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HomeMy WebLinkAboutLEVY, YARON (California Flood and Flame Construction Corp) - 1996-11-22Huntington Beach, California May 2, 1996 1. Af fordable Housing Agreement. This Promissory Note is made and delivered pursuant to and in implementation of an Affordab?e Housing Agreement by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Holder") and ASSOCIATES NINE, a California general partnership (the "Borrower"), dated (the "Agreement"), a copy of which is on file as a public record v�zih the Holder and is i orporated herein by reference. The Agreement provides for the rehabilitation of certain I�ousin units awned by the Borrower, and for the payment of moneys by the Holder to the Borrower up n certain events therein set forth. The Borrower acknowledges that but for the execution of s Promissory Note, the Holder would not enter into the Agreement. Unless definitio of terms are expressly set out at Iength herein, each term shall have the same definition ass forth in the Agreement. `ll6�v�+..6-cam 2. Promise to-Eay. Upon payment of the "Agency Loan" to Borrower pursuant to Section 6 of the Agreement, Borrower promises to pay Holder at the office of the Agency in Huntington Beach, California, or at such other place as the Holder may designate in writing, the principal sum of Four Hundred Forty-six Thousand Dollars ($446,000) (the "Note Amount"). 3. Interest R=. Compound interest shall be charged by the Agency on the portion of the Note Amount remaining unpaid, from the date of the disbursement of the Note Amount until the date which is thirty (30) years from the date of the disbursement of the Note Amount, at the prime rate of the San Francisco office of the Federal Reserve Bank which is prevailing on the date this Agreement is approved and adopted by the Agency, plus one and one-half percent (1.5%). 4. Principal and Interest Payments. (a) No payments of principal and interest shall be required during the term of the loan. On the date wHch is 30 years from the date of the disbursement of the Note Amount, the Borrower shall repay the entire Note Amount plus all interest earned thereon, except as hereinafter provided. (b) The full amount of this Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of the Agreement and/or this Promissory Dote. (c) Provided that the Developer remains in compliance with the affordability provisions of the Agreement, this Promisory Note shall be forgiven, and no payment required, as follows: Page 1 of 3 G:4-96Agmc:U ica:Attach2 (1) Each year following the adoption of this Agreement, on the anniversary date thereof, the Agency will determine whether or not the Developer has complied with the affordability requirements of the Agreement. (2) If the Agency finds that the Developer has complied, an amount equivalent to one -thirtieth (1/30) of the Note Amount, plus accrued interest, shall be forgiven from repayment. (3) If the Agency finds the Developer has not complied, the Developer shall be considered to be in default of the Agreement, and the provisions of the Agreement relating; to defaults shall be applicable. (4) The determination of compliance shall be made in the Agency's sole discretion. 5. Prepayment. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 6. Non -Waiver. Failure to exercise any right the Holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subsequent default. 7. Miver of Presentment. etc. The Borrower and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Note and consent that the holder hereof may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, by agreement between the Holder and Borrower, and such consent shall not alter or diminish the liability of any person or the enforceability of this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action of proceeding to recover any sum herein provided for, no defense of adequacy of security, or that resort must first be had to security or to any other person shall be asserted. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. S. ColIection Costs. If any attorney is engaged by the Holder to enforce or construe any provision of this Note or the Deed of Trust, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action or proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Holder, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 9. Security of Note. This Note is secured, j= aU, by a Deed of Trust (the "Deed of Trust") of even date herewith executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. Page 2 of 3 Q4-96ASme:Utic9:AnUh2 10. Maximum Interest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable Iaw. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 11. Business Purpose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for business or commercial purposes as set forth in the Agreement and not for any personal, family or household purposes. 12. Notice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the Holder to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 13. Default. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default of the Agreement or in any other instrument executed by Borrower or any guarantor in favor of the Holder, the Holder may at its election and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Holder elects to declare default as stated herein, then this Note shall bear interest after default at the discount rate of the San Francisco office of the Federal Reserve Bank which is prevailing immediately prior to default, plus five percent (51/6), and the Holder may take such action under the law or under these security documents securing this Note as Holder may determine necessary to enforce its rights hereunder. 14. Early Pa=ent Requirement. Reference is made to the Deed of Trust for the right of the Beneficiary thereunder to accelerate the indebtedness evidenced by this Note. IN WITNESS HEREOF, this instrument has been executed as of the date set forth below. Dated May 2-, 1996 .2�,194b Page 3 of 3 ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner Melvin R. Heckman General Partner G:4-96Agrcc: Utica:Attach2 RECORDING REQUEST BY AND WHEN RECORDED RETURN TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder No Fee 19970315243 1:42pm 07/02/97 006 26010212 26 25 D11 A36 14 0 14.00 0.00 39.00 0.00 0.00 0.00 0.00 0.00 0.00 (Space Above this Line for Recorder's Use) DEED OF TRUST WITH ASSIGNMENT OF RENTS `fL40" ", THIS DEED OF TRUST is made thistnd day of M" 1996, by and between ASSOCIATES NINE, a California general partnership (the "Trustor"), whose address is: 948 1 lth Street, Huntington Beach, California 92648 and FIRST AMERICAN TITLE INSURANCE COMPANY, (the "Trustee"), whose address is 114 East Fifth Street, Santa Ana, California 92701, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the 'BENEFICIARY"). WITNESSETH: That Trustor Irrevocably, Grants Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein. TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Four Hundred Forty-six Thousand Dollars ($446,000) with interest thereon according to the terms of a Promissory Note of even date herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said fax -Exempt -Government Agency This document is solely for the CITY OF HUNTINGTON BEACH official business of the City, Page 1 of 12 Connie BrockwaGy, CMC of Huntington beach, as COYltemr+ City CI rfc 4-96A ee:Utica:Aaach3 By. plated under Government Code Sec. 6103 and should be recorded puty City Cleric free of char"?- property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on May 2,1996, (hereinafter the "Agreement"), including without limitation, the payment of liquidated damages pursuant to Section 42 of the Agreement. 4. Payment,,with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: I. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. The loan secured hereby is being obtained for the purpose of financing rehabilitation improvements on said property. Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation, (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, wfiich notice may be given to Trustor by registered or certified mail, sent to his last kno Am address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any Page 2 of 12 GA-96Agrcc:Udca:Attach3 reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; (f) not to permit any stop notice claims to be presented to Beneficiary. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all times with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and Page 3 of 12 G:4-96Agree: Utica: Attach3 improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and Comity taxes, and all assessments on appurtenant water stock, affecting such property, (b) when due, all special assessments for public improvements; (c) when due, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustoes request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. a. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior to superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to Page 4 of 12 GA 96Agrcc:Utica:Anach3 pay a]I costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rat_ which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. S. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceed3 of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. 10. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and vdthout notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map or plat thereof, (c) join in granting any easement thereon, Page 5 of 12 GA-96Agrce:U1ica:Attach3 (d) join in any agreement subordinating the lien or charge hereof. 11. That 6e lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive payoff of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re -assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Agency the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Agency any duty to produce rents from the property affected by this Trust Deed, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, repaid, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Agency confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Agency may collect and retain the rents, issues and profits %wthout notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Agency or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Agency or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustoes right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured Page 6 of 12 G:4-96Agrce:Utica:Attach3 hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustees sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate;" (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set Page 7 of 12 GA-46Agrce:Utica:Anach3 forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in perform:uice of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in la A ful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive payoff of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expense of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; al sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons Iegally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be Page 8 of 12 G:4-46Agrcc:Ut1ca:Attach3 conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That 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, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 19. The property secured by this Deed of Trust is income producing property consisting of four units or more. Trustor agrees to file with Beneficiary, at Beneficiary's request, yearly, on or before the 15th day of January of each year, a written operational report. Such operational report shall contain a brief but complete statement of the year's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable change, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under an), other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Page 9 of 12 G:4-96Agrcc:Utica:A11adt3 Deed of Trust even if and notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes'which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 24. This Deed of Trust is subordinate to the Deed of Trust recorded December 31,1985 as Document No. 523941 of Official Records of Orange County, California, securing the amount of $1,300,000,00; Beneficiary World. Savings and Loan; Trustee Goldenivest Financial Corporation; Trustor Associates Nine, a California general partnership. All other encumbrances on the property, if any, shall be subordinate to this Deed of Trust. 25. That in the event of any default by the Trustor under the terms of this Deed of Trust, no general partner of the Trustor shall be personally liable for any amount which may become due to the Beneficiary as a result of such default. 26. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. Page 10 of 12 G' 496Agrc1c-.U6ca' AIixh3 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Page 11 of 12 ASSOCIATES NINE, a California general partnership 4�� 49�44-r�� Horace C. Stovall General Partner Melvin R. Heckman General Partner G:4-96Agrce: Utica:ArMch3 EXHIBIT "A" TO DEED OF TRUST All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel l The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Naps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The Nest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Page 12 of 12 0:4-96AgrecUtica:Attach3 SUBSCRIBING -WITNESS CERTIFICATE State of Ct County of A� zx+C ""VV"CE L. J0i4N50,! o . COrltlti+t. f 991M Codcry PUNnr� E COUNTY, ° En*es MAY 11.im ESS .JURArl No. 5195 On this theaUlie! day of 19_96„ before me, the undersigned SS. � Notary Public, personalty appeared _ _ (name of subscribing witness), [rsonany known to me ❑ proved to me on the oathlatlirmation of me of credible witness who identifies subscribing witness), a credible witness whom I know personally. 10 be the person whose name is subscribed to the within instnrrnent as a witness thereto, who, being try me duty sworn, deposes and says thatas present and saw (name of principal signer not appearing before Notary), the same person described in and whose name is subscribed to the within and annexed in- stnxnent as a party thereto, execute the same, and that said affiant subscribed (his'hw) name to the within instrument as a witness at the rec.Itmt om?-& � (name of principal signer again) (Notary's shpralure) ATTENTM VOTARY: Aphough the nk mhan rerpested below is OPTIONAL K Could prevent hauduleril altactrnerd of V" certficate to anotbbr doWrx". }' THIS CERTMATE Title or Type of Document�EAe.7— MUST BE ATTACHED Ntxnber of Pages Date of Document f„ TO THE DOCUMENT DESCRIBED AT RIGHT: Skner(s) Other Than Named Above CIM NATIONAL NOTARY ASSOCIATION • 823ti Remmet Ave • Canoga Park, CA 913M7184 -CALIFORNIA ALL-PURP06ACKNOWLEDGM ENT State of County of _ On before me, 4ac_ , Dats � Name and Title d On •r Is.p., •,kna Dos. Notary Puor�} personally appeared Aarne() d srgnar(s} — droved to me on the basis of satisfactory evidence to be the personfr+ whose named ista;e subscribed to the within instrument and acknowledged to me that hef_0c4l" executed the MAYttR10E LJOHNSON same in his.4�e�-authorized capacity(e4; and that by co"J. In 991Vz his4�e�signatureH on the instrument the person(6). -t NotMPubGC--COU.an'la or the entity upon behalf of which the persons acted, aLa'tiGt C�''� executed the instrument. W Comm. EwIres MAY 11.1977 WITNESS my hand and official seal. �� VIE, . rrtt OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on Me document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: N .-A Number of Pages: �rt Signer(s) Other Than Named Above:1lrSd.�� Capacity(ies) Claimed by Signer(s) Signer's Name: An 4V ❑ Individual ❑ Corporate Officer Itle(s): Partner — ❑ Limited OGeneral ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: top of thum—b here Signer Is Representing: S gner's Name: ■ w ■ ■ ■ Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attomey4n-Fact Trustee Guardian or Conservator Other: Signer Is Representing Top of tnumo Here 0 1995 W orw Notary Assonaiion • WX Remnet Ave., P.O. Boa 7184 • Car*pa Park CA 91309.7184 Prod. No. 5907 Reader. Cal Ton -Free 1-00"76-M7 Recorcea in the county or orange, caiifornia Gary L. Granville, Clerk/Recorder RECORDING REQUESTED BY I1l.l:C11:! 1.1"!lI..11lI:.1:!l1:1::1;:1:1:I:: No Fee AND WHEN RECORDED MAIL TO: ) 19970315244 1:42pm 07/02/97 Redevelopment Agency of the City 005 26010212 26 25 of Huntington Beach D02 16 7.00 45.00 0.00 0.00 0.00 0.00 2000 Main Street } Huntington Beach, Ca. 92648 Attn: City Clerk } (Space above for recorder.) This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. -T, REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH r DECLARATION OF COVENANTS_ CONDITIONS_ P', AND RESTRICTIONS THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS (the "Declaration") is entered into thisIlL day of �4w% J, a-e ---, 1996, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), and ASSOCIATES NINE,, a California general partnership (the "Developer"). A. The Developer is fec owner of record of that certain real property (th "Site") located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". The Site is the subject of an Affordable housing Agreement (the "Agreement") for the rehabilitation, operation and maintenance of an affordable housing project. B. The Agreement provides for the execution and recordation of this document. Except as otherwise expressly provided in this Declaration, all terms shall have the same meanings as set forth in the Agreement. NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS FOLLOWS: Tex-Exemrf-Government 'Agency CiTLOF FiUNTNGtON BEACH G^ tic BrocR,way7Ctac G.ry C'erk 1:3y: "- 0:4-46Agre Al l S8 Clerk This document 13 solely for t':o official b,Wness of t`:o city of Hu:lt:r. :on P:a:,. as contem- plated U^.•'or G0vt1-r..3crt Code Sec. 6103 and should be recorded Pagel of 11 free of charge. (a) Number of Units. The Developer covenants and agrees to rehabilitate a total of thirty-six (36) multifamily housing units on the Site in conformance with the Scope of Rehabilitation (Attachment No. 5 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent all of the units to "Lower Income Households" at an "Affordable Rent" (the "Affordable Units"). "Lower Income Household" shall mean a household earning not greater than sixty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety C&k Section 50079.5. "Affordable Rent" shall have the meaning set forth in Health and Safety CD& Section 50053, as further defined in subparagraph (e) of this Section 27. (b) puration ofAfl'ordabilty RMuirements. The Affordable Units shall be subject to the requirements of the Agreement and this Declaration of Covenants, Conditions and Restrictions for thirty (30) years, beginning on the date of the Agency's issuance of a Certificate of Completion for the Project (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." The Affordability Period may be extended upon mutual agreement of the parties, evidenced by a written amendment to the Agreement. All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer consents to the recording of this Declaration in the official records of Orange County, California. (c) income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 8 to the Agreement or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant renting an Affordable Unit is a Lower Income Household, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. Page 2 of l I G:4-96Agree:Ulica:At1ach7 (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Lower Income Household shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Lower Income Household, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Lower Income Household. Such new tenant shall then constitute a Lower Income Household for the purposes of the Agreement and this Declaration and until such next available unit is rented to such tenant, the former Lower Income Household who has ceased to qualify as such shall be deemed to continue to be a Lower Income Household for the purposes of this Declaration and the Agreement. The Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 9 to the Agreement or such other form as may be provided by the Agency. (d) . Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-six (36) Affordable Units required to be rented to Lower Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Orange County median income, less an established utility allowance, as annually determined and published by the United States Department of Housing and Urban Development. The maximum monthly rental amount for each Affordable Unit to be rented to Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Lower Income Household which is a "Section 8 Recipient," as defined therein ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Lower Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Lower Income Household which is not a Section 8 Recipient, then upon the next vacation of an Actual household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two (2) bedroom Page 3 of 11 Q:4-96Agrm:Utica:Anach7 unit. In no event, however, shall the rerenting of a Section 8 Unit to a Lower Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Further, in no event shall the rent by the Developer exceed the rent level defined for Low Income Households in licalth gnd Safety Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. Further, in no event shall the rent charged by the Developer exceed the level defined for Lower Income Households in Health R Safety Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than. the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. (e) Selection of Tenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who are not recipients ("non Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor ("Section 8 Program"). In the event that Developer is unable to rent an available unit to a non -Section 8 Recipient, then Section 8 Recipients may be considered as tenants. If the Developer is still unable to rent the available unit, the Agency may, at its sole option, identify a lower income household to occupy the available unit. (f) Low Income Housing Tax Crcdits. If the Developer receives Low Income Housing Tax Credits for the rehabilitation project, no less than fifty percent (50%) of the net syndication proceeds must be used to reduce the outstanding Agency Loan balance on the Project. Page 4 of 11 G A-9GAgm. Utica:Anach7 ��► 1 : ul►: r� The Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: (a) To use, devote, operate and maintain the Site and each part thereof, for the purposes and the residential uses specified in the Agreement. (b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, Iease, and contract entered into with respect to the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the follmNing conditions: That there shall be no discrimination against or segregation or any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the [easing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (3) In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with references to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the lard." Page 5 of 11 0A-96Agr=Utica:Attach7 o The Site shall be occupied, used and maintained as follows: (a) Each dwelling unit shall be used only for private apartment dwelling purposes, with appurtenant facilities, and for no other purposes. (b) All signs on the property shall conform %%ith all ordinances and other regulations of the City. (c) The Developer and the occupants shall not permit or suffer anything to be done or kept upon said premises which «rill increase the rate of insurance on any building, or on the contents thereof, or impair the structural integrity thereof or whichwill obstruct or interfere with the rights of other occupants, or annoy them by unreasonable noises or othem ise, nor shall any occupant commit or permit any nuisance on the premises or fail to keep the premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. The Developer shall comply with all of the requirements of all governmental authorities with respect to the premises. If by reason of the occupancy or uses of the premises the rate of insurance on the Site shall be increased, the Developer shall become personally liable for the additional insurance premiums. (d) There shall be no structural alteration, construction or removal of any building, fence or other structure on the Site (other than repairs or rebuilding permitted herein) without the approval of the City or the Agency and in accordance with the City Code. (e) The Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor. The Developer shall not permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas trick, etc.), or any recreational vehicle (camper unit, camper shell detached from a private passenger vehicle, motor home, trailer, boat trailer, mobilehome or other similar vehicle, except when parked within an enclosed parking space), boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle upon any portion of the Site, including parking spaces. The Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Site, including parking spaces, except for emergency repairs thereto and then only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept anywhere on the Site. The Developer shall have the right to remove, at the tenant's expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. In addition, all provisions of the Huntington Beach Municipal Code, including amendments thereto, shall apply. Page 6 of 11 G:4-95Agrcc:Utica:Attach7 j 4. � . k..J �.,l Occupancy of each dwelling unit shall be restricted to occupancy standards set forth in the Huntington Beach Municipal Code or state standards, as are effective or as may be effective or amended. The Developer shall not be permitted to lease or rent any dwelling unit thereon for transient or hotel purposes. Any lease or rental agreement covering an apartment shall provide that the terms of the lease or rental agreement shall be subject in all respects to the provisions of this Declaration of Conditions, Covenants and Restrictions and that any failure by the lessee to comply -v;7th the terms of such documents shall be a default under the lease or rental agreement. All leases and rental agreements shall be in writing. All prospective tenants/occupants of the Site shall make application through the Developer. To the extent permitted by law, the City of Huntington Beach and the Agency shall have the right of entry, at reasonable business hours and upon no less than twenty-four (24) hours advance notice, onto the Site to inspect for the need for repairs or maintenance. Entry onto the Site or into any unit for other than emergency repairs may be made only after such advance notice and request for entry. If request for entry is denied or the Site or any applicable unit is unoccupied, the City or Agency may apply for an appropriate warrant or other order from a court of appropriate jurisdiction. No part of the Site shall at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with a conversion to such oi%mcrship or uses. Other than obtaining a final subdivision map on the Site and a final subdivision public report from the California Department of Real Estate, the Developer shall not take any steps in connection with a conversion of the Site to a condominium ownership, or with a conversion of the Site to "timeshare" ownership. The exterior areas of the Site shall be kept free of rubbish, debris and other unsightly or unsanitary materials. Exterior yard areas and parking areas shall be kept free of deterioration, including: potholes, cracks in asphalt so as to become uneven, unsightly surface conditions, v--eeds growing through asphalt. Perimeter fencing, landscaping and irrigation system shall be routinely inspected and maintained in good condition. Each occupant of the Site shall have the affirmative obligation to prevent what might by considered a fire hazard or a condition dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract from the aesthetic and property values of neighboring dwelling units and properties. The following minimum performance standards for the maintenance of buildings, yards, and landscaping shall be adhered to by the Developer: Page 7 of I 1 0:4-96Agrtc:Utiea:Attach7 (a) Landscaping on the Site shall be absent of the following: (1) Lawns with grasses in excess of six (6) inches in height. (2) Untrimmed hedges. (3) Trees, shrubbery, lawns and other plant life dying from lack of water or other necessary maintenance. (4) Trees and shrubbery grown uncontrolled without proper pruning. (5) Vegetation so overgrown as to be likely to harbor rats or vermin. (6) Dead, decayed or diseased trees, weeds and other vegetation. (7) Inoperative irrigation system(s). (b) Yard areas shall be maintained so as to be absent of the following: (1) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (2) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (3) Unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public streets and common areas. (c) No building, wall or fence may be left in an unmaintained condition so that any of the following exist: (1) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state of partial construction. condition as to: (2) Unpainted buildings or buildings with peeling paint in such a Cause dry rot, ,%}arping and termite infestation; or ii. Constitute an unsightly appearance that detracts from the aesthetic or property values of neighboring properties. (3) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. Page 8 of 11 G:4-96Agrec: Utica:Auach7 �.i (4) Damaged garage doors that may become inoperative or unsafe to operate. (5) Graffiti remaining on any portion of the property for a period exceeding 72 hours. (6) Building interiors and exteriors shall be maintained to meet standards of similar residential property in the City of Huntington Beach. fit► : ► 1 : ► ► u �I►� The City of Huntington Beach ("City") and the Agency shall be made parties to this Declaration for the limited purpose as specified herein as follows: (a) Changes or amendments to this Declaration must be submitted for City and Agency review and approval. (b) In the event of inaction by the Developer, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. (c) The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City on yards, structures, and private parking areas vithin the Site. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. (d) The City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendment(s) shall be deemed approved, unless that time period is extended by mutual agreement of all parties. 1 r• M MMwrNo I M M► M M on I M M&T 67 Z i rl M weiOM ; me M to 1 ni ►- r� (a) Right of Entry. To the extent permitted by law, Developer hereby acknowledges and intends and thus grants to the City, through the City's duly authorized agents or employees, the right to enter upon the Site for the following purposes: Page 9 of 11 GA-96Agrce: Utica:Attach7 (1) Inspection, maintenance and repair of the Site. (2) Enforcement of local traffic and/or parking regulations. (b) Reimbursements of City Expenditures. All costs and expenses incurred by the City arising out of its inspection, maintenance and repair of the Site, as provided hereinabove ("City Maintenance Costs"), shall be charged as an expense of the Developer and shall be paid within ten (10) days of receipt of an invoice for same. (c) Assessments and Lien Rights of the City. If City Maintenance Costs are not paid within thirty (30) days from the date due, said unpaid costs and expenses shall become a special assessment against the Site and, upon confirmation by the City Council, shall be collected in the same manner as real property taxes and shall be subject to the same penalties, procedures and sale in case of delinquency as is provided for real property taxes. (a) If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. (b) This Declaration shall be construed in accordance with the laws of the State of California. (c) In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. (d) The Developer shall be required to take all reasonable steps necessary to insure that each tenant and all assignees, and transferors have knowledge of all terms and conditions of this Declaration. MIMM 1 R 1' ell The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any successor in interest to the Site, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of Huntington Beach. All the covenants contained in this Agreement shall remain in effect for the Affordability Period, and shall automatically terminate and be of no further force or effect after such time except for the covenants against discrimination contained in Section 2 hereof, which shall remain in effect in perpetuity Page 10 of 1 I G:4-96Agree:Ctica:Attach7 M IN WITNESS WHEREOF, the Agency and the Developer have executed this Declaration of Conditions, Covenants and Restrictions by and through their authorized officers on this 2.LA day of /1fevrr 6&r ATTEST: Agency Clerk REVIEWED AND APPROVED: J Executive Director REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: ALI 4aL�- v6hairman APPROVED AS TO FORM: -Rtr.n Dr—�� f &/'Agency Attorney 1t'141 A 6 INITIATED AND APPROVED: A'v , 4" /' 10 1 Director of Econon& Development ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner Melvin R. Heckman General Partner Page 11 of 11 GA-96Agree: Utica:Attach7 EXHIBIT "A" TO CERTIFICATE OF COMPLETION FOR REHABILITATION PROJECT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1 The Nest 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The Nest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. G:4-46Agrce:Utica:Attach6 f : CALIFORNIA ALL-PURP09=ACKNOWLEDGMENT State of _y nA& County of On _ (_I[E�u�2.1� 22; 11 before me,—L�U-1• A. 1JP_.45m, �o�( PuytG [MID ^' Name & A Title of " (a 9-.' — boa. Way personally appeared ak\z( Cntnte, Name(s) of sognar(a) personally known to me — ©fl---E�proved-to-nie-on-tt- evidence to be the person whose namerU-tshgFsubscribed to the within instrument and acknowledged to me that -t a hefflgy executed the same in histf eir uthorized capacity ies , and that by histheritheir signature 0-S on the instrument the persorEa �~ ' LAURAA. NN LMN or the entityupon behalf of which the erson acted, P P z . -0� U ComrrWon #r05: 'c- Notary Pubnc — Co,itol-11c executed the instrument. ORANGE COLTV. I yComm. ExpnasJJ!r. :;^^ WITNESS my nd and official seat. utrbP/� LSON0106W ' Cam -won � rot>aza3 z Notary Pt M — Cogforr>ia signature a Nary Putwc ORANGE COUNTY rt4y Comm. EimAres ALA 23 1900- t OPTIONAL Though fhe rnformTaatian tieto'w is not required try law, it may prove va.uabte to persons retying on the document and could prevent fr udulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: E Q- (J1 t 1'1,C,2>.d,, 1 t"y t A'sh- A�tS Document Date: _ 1T2��'1 �? to Number of Pages: Signer(s) Other Than Named Above: t- SftiaA - V'iw �, ({�C�1►�a-r.� Capacity(ies) Claimed by Signer(s) Signer's Name: t? U r°- Ste-[ (N TA/' V1 ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian r Conservator Z Other I r- n1l0 $1 Top of thumb hers Signer Is Representing: W--IffLanytkk k Signer's Name: &Cct J Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee Guardian or Conservator V) Other. Ae4+1CN CAt i-t- I Top of thumb here Signer Is Representing: 0 094 Vatand Notary Assombon • 82M Harnmet Ave., P.O. Box 7184 . Canoga Para CA 91309-7184 Prod- No. 5907 Reorder Call TWree 14W04B76-6W \Sl,�•. , t4G•WfTNESS CERTIFICATE ("WITNESS JURAT") State oe. I '•, County of r� MAYBRICE 4 JOt tMON COW% # 991835 �• z Notary Publie — Coklorrtia 0gANGE COI!!,ItY MY Came . E10e2 MAY 11,1997 On this thearbiriv[ day of 19J4-. before rne, the undlsigned No. 5195 Notary Public, per,nnatty %krf—? —d (name of subscnbing Witness). vjwsonany vnom to me <] proved to me on the oattVanrmaiion of (name of credible witness who identifies subscribing witness), a credible witness whore I know personaRy, to be the person whose name is subscribed to the within instrument as a witness thereto, who, being by me duly sworn, deposes and says that _ hc. » (helshe) was present and saw yy _ r! Y!�9+. HULL- Svt(name of principal signer not appea" before Notary), the same person descnbed in and whose name is subscribed to the within and annexed in• stnment as a party thereto, execute the same, and that said affiani subscribed _th S� fhislher) nwrie to the wittm Mtn snont as a WtnC-,s at the request al .440Iv+'4 (name of principal signer again) (Notary's signature) ATTENTION NOTARY: Atthourp the rdormetion"Quesied bNm is OPTIONAL it Could prevent fraudulent attachment of Ilia ceniKcate to another dodmrxk. if�l5 CEitTIlICAT>r Tine or Type of Document r � , � AJUSY BE ATTACHED Number of Pages %r Date of Document.lj ,y� r TO THE DOCUMENT DESCRIBED AT RIGHT; Signer(s) Other Than Named Above Ot 9V NATIONAL NOTARY ASSOCLATM • 8M ftemmal Ave • CaroMe Park, CA 91903rt B/ "CALIFORNIA ALL-PURPOSYACKNOWLEDGMENT ,z�c'ee-ccse c-crscacacrz5c.€�eac z5crccrc�cz�rcz�cr5c�c�r c rc� State of _ L�¢dL��ti�� County of v On before me, 12 Dale G -Narn� and Tqk d Or �a personally appeared NarTws) at sv*gs) npgrproved to me on the basis of satisfactory evidence to be the personH whose name(Q Ware, subscribed to the within instrument and acknowledged to me that hemexecuted the 5 same in his.4er4eis$uthorized capacity{iefr} and that by r — MAYBrhCE L.toHrvSON hisR�-'t#�e+r signatures) on the instrument the person4Q. - COMM.#4St8J5 or the Entity upon behalf of which the person(s) acted, b ` Notary pubic — Co>;forn'a ORANGE COUNFY executed the instrument. W Cm. Wes MAY 11.1 Q47 WITNESS my hand and official seal. Aea;, Signature d ...ary PWrc OPTIONAL P Though the information below is not required by law. it may prove va!uable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document c . ,,c Titfe or Type of Document: ��1C.c�'- e � Document Date: / q(. Number of Pages:_ rt Signer(s) Other Than Named Above: _� 1 Capacity(ies) Claimed by Signer(s) 7 Signer's Name: c� ❑ individual ❑ Corporate Officer Ttte(s): Partner — ❑ Limited E-0eneral ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator 11 Other: Signer is Representing: lop of murnla here Signer's Name: Individual Corporate Officer Titte(s): Partner --- ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing: Top of 1iurr,b here y00l 0 1995 N t tonal Notary Assdtiaion • 8236 Remmet Ave.. P.Q. Box 7184 • Canoga Park. CA 91 M9.7184 i� Prod. No. 5907 Reorder. Can Too -Free 14 0"76-6827 ' CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of .� County of On 71/9g7_ -before me,`EA _ P , Data Nana e+.d T-11�&.to g .'Jane Doe. N-ary Pub+,Cj personally appeared _wa.- , 0' Narr+Na) of sq-n:► P ersonally known to me to be the person(s4 whose named isleF subscribed to the within instrument ' and acknowledged to me that hels''r� executed the same in his4+erf h eir authorized capacity(ia4 and that by 1dAYB-PICE 1». CH h1sAieF4l;iei{ signature(e) on the instrument the person(Q. q ' a -}= C014M#4g1u5 Nctary Pub11'C — CohGmflo or the entity upon behalf of which the person(e+acted, executed the instrument. -_ O?ANCECOLW W Comm. Endres WY 11. 1 W7 WITNESS my hand and official seal. •tu d Notary Pubic OPTIONAL Though the information below is not required by law, it may prove valuable ro persons retying on the document and could prevent fraudulent removal and reattachment o`this form to another document. Description of Attached Document Title or Type of C Document Date: umber of Pages: _ 11 Signer(s) Other Than Named Above: -C�.l Capacity(ies) Claimed by Signer(s) .2 Signer's Name: ❑ Individual ❑ Corporate Officer Tttle(s): ❑ Partner — ❑ Limited C General C Attomey-in-Fact ❑ Trustee ❑ Puardian or Conservator Other: Top of thumb here Signer Is Representing: Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General Attomey-in-Fact ❑ Trustee Guardian or Conservator - r [IOther: Top of Ihur'b We Signer Is Representing: 0 1g9 i National Notary Assoaation • 8236 Rerrtrnet Aw.. P.Q. Box 7184 • Canoga Park. CA 91309.7184 Prod. No. 5907 Reorder. Can Toi-Free 1.NO-878-6827 } Recording requested by: Sea Wind Escrow Co., Inc. 17111 Beach Blvd., Suite 100-101 Huntington Beach, CA 92647 When recorded mail to: Redevelopment Agency City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk Recorded in the County of Orange, California IIIIIIIGary L. Granville IfIIIIIIIIIIIIIIIIIIfIIIIIIIIIIIIIIIIIIIIIIIII�III Clerk/Recorder Fee or �IIIIIII IV 005 9031863 09 129980089486 1;32pm 02/18/98 A38 7 6.00 18.00 0.00 0.00 0.00 0.00 ASSUMPTION _ %.GREEMENT The undersigned, Transferee and Transferor -of that certain real property in Orange County, Huntington Beach, more particularly described on Exhibit "A" attached hereto and incorporated herein by reference, which real property is encumbered by a Deed of Trust, dated November 22, 1996, and recorded on July 2, 1997, as Instrument No. 19970315243. Official Records of said County ("Deed of Trust") given to secure a 2t, promissory note dated November 22, 1996 ("Note") executed by Associates Nine a general partnership, ("Holder"), in the amount of Four Hundred and Forty -Six Thousand Dollars ($446,000), do hereby request the Redevelopment Agency of Huntington Beach to consent to the transfer of said real property to the Transferee and to accept the Transferee as new obligors under the Note, and in consideration of the premises and the approval by the Redevelopment Agency of Huntington Beach of the transfer to the Transferee and the assumption by the transferee of said Deed of Trust, the Transferee agrees with the Affordable Housing Agreement and recorded Declaration of Covenants, Conditions, a --id Restrictions, dated November 22, 1996 as follows: 1. To assume and promise to pay the Note and all extensions and renewals thereof; 2. To pay all taxes and insurance premiums and any other sums that may become due and payable under the provisions of the Deed of Trust; 3. To assume and agree to comply with each and all of the terms of the Note and Deed of Trust; 4. That the Transferee may be considered as obligors under the Note and Deed of Trust, and each of them, the same as if said instruments had been executed by the Transferee instead of the Maker thereof, 5. That this assumption shall constitute a release of liability of the original makers, and that the Redevelopment Agencif of Huntington Beach may pursue all This document is solely ror the Official bugIness or the City of flint°��,; �; ,Q.