentage resulting from dividing the amount of the Loan funds disbursed to Borrower in accordance with the Loan Agreement, by the total of the sum of the permanent loan from HCD for the Project, the loans from the Housing City of the City of Riverside (the "Authority") for the Project, and other Project loans payable from cash flow to a public entity.
(ix) "Lenders' Share of Residual Receipts" shall mean fifty percent (50%) of Residual Receipts.
(x) "Residual Receipts" shall mean in a particular calendar year the amount by which Gross Revenue exceeds Annual Operating Expenses.
5. Acceleration. Except as may be otherwise provided in the Deed of Trust or the other loan documents evidencing this Loan, this Note shall be due and payable in one lump sum upon the sale, conveyance, assignment, hypothecation, or refinance of the Property without prior written consent of the City, or transfer of this Note to any other partyies) other than in connection with Permitted Transfers under the Loan Agreement. With the prior written consent of the City, which consent shall not be unreasonably withheld, conditioned or delayed, this Note may be assumed by an affiliate of Borrower.
6. Default. Any failure in the performance by Borrower of any non-monetary term, condition, provision or covenant set forth in this Note or the Regulatory Agreement shall be a default under this Note, and shall cause, at the option of the City, the entire unpaid balance, together with all unpaid sums then payable under this Note to become immediately due and payable upon written notice by the City to Borrower without further demand
7. Prepayment. No prepayment penalty, fee or premium will be charged to Borrower for payment of all or any portion of the Loan amount prior to the end of the term described herein.
8. City's Remedies for Default; Cure.
1628\1113572982.2 with 3572982
4 Upon the occurrence of a default, the City shall provide Borrower written notice of said occurrence, and Borrower shall have thirty (30) days to cure the default unless the City shall agree in writing to an extension of such cure period prior to its expiration, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, if the default is of the type which is incapable of being cured within thirty (30) days, Borrower shall have such time as is reasonably necessary to cure such default, so long as Borrower has commenced such cure within such thirty (30) days and continues to diligently proceed to cure such default. If, after the cure period provided in this subparagraph (a), (i) Borrower has not cured the default, and (ii) the City has not waived its rights under this Note, the entire unpaid balance, together with all unpaid sums then payable under this Note shall, at the option of the City, become immediately due and payable upon written notice by the City to Borrower without further demand.
If a default shall occur and be continuing beyond any applicable notice and cure period, the City may pursue all rights and remedies available under this Note or as may be otherwise available to the City.
Any cure of any default made or tendered by an affiliate of Borrower or one or more of Borrower's limited partners shall be deemed to be a cure by Borrower and shall be accepted by the City as if made or tended by Borrower.
Limited Recourse. Notwithstanding any contrary provision contained in this Note, there shall be no personal liability of Borrower or its partners, or their respective members, officers, directors, agents or employees and the liability of Borrower shall be limited to the Property securing the Note. The City shall, however, be entitled to institute an action, suit, claim or demand against, and to recover a judgment against the Borrower, but only for any deficiency and the cost of collections, and only to the extent that such deficiency results directly from: (a) intentional or willful misconduct, fraud or material misrepresentation by Borrower in connection with the representations and warranties provided by Borrower; (b) the misappropriation of any rents from the Property by Borrower after an event of default has occurred and the cure period for such an event of default has expired (to the full extent of such rents misappropriated by Borrower); (c) the willful removal or disposal by Borrower of personal property or fixtures of the Property constituting a significant value, except for that which occurs through reasonable maintenance and repair; (d) the misapplication or misappropriation by Borrower of any insurance proceeds or any condemnation award with respect to the Property to the extent of such insurance proceeds and/or condemnation award; or (e) the intentional or negligent waste of any portion of the Property by Borrower.
10. Notice. Formal notices, demands, and communications between the City and Borrower shall be sufficiently given if, and shall not be given unless, dispatched by certified mail, postage prepaid, return receipt requested or sent by express delivery service or overnight courier service, to the principal office of the City and Borrower as follows, or at such other address as the parties may designate in writing from time to time:
1628\1113572982.2 with 3572982.
5 CITY:
City of Riverside
3900 Main Street
Riverside, CA 92522
Attn: Housing and Human Services Director
BORROWER:
Wakeland Entrada LP
c/o Wakeland Housing and Development Corporation
1230 Columbia Street, Suite 950,
San Diego, CA 92101
Attn: President
Any notices provided from City to Borrower or from Borrower to City shall also be provided as set forth in this Section to Borrower's limited partner at the address such limited partner shall provide to the City.
Such written notices, demands and communications shall be effective on the date shown on the delivery receipt as the date delivered or the date on which the delivery was refused.
11. Attorneys' Fees. In the event of litigation arising from the enforcement of or a default under this Note, the non-prevailing party promises to pay all reasonable costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in such litigation.
12. Modifications. This Note may not be changed orally. Any waiver, change, modification or discharge of this Note may be made only by the written consent of both parties.
13. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California.
1628111135729822 with 3572982.
6 IN WITNESS WHEREOF, Trustor has executed this Promissory Note as of the day and year first above written.
TRUSTOR:
WAKELAND ENTRADA LP, a California limited
partnership
By: Wakeland Entrada LLC,
a California Limited Liability Company,
its Managing General Partner
By: Wakeland Housing and Development
Corporation, a California nonprofit public
benefit corporation, its Sole Member and
Manager
By:
Rebecca Louie,
Chief Executive Officer
162811113572982.2 with 3572982.
7 EXHIBIT "G"
DEED OF TRUST
CITY DEED OF TRUST
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Riverside
3900 Main Street
Riverside, CA 92522
Attn: City Manager
Project: Entrada
(Space above for Recorder's Use Only)
This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383.
DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS ("Deed of Trust") is made as of , 2024 by WAKELAND ENTRADA LP, a California limited partnership ("Trustor"), whose address is 1230 Columbia Street, Suite 950, San Diego, CA 92101, to Chicago Title Company, located at First American Title Company, located at 3400 Central Ave., Suite 100, Riverside, CA 92506 ("Trustee"), for the benefit of the CITY OF RIVERSIDE, a public body, corporate and politic ("Beneficiary").
THIS DEED OF TRUST is given, inter alia, for the purpose of securing the obligation of Trustor to repay Beneficiary all principal and interest due under that certain loan in the original principal amount of One Million Dollars ($1,000,000) made by Beneficiary for the benefit of Trustor (the "City Loan"), evidenced by that certain City Promissory Note, executed by Trustor in favor of Beneficiary and dated of even date herewith (the "Note"), and made in accordance with that certain American Rescue Plan Act Subrecipient Agreement (Wakeland Entrada LP (Affordable Housing Fund)), dated substantially concurrent herewith by and between Beneficiary and Trustor (the "Loan Agreement"') and the performance of Trustor's obligations thereunder and under this Deed of Trust and the Regulatory Agreement as hereinafter defined. The City Loan shall be made in connection with the development of sixty- five (65) affordable housing Units, including one (1) unrestricted manager's unit, and any improvements appurtenant thereto by the Trustor in accordance with the Loan Agreement (the "Project"). The real property is located in the City of Riverside, State of California, as more particularly described on Exhibit A, attached hereto and incorporated herein by this reference (the "Property"), identified as 1701-1757 Seventh Street, also known as Assessor Parcel No. 211-181-033 FOR GOOD AND VALUABLE CONSIDERATION, including the financial assistance herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the Property;
TOGETHER WITH any and all buildings and improvements now or hereafter erected on the Property including, without limitation, Trustor's interest in fixtures, tenements, 1 1628\11\3572983.2
attachments, appliances, equipment, building systems, machinery, and other articles now or hereafter attached to the buildings and improvements (collectively, the "Improvements"), all of which shall be deemed and construed to be a part of the real property; TOGETHER WITH all earnings, rents, issues, profits, revenue, royalties, income, proceeds and other benefits, including without limitation prepaid rents and security deposits (collectively, the "Rents") derived from any lease, sublease, license, franchise or concession or other agreement (collectively, the "Leases") now or hereafter affecting all or any portion of the Property or the Improvements or the use or occupancy thereof, TOGETHER WITH all interests, estates or other claims, both in law and in equity, which Trustor now has or may hereafter acquire in the Property or the Improvements, including without limitation, all right, title and interest now owned or hereafter acquired by Trustor in and to any greater estate in the Property or the Improvements; TOGETHER WITH all easements, tenements, hereditaments, appurtenances, rights- of- way and rights now owned or hereafter acquired by Trustor used or useful in connection with the Property or as a means of access thereto, including, without limiting the generality of the foregoing, all rights pursuant to any trackage agreement and all rights to the nonexclusive use of common drive entries, all oil and gas and other hydrocarbons and all other minerals and water and water rights and shares of stock evidencing the same; TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases, subleases, sub-tenancies, licenses, franchises, occupancy agreements and other agreements covering the Property, the Improvements or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, prepaid or advance rentals, and deposits or payments of similar nature;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired in and to any Property lying within the right-of-way of any street, open or proposed, adjoining the Property and any and all sidewalks, vaults, alloys and strips and gores of property adjacent to or used in connection with the Property;
TOGETHER WITH all the estate, interest, right, title, other claim or demand, both in law and in equity, including claims or demands with respect to the proceeds of insurance in effect with respect to the Property, which Trustor now has or may hereafter acquire in the Property or the Improvements and any and all awards made for the taking by eminent domain, or by any proceeding of purchase in lieu thereof, of the whole or any part of the interests described in this Deed of Trust, including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages.
The entire estate, property and interest hereby conveyed to Trustee may hereafter be collectively referred to as the "Trust Estate".
2 162811113572983.2
FOR THE PURPOSE OF SECURING:
the payment of the sum of One Million Dollars ($1,000,000), or so much of such principal as may be disbursed pursuant to the Note, with non-compounding simple interest at three (3%) per annum according to the term so the note, and any and all additions, modifications or extensions thereot;
(b) performance of every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Note, and that certain Regulatory Agreement by and between Trustor and Beneficiary dated and recorded concurrently herewith (the "Regulatory Agreement") which includes among other covenants and restrictions, covenants of affordability, maintenance of the Project and restrictions on transfer of ownership of the Project and all modifications, extensions, renewals, and replacements thereof or any other agreement now or hereafter executed by Trustor which recites that the obligations thereunder are secured by this Deed of Trust and the Notice of Default (collectively, the "Loan Documents");
(c) payment of all sums advanced by Beneficiary or its successors and assigns, or Trustee, to enforce the Note, the Loan Agreement, the Regulatory Agreement or this Deed of Trust to protect the Trust Estate upon an Event of Default, with interest thereon at the rate of ten percent (10%) per annum (the "Default Rate") pursuant to the terms of the Note; payment and performance of all other obligations of Trustor arising from any and all existing and future agreements with Beneficiary, or its successors or assigns, when such agreement recites that the obligations thereunder are secured by this Deed of Trust.
All initially capitalized terms used herein which are defined in the Loan Agreement shall have the same meaning herein unless the context otherwise requires.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST,
TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
ARTICLE 1. COVENANTS AND AGREEMENTS OF TRUSTOR
1.1 Payment of Secured Obligations. Trustor shall immediately pay when due all amounts secured hereby.
1.2 Maintenance, Repair, Alterations. Subject to normal wear and tear, Trustor (a) shall keep the Property and the Improvements thereon in good condition and repair in accordance with the Loan Documents, including without limitation the Regulatory Agreement; (b) shall not remove, demolish or substantially alter any of the Improvements except upon the prior written consent of Beneficiary; (c) shall complete promptly and in a good and workmanlike manner any Improvement which may be now or hereafter constructed on the Property and promptly restore in like manner any portion of the Improvements which may be damaged or destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed and materials furnished therefor; (d) shall comply in all material respects with all applicable laws, ordinances, regulations, covenants, conditions and restrictions now or hereafter affecting the Trust Estate or any part thereof or requiring any alterations or improvements; (e) shall not commit or permit any waste or deterioration of the Property or the Improvements; (f) shall not allow 1628\1 113572983.2
changes in the use for which all or any part of the Property or the Improvements were intended; and (g) shall not initiate or acquiesce in a change in the zoning classification of the Property and the Improvements without Beneficiary's prior written consent, which shall not be unreasonably withheld, conditioned or delayed.
1.3 Required Insurance.
Trustor shall at all times provide, maintain and keep in force or cause to be provided, maintained and kept in force, at no expense to Trustee or Beneficiary, policies of insurance in accordance with the terms of the Loan Documents in form and amounts, providing for deductibles, and issued by companies, associations or organizations covering such casualties, risks, perils, liabilities and other hazards as required by the Loan Documents or by Beneficiary pursuant thereto. (b) Trustor shall not obtain separate insurance concurrent in form or contributing in the event of loss with that required to be maintained hereunder unless Beneficiary is included thereon under a standard, non-contributory mortgagee clause or endorsement acceptable to Beneficiary. Trustor shall immediately notify Beneficiary whenever any such separate insurance is obtained and shall promptly deliver to Beneficiary the original policy or policies of such insurance. (c) Within 90 days following the end of each fiscal year of Trustor, at the request of Beneficiary, Trustor at Trustor's expense shall furnish such evidence of replacement costs as the insurance carrier providing casualty insurance for the building(s) and other improvements on the Property may require to determine, or which such carrier may provide in determining, the then replacement cost of the building(s) and other improvements on the Property.