�•�;� as contem piatod t..:_:a- ._: ,ant Code See.. 6103 and should be retarded Free -at ebar. se.o Tax•ExQmpt•Government Agency CITY OF HUNTINGTON BEAC n!e BrockwC - City Clei Byi'...) (WPUVCity Clerk UAPAULWORMI-27 DOC )T 4 ZN IN WITNESS WHEREOF, the parties execute this Agreement in the County of Orange, State of California, as of the date first written above. Dated: February 2,1998 TRANSFEROR: Dated: February 2, 199 8 Associates Nine B Name: Title:General Partner By: L� ame: Title:General Partner By- Na me: Yar Levy Title: i i ideal By: N e: Yael Levy Title: an individual Dated: February 2, 1998 HOLDER REDEVELOPMENT AGENCY OF GT�iQ�EACH By: I I Name: zrley Deal Title: �hairman/� Dated: February 2, 1998 By: T�r"tu Attested to:��� Name: Connie Brockway Title: Agency -Clerk APPROVED AS TO FORIJ. GAIL HUTTOif,• City Attorney Eye Deputy City Attorney e v: FAULNEOM-r DOC J remedies in the Redevelopment Agency of Huntington Beach power against the Transferee independently of the Maker; 6. The transferee acknowledges and agrees to the assignment of the Developer's obligation under the affordable housing agreeme-nt, and the transferee acknowledges and agrees to comply with all of the provisions of tl,.e affordable housing agreement and each of the attachments thereto. UAPAULITOIN 17 DOC J ATTACHMENT NO. A Parcel 1 The 'Vest 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel The West 50 feet of the Fast 200 feet of Block 2I03 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. 11 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of On � te before me, _of �ry PuWj _. , bate Name and Troe o1 omoe e.g., ;lane Doe. �Y PuDlrc') personally appeared wms{a) d Syw[e) ersonally known to me - OR- .. to be the persons,) whose nameW Ware subscribed to the within instrument and acknowledged to me that 4e4helthey executed the same in~their authorized capacityies , and that by • turrt-iv on a pis 474 1494Asatheir signature{sj on the instrument the person(, F *)pt�yP�L'�o<�rrotwn or the entity upon behalf of which the person acted, executed the instrument. 22 2W WITNESS my hand and official seal. rSw alwa of Nolary vr,wc OPTIONAL Though the Information below is not required by law, it may prove vall:able to persons relying on the document and could prevent fraudulent removal and reattachment o` this for) to another document. Description of Attached Document Title or Type of Document: _ .2 - _- Document Date: �l,��P Number of Pages: _ Signer(s) Other Than Named Above:�.��� a" Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner --❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator C✓then-egm*..� Signer Is Representing: Top of tnumti mere Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator P-'tther: C94.,.L Signer Is Representing Top 01 0u mia sere 0 1 "S N•trorul Notary AasoGiaaon • 0236 Remrnet Are , P.O. Boa 7184 • Canoga Park. CA 91309.7t84 Prod. No. S907 Reorder- Call Ta1•Free 1.80"764W i CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No. 5907 State of Ga1►;QC(_V , C, County of Los Nn , Onyka • " • \1 1before me, crlizA e. % - ,..4 O&Q, link c DATE NAME. TITLE OF OFFICER • E.G..'JANE DOE. NO Y PUBLIC personally appeared I NAMES) OF SIGNERS) I personally known to me - OR - ❑ proved to me on the basis of satisfactory evidence to be the persorl(`s),whose names) is/gr� subscribed to the within instrument and ac- knowledged to me that he/sheA_h`ey executed the same in his/her4fFeiYj authorized capacit le , and that by his/her/(S1r signaturr,(s on the instrument the persons , "CHELIE M"` [ or the entity upon behalf of which the cormloonolomm0 t person4) acted, executed the instrument. .� Notary Public — wbmla Loa Angoies county My Comm Expkm Feb 42000 WITNESS my hand and official seal. 4!4 01W. _a - SIGNATURE OF KIVAY OPTIONAL Though the data below is not required by law, it may prove val,Iable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUAL ❑ CORPORATE OFFICER rnE(S: ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIANICONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: NAME OF PE RSON(S) OR ENTITY(IES) DESCRIPTION OF ATTACHED DOCUMENT S5"ON-con A M- TITLE bR TYPE OF DOCUMENT NUMBER OF PAGES 2 -, q-F DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION a 8236 Remmet Ave.. P.O. Box 7184 • Canoga Parts, CA 91309-7184 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No 5907 State of CAL I F'ORN I A County of „ QaAmr; On FEBRUARY 1 1 , 1997 before me, JOYCE ROLLINGS, NOTARY 1SUBLrC DATE NAME, TITLE OF OFFICER - E.G.. -JANE DOE. NOTARY PUBLV personally appeared - HORACE C. STOVALL AND MELVIN FEC MM KWE(S) OF S*NER(S) 1E personally known to me - OR - ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and ac- _knowledged to me that helshelthey_executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. i + -- �JOYCE ROLLINGS! � N COMM. # 1042820 0 s 7 WlAdi eubL1C-CALIFORNIA� 3: ORANGE COUNTY N I ✓ y COMMISSION EXPIRES OCT. 19. 1998-� 6----------------------- OPTIONAL Though the data below Is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER a INDIVIDUAL ❑ CORPORATE OFFICER TME(S) ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIANICONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: "ME OF PERSORS1 OR ENTITY(tE8) DESCRIPTION OF ATTACHED DOCUMENT ASSUMPT 1 ON AGREEMENT TITLE OR TYPE OF DOCUMENT FOUR NUMBER OF PAGES FEBRUARY Z. 1998 -� DATE OF DOCUMENT YARON LEVY AND YAEL LEVY AND THE REDEVELOPMENT AGENCY OF SIGNER(S) OTHER THAN NAMED ABOVE C 1993 NATIONAL NOTARY ASSOC IATION • 8236 Rernmet Ave., P.O. Box 7184 • Canoga Park, CA 91309.7184 r'DrderNO. 2702761 4 `✓ /— _---� Order 1 w N0. 01 -22388 J • ��— e, California of Orange. Loan NO. Recorded in the Goun}}tYClerk/Recorder GraIi'1,.'I,,.'� t-, Na -- - WHEN RECORDED MA1LT0: � •IGarY •��� �2/j��ss ----------- l'.1998QQ�94871.3�p� CON141E BROCKWAY CITY CLERK 00 0 •DO 9©300 000� U 00 0 • 0 •� CITY OF HUNTINGTON BEACH 1 G 6.00 15 S1 P O BOX 190/2000 MAIN STREET 513 HUNTINGTON BEACH CA 92648 SPACE ABOVE THIS LINE FOH RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 9Rn day of FEBRUARY .19 98 -• , by n _ YARON LEVY AM YAEL LEVY. HUSBAND AND WIFE owner of the land here'nafter described and hereinafter referred to as'Owner,' and �y -THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH. A PUBLIC BODY CORPORATE AND Y! r POLITIC' tt,_VVV\ present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as "Beneficiary"; „ter 1~ WITNESSEfH THAT WHEREAS, ASSOC 1 ATES NINE, A GENERAL PARTN1:RSH 1 P did execute a deed of trust, dated NOVEMBER 2 2, 19 9 6 f to FIRST AMER 1 CAN TITLE INSURANCE COMPANY, , as trustee, Covering: SEE EXHIBIT 'A' ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. This document Ts solely Tor'ths Tax -Exempt -Government Agency This document is solely for the • official buafress or tno Cit afficic? I-1;..in s , s.., y CITY OF HUNTINGTON BEACH of tho Cit�r of Huat.~-ton FeA:h. as contem— • or H t.•i •.ur, ;� fir., !a. a:; Coatem- nnie'Srotkwiy. CMC n'-nLi1 ► �_ :: •• •�o ; r ^trr,;nt Code plated ;it{a•3:• �v �s: ^.=acnt Coda - =C;ty cr rk " _ r Sec. Ci03 tt:jd s'�onld be recorded Sec. 61C3 and .,lZould De recordeQBy: - �` tree of charge. free Or CtltsrfiP. puty City Clerk to secure a note in the sum of $ 446.000.00 , dated NOVEMBER 22. 1996 , in favor of THE REDE VELOPMENT AGENCY OF THE CITY OF HUM' 1 NGTON BEACH , which deed of trUSt was recorded JULY 2, 1997 , as Instrument No.97.0 31 a 2 4 s , in Book - - - - - , Page - ' ' ' Official Records of said county; and WHEREAS, Owner has executed, or is about to execute, a deed of trust and note in the sum of g 1 .3 9 2.2 s o . 0 0 dated . in favor of HOME SAV I NGS OF AMER I CA. FSB , hereinafter referred to as "Lender; payable with interest and upon the terms and conditions described therein, which deed of trust Is to be recorded concurrently herewith; and WHEREAS, it is a condtion precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and (continued on reverse side) 12%(11%) • Pspa 1 012 WHEREAS, lender is willing to make said loan provided the deed of trust securing the same is alien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender, and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner, and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust first above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and iri order to induce Lender to snake_ the loan above referred to, it is hereby declared, understood and agreed as follows: (1) That said deed of trust securing said note in favor. of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed -of trust first above mentioned. (2) That Lender would not make its loan above described without this subordination agreement. (3) That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shalt supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) (b) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and (d) An endorsement has been placed upon the note secured by the deed of trust first above mentioned that said deed of trust has by this instrument been subordinated to the lien or charge of the deed of trust in favor of Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. THE REDEVELOPMENT AGENCY OF THE C 1 TY Or Htin% 1 NCTON BEACH. ��� �iY COr�] 1 E 9ROClCWAY, AGENCY CLERK L.E l JIMW (.-q,�7� Beneficiary -' YA L LEVY/ Owner David C. Biggs, Director of Economic Development (ALL SIGNATURES MUST BE ACKNOWLEDGED) . . IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIHTTORNEYS WITH RESPECT THERETO. (CLTA SUBORDINATION FORM Aj n P� i a Z ESCROW NO: 01-22588-1 DATE: FEBRUARY 3, 1998 A.F.N. 025-191-28, 29 AND 31 "EXHIBIT A" LEGAL DESCRIPTION PARCEL 1: THE NEST 50.00 FEET OF THE EAST 250.00 FEET OF BLOCK 2108 OF THE EASTSIDE VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 4, PAGE 65 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA. PARCEL 2s BLOCK 2108 OF THE EASTSIDE VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 41 PAGE 65 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, CALIFORNIA. EXCEPT THE EAST 250.00 FEET THEREOF. PARCEL 3: THE WEST 50.00 FEET OF THE EAST 200.00 FEET OF BLOCK 2108 OF THE EASTSIDE VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 41 PAGE 65 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, CALIFORNIA. J CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No. 5901? State of e/f County of e' On V before DAIS NAME, MLE OF DTFICE o.,'JANE DOE. NC)TA�rn"USLI� personally appeared NMAEA OF SM4Esjss✓ personally known to me - OR - to be the personA whose name. a) s3l'e subscribed to the within instrument and ac- knowledged W me ihatgi64e4aq executed the same in hi lei authorized capacity(io"), and that by his #ef,4�r signatureM on the instrument the person(&), or the entity upon behalf of which the person(-&) acted, executed the instrument. E:'ZA3_ H E41Z.NG WITNESS my hand and official seal. C0'r:rr.;s5'0'1 0 1150C21 7 No•a y PLX4;c - CQI'fornia :* y Orange c3unty Mt Cam--^. 6_-ies Ajg 29, 20C 1 SIGNATURE 6rNOTAny OPTIONAL Though the data below is not required by law, It may prove valuab'e to persons relying on the document and could prevent fraudulent reattachment of this loam. CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUAL ® roRPORATE OFFICER T (8t ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIANlCONSERVATOR DESCRIPTION OF ATTACHED DOCUMENT , u4 & -cel n2,4 ars ree mesz f ITLE TYPE OF DOCUMENT %hre. e NUMBER OF PAGES ❑ OTHER:rcrQ�-�j/ DATE OF DOCUMENT SIGNER IS REPR Gh��Z NAME WWASOW ENTITY /C 'e�O ✓ I T SIGNEF(g) OTHER THAN NAMED ABOVE - 01993 NATIONAL NOTARY ASSOCIATION - 8236 Plummet Ave., P.Q. Box 7164 - Carvosa Pa•k, CA 913U9.7164 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of of On & rzca+N 5-. m-ge before me, A /Velse-h, (1f��i pu Grp, ate Nano and Title of Otaeer {e g..'Jane Doe. Notary c') personally appeared et) M N 16 �O C�CWA flaf ws) of Spnsrfaf �Cpersonally known to me — — e to be the person(&) whose name , ' subscribed to the within instrument and acknowledged to me that 4, 44ey executed the same in /their authorized capacityfe&), and that by LALM4hek signaturaW on the instrument the personM, c«rrrtraton "'o # I to3e�e or the entity upon behalf of which the person"M acted, � raa1Q„P,m—c4owisfe executed the instrument. c npo coulty W COS` Fatp*tKjuA IM WITNESS my hand and official seal. Signature of Hoary Now 0 o1VAL Though the information below is not required by law, it may prove vakable to persons relying on Me document and could prevent frau[fulent removal and reattachment o' this tor" to another document Description of Attached Document Title or Type of Document: u,w-44f Vair&_" 1'ev-y e?s c a t.,:x.j IJr.%k-� Document Date: �� Number of Pages: `T' • G - Signer(s) Other Than Named Above: _�Q d [ 99S D,iriivr �c'ertcti.+-c ���PID�.�k.� Capacity(ies) Claimed by Signer(s) Signer's Name: 6QNA1& Zpe4elewAY ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner -- ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ` `)< Other: A66sxl CUxk r Signer Is Representing: etc KtGee &-d c olra a A Top of thumb here Signer's Name: J C] Individual Corporate Officer Ttle(s): Partner -- ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing: N, Top of Inumb here 0 1995 N;Donal Notary Association . 8236 Forma l Ave.. P.O. Box 7184 • Canoga Park. CA 91309.7184 Prod. No. 5907 Reorder. Can Tod -Free 1-W"76.6827 IN !PALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No. 5907 State of _ _ _ _CCINJS'w - Ccam _ County of AfigS On VIzA . S� k\ kgrkg before me, Vj""c.t.'k VA ikls.r t P'j h k1 c_ , OATS NAME. THE OF OFMA - .G..'JAHE DOE, WOTAAY PUBW personally appeared _ 'At^c% U jA C,4-,A Lk, ' I - - - - NAME(S) OF SIGNER(S) personally known to me - OR - ❑ proved to me on the basis of satisfactory, evidence MKXUE M NY Co111n*dMflow%& 70 Llw Notary RAAC -- cal tomb lna Mgeies couNY 161Y CorrmEn*es Feb 4WPW �i to be the persono) whose nam� is ar subscribed to the within instrument and ac- knowledged to me that he/sh the executed the same in his/hee2E@r authorized capacit ie ), and that by his/her heir' signatures) on the instrument the perso ); or the entity upon behalf of which the persor4))acted, executed the instrument. WITNESS my hand and official seal. OPTIONAL ira SIGNATURE OF IVRY Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED EY SIGNER ❑ INDIVIDUAL ❑ CORPORATE OFFICER TITLES) ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIANICONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: KAIAE OF PERSONS) OR ENTITY9ES) DESCRIPTION OF ATTACHED DOCUMENT �sborc�,;,-,«�:ter• Ac,t�er•,�t� TITLE OR TYPE OF DOCUMENT -- NUMBER OF PAGES _503-- VWi DATE OF DOCUMENT SIGNERS) OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOZIATION a a236 Remmet Ave., P.O. Box 7184 a Carwoa Park, CA 91309.7184 e9ea W14a �r�tau� ��., Inc. ESCROW NO.— --01-2,ASGS I DATA 01-10-29 RECEIVED OF C I TY OF HUNT I WrOK BEACH I OM BRUCH I G) the following documfnts: 1. S f GM0 SUBORD 1 NAi 1 ON AC419sum"T THIS RECc"l;'T IS T V BE USED FOR DOCUMENTS ONLY �`1-- By t W.S . PRESS 1 I °ea Wind &isctow W10., Inc. TO; SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HU'JTINGTON BEACH, CA. 92647 (7L4) 848-9000 SALE ESCROW INSTRUCTIONS V'/e hereby ceft, and exa4't tY this t0 be a SEA IVIN� Esc 0t the Odgfnajue AOW CO•, INC. ESCROW NO: 01-22588—J DATE: NOVEMBER 11, 1997 PAGE 1 OF 7 JOYCE ROLLINGS CSEO/PRESIDENT BR3KER WILL HAND YOU FOR BUYER s 75,000.00 BUYER WILL HAND YOU PRIOR TO CLOSE OF ESCROW 1 2829184.82 TRUST DEED NOW OF RECORD IN THE APPROXIMATE AMOUNT OF 1 43S,565.18 DEED OF TRUST TO RECORD 1 1, 592, 250.00 TOTAL SALES PRICE 1 2f 385, 000. 00 BLPIER will deliver to you any instruments and/or funds required from Buyer to enable you to comply with these instructions, all of which you are authorized to use and/or deliver on or before JANUARY 30, 1958, and when you are in a position to obtain a standard Policy of Title Insurance through CCMMONWEALTH LAND TITLE CO., provided that said policy has a liability of at least the 'esount of the above total consideration, (ALTA or other fare of coverage in connection with Buyers financing to be furnished lender by Buyer), covering the following described property in the City of Huntington Beach, County of Orange, State of California: PARCEL 1: THE WEST 50.00 FEET OF THE EAST 250.00FEET OF BLOCK 2108 OF THE EASTSIDE VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 4, PAGE 65 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE: COUNTY, CALIFORNIA. PARCEL 2: BLOCK 2108 OF THE EASTSIDE VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 4, PAGE 65 DF'MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, CALIFORNIA. EXCEPT THE EAST 250.00 FEET THEREOF. PARCEL 3: THE WEST 50.00 FEET OF THE EAST 200.00 FEET OF BLOCK 2108 OF THE EASTSIDE VILLA TRACTS AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 41 PAGE 65 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, CALIFORNIA. (SELLER STATES PROPERTY ADDRESS IS: 725-733 UTICA AVENUE, HUNTINGTON BEACH, CA. 92648) INSURING TITLE VESTED IN: JERRY LEVY (OR SEE BELOW) SUBJECT ONLY TO: 1. 2ND HALF (1997-98) installmentts) of the General and Special County, and City (if any) Taxes, including any special district levies, payments which are included therein and collected therewith, for current fiscal year, not delinquent, including taxes for ensuing year, if any, a lion not yet due or payable. 2. Covenants, conditions., restrictions, reservations, rights and rights of way of reccrd, easements and the exception of minerals, oil, gas, water, carbons and hydro — cartons on or under said lend, now of record. 3. Deed of Trust.to-record securing -a Note -in -the -amount of $19-592,250.00. - 4. Deed of Trust of reccrd securing a Note with an unpaid principal balance in the approximate amount of $435,565.18 to be subordinated to the new 1st loan as shown below. Deed of Trust to record, and Note secured thereby for 11,592,250.00 as per their terms; It is is acknowledged that Buyer will apply for said loan through a lender of Buyers, choice, under a FIXED rate loan program, at a rate established by lender NOT EXCEEDING 8.30 per annum, amortized over a period of 30 years (due in 10 years). Buyer agrees to pay new lenders required loan fee(s) and related expenses and acknowledge that signature on final documents or other instructions presented by lender will be deemed full approval of the terms, conditions and content thereof and will also be considered TO: SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HUN TI NGTON PEACH, CA. 92647 (714) 848-9000 SALE ESCROW INSTRUCTIONS - ESCROW NO: 01-22588—J Vie e hero y certify this to bn a }n PAGE DATE: NODFM �R 119 1997 SEA LYWhD COPY of the Co..I al. JOYCE ROLLINGS A�Y,I�, N 0.CSEO/PRESIDENT n escrow agent's authorization to comply with all lender requirements included therein. It is acknowledged that the closing of this escrow is subject to the BUYER and PROPERTY qualifying for said new Ioan. Buyer agrees to ASSUME the existing Deed of Trust of record, in favor of the CITY OF HUNTINGTON BEACH, securing a note with an approximate unpaid balance of 1435,565.18. Escrow holder is instructed to obtain a beneficiary statement from lender and should said statement indicate the unpaid principal balance to be more or less than $435,565.18 the CASH THROUGH ESCROW shall be adjusted accordingly. Buyer agrees to pay any cost associated therewith. See additional instructions below regarding the same. Buyer and Seller acknowledge that the above 2nd Note and Deed of Trust has an original 30 year amortization and that said obligation is discharged annually by 1.00% by the City of Huntington Beach. Buyer has reviewed the terms and conditions of such repayment procedure and approves of the same in their entirety. j The parties hereto acknowledge that the City of Huntington Beach will furnish a Subordination Agreement prior to close of escrow, subordinating the above end Note to the new 1st loan obtained by Buyer; Buyer and Seller acknowledge that their signature on the same, as applicable, will be deemed their full approval of the form and content thereof and will be considered escrow agent to record the same concurrently with all other documents required hereby. Buyer agrees to act diligently and in good faith to obtain all applicable financing and to submit a written application to obtain said loan to a bonafide lender within SEVEN (7) days of the Effective Date of November, 6, 1997 and shall authorize said lender to con`irm in writing to Seller that Lender has received said application. If Buyer fails to apply as required hereby or if Buyer fails to notify Seller in writing that Buyer has obtained said loan within FORTY (40) calendar days of the Effective Date, this escrow shall be canceled and the Agreement betvieen Buyer and Seller will be terminated and Buyers deposit shall bi returned to Buyer, unless both Buyer and Seller, extend this time limit in writing. You will be handed instructions as to the same, when and if applicable. Buyer agrees to accept a recourse loan, if necessary, to order to secure financing at S1,f05,Q40.00. Seller is responsible for the payment of any prepayment penalties assessed in connection with existing financing (exclude existing 2nd with the City of Huntington Beach). All parties acknowledge that Buyer deposited 175,000.00 with MARCUS 1( MILLICHAP REAL ESTATE INVESTMENT BROKERAGE: COMPANY, which sum has been deposited herein for account of Buyer. Buyer agrees to furnish new fire and flood insurance, as required, in a fora and amount acceptable to lender.and to pay the first annual premium(&) thereon through this escrow for Buyers agent will provide a paid receipt for same). SELLER EXCHANGES Buyer agrees to cooperate should Seller elect to sell the property as a part of a like —kind exchange under IRC Section 1031. Sellers contemplated exchange shall not impose upon Buyer any additional Iiability or, financial obligation and Seller agrees_ to hold Buyer._haraless.fro•_any-liability_that_might_arise from such —exchange. --- This_ Agreement is not subject to or contingent upon Seller's ability to acquire a suitable .exchange property or effectuate an exchange. In the event any exchange contemplated by Seller should fail to occur, for whatever reason, the. sale of the property shall nonetheless be consummated as provided herein. . BUYER EXCHANGE: Seller agrees to cooperate with Buyer in completing a 1031 tax —deferred exchange on a delayed basis. Buyer's exchange shall not impose upon Seller any additional liability or financial obligation and buyer agrees to hold Seller harmless from any liability that might arise from such exchange. This transaction is not subject to or contingent upon Buyer's ability to dispose of its exchange property or effectuate an exchange. In the event any exchange contemplated by Buyer should fail to occur, for whatever reason, the sale of the property shall nonetheless be consummated as herein provided. s TO: SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HUNTINGTON BEACH, CA. 92647 (714) 848-9000 . • SALE ESCROW INSTRUCTIONS ESCROW NO: 01-22588—J DATE: NOV EMBE R 11, 1997 W e hQrEbY mod; PAGE 3 OF 7 ar)d Exact cv fY thiS fo b,3 s t, fjQYCE ROLL I NGS SA�fI�vDES�AOWCOfli a,CSEO/PRESIDENT lr% Buyer reserves the right to modify the exact manner inrwhic -itle to the subject property is to be vested; these instructions will be amended for the same, when applicable. Seller agrees to execute a new/corrected Grant Deed, when applicable and upon demand. The parties hereto acknowledge that MARCUS b MILLICHAP REAL ESTATE INVESTMENT BROKERAGE COMPANY is representing both parties to this transaction, that such dual agency has been explained to them and they have freely and fully consented to such dual rept•esentation. RENT STATEMENT/PRORATIONSs Seller agrees to provide a rent statement for proration purposes as noted herein; it is agreed that all tenant deposits or other concessions shown therein, including key, cleaning, security and/or last months+ rent, shall be debited to Seller and credited to Buyer at the close of this escrow. j SECURITY DEPOSITSs Security Deposits, if any, to the extent that they have not been applied by Seller in accordance with the rental agreements and current law, shall be transferred to Buyer (see additional instructions regarding same). Seller is responsible to notify each tenant, in compliance with Civil Code Section 1950.5(g) for residential property or Civil Code 1950.7(d) for non—residential property, of the transfer of title; said notice(s) to be given immediately following close of escrow. Any future rent concessions and/or credits included in the Rent Statement furnished by Seller, including any advance rents collected by Seller, shall be debited to Seller and credited to Buyer at close of escrow. NUMVER OF UNITS: Seller warrants the property is legally approved as THIRTY—SIX (36) units. At the close of this escrow, Seller shall deliver to Buyer all items in Seller's possession and/or under Sellers' control, including: (a) All construction, repair, remodeling and maintenance contracts concerning the property obtained from any governmental entity, including but not limited to, Certificate(s) of Occupancy, Conditional Use Permits, Development Plans, licenses, permits and warranties pertaining thereto. (b) An assignment of warranties and permits, in blanket form, executed by Seller, the terns and conditions of which shall be ■utually agreed upon between Buyer, and Seller prier to close of escrow. TENANCY STATEMENT: Seller warrants and represents that none of the tenants in occupancy of any unit of the property are "Section 8 Recipients" and that none of the units will be rented to Section 8 Recipients during the course of this escrow. LIQUIDATED DAMAGES: / Buyer and Seller acknowledge that the Agreement which they have executed includes a provision for Liquidated Damages, which provision states, among other things, that it would be impracticable or extremely difficult to fix actual damages in the event of a default -by -Buyer. _Should this escrow cancel by -- reason of any default of Buyer, Seller shall be released from obligation to sell the property to Buyer and shall retain Buyers deposit, including any increase thereof, as a reasonable estimate of Seller's damages; said retention to be Seller's sold and exclusive remedy in law or at equity for such default of Buyer. Buyer and Seller further acknowledge that funds deposited in escrow trust accounts are not released autoratically in the event of a dispute. Release of funds requires either written agreement of the parties, judicial decision or arbitration. ARBITRATION OF DISPUTESs If a controversy arises with respect to the subject Patter of the Purchase Agreement or these Escrow Instructions or the transaction contemplated hereby (including but not limited to the parties' rights to the deposit or the payment of commissions as provided herein) Buyer, Seller and Agent have agreed that such Y TO: SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HUN'TINGTON BEACH, CA. 92647 (714) 848-9000 SALE ESCROW INSTRUCTIONS N/e herLh ESCROW NO: 01-2258a-3 Y certify this to DATE: NOVEMBER i 1, 1997 and e;rrCt Copy of the ongin t CO.UPPAGE 4 OF 7 SEA yyt10 EOCROW JOYCE ROLLINGS n , it, CSEO/PRESIDENT controversy shall be settled by final, binding arbitration in accordance with the Commercial Arbitration Rules of the American -Arbitration Association and judgment upon the award rendered by the arbitrator(s) say be entered in any court having jurisdiction thereof. NOTICE: INITIALING OF THE FOREGOING MEDIATION/ARBITRATION IN THE AGREEMENT HAS CAUSED THE RESTATEMENT OF SAME WITHIN THESE ESCROW INSTRUCTIONS. BY INITIALING SAME, YOU HAVE AGREED TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECID=D BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PRDVISION, YOU MAY RE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION IS VOLUNTARY. i TAX WITHHOLDING: (A) Under the Foreign Investment in Real Property Act (FIRPTA), IRC Section 144S, every Buyer of U. S. real property must, unless an exemption applies, deduct and withhold from Seller's proceeds, 10.009 of the gross sales price and send it to the Internal Revenue Service, if the Seller is a "foreign person" under that statute. (B) In addition, under California Revenue and Taxation Code Sections 18005 and 26131, the Buyer must deduct and withhold ar, additional 3-1/3rd of the gross sales price from Seller's proceeds and send it to the Franchise Tax Board if the Seller has a last known address outside of California or if the Seller's proceeds will be paid to a finLncial intermediary of the Seller. (see additional .instructions regarding the same). (C) Penalties may be imposed on a responsible party for non-compliance with the requirements of these statutes and related regulations. Seller and Buyer agree to execute and deliver any instrument, affidavits -statement or instruction reasonably necessary to carry out these requirements, and to withholding of tax under those statutes if required. FELLERS AFFIDAVIT OF NON -FOREIGN STATUS AND/DR CALIFORNIA RESIDENCY (CAR FORM AS-14) OR BUYERS AFFIDAVIT (CAR FORM AB-11) IF APPLICABLE, SHALL SATISFY THESE REQUIREMENTS. STATE FRANCHISE TAX WITHHOLDING: This is a notice of a withholding requirement pursuant to State of California Revenue and Taxation Code resections 18805 and 26131 of sales of real property. Effective January 1, 1991, California law requires a state income tax withholding of 3 1/3% of the total sales price of all real property by a Seller with a last known address outside the boundaries of California. This law applies to both individuals and corporations. Exempt from this requirement is: (1) property with a current California homeowners exemption on the real property which is the subject of this escrow; (2) property with a sales price which does NOT EXCEED 4100,000.001 (3) property owned by a partnership, (4) property being acquired in foreclosure by a corporation or (5) property being sold wherein the Seller is a bank acting as trustee of a Deed of Trust. Unless a written statement to the contrary is received herein from the Franchise Tax Board prior, to close of escrow, it is understood that escrow agent will, without further authorization or instruction, withhold said sus from proceeds due seller and that said sum will be held in escrow until the loth day of the month following the month in which this escrow is closed, at which tine said sum will be remitted to the Franchise Tax Board for account of Seller, with California Fors 597. Seller acknowledges that California Fors 597-A is available for application of a reduction or waiver of withholding, and if subnitted through this escrow, any such waiver or reduction must be confirmed by -the Franchise' -Tax Board, -in writing, prior to the scheduled release date outliined herein. MEMO, as a matter of record only, with which escrow agent is not to be further concerned nor liable, the parties hereto mutually agree that: 1). POSSESSION: Subject to rights of tenants now occupying the property, possession shall be granted Buyer at close of escrow. 2). PERSONAL PROPERTY: All existing items of personal property now on the premises and Lsed in the operation of the business are included herein. TO: SETA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HU14TINGTON BEACH, CA. 92647 (714) 848-9000 SALE ESCROW INSTRUCTIONS Vie heretry comity this 10 t)(? a tru© and exact copy of the original. SEA MIN1) ESCROW CO., INC. ESCROW NO: 01-22588-J DATE: NOVEMBER 111 1997 PAGE 5 OF 7 JOYCE ROLLINGS CSEO/PRESIDENT 31. CONDITION OF PROPERTY: It is understood and agrel;d that the property is being sold "as is"; that Buyer has, or will have prior to the closing date, inspected the property; that neither Seller nor agent makes Any representation or warranty as to the physical condition or value of the property or its suitability for Buyer*.s intended use. 4). RISK OF LOSSi Risk of loss to the property shall be borne by Seller until title has been conveyed to Buyer. In the event that the improvements on the property are destroyed or materially damaged between the date hereof and the date title is conveyed to Buyer, Buyer shall have the option of demanding and receiving a return of the entire deposit, less costs incurred, and being released from all obligations hereunder or, alternatively, taking such improvements as Seller can deliver. !Upon Buyers physical in!pection and approval of the property, Seller shall maintain the property through close of escrow in the sane condition and repair as approved, reasonable wear and tear excepted. 5). SMOKE DETECTOR(S), FIRE EXTINGUISHER(S), SPRINKLERS AND HOSS(S): If required by law, approved smoke detector(s), fire extinguisher(s), sprinkler(s) and hoses() shall be installed prior to close of escrow at expense of Seller; Seller, where required and prior to close of escrow, shall provide to Buyer a written statement of compliance. *eeee*erreee*e***eee*eeeeeae***s*****END OF MEMO ITEMSs***se#**e*f*e*eee***e*e***ef*e*fe These instructions are rot intended to cancel, supersede or modify the terms of the Real Estate Purchase Agreement, Addendums and/or Counter offers thereto by and between the parties insofar as said agreement relates to matters not actually pertinent to the escrow instructions such as, but not limited to, inspections, repairs, warranties,. personal property or possession. The parties hereto further acknowledge receipt of "Disclosure Regarding Real Estate Agency Relationships" and state that they have executed the sane acknowledging their understanding of representation(s) therein defined. Escrow holder is hereby authorized and directed to provide copies of these instructions, any amendments or supplements hereto, and any related documents, including closing statements to any lender or broker identified herewith. UNLESS AND EXCEPT specifically stated herein, it is agreed by and between the parties hereto that each party is to pay their own normal costs and charges, in accordance with customary escrow practice in Southern California. Buyer and Seller are aware that SEA WIND ESCROW CO., INC. may incur certain expenses during the course of processing this escrow which must be paid prior to the close of esc:^ow. Such costs may include, but are not limited to, courier fees, overnight tail service, appraisal and credit report fees, association documents and demand statement fees. Escrow holder is authorized and instructed to release funds for payment of such costs, prior to the close of escrow, from funds deposited into escrow by Buyer. Parties acknowledge that said funds are not refundable. At the close of escrow, Escrow holder is authorized to charge the.appropriate party for_costs_incurred, and is released from any.rall liability in connection with complying with this transaction. In the event Buyer, Seller or Agent and/or assigns, utilize "facsimile" transmitted instructions by (telefax, etc.), escrow holder is instructed to rely and act upon such instruction in the same manner as if original signed instructions and/or amendment(s) were in the possession of escrow holder and Buyer and/or Seller agree to forward signed hard copies of instructions, and or amendments within 48 hours of transmission. Escrow holder shall have no liability to any party for relying upon facsimile instructions which were erroneously transmitted to escrow holder. Buyer and Seller agree that when necessary to permit compliance with closing instructions, escrow holder may rely on facsimile transmitted demands. r TC: SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SUITE 100-101 HUNTINGTON REACH, CA. 92(.47 (714) 848-9000 SALE ESCROW INSTRUCTIONS VVC hereb/ car,;ty this to be a true and exaci COPY Of the Original. n Y`l'Nr- ESCF1OVVCO., INC. ESCROW NO: 01-22580-J DATE: NOVEMBER It, 1997 PAGE 8 OF 7 JOYCE ROLLINGS CSEO/PRESIDENT THE PARTIES HERETO ACKNOWLEDGE that they are aware that a lien of Supplemental Taxes will be assessed pursuant to Chapter 498, Statutes of the State of California, 1983, based on the Change of Ownership contemplated hereby. Unless notified to the contrary, prorations shall be based upon the amount of the actual tax bill or statement presented into escrow, or tax figures as furnished by the title company named herein, based on that portion of the subject property which is included therein. TH' PARTIES HERETO FURTHER ACKNOWLEDGE that they are aware that the California State Legislature has passed a law directing the County Assessor to provide and require the return of a "Change of Ownership Statement" from all property owners concurrently with any ownership change; you are instructed to attach said form to the Grant Deed to file through this escrow, as completed by Buyer. 'Buyer understands that in the event said form is not returned prior to closing or is submitted and is unacceptable for any reason, the County Assessor will charge a fee of $20.00 for the same and Buyer -will be required to file a statement with the County Tax Assessor's office within 90 days thereafter (and if not filed, Buyer is subject to additional penalties as may be imposed by the County Tax Assessor's office). Debit Buyer, at close of escrow, as applicable in this regard. NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY CONTAINED IN THESE ESCROW INSTRUCTIONS OR ANY SUPPLEMENTS OR AME11DMENTS THERETO, ESCROW HOLDER SHALL NOT BE RESPONSIBLE IN ANY WAY WHATSOEVER FOR THE SUFFICIENCY, VALIDITY DR CORRECTNESS OF ANY SIGNATURE OF ANY PRINCIPAL TO THIS ESCROW OR ANY THIRD PARTY TO THIS ESCROW, N7R FOR THE SUFFICIENCY OR COFAECTNESS AS TO FORM, PIANNER OF EXECUTION CR VALIDITY OF ANY DOCUMENTS DEPOSITED IN THIS ESCROW, NOR AS TO THE IDENTITY, AUTHORITY, OR RIGHT OP ANY PERSON EXECUTING THE SAh._, EITHER AS TO DOCUMENTS OF RECORD OR THOSE HANDLED IN THIS ESCROW. In accordance with the manner specified under the "General Instructions" shown an the reverse of the last page of these Escrow Instructions, you are authorized and instructed to adjust or prorate the following to CLOSE OF ESCROW: TAXES AND RENTS. In addition to the aforementioned sum, Buyer will hand you, before the date of shown on page one, sufficient funds to cover adjustments and prorations as hereinbefore set out, Buyer's escrow fees, drawing fees, usual recording fees, Buyer's portion of monument and/or sub -escrow fee, and fire insurance premiums, if applicable. Seller will hand you all instruments and/or funds necessary to enable you to comply with these instructions. You are authorized to use and/or deliver these instruments and funds as instructed, providing you hold for the account of the Sellers within the time limit provided for, instruments called for in these instructions and all monies due, plus or minus the above prorations and adjustments. From said monies, you shall ded.ict and pay Seller's escrow fees, drawing fees, usual recording fees, Seller's portion of monument and/or sub -escrow fee, evidence of title fee, documentary transfer tax,,as required. You are authorized to pay off bonds, aSsessments and/or taxes, also any encumbrances of record, plus accrued interest and charges, if any, to show title as called for in these instructions. You are instructed to order the title search as soon as possible. Pay commission due broker(s) as provided in separate instructions. e �*********�*e��em•*e-*s`�t*�******eeee*��+�a***a������ea***�e��**�*��m_aa:r* 11 12 OCKMLLROFP 1HA1 M W I ND ESCROW QO.. INC. Corporation licensed hi the Peoart tint of Corearat f ons (Los Angeles office). -State of California. (LICENSE #i963-0441) THE PARTIEra TO THIS ESCROW FURTHER UNDERSTAND AND ACKNOWLEDGE THAT ESCROW AGENT DOES NQT AND WILL NOT PROVIDE LEGAL ADVICE OF ANY KIND AND IS MT LICgNSED DR QUALIFIED TO DO 50. SISN.ITURE PAGE ATTACHED AS PAGE 7 OF THESE ESCROW INSTRUCTIONS. TO: SEA WIND ESCROW CO., INC. 17111 PEACH BLVD., SUITE 100-101 HUNTINGTON BEACH, CA. 92E.47 (714) 848-9000 SALE ESCROW INSTRUCTIONS (SIGNATURE PAGE) WO her 'fir rr?;r:�, ESCROW NO: 01-22588-J 8nd Matt I r this to t>, 8 t�vPATE: NOVEMPER 11, 1997 $E,q Ylf�D A,� of tree O: t-'�:nfl' PAGE 7 OF 7 ESCAOb'jCO., ffJC. JOYCE ROLLINGS CSEO/PRESIDENT EACH OF THE UNDERSIGNED STATES THAT THEY HAVE READ THE FOREGOING INSTRUCTIONS TO ESCROW INSTRUCTIONS, UNDERSTANDS AND AGREES TO THEM. THE UNDERSIGNED FURTHER ACKNOWLEDGE RECEIPT OF A COPY OF THESE INSTRUCTIONS. BUYER'S SIGNATURE: (INITIAL WAGE 3) JERRY LEVY MAILING/FORWARDING: (PLEASE FURNISH)= SELLER'S SIGKATURE3 (INITIAL PAGE 3) ASSOCIATES NINE, A GENERAL PARTNERSHIP HORACE C. STOVALL RECEE STOVALL MARGARET EGGERS 11APOLD WIEGMANN MELVIN HECKMAN LEON EGGERS GLORIA WILLIAMS AUGUSTINE LAWRENCE D. SCHLEY e EAFLEEN A. SCHLEY MAILING/FORWARDING: C/O 948 11TH STREET, HUNTINGTON.BEACH, CALIFORNIA 92648 k 5 s 6EKXL INSIRIE1106 FOR Sfg.E E9fJtv11 IT IS MUIt>< IT UMERSIM 11116 AGREED TO BY f!L If PARTIES OF 11119 ESt31011, JOIMTIY 41D SE RnLLY, Time The adjvstoesls and/or proratioos provided Iw so prior pales, shall be lade to accordance with the following lastructieest I. Charge the Buyer, vendee or grantee end credit the Seller, vtsdw or graater'the anent of any funds show on beneficiary's 5tairseat as lopevnded for future payment of fire Ivivranct previous, taxes said asrtlale insurance premiums and prorate mortgagt Insurance premiums paid F.N.A. dvrinl the past 12 stoths, based to said statement. tlaless specifically provided for, debtor of said FILL insured loan, or any other lender, valves substitwtton of liability, affected hereby. 2. All Pro -rations and adjosiseels to bt tfftcttd an a 30 daf buss, and close of escrow Is the day instruments art recorded. 3. If any mentioned Tryst Deed Is mile of record, proctrt statement by ewer of the limit secured thereby, or the holder for csiltclion, and adjust irlertst thereon on tht basis of such statestat. I. Adjvsi lattrest on new encumbrances by endwstmemt n astttsl. S. Pro -rate TAILS n real property silly, Will to latest tax bill available Is yet, and charge the Seller and credit the buyer with the sweat of unpaid property lair, sdsich Is a lien based as latest lax bill. b. Pro -rats rentals based so rental statement handed you by Seller. Yew are is ensidrr on basis of said rent statement, that Seiler will collect all rents Mulch fall due prior to the close of this tscrew, unless he Instructs Yom In writing to the esntrary. No adjustment against Buyer sit uncollected rentals. 