1.4 Delivery of Policies, Payment of Premiums.
(a) At Beneficiary's option Trustor shall furnish Beneficiary with a copy of all policies of insurance required under Section 1.3 above or evidence of insurance issued by the applicable insurance company for each required policy setting forth the coverage, the limits of liability, the name of the carrier, the policy number and the period of coverage, and otherwise in form and substance satisfactory to Beneficiary in all respects.
(b) In the event Trustor fails to provide, maintain, keep in force or deliver to Beneficiary the policies of insurance required by this Deed of Trust or by any Loan Documents, Beneficiary may (but shall have no obligation to) procure such insurance or single- interest insurance for such risks covering Beneficiary's interest and Trustor will pay all premiums thereon and reimburse Beneficiary for all amounts paid or incurred by it in connection therewith promptly upon demand by Beneficiary and, until such payment and reimbursement is made by Trustor, the amount of all such premiums and amounts paid or incurred by Beneficiary shall become indebtedness secured by this Deed of Trust and bear interest at the Default Rate. Following an Event of Default for failure to maintain insurance in accordance with this Section 1.4 and upon written request 4 1628\11\3572983.2
by Beneficiary, Trustor shall deposit with Beneficiary in monthly installments, an amount equal to 1/12 of the estimated aggregate annual insurance premiums on all policies of insurance required by the Loan Documents or this Deed of Trust. In such event Trustor further agrees to cause all bills, statements or other documents relating to the foregoing insurance premiums to be sent or mailed directly to Beneficiary. Upon receipt of such bills, statements or other documents evidencing that a premium for a required policy is then payable, and providing Trustor has deposited sufficient funds with Beneficiary pursuant to this Section 1.4, Beneficiary shall timely pay such amounts and for any reason the funds deposited with Beneficiary are or will be insufficient to pay such amounts as may be then or subsequently due, Beneficiary shall notify Trustor and Trustor shall immediately deposit an amount equal to such deficiency with Beneficiary.
Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary to be deemed a trustee of the funds or to be obligated to pay any amounts in excess of the amount of funds deposited with Beneficiary pursuant to this Section 1.4, nor shall anything contained herein modify the obligation of Trustor set forth in Section 1.3 hereof to maintain and keep such insurance in force at all times. Beneficiary may commingle the reserve with its own funds and Trustor shall be entitled to no interest thereon.
Casualties; Insurance Proceeds. Trustor shall give prompt written notice thereof to Beneficiary after the happening of any casualty to or in connection with the Property, the Improvements, or any part thereof, whether or not covered by insurance.
Subject to the provisions of any senior liens, in the event of such casualty, all proceeds of insurance shall be payable to Beneficiary up to the outstanding balance of the City Loan, whether required by the Loan Documents or otherwise, and Trustor hereby authorizes and directs any affected insurance company to make payment of such proceeds directly to Beneficiary. Subject to the rights of senior lenders, if Trustor receives any proceeds of insurance resulting from such casualty, whether required by the Loan Documents or otherwise, Trustor shall, without limiting the terms of any subordination agreement, make insurance proceeds available for rebuilding (rather than repaying the Loan) so long as there are adequate proceeds to rebuild prior to the end of the City Loan. Subject to the rights of senior lenders, Beneficiary is hereby authorized and is empowered by Trustor to settle, adjust or compromise any and all claims for loss, damage or destruction under any policy or policies of insurance. In the event of any damage or destruction of the Property or the Improvements, subject to the rights of senior lenders, Beneficiary shall apply all loss proceeds remaining after deduction of all expenses of collection and settlement thereof, including, without limitation, fees and expenses of attorneys and adjustors, to the restoration of the Improvements, but only as repairs or replacements are effected and continuing expenses become due and payable and provided all applicable conditions specified in the Loan Documents with respect thereto have been satisfied. If any one or more of such conditions in the Loan Documents has not been met, Beneficiary shall not be obligated to make any further disbursements pursuant to the Note and Beneficiary shall apply all loss proceeds up to the outstanding balance of the City Loan, after deductions as herein provided, to the repayment of any indebtedness thereunder, together with all accrued interest thereon, notwithstanding that the outstanding balance may not be 5 1628\11\3572983.2
due and payable and the Loan Agreement shall terminate. Nothing herein contained shall be deemed to excuse Trustor from repairing or maintaining the Property and the Improvements as provided in Section 1.2 hereof or restoring all damage or destruction to the Property or the Improvements, regardless of whether or not there are insurance proceeds available to Trustor or whether any such proceeds are sufficient in amount, and the application or release by Beneficiary of any insurance proceeds shall not cure or waive any Event of Default nor any notice of default under this Deed of Trust or invalidate any act done pursuant to such notice.
1.6 Indemnification; Subrogation; Waiver of Otiset.
(a) If Beneficiary is made a party to any litigation concerning this Deed of Trust or any of the Loan Documents, the Trust Estate or any part thereof or interest therein, or the occupancy of the Property or the Improvements by Trustor, then Trustor shall indemnify, defend and hold Beneficiary harmless from all liability by reason of that litigation, including reasonable attorneys' fees and expenses incurred by Beneficiary as a result of any such litigation, whether or not any such litigation is prosecuted to judgment, except to the extent that such liability is caused by the sole negligence or willful misconduct of Beneficiary, its board members, officers, agents or employees. Beneficiary may employ an attorney or attorneys selected by it to protect its rights hereunder, and Trustor shall pay to Beneficiary reasonable attorneys' fees and costs incurred by Beneficiary, whether or not an action is actually commenced against Trustor by reason of its breach. (b) Trustor waives any and all right to claim or recover against Trustee, Beneficiary, and their respective officers, employees, agents and representatives, for loss of or damage to Trustor, the Trust Estate, Trustor's property or the property of others under Trustor's control from any cause insured against or required to be insured against by the provisions of this Deed of Trust.
(c) All sums payable by Trustor in accordance with the terms of this Deed of Trust, the Note or the Loan Agreement shall be paid upon notice and demand and without counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of (i) any damage to or destruction of or any condemnation or similar taking of the Trust Estate or any part thereof, (ii) any restriction or prevention of or interference by any third party with any use of the Trust Estate or any part thereof, (iii) any title defect or encumbrance or any eviction from the Improvements or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (V) any claim which Trustor has or might have against Beneficiary, which does not relate to the City Loan; or (vi) any other occurrence whatsoever, whether similar or dissimilar to the foregoing; whether or not Trustor shall have notice or knowledge of any of the foregoing. Except as expressly provided herein and subject to any limitation thereon provided by law, Trustor waives all rights now or hereafter conferred by statute or 6 1628\1113572983.2
otherwise to any abatement, suspension, deferment, diminution or reduction of any sum secured hereby and payable by Trustor.