7. held and transfer INIM 10E as handed low with mortgage clause attached. Prorate premises thereon as per Instructions gives yes sit the rtrerse hereof. Tot oil assume that premiums, so said policies have been paid sad that the policies have set been hypothecated. Deliver to Ist beneficiary, If any. Obtain Insurance roveralt is the total navat of enttmbranets being assumed and/or reeaeded through the escrow at buyer's expense. Return existing policy to Seller sdseo Buyer provides new insurance. b. All disbursements of finds andlsr instruments of this escrow shall be mailed, unregistered, to the designated party is accordance with subject escrow Instructions, address of whom is laeerporattd hertim. Deliver new title policy Is buyer or to holder of first and/or new tociabranee. 9. You shall safe of physical emaminatlss and/or representation of the real ambler personal property described in any document deposited is said escrow. 10. Drpvsit all Funds in camorcties with this transaction In an 'Escrow Fvad Accnel' with any kcal bank, without any liability for imltrest. All disbursements to be made by check of your company on said account sad eoplmyets will set Identify and polio or goaranitt hit or her signature at any bank. 11. Your csmpanr is not responsible for any personal property tax which say be assessed oaf firmer owner of the above described properly, nor for the corporation of license tat of any corporation as a fervor ewer. 12. All of the provisitas, instructions and conditions stationed btreis shall livery withmul restrialin, nay amended and/or suppltaeatil instructions furnished this escrow. All such amended andler supptesealal Instructions oust be Is writing and dtposited with your tsopany. + 13. Yew are not to be held liable for the svfficlenry or reirecluss as to term, sneer or exteutloo, mr validity of any instrument deposited In this escrow, nor as to Idtallty, authority, or rights of any person esectlial the same, nor for fallore is comply with any of the provision of any agreement, contract or other instrument filed herein or referred to herein, aid your duties hereunder shall bt limited to the safekeepiag of such money, instruments, or other doceseats received by yes as escrow holder, and for dispssitlsn of sale In accordance with the written instructions accepted by you IN this escrow. IA. These Instructions val bt executed In eouterparts, each of slsich so executed shall Irrespective of the date of its execution and delivery, be dreoed an original, and said counterparts la;ether shall constitute see and the site Instrument. 15. Any policy of title insurance called for under these Instructions may bt issued for the benefit of all parties In interest and say be procured from any tillt company operating in the country %/sere the property is located sad will be subject to excrptiens and conditions ematained in such company's firm, including but mot limited to as exception that said policy will Not insure against loss by reason of the roservatian or exception of any water rights, claios, or title to water. ; 16. You company Is svlherlted to destroy or otherwise dispose of any and all doevmeats, papers, Instructions, emospondence, and other material pertaining to this escrow at the expiration of five roars from the date of claim or cancellation of escrow without liability and witheml further notice to vs. 17. tie, jointly and severally, agree to save and hold lit hapless by reason of arr misrepresentation or omission by Seller or buyer or his agent as to Stiler's compliance with roles Wier rriviatioss of nay lovepsestal agency, Stator, Federal, Conly, 1lumicipal or otherwise. IA. Parties to this escrow hereby astherize recordation of sill lasirusmots delivered Weigh this escrow, If necessary or property In the issuance of tilt policy of title insurance called for, and Is emossection therewith, leads and/or lmstrusents rmetived to this escrow any be delivered to, or deposited with any title covpaay situated is the Cousty mentioned on the reverse of this@ iastruclioast for the purpose of complyisl with the terms and Conditions of these escrow Instructions. 11. 1% the event that the condillses of this escrow have set bete compiled with at the eopiratima of the list provided ter hertla yeti are Instructed to complete the salt at the earliest possible date thereafter, unless we or either of is have made written demand open yew for the return of the sooty avdlor instruments deposited by either of it, in which case Ism may withhold and step all further proceeding in this escrow without liability for interest on funds held or for damages until receipt of total cancellation loslroctisas by all parties shall have beta deposited is this escrow, whereupon you are then instrvtttd to disburse the escrowed funds and imslruitals accordingly, less your proper charges to the respective parties berets and this escrow will without further Police be considered terminated. 20. You are further authorized and instructed to remit all funds by your check to the partyliesl depositial salt is this escrow If this escrow is mot csnseooated, @less specifically Instructed to the esatrary. 21. 1n the event it oil be necessary or proper for the cosssmsatiss of this escrow, yet are autherlud to deposit or have deposited IvWs or docrernis, or both, with any bank, trust emspany, title Insurance company, savings and leas associatioy building and loan association, Industrial loan company, credit union, admitted insurer, mr licensed eserele agent, subject to yew order pursuant to closing this escrow and such deposit shall be detsed a deposit In accordance with Iht spaniel of those, instraclloNs. 22. Ile, the Buyer and Seller, jsiatly and severally agree that Is the event of cancellation or other lerolullea of this escrow prior to the clesiag 111trtof, use shall pay Ise for ANY exptosts thick yew have lmcurrid or becose obliged for pursuant to those Instructions, and alse a reasonable escrow Ire for the services rsotracltd by vs to be rendered by fow and such exptases, If any, and fees shall he paid sad put in escrow before any canctllatise or other leroinatimm Is effective. 11e agree that said charges for expenses and fees ear be appwilesed betwere us is a manner which, Is your sole discretion, you consider tgoltablt, and that your decision In that regard will be, binding suwl conclusive open is. flay do"atmis or funds deposited with yet say be retained by yes as a lite, to secure to yes the relaburseoeat of and payment of expenses, If any, and fees above provided for. 23. If conflicting demands art made w outlet served open yea or legal actin Is takes is conviction with this escrow yet shall not be required to determine the snot or We any action In the premises, but withhold and stop all further proceeding wllhsvl liability thtrifor, or yet say file svit In laterpleadw or for declaratory rtlitf. If year are required to respond is any legal sasums or prectedlal, or If any actima of laltrpleader or declaratery rtilef is brought by ysu, or if cenflictial demands or Notice by parties to this escrow or by any other party or parties is %erred open rev, we jointly and severally agree to pay reasonable escrow fees sad all costs, expenses, and reasonable atterney's fees esptnded w Incurred by yet as a result of any of the above described events, and a lien is hereby created IN your coopany's favor to cover said' items. we agree to save yea hapless is escrotholder hereunder from all losses and expenses, including reassaablt attorneys fees and court costs sustained by reason of any eiato, demand, er action filed, legal w otherwise, which may In any manner arise out or, or from the properly slsich Is the subject sf this escrow, or sit of or from this escrow, befort or after closing, Notwithstanding anything is these Instructions to the contrary, and is additlea thereto, we jointly • aad severally agree to pay reasonable escrow fee% therefor. 21. Yew art svtherlted and lastrucied to Isrnish a copy of these lastnctisms and/or final closing statement to the Aral Estate Broker represtnting any of lilt parties to this transaction, site to any lender holding, or contemplating, a loss against the subject property. 21 My signature to all Instriseals and lastrwilmas pertaining to this tscrew indicated my unconditional acceptance and approval of save, and I hereby acknowledge receipt of a copy of these lostructless. 26. SLq VIED ESM CO., 111v. Is lietesed by the Deparlmtst of Corporations State of Califwala under Litta t No. 163-0111. `, n r'1 lea wf:pa &C4110M f99100 . 't Inc. ANENT TO ESCROW INSTRUCTIONS TO SEn WIND ESCROW CO.s INC. 17111 BEACH BLVD., SUITE 100-101 HUNTINGTON BEACH, CA. 92647 (7141 80-9000 RE: 725 - 733 UTItrA AVENUE, HLNNTINGTON BEACH, CALIFORNIA 92648 ESCROW NO: 01-22588-J DATE: DECEMBER 19, 1997 PAGE 1 OF I JOYCE ROLLINGS CSEO/PRESIDENT MY PREVIOUS INSTRUCTIONS IN THIS ESCROW ARE HEREBY AMENDED IN THE FOLLOWING PARTICULARS ON.Y: 1. BUYER"S VE97ING IN THIS ESCROW IS HEREBY AMID/CORRECTED TO READ AS FOLLOWS: YARON LEVY AND YAEL LEVY, HUSBAND AND AND WIFE, AS Ca"MITY PROPERTY YOU ARE INSTRUCTED TO CORRECTOR PREPARE A WW GRANT DEED FOR RECORDING THROUGH THIS ESCROW TO REFLECT THE -ABOVE. YAEL LEVY, -as additional Buyer/Vestee'herein, acknowledges receipt of all previous Escrow Instructions prepared in connection herewith, including Amendment dated 11-11-97 and, by signature below, approves of the form and content thereof entirely. Said party further acknowledges receipt of a copy of said instructions. 2. From the commission due Marcus i Millichap Real Estate Investment Brokerages at the close of this escrows you are instructed to deduct the sum of $20,000.00 and credit same to the Buyer herein; said credit to apply towards Buyers non -recurring costs in connection herewith. It is acknowledged that non -recurring costs include lender, title, escrow and recording fees. Buyer and Seller join in the execution of this Amendment to acknowledge and approve the credit from Marcus A Millichap herein aubhorized. EACI1 OF THE UNDERSIGNED STATES THAT THEY HAVE READ THE FOREGOING AMENDED INSTRUCTIONS, LM'.RSTANDS AND AGREES TO THEM. THE UNDERSIGNEI) FURTHER ACKNOWLEDGE RECEIPT OF A COPY OF THESE AMENDED ESCROW INSTRUCTIONS. ALL OTHER TERMS AND CONDITIONS SHALL REMAIN AS WRITTEN. ASSOCIATES NINE»= A GENERAL. PARTNERSHIP Horace C. Stovall Renee Stovall Leon Eggers Gloria Williams Augustine Lawrence D. Schley MARCUS & MIL LICHAP REAL ESTATE INVESTMENT BROKERAGE COP -ANY, By: (authorized signature) Yaron Levy Yael Levy Melvin Heckman Margaret Eggers Harold Wiegmann Earleen A. Schley YVO hereby co.lify this to b� a true and a :act Copy of the crim:n:f. SEA UND ESCHO'N CO., jr °ea WiNW &CtIOW WO 9.1 Inc. ANT TO ESCROW INSTRUCTIONS TO: SEA WIND ESCROW CO., INC. 17111 BEACH BLVD., SMITE 100-101 HUNTINGTON BEACH, CA. 92647 (714) 848-9000 RE: 725 - 733 UTICA AVENUE, HUNTINGTON BEACH, CALIFORNIA 92648 ESCROW NOs 01-22588-3 DATE: NOVEMBER E1, 1997 PAGE 1 OF 1 30YCE ROLLINGS CSEO/PRESIDENT MY PREVIOUS INSTRUCTIONS ARE HEREBY AMENDEDMORRECTED TO READ AS FOLLOWS: IT IS ACKNOWLEDGED BY ALL PARTIES THAT THE 2ND NOTE SECURED BY DEED OF TRUST IN FAVOR OF T11E CITY OF HMTINGTON IIEACH IS DISCHARGED BY THE AMOUNT OF 1/30TH OF THE AMORTIZED AMOLM DUE OVER A 30 YEAR TERM, ANNUALLY (NOT 1.00% AS STATED IN ORIGINAL INSTRUCTIONS). EACH OF THE UNDERSIGNED STATES THAT THEY HAVE READ THE FOREGOING INSTRUCTION, UNDERSTANDS AND AGREES TO THEM. THE UNDERSIGNED FURTHER ACKNOWLEDGE RECEIPT OF A COPY OF THESE INSTRUCTIONS. ALL OTHER TERMS AND CONDITIONS SHALL REMAIN AS WRITTEN. ASSOC TES NINE, A �RTNERSHIP %11-� 0--d�V/ 7 No a--7 . Stovall ,��' Renee Stovall Leon Eggers Gloria Williams Augustine Laur•rnce D. Schley lorry Levy Melvin Heckman Margaret Eggers Harold Wiegmann Earleen A. Schley via Co copy at O':- 1tAG SC i 5pd`W1N0 I `. ova Wind SPA., Inc. 17111 Beach Boulevard, Suite 100 • Huntington Beach, CA 92647 (714) 848-9000 • (800) 821-3377 9 FAX (714) 842-5572 CITY OF HUNTINGTON BEACH ECONOMIC REDEVELOPMENT DEPARTMENT 2000 MAIN STREET HUNTINGTON BEACH, CA. 92648 ATTENTION: DAN BRUENING REQUEST FOR BENEFICIARY'S STATEMENT ESCROW NO: 01-22588-J DATE: FEBRUARY 3, 1998 RE: ASSOCIATES MINE, RE: 725 - 733 Utica Avenue, Huntington Beach, California 92648 An escrow has been opened involving the property encumbered by your above referenced loan. We have been instructed to request a Statement of Condition of your loan for the following purpose: (XX) Transferring title to a new owner, subject to your loan and the Subordination of same to a new 1st loan ( ) Owner arranging additional financing subject to your loan. PURSUANT TO CIVIL CODE SECTION 2943, WE HEREBY REQUEST THAT A TRUE, CORRECT AND COMPLETE COPY OF THE NOTE, ANY MODIFICATIONS THERETO, AND TRUST DEED SECURING SAME BE FORWARDED TO US ALONG WITH THE BENEFICIARY STATEMENT. Kindly fill in and sign the bottom portion of this letter and return the original to this office. For your reference we enclosed: Subordination Agreement, Certified copy of the Sale Escrow Instructions and Amendments (vesting and terms of your Note) and a copy of the Preliminary Title Report. Please advise any further items required. ncerely r JOYCE ROLLING CSEOIPRESIDENT In response to your above request, the following is the present condition of our loan. Principal balance $ Interest paid to Monthly payment $ Next payment due Interest rate X per annum Note due in full Is interest included in payment? YES -NO Special terms or conditions of the Note and Trust Deed: SIGNATURE DATE SIGNATURE DATE / ti Council/Agency Meeting Held: f !� Deferred/Continued to: 211 p roved Condition�ll Appr ved ❑ Denied City Clerk's ignature Council Meeting Date: February 2, 1998 Department ID Number. ED 98-3 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: RAY SILVER, Acting Executive Director or�J PREPARED BY: DAVID C. BIGGS, Director of Economic Development to SUBJECT: Approve Transfer & Assumption of Affordable Housing AnruAmant and Lnan- 725 .733 Utica AvpnitA Statement of issue, Funding Source, Recommended Action, Altemative Action(s), Analysis, Environmental Status, Attachmen s) Statement of,issue: The owners of the project wish to sell and Yaron Levy (California Flood & Flame Construction Corporation) would like to purchase the property. The affordable housing agreement entered into with Associates Nine in 1994, section 5, Pages 4 & 5, allows for the present property owner to transfer title under certain conditions. Funding Source: None as a result of this action. Authorize the Chairman and Agency Clerk to execute the assumption agreement with all the attachments provided of the Affordable Housing Agreement and loan for the property located at 725 - 733 Utica Avenue, a 36-unit affordable housing complex. 1. Do not approve the assumption agreement. Analysis: On May 2, 1994, Redevelopment Agency Resolution No. 257, and City Council Resolution No. 6590 were adopted which approved a loan agreement between the Redevelopment Agency of the City of Huntington Beach and Associates Nine, a California general partnership. It called for a forgivable loan of no more than $546,000 in housing set aside funds in exchange for rehabilitation of 36 units of affordable housing for households earning below 60% of the Orange County median income. REQUEST FOR REDEVELOPMENT AGEITCY ACTION MEETING DATE: February 2,1998 DEPARTMENT ID NUMBER: ED 98-3 The loan and grant was issued to Associates Nine to rehabilitate the 36 units located at 725 through 733 Utica Avenue. The loan amount was $446,000 and the grant was in the amount of $100,000. The loan was a forgivable, non -recourse Second Trust Deed. The Trust Deed, Covenants, and Promissory Note were recorded as a lien against the property. The loan and the accrued interest (which accrues at a rate of 150 basis points over the prime rate) will be forgiven at the rate of 1130 per year over the 30-year compliance period. The principal balance plus accrued interest would be due only if a default occurs, or if the property is transferred to a new owner who wishes to remove the affordability restrictions. The proposed new property owner want to maintain the affordability,and agrees to keep the affordable convenant in place as was originally approved. Economic Development staff, visited other properties that Mr. Levy owns in North Hollywood and Santa Monica that are similar to Utica Avenue. After visiting both sites, speaking to tenants who live at these properties, and reviewing financial and credit documents submitted by the prospective buyer, Economic Development believes that Mr. Levy has the appropriate experience in the ownership, operation and management of rental housing developments like Utica Avenue. As such, we recommend approval of the assumption. Section 5, Paragraph 1(b) requires that the prospective buyer submit a written legal opinion acknowledging that said buyer will assume all of the current owner's duities and responsibilities under the Affordable Housing Agreement and that "such obligations are binding...". Sherman, Nathanson & Miller, counsel for the developer in a legal opinion dated January 21, 1998 states that the obligations of Associates Nine evidenced by the Housing Agreement, Trust Deed, Note and Declaration shall de duly assumed by Levy, and shall be binding upon Levy, upon full execution and delivery of the assignment. 1. 1 Original RAA 2. 1 Assumption Agreement 3. 1 Legal Opinion from Sherman, Nathanson & Miller 4. Information Packet from Yaron Lew RAA Author. Daniel E. Bruening, ext. 5901, Greg Brown, ext. 8831 RAAASUME.DOC -2- 01/26198 11:50 AM v Marcus&Millichap Real Elute 1msstamt &oka;gc Co�play From the desk of Paul Rosow To ! b a., Fr-t, P(. Phone (714) 851-3030 ext 646 Date Subject Number of Pages to Follow: Comments: Paul Rosow 19300 MacArthur Blvd. Suite 150 Irvine, CA 92612 Phone (714) 851.3030 Fax (714) 833-0701 Zt/r'd SS0'ON HDUM 1 3 J da-OI-1-1IW '3 5r'ilLAV WG2:01 8661*r '93J L Atlanta AuSan Ch:t:c.ro Dallas Doneer Inaro HOJStort w Vegas Lan.- Scach t as Angels M antTL Lxadcrdalc Iitilwoukee Ncwpart D=h Toy Lee Ncw York Ontario Peo Alto P:Iocnix PnrWd Sac.-atneato Salt Lake City San Diego San Finactico 5cat::o Tumn w asNinctoa D.0 Investment Offering SEA AIRE APARMEN"I S 36 Units Huntington Beach, CA $2,50%000 Marcus& Millichap Kcal imam hnaetaeane grakerw C mp=y Manua k MOP Kcal Eme Umsuwt Brokerage Contpacyor\e port Beach IWO MacArthur 011yd Swte 0150 Irving, CA 927IS-2433 Tel (111) =JI -3030 2112'd SS01ON HOd3$ 1210cKN cM-0I-nIW '8 SrObW WK2:0I 866T'ly '033 L� IN Investment Property Sea Aire Apartments 36 Units Huntington Beach, CA S2,500,000 Marcus&Mill ichap W bate Lzrewwas vcokwp c mpn7 A,T N-TI4`': This brochure has been prepared to provide surnmary information to prospective purchasers and to establish a preliminary level of interest in the property presented. It does not, however, purport to present all material information regarding the subject property, and it is not a substitute for a thorough due diligence investigation. in particular, Marcus & MiRichap has not made any investigation, and mattes no warranty or representation with respect to the fu=cial condition or business prospects of any tenant, or any tcaanVs plans or intentions to continue or renew its occupancy of the subject property. The information contained in this brochure has been obtainers from sources we believe to be reliable; however, Marcus & Nfillichap has not conducted any investigation regarding these mat~ers and makes no wuzaaty or representation whatsoever regarding the accuracy or completeness of the information provided. Lisdng No.: 01O.79083 . - (0) bei0l ropOI copyrisw xmw t xtCM461"7 ZTiE'd SSD'ON HDtM 180 Mal dU-01 1IW s sn-xt:ibJ WbS2:01 866T'tS 1133 IN Marcus&M11I!chap >tcal l uuaumstmas neake:a�e Caa+p.ay Investment Property Description Sea Aire Apartments 36 Units Huntington Brach, CA S2,500,000 Description The Sea Aire Apa=cnts represents a unique investment opportunity in the city of Huntington Beach. Within the past twenty-four months, the current owners have utilized substantial funds from the City of Huntington Beach toward the property's extensive rehabilitation. As a result, the buyer of this property will be acquiring a property in excellent condition, with high occupancy. The complex is located just minutes from the Pacific Ocean in a city, which, according to Governing Magazine, among America's 100 largest cities, "was rated first in personal income, third in safety, and fourth in median home value." For example, within a 3.5 mile radius of the Sea Aire, the 1996 estimated annual average household income is in excess of S82,000. Its strong economic demographics combined with its near perfect year-round weather, make Huntington Brach a location strongly favored by businesses, homeowners, vacationers and, of course, rEntem. THE COMPLEX: Situated on thrze individual panels covering over an acre of land, the Sea Aire Apartments represents an opportunity for an investor to acquire a stable investment property which has undergone major improvements in the past couple of years. The complex consists of three two-story apartment buildings, with laundry facilities, a tot lot and abundant parking. One of the Sea Aire's prime attributes is its ideal mix of all two bedroom/one bath units. The units all include gas appliances and gas wall heating. Each is Listing No.: 010-79083 -1- (0) bej01 ropol ihh lafor nitioaboabeen asaered bm aoarca re believe tuba fd4bk, bW rs MAe m repraalaoom a ranu+rk.