1.7 Taxes and Impositions.
(a) As used herein, "Impositions" shall mean all applicable real property taxes and assessments, general and special, and all other taxes and assessments of any kind or nature whatsoever, including, without limitation, nongovernmental levies or assessments such as maintenance charges, levies or charges resulting from covenants, conditions and restrictions affecting the Trust Estate, which are assessed or imposed upon the Trust Estate or any portion of it, or become due and payable, and which create, may create or appear to create a lien upon the Trust Estate, or any part thereof, or upon any person, property, equipment or other facility used in the operation or maintenance thereof, or any tax or assessment on the Trust Estate, or any part of it, in lieu thereof or in addition thereto, or any license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding obligations secured hereby. Trustor shall pay all Impositions prior to delinquency. Trustor shall deliver to Beneficiary proof of the payment of the Impositions within thirty (30) days after such Impositions are due.
After an Event of Default that remains uncured by Trustor after any applicable notice and cure period, and upon written request by Beneficiary, Trustor shall pay to Beneficiary, unless the Property and Improvements have received an ad valorem property tax exemption pursuant to subdivision (f) or (g) of Section 214 of the California Revenue and Taxation Code, an initial cash reserve in an amount adequate to pay all Impositions for the ensuing tax fiscal year and shall thereafter continue to deposit with Beneficiary, in monthly installments, an amount equal to 1/12 of the sum of the annual Impositions reasonably estimated by Beneficiary, for the purpose of paying the installment of Impositions next due on the Property and the Improvements (funds deposited for this purpose shall hereinafter be referred to as "Impounds"). In such event Trustor further agrees to cause all bills, statements or other documents relating to Impositions to be sent or mailed directly to Beneficiary. Upon receipt of such bills, statements or other documents, and providing Trustor has deposited sufficient Impounds with Beneficiary pursuant to this Section 1.8(b), Beneficiary shall timely pay such amounts as may be due thereunder out of the Impounds so deposited with Beneficiary. If at any time and for any reason the Impounds deposited with Beneficiary are or will be insufficient to pay such amounts as may then or subsequently be due, Beneficiary may notify Trustor and upon such notice Trustor shall deposit immediately an amount equal to such deficiency with Beneficiary. If after the payment of the Impositions there shall be an excess amount held by Beneficiary, such excess amount shall be promptly refunded to Trustor in any reasonable manner and in such amount as Beneficiary may elect.
Beneficiary shall not commingle Impounds with its own funds and shall be obligated to pay any interest on any Impounds held by Beneficiary pending disbursement or application hereunder.
(c) Trustor shall not suffer, permit or initiate the joint assessment of any real and personal property which may constitute any portion of the Trust Estate or suffer, 7 1628\1113572983.2
permit or initiate any other procedure whereby the lien of the real property taxes and the lien of the personal property taxes shall be assessed, levied or charged to the Trust Estate, or any portion of it, as a single lien.
(d) If requested by Beneficiary, Trustor shall cause to be furnished to Beneficiary a tax reporting service covering the Property and the Improvements of the type, duration and with a company satisfactory to Beneficiary. (e) If, by the laws of the United States of America, or of the State of California or any political subdivision thereof having jurisdiction over Trustor, Beneficiary or the Trust Estate or any portion thereof, any tax, assessment or other payment is due or becomes due in respect of the issuance of the Note or the recording of this Deed of Trust, Trustor covenants and agrees to pay each such tax, assessment or other payment in the manner required by any such law. Trustor further covenants to defend and hold harmless and agrees to indemnity Beneticiary, its successors or assigns, against any liability incurred by reason of the imposition of any tax, assessment or other payment on the issuance of the Note or the recording of this Deed of Trust.
1.8 Utilities. Trustor shall pay or shall cause to be paid when due all utility charges which are incurred by Trustor for the benefit of the Property or the Improvements and all other assessments or charges of a similar nature, whether or not such charges are or may become liens thereon.
1.9 Actions Affecting Trust Estate. Trustor shall promptly give Beneficiary written notice of and shall appear in and contest any action or proceeding purporting to affect any portion of the Trust Estate or the security hereof or the rights or powers of Beneficiary or Trustee; and shall pay all costs and expenses, including the cost of evidence of title and attorneys' fees, in any such action or proceeding in which Beneficiary or Trustee may appear.
1.10 Actions By Trustee or Beneficiary to Preserve Trust Estate. During the continuation of an event of default, Beneficiary and/or Trustee, each in its own discretion, without obligation so to do, without releasing Trustor from any obligation, and without notice to or demand upon Trustor, may make or do the same in such manner and to such extent as either may deem necessary to protect the security 'hereof In connection therewith (without limiting their general powers, whether conferred herein, in any other Loan Documents or by law), Beneficiary and Trustee shall have and are hereby given the right, but not the obligation, (a) to enter upon, subject to the rights of tenants, and take possession of the Property and the Improvements; (b) to make additions, alterations, repairs and improvements to the Property and the Improvements which they or either of them may reasonably consider necessary or proper to keep the Property or the Improvements in good condition and repair; (c) to appear and participate in any action or proceeding affecting or which may affect the security hereof or the rights or powers of Beneficiary or Trustee; (d) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or debt which in the judgment of either may affect or appears to affect the security of this Deed of Trust or be prior or superior hereto; and (e) in exercising such powers, to pay necessary expenses, including reasonable attorneys' fees and costs or other necessary or desirable consultants. Trustor shall, immediately upon demand therefor by Beneficiary and Trustee or either of them, pay to 8 1628\11\3572983.2
Beneficiary and Trustee an amount equal to all respective costs and expenses incurred by such party in connection with the exercise of the foregoing rights, including, without limitation, reasonable costs of evidence of title, court costs, appraisals, surveys and receiver's, trustee's and reasonable attorneys' fees, together with interest thereon from the date of such expenditures at the Default Rate.
1.11 Transfer of Trust Estate by Trustor. Subject to the provisions of the Loan Agreement, in the event the Trust Estate or any part thereof, or any interest therein is sold, transferred or leased in violation of the Loan Documents, Beneficiary shall have the absolute right at its option, upon notice and demand in accordance with Section 4 of the Loan Agreement, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. As a condition of the City Loan, Trustor agrees for itself, its successors and assigns that the use of the Property shall be subject to the restrictions on rent and occupancy and use of the Property set forth in the Loan Documents, including without limitation, the Regulatory Agreement.
1.12 Survival of Warranties. All representations, warranties and covenants of Trustor contained in the Loan Documents or incorporated by reference therein expressly stated to survive the execution and delivery of this Deed of Trust, shall survive the execution and delivery of this Deed of Trust and shall remain continuing obligations, warranties and representations of Trustor so long as any portion of the obligations secured by this Deed of Trust remains outstanding.
1.13 Eminent Domain.
(a) Subject to the provisions of any senior liens, in the event that any proceeding or action be commenced for the taking of the Trust Estate, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, condemnation or otherwise, or if the same be taken or damaged by reason of any public improvement or condemnation proceeding, or in any other manner, or should Trustor receive any notice or other information regarding such proceeding, action, taking or damage, Trustor shall give prompt written notice thereof to Beneficiary. Subject to the provisions of any senior liens, Beneficiary shall be entitled at its option, without regard to the adequacy of its security, to commence, appear in and prosecute in its own name any such action or proceeding so long as the probable compensation exceeds $50,000. Subject to the provisions of any senior liens, all compensation, awards, damages, rights of action and proceeds awarded to Trustor by reason of any such taking or damage shall hereinafter be referred to as the "Condemnation Proceeds" and after deducting therefrom all costs and expenses (regardless of the particular nature thereof and whether incurred with or without suit), including reasonable attorneys' fees, incurred by it in connection with any such action or proceeding, subject to any applicable terms of the Loan Agreement, Trustor shall apply all such Condemnation Proceeds to the restoration of the Improvements, provided that (i) the taking or damage will not, in Trustor's reasonable judgment, materially and adversely affect the contemplated use and operation of Property and the Improvements. 9 1628\1113572983.2
(b) If any one or more of such conditions is not met, Trustor shall apply all of the Condemnation Proceeds, after deductions as herein provided, to the repayment of the outstanding balance of the Note, together with all accrued interest thereon, notwithstanding that the outstanding balance may not be due and payable; and Beneficiary shall have no further obligation to make disbursements pursuant to the Loan Agreement or the other Loan Documents. If the Condemnation Proceeds are not sufficient to repay the Note in full, Trustor shall have no obligation to pay any remaining balance. Application or release of the Condemnation Proceeds as provided herein shall not cure or waive any Event of Default or notice of default hereunder or under any other City Loan Document or invalidate any act done pursuant to such notice.
1.14 Additional Security. No other security now existing, or hereafter taken, to secure the obligations secured hereby shall be impaired or affected by the execution of this Deed of Trust and all additional security shall be taken, considered and held as cumulative.
The taking of additional security, execution of partial releases of the security, or any extension of the time of payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability of any Trustor, surety or endorser for the payment of the indebtedness. In the event Beneficiary at any time holds additional security for any of the obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at its option, either before, concurrently, or after a sale is made hereunder.
1.15 Successors and Assigns. This Deed of Trust applies to, inures to the benefit of and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder of the Note, whether or not named as Beneficiary herein. In exercising any rights hereunder or taking any actions provided for herein, Beneficiary may act through its employees, agents or independent contractors authorized by Beneficiary.
1.16 Inspections. Beneficiary, or its agents, representatives or employees, are authorized, subject to the rights of tenants, to enter upon or in any part of the Property and the Improvements at any reasonable time following reasonable written notice of no less than 48 hours' in advance thereof for the purpose of inspecting the same and for the purpose of performing any of the acts it is authorized to perform hereunder or under the terms of any of the Loan Documents. Without limiting the generality of the foregoing, Trustor agrees that Beneficiary will have the same right, power and authority to enter and inspect the Property and the Improvements as is granted to a secured lender under Section 2929.5 of the California Civil Code, and that Beneficiary will have the right to appoint a receiver to enforce this right to enter and inspect the Property and the Improvements to the extent such authority is provided under California law, including the authority given to a secured lender under Section 564(c) of the California Code of Civil Procedure.
1.17 Liens. Trustor shall pay and promptly discharge, at Trustor's cost and expense, all liens, encumbrances and charges upon the Trust Estate, or any part thereof or interest therein, subject to Trustor's right to contest in good faith any such liens, encumbrances and charges. The Trustor shall remove or have removed any levy or attachment made on any of 10 1628\1113572983.2
the Property or any part thereof, or assure the satisfaction thereof within a reasonable time.
Despite the foregoing, Trustor shall not be required to prepay any consensual lien or encumbrance against the Trust Estate which has been consented to in writing by Beneficiary.
If Trustor shall fail to remove and discharge any such lien, encumbrance or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in a court a bond or the amount claimed or otherwise giving security for such claim, or by procuring such discharge in such manner as is or may be prescribed by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge any such lien, encumbrance or charge, together with interest thereon from the date of such expenditure at the Default Rate.
1.18 Trustee's Powers. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of the Trust Estate, Trustee may (a) reconvey any part of the Trust Estate, (b) consent in writing to the making of any map or plat thereof, (c) join in granting any easement thereon, or (d) join in any extension agreement or any agreement subordinating the lien or charge hereof.
1.19 Beneficiary's Powers. Without affecting the liability of any other person liable for the payment of any obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Trust Estate not then or theretofore released as security for the full amount of all unpaid obligations, Beneficiary may, from time to time and without notice (a) release any person so liable, (b) extend the maturity or alter any of the terms of any such obligation, (c) grant other indulgences, (d) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary's option any parcel, portion or all of the Trust Estate, (e) take or release any other or additional security for any obligation herein mentioned, or (f) make compositions or other arrangements with debtors in relation thereto.
1.20 Personal Liability. The loan secured by this Deed of Trust shall be subordinate only to the senior financing to which Beneficiary has expressly subordinated and such exceptions to title shown in the title report for the Property which are approved in writing by Beneficiary.
The City Loan is a nonrecourse obligation of Trustor, and neither the Trustor nor any partner, or their respective members, directors or officers shall have any direct or indirect personal liability for payment of the principal of, or interest on, the Note. The sole recourse of the Beneficiary with respect to the principal of, or interest on, the Note shall be to the Property securing the indebtedness evidenced by the Note; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the Beneficiary, or (b) be deemed in any way to impair the right of the Beneficiary to assert the unpaid principal amount of the Promissory Note as a demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is 11 1628\11\3572983.2
intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Promissory Note; nothing contained therein is intended to relieve the Trustor and, if Trustor is a partnership, any general partner of Trustor of liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Loan Documents that are payable or applicable prior to any foreclosure under this Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Project collected by Trustor after the Beneficiary has given any notice that Trustor is in default to the full extent of the rental income or other income retained and collected by Trustor after the giving of any such notice; (iv) the fair market value as of the time of the giving of any notice referred to in subparagraph (iii) above of any personal property or fixtures removed or disposed of by Trustor other than in accordance with the Loan Documents after the giving of any notice referred to above; and (v) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (vi) breach of any environmental covenant or representation made by the Trustor relating to the Project.