% eVmmd a L-plka, as m d►c vAwuV st" iskemuloa. Retsreaoea b Kwre homp or ate we app.vdwee. 94a mud vaiy am 6wm mim ad WAR AD riot for Ally iaaccowd". CopyPkM Marcw & b!i$icbap,1997 21ib*d ssoIow H9tixi i8od'13J dtl-or-nIW i 5ruet! Wt19Z:ol e66Vt7 'a31 1W Marcus &Millichap >va YJtatt bMgtresns Dco�asde taoreyna� Investment Property Description Sea Aire Apartments 36 Units Huntington Beach, CA S2,500,000 Description (continued) individually metered for both gas and electricity. THE DEAL: The property is being offered at a price of S2,500,000. A qualified buyer may acquire a New First Loan and assume the existing Second Loan which was provided by the City of Huntington Beach in the amount of approximately $446.000. The loam is a major bonus for any investor since no payments are required to be made by the owner if the complex remains in compliance with the eity's requirements. In addition, for each year the property Is in compliance, debt is forgiven by 1/30 of the original debt amount until the balance has been reduced to zero (see addendum). Based on Current rcuts and combined expenses and vacancy of approximately 39%, the property offers a positive cash flow and a Total Return including Principle Reduction of over 12.0%. The Total Return would jump to over 13.0% at market rent levels. C Al�r� Following several years of turmoil in California's economy, we are now witnessing the beginnings of a major surge in opportunities for investors, business owners, and workers alike. This trend is especially clear in Orange County, California where imemployment is reported to be below 4%, and job growth is fueling growing demand for housing among all economic sectors of the population. Listing No.: OIN79DBS •1• (o) bei0l ropol IU& Wbn=t m bu been wcvx d 9= wwm wo bdiere 10 bG %1C 1% bw •o nulw 10 rep ewAdw w wmwbm expmned or i *uA u 6+ Ow uazwy of Mr k6cm aL kiln p b Kwm twra or rye we empui rtn Buyer ~ vatity 1ho ietwNlan sod bms ab d* far Copy,AetY&mw a MMabV� 1 "7 21iS'd SS010N H9ti3H ibocv i citl-ci niw '8 sn3' W WU92:01 e66t'tr 'H33 V Marcus&Mt11ichap Rol bun kwtvaneat Eralcaraja Ce>Rt+t:s Investment Property Description Sea Aire Apartments 36 Units Huntington Beach, CA S2,500,000 Description (continued) With rental demand especially beating up for well located Orange County apartments, there may never be a better time for apartment investors to acquire such properties before they regain the losses suffered during recent y=. In the July 13, 1997 issue of The Orange County Register, the "average rent for all types of apartments in Orange, County hit its highest level in more than 13 years, rising 5.5 percent to S846 a month." The potential for even further growth has not been lost on some of the nation's most astute investors on Wall Street who, during the past several months hav: been pouring tens of millions of dollars into well located Orange County apartments. The Sea Aire Apartments wre.a unique and exceptional opportunity for an investor to earn a stable cash flow from a well maintained complex in one of California's prime beach side eomm=ities. AT THE SELLER'S REQUEST, ALL LNSPECTIONS OF THE PROPERTY SHALL BE COORDINATED THROUGH THE LISTING AGENTS. PLEASE CONTACT JOE BEMON OR PAUL ROSOW AT (714) 851-3030 TO SCHEDULE AN APPOINTNiEN7. Listing No.: 010-79038 -1. (0) bej01 ropol Tha rJwnaion Dan beft arvw4 noel IozW ee btUm 0 be x'4kk. but ya swU m rwMaatrtiam or rr=a ". Wwased ar inVIMA as to taa imaaq of U W m etioa. AasrMM to eqmn tnotate or ago am or-Vt aria aayar nwtt vW* d* irlormalioa sad Dram an ride for my k=twulds. CcW ght Umaa A 160klnp,1"7 21/9'd sso'ON HOti32 180dM3W dtl�OI-niw 2 smdw WbS2:05 8661'b T3J Marcus&Milfichap Muld-Residential • Operating Information Sea Aire Apartments 723-733 Utica Ave. du ton Beacb, California Summary price: S2,500,00fl Proposed Financing [town Payment: 25.00°.S 5623,000 First Loan Amauat: $1,429,000 New Number of Units: 36 Terns: 7.82% Fixed Rate Lawn Cast Per Unit $69,444 cirreat GRM: 8.I Ilarket C NI- 7.9 Sewed Loan Amount: 5446,000 Assumption Cutst:at CAP: 7.47% Terror: City of H.B. "tires no paymonts. Debt is forgiven over the term of the Ioan if property is 31ukct CAP. 7.88% in comp•a.• . Approximate Age: 34 Yrs. Approximate Lot Size: 1.03 Acres Approximate Net R.SF: 27,789 Cost Per Net RSF: $89.96 Cost Per Room: N/A Annualized Operating Dato Current Rents Market Rents S .hedulcd Gross Income: MK900 5317,700 Less Vacancy Rate Reserve: 15,345 5.009a 15,835 5.000% Gross Operating Income: 291,555 301,815 Ltss Expenses: 104,877 34.17% 104,977 Net Operating Income: $186,678 51%,938 ltss Loan Payments: 123,631 123,691 Pr aTax Cash Flow: 62,997 10.08% • 73,257 11.72% Plus Principal Reduction: 12.370 12,370 Total Return Before Taxes: 575,367 12."% S95,627 13.70% Scheduled Income No. of BDR41S1 Approx. Units BATHS Sq.FL 35 211 Current Rents Monthly Monthly Rentfunit income 5700 29.200 Total Scheduled Rent•. Lt:uidry: Other Income: Monthly Scheduled Glow Intomt: Annual Scheduled Cross Income: 0-1ties Paid by Tenatt: Gas & E rtt<ic 25,200 375 0 $25,575 1306,900 Market Rents Monthly Monthly Rea Wait Income 5725 26.100 26,100 375 0 525,475 5317,700 As wm: of DO" rsyn=t Annualized Fspeasea Taus New Rate: 1.05 In=aaze Utilities Trish '.1+Lwt Repairs (7.3a/o) Manager Off -Site MVIL Oardener Ammon Rcscnvcs Special Assessments Total Expetm: Per Net Sq.tt.: Per Unit: S26,461 5,6w 13.080 5,225 22,416 9,400 15,345 900 Z500 4,500 450 $104,877 53.77 52,913.35 hating No.: 010.79088 4. (0) bej01 rap01 t Thu c:Qautm huboa, eaw.d ft" sowc" ws Wave to % nS.bk bat we mike ea uprmnea-Aw or omen cs, Or ieglte4 as a ih. aairaay o[tlw ieiormatiol► 9a:hn -AM 10 lgwam &*kV of e;e ere gVrmei=M Birya =0 Wadthe WJXTIMuan AM bOM 311 rl* rot say b&,&9roief, 2ZiL'd SSa'ON FCtM 1a0d' J dt*-0ITIiw 2 W ZZ:01 6661rxa E333 r. Q g Marcus&Mill [chap Muld-Residential - Rest Survey Sea Aire Apartmenit 725-733 [Rita Ave. Hanon^ton Deach, Caiifornia Surveyed N Of Unit: 2 Dr/t Da Property Survey Rent Rent Amenities' Ra"ne* Sgft. Sqft. PhYLILoc RentlSgft. RentlSgft. Sea Aire ApartimrAs 72S-733 Ubm Ave. 36 $700 515 IInntingbn (leach, CA 1) 706 Utica 4 $750 515 Huatijs m Beach, CA 2) 2006 t? OM% 22 $725 evs Ilmde ton Beach. CA 3) 211442118 Florida 8 $750 415 H=tington Beret, CA 4) 2320 Florida 1iuntingtoa Reset, CA W GstingNo.: 010.79088 -1- (0) bej01 r0fol 7is ieremudm bw bean ucwed fma mwtei w belme lobe RlUSA aww mmvu* be i.twa tat eee lean of if lir &W 1030ioe6ra Copyrf�f Fti�e+a � Mitt4wp� 19l7 C C N F41 Marcus&Miliichap Multi -Residential - Rent Surrey Sea Aire Apartrreents 725-733 Utica Ave. nQntin ton Reach, CaUfornis Surveyed x or units 2 Ertl Ba Property Survey Rent Rent Arnenilies' RoHns" .Buff. Sgft. PhyslLoc Rent/Sgf►. ReritfSgn. See Aire Apartments 725-733 Utica Ave. 36 S700 515 Hueti wCm i "CK CA 5) 2202 lless Huntington Beach, CA 16 $775 NIA 616 LLWwg No- 010-79018 4- (0) Hot ropol M L aumdoe bm beta awaad iom mpom of kgrw to b1 r HAK but —CHUM eemmoodw at %WTUO1 m ewm d w UVIIK n 10 eK a mmy ofiba hj wwdm Itabamme to fqmaa fm se trap am amputw.le lrrer km4 "ft to fak w tom mad bwn 0 tbY b wy kwwwSn. CAWMaeatR> IV" C L Marcus&Millichap Multi -Residential Investment Recent Sales Property Address: 725.733 Utica Ave, Hantiogtab Beach, CALfO aia Stu-veyed Property a Or unit inilx Approx. price 1 Terms Cost/Unit C"I Ratings Approx. COX (NINYO Units Age % Donn Cast/Sglt. CAP Myslboe Sea Aire Apartments 725-733 Utica Ave. 36 36 - 2/1 34 Yts. $2.500.000 New Loan $69,444 8.1 515 3iun&gton Beach, Cautomia 25.00% $89.96 7A70% 1) 309 Memphis Ave. I9 4 - Siaagle 33 Yrs. $1,060,000 Assumption 355,789 7.4 413 Hw2fngtDn Bea* CA 11 -111 30.Oelo S90.20 9.0% 12196 4 - 211 4 Listing No.: OM79088 4- (0) be101 rop01 C4 ersMaer of t TW, iiRrk mdflo a.� we wmd ion memo we kCrW b h L` Rtt [�M1 re �..�in se rgtird.bttco� or *snaetis, svrsuN vr inptkl �n 4 �s lts inier� Iea. R.li+4ces WSW" G,wde ar ��e wr �rsrnitile. 6OR mot"* tie tdwmrd a aWbars %U rbt for a" I.: maim �e►Y't7:e Haiete as r•�t� H'!I RI Marcus& Mill ichap Mulli-Residential Investment Recent Sales Property Addrm, 725-733 Utica Ave. Ifuntingtoo Aeach, Colifomis St rveyed Property 8 or Unit INUX APprox. Price / Terto Costfuldi GRM Rat(n8* Approx. COE (HafYr) units Age %Aoym CodMgtt. CAP Physfl" Sea Aire Aparttnmts 725-733 Utica Ave. 36 36 - 2/1 34 Yrs, 52.500,000 Nnv Loan $69,444 8.1 515 1f1)V-iaglenBexlr,Caldornin 25.00'/o $89.96 7.47% 4) 16642 Island Circle 5 4-2/2 18 Yn. 3530,000 New Loan Il»ntingtan Beach, CA 1-3/2 4SM/6 OM76 $106,000 8.8 7.5% 6/6 v Listing No: 010-M88.1- (0) bejOt fool Jul k1muson fin bn wmn d f-M low ere lelkwe into Rye, bit we mace W a+V"OdK. emVINd or k*fee, u b ft "nowt' of fs mmawd& Refit males fo 19W bubo grip see eq{"aet&. ply" mue m* IA. tQae6 8 cwflisb mews & Mzd.A Im C C a Marcus&Ml1iichap Multi -Residential Investment Recent Sales Property Address: 725-733 Utica Ave. iFuntinvton Beach, Calirniaia Surveyed Property for Unit All, Approx. Price ! Terms Casfli)oit G%NI Rating* Approx. COE (Mo1Yr) TWIN Age % D&wn Costmq.rf. CAP Phy'0 etc Sea Aire Apartments 725.733 Utica Ave. 36 36 - 2/1 34 Ym $2,500,000 Near Loan 569,444 8.1 515 Huntkttoa Heath, Califnrnis 25.W,4 $89.96 7Ar/o 7) 7931 Stark S 2 -1/13 Hertbigton Bea* CA 6. 2/1.75 06r9S 20 Yra. $632,000 Asnmptioa 27V/. S79,OOO 9.3 614 6.7% Listiagxo: 010-79093 -1- (0) bej01 rop01 Tth i#N ffiEw6 . bU bM wCwt4 6M "Won we b■u" b i+ wli.tok 14 we Mko no o k eye n-I &w a wwrer+in, egrmw or EWPOV , n b tk oocwwr er se ieeR. w&ft Rdae�rrt I. �gane use w •�t w+ K'+mde.+r B��,wet reeity tw faluwe om wd bem A Birk for ury iuxevwa C C L,1 SHERMAN. NATHAN50N 8 MILLER A PROFCSSIONAL CORPORATION 9454 WILSHIRE 601671.CVAAID SUITE azo BEVERLY HILLS. CALIFORNIA 90212 TELEPHONE 13101 24e-0321 TELECOPIER t31W 24E-030S January 21, 1998 Gail Hutton, Esq. City Attorney Huntington Beach 2000 Main Street Huntington Beach, California 92648 Re: Yaron Lever Dear Ms. Hutton: CITY M�►� r : u xc;° 8 = CH We are counsel to Yaron Levy, an individual ("Levy"), with respect to the assumption by Levy ofall obligations under that certain Affordable Ilousing Agreement (the "Housing Agreement") by and between the Redevelopment Agency of the City of Huntington Beach, a public building, corporate and politic (the Agency") and Associates Nine, a California general partnership ("Associates") pursuant to that certain Assignment and Subordination Agreement (the "Assignment"), dated as of December 19,1997, by and among Levy, the Agency and Associates (the "Transaction"). Relative to the Transaction, we have reviewed and examined the list of documents set forth and defined on Exhibit "A" attached hereto. In our examination we have assumed the genuineness of all signatures, the legal capacity of all natural persons, that all documents submitted to us as photostatic copies conform to originals, the authenticity of the original of such copies, and that the laws of the State of California apply to the Transaction. As to any facts material to this opinion which we did not independently establish or verify, we have relied upon statements and representations of Levy, as well as public records. Any such facts that were not independently established or verified are specifically noted below. Without having made any independent investigation, nothing has come to our attention which leads us to believe that reliance upon Levy as to matters not independently established or verified is not proper. Members of this Firm are admitted to the Bar of the State of California. We express no opinion as to the laws of any jurisdiction other than the Iaws of the State of California. Based on the foregoing, subject to the limitations, qualifications, exceptions and assumptions set forth herein, and specifically confining the application of the following opinions solely to the documents defined (which definitions are incorporated by reference herein) and set forth on Exhibit "A" hereto, we are of the opinion that: SHERMAN. NATHANSON & MILLER Gail Hutton, Esq. January 21, 1998 Page 2 (1) Levy has the power and authority to execute and deliver to the Agency the Assignment; (2) Levy has duly executed and delivered to the Agency the Assignment; and (3) Upon the execution of the Assignment by Levy, Levy will assume all of the obligations of Associates under the Housing Agreement. We disclaim any obligation to update this opinion letter for events occurring after the date of this opinion letter. We have assumed the due execution by all other signatories of the documents set forth on Exhibit "A" hereto to which each is a party. This opinion is being furnished to you only and is solely for your benefit in connection with the Transaction, and is not to be relied upon for any other purpose, or by anyone other than ASSOCIATES NINE or its affiliates, without our prior written consent. Very truly yours, SIIERM^ NATIIANSON & MILLER a Professional Corporation KEN NATHANSON State ar No. 77556 oe /sp Enclosure APPROVED AS TO FOPM: GAIL HUTTOZI, City Attorney By:. Deputy, City Attornoy f �_t tp'lIge r nAn.rc�unckva+a►w�a n�omFnrtz,�sora� wI Exhibit A 1. Memorandum of Affordable Housing Agreement, dated November 22, 1996, by and between the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic and Associates Nine, a California general partnership. 2. Affordable Housing Agreement, dated November 22, 1996, by and between the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic and Associates Nine, a California general partnership. 3. Deed of Trust With Assignment of Rents, dated November 22, 1996, by and between Associates Nine, a California general partnership and First American Title Insurance Company and the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic. 4. Promissory Note Secured By Deed of Trust, dated May 2, 1996, by and beteveen the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic as Holder and Associates Nine, a California general partnership as Borrower. 5. Notice of Completion for Rehabilitation Project, dated November 22, 1996. 6. Declaration of Covenant, Conditions and Restrictions, dated November 22,1996, by and between the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic and Associates Nine, a California general partnership. 7. Asshm ment and Subordingtion Agreement,dated as of December 19,1997,by and among Yaron Levy, an individual, the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic and Associates Nine, a California general partnership. FA1024.1Txhibit Commonwealth Land Title Company 200 West Santa Ana Boulevard Santa Ana, California 92701 (714) 835.8511 TrrLE DEPARTIM ENT rAx No. (714) 833.0313 Issuing Policies Of Commonwealth 4*10-- LAND TITLE INSVRANCE COMPANY Marcus & Millichap 19800 MacArthur, Suite 150 Irvine, California Attn: Paul Rosow Your Ref: Associates Nine Our No: 2702761-3 Title Officer: JIM PRAS CI I PRELLNILNARY REPORT Dated as of October 17, 1997 at 7:30 A.M. In response to the above referenced application for a policy of title insurance, Commonwealth Land Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said policy forms. The printed Exceptions and Exclusions from the coverage of said Policy or Policies are set ford] in Exhibit A attached. Copies of the Policy forms should be read. They are available from the office which issued this report. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you r%ith notice of matters which are not covered under the tent, of the title insurance policy and should he carefully considered. It is important to note that this preliminary report is not a written representation as to the condition or title and may not list all liens, defects, and encumbrances affecting title to the land. CLTA Preliminary Rel mnt Form (Rev. 1105) 2702761 Page 2 SCIIEDULE A The form of policy of title insurance contemplated by this report is: A CLTA Owners Policy The estate or interest in the land hereinafter described or referred to covered by this report is: A FEE Title to said estate or interest at the date hereof is vested in: Associates Nine, a General Partnership The land referred to in this Report is situated in the State of California, County of Orange, and is described as follows: SEE EXHIBIT "I" ATTACHED HERETO AND MADE A PART HEREOF CLTA Preliminary Report Form (Rev. 1/1195) 0 2702761 Page 3 E-11131T "I" PARCEL L The West 50 feet of the East 250 feet of Block 2108 Eastside Villa Tract, as per map recorded in book 4, page 65 of Miscellaneous Maps, in the office of the County Recorder of said County. PARCEL 2: Block 2108 of the Eastside Villa Tract, as per map recorded in book 4, page 65 of Miscellaneous Maps, in the office of the County Recorder of said County. Except the East 250 feet thereof. PARCEL 3: The West 50 feet of the East 200 feet of Block 2108 of Eastside Villa Tract, as per map recorded in book 4, page 65 of Eastside Villa Tract, as per map recorded in book 4, page 65, of Miscellaneous Maps, in the office of the County Recorder of said County. CLTA preliminary Report Form (Rev, 11=/95) 2702761 Page 6 S. An unrecorded lease, affecting the premises herein stated, executed by and between the parties named herein, for the term and upon the terms, covenants, conditions, and provisions therein contained. Dated: February Is. 100S Lessor: Associates Nine, a General Partnership Lessee: Web Service Company, Inc. Tenn: as set forth therein Disclosed by: Memorandum of Lease Recorded: March 22, 1995, as Instrument No. 95-0114919, Official Records The present ownership of said leasehold and other matters affecting the interest of the lessee are not shown herein. 6. A document subject to all the terms, Provisions and conditions therein contained. Entitled: Notice of Completion for Rehabilitation Project Dated: November 22, 1996 Executed by: Redwelopment Agency of the City of Huntington Beach, a public body corporate and politic and Associates Nine, a California general partnership Recorded: June 12, 1997, as Instrument No. 97-0270748, Official Records Reference is made to said document for full particulars. Re -recorded: July 2, 1997 as Instrument No. 97-0315241, Official Records 7. A document subject to all the terms, provisions and conditions therein contained. Entitled: Memorandum of Affordable Housing Agreement Dated: November 22, 1996 Executed by: Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic and Associates Nine, a General Partnership Recorded: July 2, 1997, as Instrument No. 97-0315242, Official Records Reference is made to said document for full particulars. S. A deed of trust to secure an indebtedness in the amount shown below: Amount: $446,000.00 Dated: November 22, 1996 Trustor: Associates Nine, a General Partnership Trustee: First American Title Insurance Company Beneficiary: The Redevelopment Agency of The City of Huntington Beach, a public body corporate and politic Retarded: July 2, 1997, as Instrument No. 97-0315243, Official Records CLTA Prehinirmy Report Fonn (Rev. 1/1/95) 2702761 Page 5 1. An easement for the purpose shown below and rights incidental thereto as set forth in document Granted to: Southern California Edison Company Pugj ose: Public Utilities Recorded: September 26, 1962, in boot: 6262, page 986, Official Records Affects: the Northerly 6 feet of said land 2. An easement for the purpose shown below and rights incidental thereto as set forth in document Granted to: Southern California Edison Company Purpose: Public Utilities Recorded: May 8, 1963, in book 6540, page 608, Official Records Affects: the East 6 feet of said land 3. A deed of trust to secure an indebtedness in the amount shown below: Amount: $ 1,300,000.00 Dated: December 19, 1985 Trustor: Associates Nine, a General Partnership, and Avanti Enterprises, a general partnership Trustee: Golden West Financial Corporation, a Delaware corporation Beneficiary: World Savings and Loan Association, a Federal Savings and Loan Association Recorded: December 31, 1985, as Instrument No. 85-523941, Official Records 4. An unrecorded lease, affecting the premises herein stated, executed by and between the parties named herein, for the tern and upon the terms, covenants, conditions, and provisions therein contained. Dated: April 3, 1991 Lessor: Associates Nine Lessee: California Meter Service Tenn: not to exceed 10 years Disclosed by: Memorandum of Lease Recorded: May 13, 1991, as Instrument No. 91-232712, Official Records The present ownership of said leasehold and other matters affecting the interest of the lessee are not shown herein. CLTA Preliminary Rgwl Fonn (]rev. 1/1/93) 2702761 Page 4 SCHEDULE B At the date hereof Exceptions to coverage in addition to the printed exceptions and exclusions in said policy form would Ee as follows: A. General and special taxes and assessments collected with taxes for the fiscal year 1997-1998. Total: $6,151.82 First Installment: 3,075.91 Open Second Installment: 3,075.91 Open Homeowners' Exemption: $0 Code: 04-001 Parcel: 025-191-28 B. General and special taxes and assessments collected with taxes for the fiscal year 1997-1998. Total: $6,152.10 First Installment: 3,076.05 Open Second Installment: 3,076.05 Open Homeowners' Exemption: $0 Code: 04-001 Parcel: 025-191-29 C. General and special taxes and assessments collected with taxes for the fiscal year 1997-1998. Total: $6,179.48 First Installment: 3,089.74 Open Second Installment: 3,089.74 Open Homeowners' Exemption: $0 Code: 04-001 Parcel: 025-191-31 D. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section 75, et seq. of the Revenue and Taxation Code of the State of California. CLTA Pml4ninaq Report Fom (Rev. 1/1/95) 2702761 Page 7 9. Covenants, conditions and restrictions (deleting any restrictions indicating any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin) as set forth in the document Recorded: July 2, 1997, as Instrument No. 97-0315244, Official Records PAYOFF INFORMATION Note No. 1: AS OF JANUARY 1, 1990, CHAPTER 598, CALIFORNIA STATUTES OF 1989, (AB 512; INSURANCE CODE SECTION 12413.1) BECOMES EFFECTIVE. THE LAW REQUIRES THAT ALL FUNDS BE DEPOSITED AND AVAILABLE FOR WITHDRAWAL BY THE TITLE ENTITY'S ESCROW OR SUBESCROW ACCOUNT PRIOR TO DISBURSEMENT OF ANY FUNDS. ONLY CASH OR WIPED FUNDS CAN BE GIVEN IMMEDIATE AVAILABILITY UPON DEPOSIT. CASHIER'S CHECKS, TELLER'S CHECKS AND CERTIFIED CHECKS MAY BE AVAILABLE ONE BUSINESS DAY AFTER DEPOSIT. ALL OTHER FUNDS SUCH AS PERSONAL, CORPORATE OR PARTNERSHIP CHECKS AND DRAFTS MAY CAUSE MATERIAL DELAYS IN DISBURSEMENT OF FUNDS ON THIS ORDER. IN ORDER TO AVOID DELAYS, ALL FUNDING SHOULD BE WIRE TRANSFERRED. OUTGOING WIRE TRANSFERS WILL NOT BE AUTHORIZED UNTIL CONFIRMATION OF THE RESPECTIVE INCOMING WIRE TRANSFER OR AVAILABILITY OF DEPOSITED CHECKS. WIRING INFORMATION FOR THIS OFFICE IS AS FOLLOWS: Union Bank 500 South Main Street Orange, California 92668 ABA No. 122000496 Account No. 9120008290 PRASE REFERENCE TITLE ORDER NUMBER AND TITLE OFFICER Note No. 2: THIS COMPANY DOES REQUIRE CURRENT BENEFICIARY DEMANDS PRIOR TO CLOSING. If the demand is expired and a current demand cannot be obtained, our requiremeats will be as follows: CLTA Prelimh" Report Fomi (Rev. 1/1195) 2702761 Page 8 (a) If this Company accepts a verbal update on the demand, we may hold an amount equal to one monthly mortgage payment. This hold will be in addition to (lie verbal hold (he lender may have stipulated. (b) If this Company cannot obtain a verbal update on the demand, we will either pay off the expired demand, or wait for the amended demand, at our discretion. Note No. 3: This report is incomplete as to the effect of documents, proceedings, liens, decrees, or other matters which do not specifically describe said land, but which, if any do exist, may affect the title or impose liens or encumbrances thereon. This Company will require statement(s) of information from buyer, seller, and/or borrower, in order to complete this report. Note No, 4: The premium for a policy of title insurance, if issued, will be based on 80% jp/kbljc CLTA Pre iminxry Report Forin (Rev. 1/1/95) j Nst11;[1111'. ' , CUAIAJOMWEALT1t LAND TITLE INSt-ItANrt L"tY ),V %�/ ` Commonwealth EXHIBIT "Am LIST OF PRLPRINTED POLICY EXCLUSIONS AND EXCEPTIONS CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - 1"0 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded From the coverage of this policy and the Company will nol pay loss a damage, costs, attorneys' feet or expenses which arise by rcas_an of I. (a) Any law, ordinance a governmental regulation (including but not limited to bui)Jing and toning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the ebarscter, dirnroslons or location of any improvement now whereafter erected on the land; (iii) s separation in ownership or a change in the dimensions or area of the land or any pace) of which the land Is or was apart; or (iv) environmental protection, et the effect of any v;vladon of these laws, ordinances of governmental regulations, except to the extent that a notice of the enforcement thereof a a notice of a dcfeet.lien Or encumbrance resulting Omit a violation or alleged violation affecting the land hat been recorded In the public teeotdt at mate of Polity. (b)Any governntenial police power net excluded by (a) above, except to the extent that a ranee Of die exercise thereof or a notice of it defect, lien cc twumbrance se .usting Films a violas" Or stlegtd violation affecting tee land fiat been recorded In the public records at Date of Policy. 2. Rid hts of eminent domain unless notice of the. exercise thereof has been recorded in the public records at Date of policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defecls, liens, encumbrances, adverse claims or other mailers: (a) whether or net recorded in the public records at Dale of Policy, but created, suffered, assumed or agreed to by the Insured claimant; (b) net known to the Company, not recorded in the public records at Date of Policy, but known to the insured etainunl and not disclosed in writing W the Company by the insured claimant prior to the date the assured elAnsanl became an insured under this policy; (c) resulting in no loss OF damage to die insured claimant; (d) attaching or created subsequent to Dole of Policy IN; (c) resulting in loss or damage which would not have been sustained if The insured claimant had paid value for the Insured mortgage oc for the estate Or interest Insured by this policy. d. (lrx nforceabiliry of die lien of the insured mortgage because of de Inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land Is situated. S. Invalidity or unenforceahilily of the lien of the insured marlgage, or claim thereof, which arises out of the transaction evidenced by the insured moagage and is based uprn usury or any consumer credit protection or truth in lending law. b. Any claim. which wises out of Use transaction vestirsg in the insured the estate or Werest insured by this policy or the transaction treating the interest of the Insured lernter, by reason of the operation of federal bankruptcy, stale insolvency or similar creditore rights laws. EXCEPTIONS FROM COVERAGE (SCHEDULE B - PART I) This pohey does not Insure against loss or damage (and the Company will not pay costs. attorneys fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing oulhorisy that levies taxes or assessments on real property or by the public records. Pror•eedings by a public agency which may result In taxes or assessments. or notices of such proceedings, whether or not shown by the records of such agency or by the pubic scrods. 2. Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land at which may be asserted by petst>ns in possession thereof. 3. Easements, liens or encumbrances, or claims U.ercof. which art not shown by Use public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other faces which a correct survey would disclose, and which are sot shown by the public records. 3. (a) Unpalented mining claims; (b) reservations or txceplions in patents or in Acts suilWdling the issuance thereof; (c) water rights, claims of title to water, whether or wit the nutters excepted under (a). (b) or (c) tie shown by the public leeoeds_ AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY (10-17-92) AND AMERICAN LAND TITLE ASSOCIATION LEASEHOLD OWNER'S POLICY (I0-17-92) EXCLUSIONS FROM COVERAGE The follow ing mailers are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys fees a expenses which arise by reason of: I. (a) Any law, Ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, Or regulations) restricting, regulating, prohibiting Of relaling to (1) the occupancy, use, Of enjoyment of die land; (ii) the character, dimensions or location of any improvement now or hereaAct ecected on the land; (ui) a separation In ownership or a change In the dimensions or area of the land or any parcel of which the land Is Or was a part; or (iv) environmental protection, or Ott effect of any violation of these taws, ordinances of governmental regulations, except to the ss,ent that a notice of the enforcement thereof Or a Wke of a defect, lien of encumbrance resulting from a violation or alleged violation affecting the land has been recorded in Use public records al Date of policy. (b)Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof Or a notice ors defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in tee public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in th-e public records al Date of Policy, but not excluding from coverage any taking whictt has occurred grin to Date of Policy which would be binding on the rights of a purchases fat value without knowledge. 3. Defects. liens, encumbrances, adverse claims or other mailers: (a) created, suffered, assumed or agreed to by d,e Insured claimant: (b) n-.1 known to the Company, not recorded in the public words at Date of Policy, but known to the Insured claimant and not disclosed In writing to the Company by the insured cfaimtnt prior to die dale Use insured claimant became an insured sender Ibis policy. (e) re :selling In no loss or damage to the Insured claimant; (d) attaching or created subsequent to Date of Policy; at (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or Interest Insured by this policy. d. Any claim which arises out of the transaction vesting in else Insured Use estate or Interest insured by this policy, by reason of the operation of federal bankruptcy, stale insolvency, or similar creditors' rights laws, that is based on: (a) tau ttansactidu creating the tstatt Of interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer, or (b) OW transaction erealirig the estate or Interest insured by the policy being deemed a preferential transfer except where the prefMAIIal transfer results from the failure; (i) to timely record the Inserunseni of tr ansfer; or (ii) of such recordation to impart notice to a purchaser fur value or a judgment of lice creditor. Fain 2210 - 1493)SA (Cominued on back) Commonwealth I and Title Company 200 W. Santa Ana BIvd. Santa Ana, CA 92701 (714) 835.8511 RZ, Commonwealth Home Savings 9150 Wilshire 131vd. Suite 103 Beverly I1i11s, California Attn: Joanna Bashout Your Ref: 725,729 Utica Our No: 2702761-3 Title Officer: Jim Prasch A.L.T.A. SUPPLEMENTAL REPORT Dated: November 12, 1997 Supplemental to our original report elated October 17, 1997, the following matters will be reflected in our A-L.T.A_ policy, when issued: 1. The ALTA Lender's policy, when issued, will include CLTA Indorsements 100 and 116. The following information will be included in said CLTA Indorsement 116: There is located on said land an Apartment Complex, known as 725, 729 and 733 Utica Avenue, Huntington Beach, California 2. The only conveyances affecting said land recorded within six (6) months of the date of this report are as follows: None. COMMONWEALTH LAND 200 West Santa Etna Boulevard 1P Commonwealth TITI.F, COMPANY Santa Anti, California 92701 1 714-835-8311 1 fiu 714-835-0513 SEAWIND ESCROW 17111 BEACH BLVD. SUITE 100 HUNTINGTON BEACH, CA Attn: JOYCE Ref: 22588 Our No.: 2702761-3 Title Officer: Jim Prasch Daled as of November 17, I997 Enclosures: Preliminary Report 1W October 16, 1997 City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Director 7141536-5582 Redevelopment 7141536-5582 FAX 7141375-5087 Housing 7141536-5542 Associates Nine 948 11th Street Huntington Beach, CA 92648 Ann.: Mel Heckman & H.C. Stovall, Managing Pareiers Dear Messrs. Heckman R Stovall: SUBJECT: 725 - 733 Utica Street - Forgiveness of Loan At the City Council meeting of October 6, 1997, Council approved the forgiveness of 3/30th (for the period from May 2,1994 to May 2, 1997) of the affordable housing loan for the subject properties. The principal balance of the affordable loan that was issued by the City on May 2, 1994 was for $446,000.00. As of June 2, 1997, the new principal balance after the forgiveness of 3/30th of the loan and amortized interest totals $437,222.08. I have enclosed an amortized payment schedule that was prepared for this action. Over time, the amount forgiven may change. The prime interest rate for this period was 8.5% and the prime rate is subject to lluctuatation. On behalf of the City, I would like to thank you for keeping your properties well -maintained and free of overcrowded conditions. Should you have any questions, you may contact Dan Bruening of my staff at (714) 536-5901. Sincerely, AW e,#) David C. Biggs Director of Economic Development Enclosure /xc: Connie Brockway, City Clerk G:Bruenind\LettcrlAssoc9.doc DCB:DEB:Ic . 8/27/97 Page 1 LOAN AMORTIZATION SCHEDULE Loan �mortized at 10% Payment Payment Principal Date Number Amount Principal Interest Balanc© Opening Balance 446.000.00 512194 1 3,913.97 197.30 3,716.67 445,802.70 612194 2 3,913.97 198.95 3,715.02 445,603.75 712194 3 3,913.97 200.61 3,713.36 445,403.14 812194 4 3,913.97 202.28 3,711.69 445,200.86 912194 5 3,913.97 203.96 3,710.01 444.996.90 1012194 6 3.913.97 205.66 3,708.31 444.79124 1112.194 7 3,913.97 207.38 3,706.59 444,583.86 1212194 8 3,913.97 209.10 3,704.87 444,374.76 112/95 9 3,913.97 210.85 3.703.12 444.163.91 2rM5 10 3,913.97 212.60 3.701.37 443.951.31 312/95 11 3,913.97 214.38 3,699.59 443.736.93 412195 12 3,913.97 216.16 3,697.81 443.520.77 512195 13 3,913.97 217.96 3,696.01 443.302.81 617J95 14 3.913.97 219.78 3,694.19 443.083.03 712195 15 3,913.97 221.61 3.692.36' 442,861A2 812.195 16 3,913.97 223.46 3.690.51 442.637.96 912195 17 3,913.97 225.32 3.688.65 442,412.64 10/2195 18 3,913.97 227.20 3,686.77 442,185.44 1IM95 19 3,913.97 229.09 3,684.88 441,956.35 12R195 20 3,913.97 231.00 3.682.97 441,725.35 t 1/2196 21 3.913.97 232.93 3,681.04 441,492.42 2/2196 22 3,913.97 234.87 3,679.10 441,257.55 3/2/96 23 3,913.97 236.82 3,677.15 441,020.73 4/2196 24 3,913.97 238.80 3.675.17 440,781.93 512196 25 3.913.97 240.79 3.673.18 440,541.14 6096 26 3,913.97 242.79 3,671.18 440,298.35 712196 27 3,913.97 244.82 3,669.15 440,053.53 812196 28 3,913.97 246.86 3.667.11 439.806.67 9/2196 29 3.913.97 248.91 3,665.06 439.557.76 10/2196 30 3.913.97 250.99 3.662.98 439,306.77 11/2196 31 3.913.97 253.08 3.660.89 439.053.69 12/2/96 32 3,913.97 255.19 3.658.78 438,798.50 112197 33 3.913.97 257.32 3,656.65 438,541.18 212/97 34 3.913.97 259.46 3,654.51 438,281.72 3/2197 35, 3.913.97 261.62 3.652.35 438.020.10 412/97 '26 3,913.97 263.80 3,650.17 437,756.30 512/97 37 3,913.97 266.00 3.647.97 437.490.30 612197 38 3.913.97 268.22 3.645.75 437.222.08 712197 39 3,913.97 .270.45 3.643.52 ��436,951.63 812197 40 3.913.97 272.71 3,641.26 436,678.92 912197 41 3,913.97 274.98 3.638.99 436.403.94 i01?J97 42 3,913.97 277.27 3,636.70 436,126.67 1112197 43 3,913.97 279.58 3.634.39 435,847.09 1212197 44 3,913.97 281.91 3,632.06 435.565.18 112198 45 3.913.97 284.26 3,629.71 435,280.92 212198 46 3,913.97 266.63 3,627.34 434,994.29 ( 312/98 47 3,913.97 289.02 3.624.95 434,705.27 ` 4/2198 48 3.913.97 291.43 3,622.54 434,413.84 512198 49 3,913.97 293.85 3.620.12 434,119.99 3/27197 U t% Page 2 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 612198 50 _ 3,913.97 296.30 3.617.67 433,823.69 712198 51 3,913.97 298.77 3,615.20 433.524.92 812198 52 3,913.97 301.26 3,612.71 433.223.66 912198 53 3.913.97 303.77 3,610.20 432,919.89 102198 54 3,913.97 306.30 3.607.67 432.613.59 11/2/98 55 3,913.97 308,86 3,605.11 432,304.73 1212198 56 3.913.97 311A3 3.602.64 431.993.30 VM9 57 3.913.97 314.03 3,599.94 431,679.27 2J2/99 58 3.913.97 316.64 3.597.33 431.362.63 317199 59 3,913.97 319.28 3.594.69 431,043.35 412199 60 3.913.97 321.94 3.592.03 430,721 Al 5/2199 61 3,913.97 324.62 3,589.35 430,396.79 6/2/99 62 3.913.97 327.33 3.586.64 430,069.46 712/99 63 3.913.97 330.06 3,583.91 429,739.40 812199 64 3,913.97 332.81 . 3,581.16 429.406.59 912/99 65 3,913.97 335.58 3,578.39 429.071.01 1012199 66 3.913.97 338.38 3,675.59' 428.732.63 1112l99 67 3.913.97 341.20 3.572.77 426.391.43 1212199 68 3.913.97 344.04 3.569.93 428,047.39 1/2100 69 3,913.97 346.91 3,567.06 427.700.48 2=0 70 3,913.97 349.80 3.564.17 427.350.68 3R100 71 3,913.97 352.71 3,561.26 426.997.97 4/2100 72 3,913.97 355.65 3.558.32 426,642.32 512/00 73 3,913.97 358.62 3,555.35 426,283.70 612100 74 3,913.97 361.61 3.552.36 425,922.09 W2/00 75 3.913.97 364.62 3,549.35 425,557.47 812100 76 3.913.97 367.66 3,546.31 425.189.81 912100 77 3,913.97 370.72 3,543.25 424.819.09 1012100 78 3,913.97 373.81 3.540.16 424,445.28 11/2100 79 3,913.97 376.93 3,537.04 424,068.35 12/2100 80 3,913.97 380.07 3,533.90 423,688.28 1/1101 81 3,913.97 383.23 3,530.74 423.305.05 2R/01 82 3.913.97 386.43 3,527.54 422,918.62 3=1 83 3,913.97 389.65 3,624.32 422.528.97 4/2101 84 3,913.97 3922.90 3,521.07 422.136.07 5/2101 85 3.913.97 396.17 3.517.80 421,739.90 612101 86 3,913.97 399.47 3,514.50 421.340.43 UM 87 3,913.97 402.80 3,511.17 420,937.63 812101 88 3.913.97 406.16 3,507.81 420.531.47 9R101 89 3,913.97 409.54 3,504.43 420,121.93 1D12101 90 3,913.97 412.95 3,501.02 419,708.98 1112101 91 3,913.97 416.40 3.497.57 419.292.58 1212101 92 3,913.97 419.87 3,494.10 418,872.71 1/2102 93 3,913.97 423.36 3.490.61 418.449.35 212102 94 3.913.97 426.89 3.487.08 418,022A6 312/02 95 3,913.97 430.45 3,483.52 417.592.01 4=2 96 3,913.97 434.04 3,479.93 417,157.97 512102 97 3.913.97 437.65 3,476.32 416,720.32 612102 98 3.913.97 441.30 3.472.67 416,279.02 712102 99 3.913.97 444.98 3,468.99 415.834.04 817102 100 3.913.97 448.69 3.465.28 415,385.35 • 8/27/97 k.) Page 3 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Payment Payment Principal Dato Number Amount Principal Interest Balance 912102 101 3,913.97 452.43 3,461.54 414.932.92 1012102 102 3,913.97 456.20 3.457.77 414,476.72 1112102 103 3.913.97 460.00 3.453.97 414.016.72 1212102 104 3,913.97 463.83 3,450.14 413,552.89 1003 105 3,913.97 467.70 3,446.27 413,085.19 2/2103 106 3,913.97 471.69 3,442.38 412.613.60 3rM3 107 3.913.97 475.52 3,438.45 412.138.08 4/2103 108 3,913.97 479.49 3,434.48 411,658.59 SrM3 109 3,913.97 483.48 3,430.49 411.175.11 612/03 110 3.913.97 487.51 3.426.46 410.687.60 7/2t03 111 3.913.97 491.57 3,422.40 410.196.03 8/2103 112 3.913.97 495.67 3,418.30 409,700.36 912103 113 3,913.97 499.80 3.414.17 409,200.56 10003 114 3,913.97 503.97 3,410.00 408,696.59 11/2103 115 3,913.97 508.17 3,405.80 408.188.42 12M03 116 -3,913.97 512.40 3.401.57 407,676.02 1/2104 117 3,913.97 516.67 3,397.30 407,159.35 2/2104 118 3.913.97 520.98 3,392.99 406,638.37 312/04 119 3,913.97 525.32 3,388.65 406,113.05 412/04 120 3,913.97 529.69 3,384.28 405,583.36 5/2104 121 3.913.97 534.11 3,379.86 405,049.25 6/2/04 122 3.913.97 538.56 3,375.41 404.510.69 { 7/2tC4 123 3,913.97 543.05 3,370.92 403.967.64 812/04 124 3,913.97 547.57 3,366.40 403,420.07 9/2/04 125 3,913.97 552.14 3,361.83 402.867.93 10/2104 126 3.913.97 556.74 3.357.23 402,311.19 11/2104 127 3,913.97 561.38 3,352.59 401.749.81 1212/04 128 3,913.97 566.05 3.347.92 401.183.76 112105 129 3,913.97 570.77 3,343.20 400,612.99 2/2/05 130 3,913.97 575.53 3,338.44 400,037.46 3005 131 3.913.97 580.32 3,333.65 399,457.14 412105 132 3,913.97 585.16 3.328.81 398,871.98 5/2105 133 3,913.97 690.04 3,323.93 398,281.94 6/2/05 134 3,913.97 594.95 3.319.02 397.686.99 7/2105 135 3,913.97 599.91 3,314.06 397.087.08 8/2/05 136 3.913.97 604.91 3,309.06 396,482.17 9/2/05 137 3,913.97 609.95 3.304.02 395,872.22 10/2/05 138 3.913.97 615.03 3,298.94 395,257.19 11/2105 139 3.913.97 620.16 3,293.81 394,637.03 12=5 140 3,913.97 625.33 3,288.64 394.011.70 1/2/06 141 3.913.97 630.54 3.283A3 393,381.16 212/06 142 3.913.97 635.79 3,278.18 392,745.37 312/06 143 3.913.97 641.09 3,272.8E 392,104.28 4=6 144 3,913.97 646.43 3,267.54 391,457.85 5=6 145 3,913.97 651.82 3,262.15 390,806.03 6/2106 146 3,913.97 657.25 3,256.72 390,148.78 7=6 147 3,913.97 662.73 3.251.24 389,488.05 8f2106 148 3,913.97 , 668.25 3.245.72 388,817.80 9/2106 149 3,913.97 673.82 3,240.15 388.143.98 10/2106 150 3.913.97 679.44 3,234.53 387,464.54 11/2106 151 3,913.97 685.10 3.228.87 386.779.44 . • 8f27/97 Page 4 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Intorest Principal Balance 12t2106 152 3,913.97 690.81 3.223.16 386,088.63 1/?d07 153 3,913.97 696.56 3,217.41 385,39107 2007 154 3,913.97 702.37 3.211.60 384,689.70 3=7 155 3,913.97 708.22 3.205.75 383.981 AS 4=7 156 3,913.97 714.12 3,199.85 383,267.36 5M07 157 3,913.97 720.08 3,193.89 382,547.28 612107 158 3,913.97 726.08 3,187.89 381.821.20 7=7 159 3,913.97 732.13 3,181.84 381.089.07 81=7 160 3,913.97 738.23 3,175.74 380,350.84 9/2/07 161 3,913.97 744.38 3.169.59 379.606.46 10007 162 3,913.97 750.58 3,163.39 378.855.88 11/2/07 163 3,913.97 756.84 3,157.13 378.099.04 12l2107 164 3,913.97 763.14 3,150.83 377,335.90 1/2108 165 3,913.97 769.50 3.144.47 376,566.40 2/2108 166 3,913.97 775.92 3.138.05 375,790.48 3=8 167 3,913.97 782.38 3.131.59 375,008.10 412/08 168 3,913.97 788.90 3,125.07 374,219.20 512/08 169 3,913.97 795AB 3,118.49 373.423.72 612108 170 3,913.97 802.11 3,111.86 372,621.61 7/2108 171 3,913.97 808.79 3.105.18 371.812.82 812108 172 3,913.97 815.53 3,098A4 370,997.29 912108 173 3,913.97 822.33 3.091.64 370,174.96 10/2/08 174 3,913.97 829.18 3,084.79 369.345.78 11/2108 175 3,913.97 836.09 3.077.88 368,509.69 1212108 176 3,913.97 843.06 3,070.91 367.666.63 1/2109 177 3,913.97 850.08 3,063.89 366,816.55 212109 178 3,913.97 857.17 3.056.80 365,959.38 3WO9 179 3,913.97 864.31 3.049.66 365,095.07 412109 180 3,913.97 871.51 3.042.46 364,223.56 5=9 181 3.913.97 878.77 3,035.20 363,344.79 6/2/09 182 3.913.97 886.10 3,027.87 362,458.69 71=9 183 3,913.97 893.48 3,020.49 361,565.21 arm 184 3,913.97 900.93 3,013.04 360,664.28 912109 185 3,913.97 908.43 3,005.54 359.755.85 10/2/09 186 3,913.97 916.00 2,997.97 358,839.85 1112109 187 3,913.97 923.64 2,990.33 357,916.21 121=9 186 3.913.97 931.33 2.982.64 356,984.88 1/2110 189 3,913.97 939.10 2,974.87 356.045.78 2/2/10 190 3,913.97 946.92 2,967.05 355.098.86 3010 191 3,913.97 954.81 2,959.16 354,144.05 4/2110 192 3.913.97 962.77 2,951.20 353,18128 6W10 193 3,913.97 970.79 2.943.18 352,210.49 612110 194 3,913.97 978.88 2,935.09 351,231.61 7/2110 195 3,913.97 987.04 '2,926.93 350,244.57 8/2110 196 3.913.97 995.27 2.918.70 349.249.30 0/2110 197 3.913.97 1,003.56 2,910.41 348.245.74 10/2110 198 3.913.97 1.011.92 2,902.05 347,233.82 11/2/10 199 3.913.97 1.020.35 2,893.62 346.213.47 12/2110 200 3,913.97 1.028.86 2.885.11 345.184.61 1/2111 201 3.913.97 1.037.43 2.876.64 344.147.18 2/2111 202 3.913.97 1.046.08 2.867.89 343,101.10 617197 k1.) Page 5 LOAN AMGRTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balanc© 3011 203 3.913.97 1,054.79 2,859.18 342,046.31 4/2/11 2&1 3,913.97 1,063.68 2,850.39 340,982.73 512J11 205 3,913.97 1.072.45 2,841.52 339.910.28 62/11 206 3,913.97 1,081.38 2.832.59 338,828.90 7/2111 207 3,913.97 1.090.40 2,823.57 337,738.50 awl 203 3,913.97 1,099.48 2.814.49 336.639.02 92111 209 3,913.97 1.108.64 2.805.33 335,530.38 102/11 210 3,913.97 1,117.88 2.796.09 334,412.50 1112/11 211 3,913.97 1.127.20 2,786.77 333,285.30 122/11 212 3,913.97 1.136.59 2,777.38 332.148.71 112/12 213 3,913.97 1.146.06 2,767.91 331.002.65 212112 214 3,913.97 1.155.61 2.758.36 329.847.04 32/12 215 3,913.97 1.165.24 2,748.73 328,681.80 42/12 216 3.913.97 1.174.95 2,739.02 327.506.85 52/12 217 3.913.97 1.184.75 2.729.22 326,322.10 62/12 218 3,913.97 1.194.62 2,719.35 325,127AS 7/2/12 219 3,913.97 1.204.57 2,709.40 ' 323.922.91 82/12 220 3,913.97 1,214.61 2,699.36 322,708.30 92/12 221 3.913.97 1,224.73 2,689.24 321.483.57 1012/12 222 3,913.97 1,234.94 2,679.03 320,248.63 1112/12 223 3.913.97 1,245.23 2,668.74 319,003.40 12r2/12 224 3,913.97 1,255.61 2,658.36 317,747.79 112/13 225 3,913.97 1,266.07 2.647.90 316,48112 22113 226 3.913.97 1,276.62 2,637.35 315,205.10 32/13 227 3.913.97 1,287.26 2.626.71 313.917.84 4013. 