Indemnity. In addition to any other indemnities to Beneficiary specifically provided for in this Deed of Trust and/or in the Loan Agreement. Trustor hereby indemnifies, and shall defend and save harmless, Beneficiary and its authorized representatives from and against any and all losses, liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable attorneys' fees and all costs which may be imposed upon, incurred by or asserted against Beneficiary by reason of: (a) the construction of any improvements on the Property, (b) any capital improvements, other work or things done in, on or about the Property or any part thereof, (c) any use, nonuse, misuse, possession, occupation, alteration, operation, maintenance or management of any portion of the Trust Estate or any part thereof or any street, drive, sidewalk, curb, passageway or space comprising apart thereof or adjacent thereto, (d) any gross negligence or willful act or omission on the part of Trustor and its agents, contractors, servants, employees, licensees or invitees, (e) any accident, injury (including death) or damage to any person or property occurring in, on or about the Property or any part thereof, (t) any lien or claim which may be alleged to have arisen on, against, or with respect to any portion of the Trust Estate under the laws of the local or state government or any other governmental or quasi-governmental authority or any liability asserted against Beneficiary with respect thereto, (g) any tax attributable to the execution, delivery, filing or recording of this Deed of Trust, the Note or the Loan Agreement, (h) any contest due to Trustor's actions or failure to act, permitted pursuant to the provisions of this Deed of Trust, (i) subject to the nonrecourse provisions set forth in Section 1.21, any Event of Default under the Note, the Regulatory Agreement, this Deed of Trust or the Loan Agreement, or (i) any claim by or liability to any contractor or subcontractor performing work or any party supplying materials in connection with the Property or the Improvements, except, in all events, to the extent caused by the negligence or willful misconduct of Beneficiary, its board of directors, officers, agents or employees.
ARTICLE 2. ASSIGNMENT OF RENTS, ISSUES AND PROFITS
2.1 Assignment. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns and transfers to Beneficiary all the Rents of or from any portion of the Trust Estate, and hereby gives to and confers upon Beneficiary the right, power and 12 1628111135729832
authority to collect such Rents. Trustor irrevocably appoints Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in the name of Trustor, Trustee or Beneficiary, for all such Rents, and apply the same to the indebtedness secured hereby; provided, however, that so long as an Event of Default shall not have occurred hereunder and be continuing beyond any applicable notice and cure period, Trustor shall have the right to collect such Rents. Upon the request of Beneficiary, Trustor shall execute and deliver to Beneficiary, in recordable form, a specific assignment of any leases now or hereafter affecting the Trust Estate or any portion thereof to evidence further the assignment hereby made. The Assignment of Rents in this Article 2 is intended to be an absolute assignment from Trustor to Beneficiary and not merely an assignment for security only.
2.2 Election of Remedies. Subject to Trustor's right to collect the Rents pursuant to Section 2.1 , Beneficiary may, subject to the rights of tenants, either in person, by agent or by a receiver appointed by a court, enter upon and take possession of all or any portion of the Property and the Improvements, enforce all Leases, in its own name sue for or collect all Rents, including those past due and unpaid, and apply the same to the costs and expenses of operation and collection, including, without limitation, reasonable attorneys' fees, and to any indebtedness then secured hereby, in such order as Beneficiary may determine. The collection of such Rents, or the entering upon and taking possession of the Property or the Improvements, or the application thereof as provided above, shall not cure or waive any Event of Default or notice of default hereunder or under any of the Loan Documents or invalidate any act done in response to such Event of Default or pursuant to such notice of default.
ARTICLE 3. REMEDIES UPON DEFAULT
3.1 Events of Default; Cure. For all purposes hereof, the term "Event of Default" shall mean (a) at Beneficiary's option, the failure of Trustor to pay any amount due hereunder or under the Note when the same is due and payable, whether by acceleration or otherwise; (b) the failure of Trustor to perform any non-monetary obligation hereunder, or the failure to be true in any material respect when made of any representation or warranty of Trustor contained herein, without curing such failure within ten (10) days after receipt of written notice from the City (or from any party authorized by City to deliver such notice as identified by the City in writing to Trustor) for a monetary default and thirty (30) days for a non- monetary default, and the continuance of such failure for thirty (30) days after notice; provided, however, if the non-monetary default is of the type that cannot be reasonably cured within thirty (30) days, Trustor shall have such additional time as may be reasonably necessary to cure such default if Trustor commences to cure such default within such thirty (30) day period and thereafter diligently prosecutes such cure to completion, or (c) the existence of any Event of Default under the Loan Documents that is continuing beyond any applicable notice and cure period.
3.2 Acceleration Upon Default, Additional Remedies. Upon the occurrence and continuance of an Event of Default beyond any applicable notice and cure period, Beneficiary 13 1628\11\3572983.2
may, at its option, declare all indebtedness secured hereby to be immediately due and payable upon notice and demand. Thereafter Beneficiary may:
Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, subject to the rights of tenants, enter upon and take possession of the Property and the Improvements, or any part thereof, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of any portion of the Trust Estate, including, without limitation (i) taking possession of Trustor's books and records with respect to the Property and Improvements, (ii) completing the construction of the Improvements, (iii) maintaining or repairing the Improvements or any other portion of the Trust Estate, (iv) increasing the income from the Trust Estate, with or without taking possession of the Property or the Improvements, (v) entering into, modifying, or enforcing Leases, (vi) suing for or otherwise collecting the Rents or other amounts owing to Trustor, including those past due and unpaid, and (vii) applying the same, less costs and expenses of operation and collection including, without limitation, reasonable attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Property or the Improvements, the collection of such Rents and the application thereof as provided above, shall not cure or waive any Event of Default under the Loan Documents or this Deed of Trust or notice of default hereunder; (b)k Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale and a written notice of default and election to cause Trustor's interest in the Trust Estate to be sold, which notice Trustee or Beneficiary shall cause to be duly filed of record in the Official Records of the county in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in any of the Loan Documents or other document now or hereafter securing all or any portion of the obligations secured hereby, or by law.
3.3 Foreclosure by Power of Sale. Should Beneficiary elect to foreclose by exercise of the power of sale herein contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust and the Note and such receipts and evidence of expenditures made and secured hereby as Trustee may require. (a) Beneficiary or Trustee shall give such notice of default and election to sell as is then required by applicable law. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such notice of default and after notice of sale having been given as required by law, sell the Trust Estate at the time and place of sale fixed by it in the notice of sale, either as a whole, or in separate lots or parcels or items as Beneficiary shall deem expedient, 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 the time of sale. Trustee shall deliver to such purchaser or purchasers thereof a trustee's deed conveying the property so sold, which shall not contain any covenant 14 1628\11\3572983.2
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, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale and Beneficiary shall be entitled to pay the purchase price by crediting the purchase price of the property against the obligations secured hereby. Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers.
(b) 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 in the following priority, to payment of: (i) first, all sums expended under the terms hereof: not then repaid, with accrued interest at the Default Rate;(ii) second, all other sums then secured hereby; and (ili) the remainder, if any, to the person or persons legally entitled thereto.
Subject to California Civil Code 2924g, Trustee may postpone sale of all or any portion of the Trust Estate by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.
3.4 Appointment of Receiver. Upon the occurrence and continuance of an Event of Default hereunder, Beneficiary, as a matter of right and without notice to Trustor or anyone claiming under Trustor, and without regard to the then value of the Trust Estate or the adequacy for any security for the obligations then secured hereby, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided herein.
3.5 Remedies Not Exclusive. Trustee and Beneficiary, and each of them, shall be entitled to enforce payment and performance of any indebtedness or obligations secured hereby and to exercise all rights and powers under this Deed of Trust or under any Loan Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the indebtedness and obligations secured hereby may now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement whether by court action or pursuant to the power of sale or other powers herein contained, shall prejudice or in any manner affect Trustee's or Beneficiary's right to realize upon or enforce any other security now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Beneficiary or Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Trustee or Beneficiary or to which either of 15 1628\1113572983.2
them may be otherwise entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies.
3.6 Request for Notice. Trustor hereby requests a copy of any notice of default and that any notice of sale hereunder be mailed to it at the address set forth in Section 4.3 of this Deed of Trust.
3.7 Forbearance by Lender Not a Waiver. Any forbearance by Beneficiary in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any right or remedy. The acceptance by Beneficiary of payment of any sum secured by this Deed of Trust after the due date of such payment shall not be a waiver of Beneficiary's right either to require prompt payment when due of all other sums so secured or to declare an Event of Default for failure to make prompt payment. The procurement of insurance or this payment of taxes or other liens or charges by Beneficiary shall not be a waiver of Beneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust nor shall Beneficiary's receipt of any awards, proceeds or damages under this Deed of Trust operate to cure or waive any Event of Default with respect to any payment secured by this Deed of Trust.
3.8 Environmental Provisions. Without limiting any of the remedies provided in the Loan Documents, Trustor acknowledges and agrees that portions of Section 4 of the Loan Agreement and Section 1.2 of this Deed of Trust are environmental provisions (as defined in Section 736(t)(2) of the California Code of Civil Procedure) made by the Trustor relating to the real property security (the "Environmental Provisions"), and that Trustor's failure to comply with the Environmental Provisions is a breach of contract such that Beneficiary shall have the remedies provided under Section 736 of the California Code of Civil Procedure ("Section 736"') for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. Other than the remedy provided under Section 736, all remedies provided for by the Loan Documents are separate and distinct causes of action that are not abrogated, modified, limited or otherwise affected by the remedies provided under Section 736(a) of the California Code of Civil Procedure.
ARTICLE 4. MISCELLANEOUS
4.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought.
4.2 Trustor Waiver of Rights. Trustor waives to the extent permitted by law, (a) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Trust Estate, (b) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the 16 1628\11\3572983.2
whole of the secured indebtedness and marshalling in the event of foreclosure of the liens hereby created, (c) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties, (d) the right to assert any statute of limitations as a bar to the enforcement of the lien of this Deed of Trust or to any action brought to enforce the Loan Agreement or any other obligation secured by this Deed of Trust, and (e) any rights, legal or equitable, to require marshalling of assets or to require upon foreclosure sales in a particular order, including any rights under California Civil Code Sections 2899 and 3433. Beneficiary shall have the right to determine the order in which any or all of the Trust Estate shall be subjected to the remedies provided herein. Beneficiary shall have the right to determine the order in which any or all portions of the indebtedness secured hereby are satisfied from the proceeds realized upon the exercise of the remedies provided herein. Nothing contained herein shall be deemed to be a waiver of Trustor's rights under Section 2924c of the California Civil Code.
4.3 Notices.
(a) All notices and demands given under the terms hereof shall be in writing and sent y first-class registered or certified mail, postage prepaid, return receipt requested, or y private courier service which provides evidence of delivery. Unless a differen address is given by any party as provided in this Section, all such communication will be addressed as follows:
If to Trustor: Wakeland Entrada LP
c/o Wakeland Housing & Development Corporation
1230 Columbia Street
San Diego, CA 92101
Attn: Rebecca Louie
If to Beneficiary: City of Riverside
Attn: Housing and Human Services Director
3900 Main Street
Riverside, California 92522
Copies to: City of Riverside
Attn: City Attorney
3900 Main Street
Riverside, California 92522
Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail.
Each party shall promptly notify the other party of any change(s) of address to which notice shall be sent. Any address for service of notice on any party may be changed by that party serving a notice upon the other of the new address, except that any change of address to a post office box shall not be effective unless a street address is also specified for use in effectuating personal service.
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(b) Notwithstanding any provision to the contrary in the Loan Documents, City hereby agrees that the City will send copy of any notice to the Subrecipients investor limited partner at the address below:
WF Affordable Housing LLC
550 S. Tryon Street
23rd Floor, MAC D1086-239
Charlotte, NC 28202-4200
Attention: Director of Asset Management
[email protected]
[email protected]
[email protected]
4.4 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.
4.5 Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust.
4.6 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal, invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.
4.7 Subrogation. To the extent that proceeds of the Note arc used to pay any out- standing lien, charge or prior encumbrance against the Trust Estate, such proceeds have been or will be advanced by Beneficiary at Trustor's request and Beneficiary shall be subrogated to any and all rights and liens held by any owner or holder of such outstanding liens, charges and prior encumbrances, irrespective of whether the liens, charges or encumbrances are released.
4.8 Attorneys' Fees. If any payment secured hereby is not paid when due, Trustor promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees, whether or not such enforcement and collection includes the filing of a lawsuit. As used herein, the terms "attorneys' fees" or "attorneys' fees and costs" shall mean the fees and expenses of counsel to the parties hereto (including, without limitation, in- house counsel employed by Beneficiary) which may include printing, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and others not admitted to the bar but performing services under the supervision of an attorney. The terms "attorneys' fees" or "attorneys' fees and costs" shall also include, without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred.
4.9 No Merger of Lease. If both the lessor's and lessee's estate under any lease or any portion thereof which now or hereafter constitutes a part of the Trust Estate shall at any time become vested in one owner, this Deed of Trust and the lien created hereby shall not 18 1628\1113572983.2
be destroyed or terminated by application of the doctrine of merger unless Beneficiary so elects as evidenced by recording a written declaration so stating, and, unless and until Beneficiary so elects, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the foreclosure of the lien created by this Deed of Trust on the Trust Estate pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Trust Estate shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice thereof to such tenant or subtenant.
4.10 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California.
4.11 Joint and Several Obligations. Should this Deed of Trust be signed by more than one party, all obligations herein contained shall be deemed to be the joint and several obligations of each party executing this Deed of Trust.
4.12 Interpretation. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neutral and vice versa, if the context so requires.
4.13 Completion of Construction. This Deed of Trust is a construction deed of trust within the meaning of California Commercial Code Section 9313. For purposes of subdivision (6) of that statute, "completion of construction" shall not be deemed to occur prior to completion of all work, as evidenced by a certificate of occupancy or equivalent document from the jurisdiction, and installation or incorporation into the Improvements of all materials, for which sums secured hereby are disbursed by Beneficiary.
4.14 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid or that all obligations under the Regulatory Agreement have been satisfied, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention and upon payment by Trustor of Trustee's fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Trust Estate then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or persons legally entitled thereto." Such grantee shall pay Trustee a reasonable fee and Trustee's costs incurred in so reconveying the Trust Estate.
4.15 Nonforeign Entity. Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code") and Sections 18805, 18815 and 26131, as applicable, of the California Revenue and Taxation Code ("CRT') provide that a transferee of a U.S. real property interest must withhold tax, in the case of the Code, if the transferor is a foreign person, or if, in the case of the CRTC, the transferor is not a California resident. To inform Beneficiary that the withholding of tax will not be required in the event of the disposition of 19 1628\11\3572983.2
the Property or the Improvements, or any portion thereof or interest therein, pursuant to the terms of this Deed of Trust, Trustor hereby certifies, under penalty of perjury, that: (a) Trustor is not a foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Code and the regulations promulgated thereunder; and (b) Trustor's U.S. employer identification number 90-1001541; and (c) Trustor's principal place of business is 1230 Columbia Street, San Diego, CA 92101. It is understood that Beneficiary may disclose the contents of this certification to the Internal Revenue Service and the California Franchise Tax Board, and that any false statement contained herein could be punished by fine, imprisonment or both. Trustor covenants and agrees to execute such further certificates, which shall be signed under penalty of perjury, as Beneficiary shall reasonably require. The covenant set forth herein shall survive the foreclosure of the lien of this Deed of Trust or acceptance of a deed in lieu thereof.
4.16 Substitute Trustee. Beneficiary at any time and from time to time, by instrument in writing, may substitute and appoint a successor Trustee (either corporate or individual) to any Trustee named herein or previously substituted hereunder, which instrument when executed, acknowledged, and recorded in the Official Records of the Office of the Recorder of the county or counties where the Property is located shall be conclusive proof of the proper substitution and appointment of each successor trustee or trustees, who shall then have all the title, powers, duties and rights of the predecessor Trustee, without the necessity of any conveyance from such predecessor. Trustee shall not be obligated to notify any party hereto of pending sale under any other Deed of Trust, or, unless brought by Trustee, or any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party.
4.17 Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder in the county in which the Property is located with respect to any and all fixtures included within the term "Trust Estate" as used herein and with respect to any goods or other personal property that may now be or hereafter become such fixtures.
4.18 Waiver of Jury Trial, TO THE EXTENT PERMITTED BY LAW, TRUSTOR
AND BENEFICIARY EACH HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENTS OR RELATING
THERETO OR ARISING FROM THE RELATIONSHIP WHICH IS THE SUBJECT OF
THE LOAN AGREEMENT AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
TRUSTOR ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS DEED OF TRUST WITHOUT CHARGE.
TRUSTOR PLEASE NOTE: UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT, CALIFORNIA PROCEDURE PERMITS TRUSTEE TO SELL THE TRUST
ESTATE AT A SALE HELD WITHOUT SUPERVISION BY ANY COURT AFTER EXPIRATION OF A PERIOD PRESCRIBED BY LAW. UNLESS YOU PROVIDE AN 20 1628\11\3572983.2
ADDRESS FOR THE GIVING OF NOTICE, YOU MAY NOT BE ENTITLED TO NOTICE OF THE COMMENCEMENT OF ANY SALE PROCEEDINGS. BY EXECUTION OF THIS DEED OF TRUST, YOU CONSENT TO SUCH PROCEDURE. BENEFICIARY URGES YOU TO
GIVE PROMPT NOTICE OF ANY CHANGE IN YOUR ADDRESS SO THAT YOU MAY RECEIVE PROMPTLY ANY NOTICE GIVEN PURSUANT TO THIS DEED OF TRUST.
4.19 Request For Notice. Pursuant to California Government Code Section 27321.4(b) Trustor hereby requests that a copy of any notice of default or notice of sale given under this Deed of Trust be mailed to Trustor at the address for Trustor set forth
4.20 Reconveyance. Except upon the Event of Default by Trustor, Beneficiary shall reconvey this Deed of Trust upon termination of the Affordability Period as that term is defined in the Loan Agreement.
4.21 Subordination. This Deed of Trust and the provisions contained herein shall be subordinate to any senior financing approve by Beneficiary in accordance with the Loan Agreement.
4.22 Tax Credit Provisions. Notwithstanding anything to the contrary contained herein or in any documents secured by this Deed of Trust or contained in any subordination agreement, and to the extent applicable, the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, "Foreclosure'} with respect to the Security encumbered by this Deed of Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as amended, shall apply:
For a period of three (3) years from the date of Foreclosure, with respect to an existing tenant of any low-income unit, (i) such tenant may not be subject to eviction or termination of their tenancy (other than for good cause), (il) nor may such tenant's gross rent with respect to such unit be increased, except as otherwise permitted under Section 42 of the Internal Revenue Code of 1986, as amended.
4.23 Counterparts. This document may be executed and acknowledged in counterparts, all of which executed and acknowledged counterparts shall together constitute a single document. Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this document to physically form one document, which may be recorded.
4.24 Investor Limited Partner Cure Rights. The Investor Limited Partner shall have the right, but not the obligation, to receive notice of and to cure any default of the Borrower under any of the Loan Documents within the cure periods set forth therein. Notwithstanding the foregoing, if the Investor Limited Partner elects to remove a general partner of the Borrower in connection with any such cure, then so long as the Investor Limited Partner commences proceedings and diligently proceeds to remove such general partner, the cure period shall be extended for so long as reasonably necessary for the Investor Limited Partner to remove such general partner and effectuate the cure. The "Investor Limited Partner" is WF Affordable Housing LLC, a North Carolina limited liability company, and its successors and/or assigns. 21 162811113572983.2
4.25 The Beneficiary hereby acknowledges that, notwithstanding anything to the contrary in the Loan Documents, the following transfers shall be permitted without the Beneficiary's approval:
(i) the admission of the investor limited partner and subsequent transfers of limited partner interests in the Trustor; and (il) the removal and replacement of a general partner of the Trustor by the investor limited partner pursuant to the terms of the Trustors Second Amended and Restated Agreement of Limited Partnership dated April 11, 2022, as the same may be amended from time to time. Trustor shall provide notice to Beneficiary upon any changes in (i) and (ii) above and shall provide Beneficiary with documentation of such changes. /Signature Page Follows/
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written.
TRUSTOR:
WAKELAND ENTRADA LP, a California limited
partnership
By: Wakeland Entrada LLC,
a California Limited Liability Company,
its Managing General Partner
By: Wakeland Housing and
Development Corporation,
California nonprofit public benefi
corporation, its Sole Member and
Manager
By:
Rebecca Louie,
Chief Executive Officer
23 1628\1 113572983.2