228 3.913.97 1,297.99 2.615.98 312,619.85 512/13 229 3.913.97 1,308.80 2.605.17 311,311.05 612/13 230 3,913.97 1,319.71 2,594.26 309,991.34 7M13 231 3,913.97 1,330.71 2,583.26 308.660.63 8/2/13 232 3.913.97 1.341.80 2.572.17 307.318.83 92/13 233 3,913.97 1,352.98 2.560.99 305.965.85 1012/13 234 3.913.97 1,364.25 2.549.72 304,601.60 1112/13 235 3.913.97 1,375.62 2,538.35 303.225.98 12/2113 236 3,913.97 1,387.09 2.526.88 301,838.89 1014 237 3,913.97 1,398.65 2.515.32 300.440.24 2/2114 233 3,913.97 1,410.30 2.503.67 299,029.94 32114 239 3,913.97 1,422.05 2.491.92 297,607.89 412/14 240 3,913.97 1.433.90 2,480.07 296,173.99 5/2114 241 3.913.97 1,445.85 2.468.12 294.728.14 62114 242 3,913.97 1,457.90 2.456.07 293,270.24 7MI4 243 3,913.97 1,470.05 2.443.92 291,800.19 82114 244 3,913.97 1,482.30 2,431.67 290.317.89 92/14 245 3,913.97 1,494.65 2.419.32 288,823.24 102/14 246 3,913.97 1,507.11 2,406.86 287,316.13 112114 247 3,913.97 1,519.67 2.394.30 285,796.46 122/14 248 3,913.97 1.532.33 2.381.64 284,264.13 1/2115 249 3.913.97 1,645.10 2,368.87 282.719.03 212/15 250 3,913.97 1,557.08 2,355.99 281.161.05 32/15 251 3.913.97 1,670.96 2,343.01 279,590.09 42115 252 3.913.97 1.584.05 2,329.92 278,006.04 5/2/15 253 3,913.97 1,597.25 2.316.72 276,408.79 8/27/97 u Page 6 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Payment Payment Principal Dato Numbor Amount Principal Interest Balanco 6/2/15 254 3,913.97 1.610.56 2,303.41 274.798.23 712/15 255 3,913.97 1.623.98 2.289.99 273,174.25 8/2115 256 3,913.97 1.637.52 2,276.45 271,536.73 912115 257 3.913.97 1,651.16 2,262.81 269,885.57 10015 258 3,913.97 1.664.92 2,249.05 268,220.65 1112/15 259 3,913.97 1,678.80 2,235.17 266,541.85 12/2/15 260 3,913.97 1,692.79 2.221.18 264,849.06 112/16 261 3,913.97 1,706.89 2.207.08 263,142.17 212/16 262 3,913.97 1,721.12 2,192.85 261.421.05 3/2/16 263 3.913.97 1,735A6 2,178.51 259,685.59 4/2/16 264 3,913.97 1.749.92 2.164.05 257.935.67 5/2/16 265 3,913.97 1,764.51 2,149.46 256.171.16 6/2/16 266 3.913.97 1.779.21 2,134.76 254.391.95 7016 267 3,913.97 1.794.04 2,119.93 252.597.91 8/2/16 268 3,913.97 1.808.99 2.104.98 250.788.92 9/2/16 269 3,913.97 1.824.06 2,089.91 248,964.86 10/2/16 270 3,913.97 1.839.26 2,074.71 247.125.60 11/2/16 271 3.913.97 1.854.59 2,059.38 245,271.01 12/2/16 272 3,913.97 1.870.04 2,043.93 243,400.97 112/17 273 3,913.97 1.885.63 2,028.34 241,515.34 2/2117 274 3.913.97 1.901.34 2,012.63 239,614.00 3/2/17 275 3,913.97 1,917.19 1,996.78 237,696.81 4/2/17 276 3.913.97 1.933.16 1,980.81 235,763.65 ` 5/2/17 277 3,913.97 1,949.27 1,964.70 233.814.38 6/2/17 278 3,913.97 1.965.52 1,948.45 231,848.86 7/2/17 279 3,913.97 1,981.90 1.932.07 229.866.96 8/2/17 280 3,913.97 1.998.41 1.915.56 227,868.55 9/2117 281 3,913.97 2,015.07 1.898.90 225,853.48 10/2/17 282 3.913.97 2,031.86 1.882.11 223.821.62 11/2/17 283 3,913.97 2.048.79 1,865.18 221,772.83 12/2117 284 3,913.97 2,065.86 1,848.11 219,706.97 1/2/18 285 3,913.97 2.083.08 1.830.89 217,623.89 2/2/18 286 3.913.97 2.100.44 1.813.53 215,523.45 3/2/18 287 3,913.97 2.117.94 1,796.03 213,405.51 4/2118 288 3,913.97 2,135.59 1.778.38 211,269.92 5/2/18 289 3.913.97 2,153.39 1,760.58 209,116.53 6/2/18 290 3,913.97 2,171.33 1,742.64 206.945.20 712/18 291 3,913.97 2,189A3 1.724.54 204,755.77 8r2118 292 3,913.97 2.207.67 1,706.30 202,548.10 9/2/18 293 3,913.97 2,226.07 1,687.90 200,322.03 10/2/18 294 3,913.97 2.244.62 1,669.35 198.077.41 11018 295 3.913.97 2.263.32 1,650.65 195,814.09 12r2/18 296 3.913.97 2.282.19 1,631.78 193,531.90 1/2/19 297 3,913.97 2.30120 1.612.77 191,230.70 2/2/19 298 3,913.97 2,320.38 1.593.59 188,910.32 3/2119 299 3,913.97 2.339.72 1,574.25 186,570.60 4/2119 300 3,913.97 2,359.21 1.554.76 184.211.39 5019 301 3,913.97 2,378.88 1,535.09 181.832.51 6/2/19 302 3,913.97 2,398.70 1,515.27 179.433.81 7/2/19 303 3.913.97 2,418.69 1.495.28 177.015.12 8/2/19 304 3,913.97 2,438.84 1,475.13 174.576.28 . • 8/27/97 Page 7 LOAN AMOMIZATION SCHEDULE Loan Amortized at 10% Data Payment Number Payment Amount Principal Interest Principal Balance 912/19 305 3,913.97 2.459.17 1,454.80 172.117.11 1012119 306 3.913.97 2.479.66 1,434.31 169.637A5 1112119 307 3.913.97 2,500.32 1,413.65 167,137.13 1212119 308 3,913.97 2,521.16 1,392.81 164,615.97 1/2/20 309 3,913.97 2,542.17 1,371.80 162.073.80 2=0 310 3.913.97 2,563.35 1,350.62 159,510.45 3/2120 311 3,913.97 2.584.72 1,329.25 158,925.73 4/2/20 312 3,913.97 2.606.26 1.307.71 154,319.47 5/2120 313 3,913.97 2.627.97 1.286.00 151.691.50 6/2/20 314 3,913.97 2.649.87 1,264.10 149,041.63 7/2/20 315 3,913.97 2.671.96 1,242.01 146,369.67 8/2/20 316 3,913.97 2,694.22 1,219.75 143.675.45 9/2120 317 3.913.97 2,716.67 1,197.30 140.958.78 10/2/20 318 3,913.97 2,739.31 1,174.66 138,219.47 11=0 319 3,913.97 2,762.14 1.151.83 135.457.33 12/2/20 320 3.913.97 2.785.16 1,128.81 132,672.17 1/2/21 321 3,913.97 2,808.37 1,105.60 129.863.80 2/2/21 322 3,913.97 2,831.77 1,082.20 127,032.03 312/21 323 3,913.97 2.855.37 1,058.60 124,176.66 4/2/21 324 3,913.97 2.879.16 1,034.81 121,297.50 512/21 325 3.913.97 2.903.16 1,010.81 118,394.34 612/21 326 3,913.97 2,927.35 986.62 115.466.99 7/2/21 327 3,913.97 2,951.75 962.22 112,515.24 812/21 328 3,913.97 2,976.34 937.63 109.538.90 9/2/21 329 3.913.97 3,001.15 912.82 106,637.75 10/2/21 330 3,913.97 3,026.16 887.81 103,511.59 1112/21 331 3,913.97 3.051.37 862.60 100,460.22 12/2/21 332 3,913.97 3,076.80 837.17 97.383.42 1/2/22 333 3,913.97 3,102.44 811.53 94,280.98 2/2/22 334 3,913.97 3.128.30 785.67 91.152.68 3/2122 335 3.913.97 3.154.36 759.61 87.998.32 4/2/22 336 3,913.97 3,180.65 733.32 54,817.67 5/2/22 337 3.913.97 3.207.16 706.81 81.610.61 6/2/22 338 3.913.97 3.233.88 680.09 78,376.63 712122 339 3,913.97 3,260.83 653.14 75,115.80 812122 340 3,913.97 3.288.00 625.97 71.827.80 Or= 341 3.913.97 3.315.40 598.57 68,512.40 1012122 342 3.913.97 3.343.03 570.94 65.169.37 11=2 343 3.913.97 3.370.89 543.08 61,798.48 1212/22 344 3,913.97 3,398.98 514.99 58.399.50 1/2123 345 3.913.97 3,427.31 486.66 54,972.19 2/2/23 346 3,913.97 3,455.87 458.10 51,516.32 312123 347 3,913.97 3.464.67 429.30 48.031.65 4=3 348 3,913.97 3.513.71 400.26 44,517.94 5/2/23 349 3.913.97 3,542.99 370.98 4D,974.95 6/2123 350 3,913.97 3,572.51 341.46 37,402.44 7/2123 351 3,913.97 3.602.28 311.69 33,800.16 8/2123 352 3,913.97 3,632.30 281.67 30,167.86 9=3 353 3,913.97 3,662.57 251.40 26,505.29 10/2123 354 3.913.97 3,693.09 220.88 22,812.20 11/2/23 355 3,913.97 3.723.87 190.10 19,083.33 ' 8f27197 Page 8 0 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Payment Payment Principal Date Number Amount Principal interest Balance 1212/23 356 3,913.97 3,754.90 159.07 15,333.43 1/2l24 357 3,913.97 3,786.19 127.78 11.547.24 2/2/24 358 3.913.97 3.817.74 93.23 7,729.50 31=4 359 3,913.97 3,849.56 64A1 3,879.94 41=4 360 3,912.27 3,879.94 32.33 0.00 GRAND TOTAL 1,409,027.50 446,000.00 963,027.50 0.00 5 r" LA Council/Agency Meeting Held: io- G - 97 Deferred/Continued to:�,;,��,�, M Approved O Conditionally Approved ❑ Denied City Clerk' ignature 0- Council Meeting Date: October 6, 1997 1 Department ID Number: ED 97-40 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Director /l��CA�, PREPARED BY: DAVID C. BIGGS, Director of Economic Development SUBJECT: Authorize Forgiveness of Principal & Interest for Affordable Housing Loan: 725 - 733 Utica Avenue v Statement of Issue, Funding Source, Recommended Action, Alternative Action(s). Analysis, Environmental Status, Attachment(s) r : The affordable housing agreement entered into with Associates Nine in 1994, instructs that the loan and the accrued interest be forgiven at a rate of 1130 per year if compliance with affordability and property maintenance requirements are met. Funding Source: None as a result of this action. i- - 1lI111--j15rTiW--T4 NO oil 6 Authorize the Director of Economic Development to provide written confirmation of the forgiveness of 3130 (5l2194 - 512197) of the affordable housing loan to the owners of 725 - 733 Utica Avenue, a 36-unit affordable housing complex. Alternative Action[st: 1. Direct staff to provide additional information and delay action. Analysis: On May 2, 1994, Redevelopment Agency Resolution No. 257, and City Council Resolutions No. 6590 were adopted which approved a loan agreement between the Redevelopment Agency of the City of Huntington Beach and Associates Nine, a Califomia general partnership. It called for a forgivable loan of no more than $546,000 in housing set aside funds in exchange for rehabilitation of 36 units of affordable housing for households earning below 60% of the Orange County median income. REQUES+iOR REDEVELOPMENT AGERCY ACTION MEETING DATE: October 6, 1997 DEPARTMENT ID NUMBER: ED 9740 A loan and a grant was issued to Associates Nine to rehabilitate the 36 units located at 725 through 733 Utica Avenue. The loan amount was $446,000 and the grant was in the amount of S100,000. The loan was a forgivable, non -recourse Second Trust Deed. The Trust Deed, Covenants, and Promissory Note were recorded as a lien against the property. The loan and the accrued interest (which accrues at a rate of 150 basis points over the prime rate) will be forgiven at the rate of 1130 per year over the 30-year compliance period. But the principal balance plus accrued interest would be due if a default occurs, or if the property is transferred to a new owner who wishes to remove the affordability restriction. The loan is structured so that 1130 of the principal and accrued interest is forgiven annually, but only after a review by staff for continued compliance with the loan agreement. The review of two major areas has occurred. First, the income of the families living at the property was reviewed, and all but one unit (the manager's unit) did not exceed 60% of median income. Second, staff has conducted a site visit to review the condition of the building, units, landscaping, and parking for the purpose of compliance with the requirement of the loan agreement. The overall condition of the property is in compliance with the requirements of the loan agreement. Environmental Status: None. Attachments): 1. j Original RAA. 2. 1 Loan Amortization Schedule. 3. i Certificate of Com RCA Author: Daniel E. Bruening, ext. 5901 RAAUTICA.DOC -2- 09110W 9:44 AM I Original IZAA ATTACHMENT #1 REQUEST FOR REDEVELOPMENT AGENCY ACTION Date: May 2,1994 Submitted to: Honorable Mayor and City Council Members APPROVED BY CITY COUNC Submitted by: Michael T. Uberuaga, City Administrator u 19 • � �P y Prepared by: Mike Adams, Director of Special Projects crrYtx.L-tx Subject: AFFORDABLE HOUSING REIIAI31LITATION LOAN AGREEMENT: 725-733 UTICA AVENUE Consistent with Council Policy? jX] Yes [ ] New Policy or Exception _ G S 9a Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: ! .Gea a-trs•y yG� (3'0 /) x1�.e x �<e.c�fc.ycv�.c e Gt� iLr e `f "#Q Titan v —'0-11 ccsy On A , 1 9etthe Redevelopment Agency approv d a o ab a housing reha rlitation loan agreement -%ith the owners of a 36 unit residential complex located at 725-733 Utica Avenue. On April 6,1994, the Agency voted to reconsider the April 4th action and then rescindcd-that-� approval and continued the item for two meetings in order for additional information to be presented. On April 12, 1994, a special meeting of the Florida -Utica Task Force was held to discuss the affordable housing loan agreement. After considerable discussion, the Task Force voted to support the project, although there were two dissenting votes. ' RECOMMENDATION: Staff recommends that the Council -Redevelopment Agency take the following action: Motion to 1. "Approve Resolution No. a 57 approving a loan agreement between the Redevelopment Agency of the City of Huntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." 2. "Approve Resolution No. 4 590 approving a loan agreement between the City of Huntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." 09 Discussion at the April 6th Council meeting produced three major areas of concern about the affordable housing loan agreement: 1.) the configuration of the Associates Nine partnership prior to negotiations with the city verses the present structure ; 2.) the rationale behind the forgivable loan; 3.) and the potential effect of tax credits on the projecVs annual income. Associates Nine Partnership Prior to October 1, 1991, the Utica Avenue apartments were the flash point for many of the problems in the Florida -Utica area. Mel Heckman and Sam Stoval were part of the original partnership, but only held a 1 /12 interest each in the property and did not have management control. When they became aware of the numerous problems that were plaguing the property, they assumed control in October of 1991. Not long after, Mr. Heckman and Mr. Stovall began informal discussions with city staffabout the possibility of financial assistance for the property. S taff began these discussions with Mr. Heckman and Mr. Stovall because of their increased involvement with the property, and also because of their efforts to increase their respective shares of the partnership. By May of 1992, Mr. Stovall and Mr. Heckman had increased their interest in the partnership to 1 /4 each, or 1 /2 of the total partnership interest in the property. As the chronology of events indicates (Attachment No. 1), Mr. Stovall and Mr. Heckman were instrumental in cleaning -up the Utica property while actively participating in the Florida -Utica Task Force. They cooperated m ith the police department by making citizen arrests and by providing the police with a free apartment for use as a temporary substation. After the good faith efforts made by Mr. Heckman and Mr.Stovall, staff felt comfortable in approaching the City Council for formal approval to negotiate. On September 8, 1992, the Council directed staff to formalize negotiations with Associates Nine. S446,000 Forgivable Loan Keyser Marston Associates (KMA), the Agency's financial consultants, determined the amount of financial assistance based on the economic detriment to the project that is created when rental units are price -restricted. This analysis, known as the "affordability gap", measures the difference between the market rents and the restricted rcnts. KMA concluded (Attachment No. 2) that the imposition of income restrictions on all 36 units would result in $446,000 in lost revenues to the project in net present value terms. The $446,000 loan takes the form of a forgivable, non -recourse second trust deed. This trust deed, along with covenants and a promissory note, is recorded as a lien against the property. The lonn and the accrued interest ( which accrues at a rate of 150 basis points over the prime rate) will be forgiven at the rate of 1/30 per year over the 30 year compliance period, but the principal balance plus accrued interest would be due if a default occurs, or if the property is transferred to uli[a%udcarald" 2 raOaW a new owner who wishes to remove the affordability restrictions. Non -recourse simply means that should a default occur, the security for the loan would be limited to the value of the project _ at the time of the default. Conventional real estate loans are considered non -recourse loans --that is, the property is the security for the loan, not the individual or entity who owns the property. The proposed deal is structured so that 1130 of the principal and accrued interest is forgiven annually, but only after a review by staff for continued compliance with the loan agreement. Review of two major areas will occur: first, the incomes of the families living at the property (Loan Agreement, pages 28-33) will be reviewed to make sure that they do not exceed 60% of median income; secondly, the overall condition of the property will be assessed to make sure that the building and improvements are adequately maintained (Loan Agreement, pages 33-35; plus Attachment No. 7); . One other area will be reviewed as well: the use or sale of low income housing tax credits. Staff has verified with the first mortgage lender on the property, World Savings, that the property could not refinance, or qualify for a property improverrent loan, based on the current 30% vacancy rate and the projected loan to value and income to debt ratios. This statement is consistent with the current real estate lending climate. $100,000 Grant F:MA also agreed with staff that the project warrants a $100,000 grant to fund the aptiona rehabilitation work, which includes landscaping, security lighting, passive area, sport court and soon. These exterior improvements will greatly enhance the neighborhood while providing a secondary benefit to the project. Low Income Housing Tax Credits (LIHTC) Low Income Housing Tax Credits are available under both federal and California law. Owners of eligible projects can apply for these credits, which are then used to reduce income tax liability. These credits may also be syndicated (sold) to other investors. Where tax credits are awarded, they can only be taken over a ten year basis and under very strict conditions. Tliough the Utica project appears to qualify for tax credits, there is absolutely no guarantee that credits will be awarded --approval is not automatic. In California, state and federal credits are awarded by the California Tax Credit Allocation Committee (CTCAC). Competition for tax credits is intense, with CTCAC awarding credits to projects that provide the most benefits to low income persons (those at 50% of median income and below). Attachment number three provides a more detailed discussion of tar credit process. Attachment number four is a memorandum from Keyser Marston (dated April 20,1994) that discusses the tax credit issue --as it relates to the Utica project --in more detail. An excerpt from that report states, in part, that oficaliriaraldoe 3 raa5W4 assuming tax credits are awarded to the project, the gross value would be equal to 9% of the allowable costs paid annually over a ten year period. _ Assuming the developer would syndicate —the net value would be diminished to approximately 50% of the gross credit amount. For the Utica Avenue project, the ... credit is estimated to have a net value of approximately $250,000. KMA goes on to point out that The application process for tax credits is extremely competitive, and syndicators typically attempt to invest in larger scale projects than the proposed Utica Avenue apartment rehabilitation. Given both these factors, there is no guarantee that the proposed project will be awarded tax credits or that they would be salable in the marketplace. In recognition of this fact, KMA eliminated the proceeds of the low Low Income Housing Tax Credits from the financial analysis of the project performed in May of 1993. KMA concludes that It has been KMA's historical experience that small scale projects will often test the market by applying for tax credits, simply because there is not a large up front investment required to compile an application. Therefore, to protect the Agency's financial interests in the proposed project, and to prevent the developer from receiving excess assistance, KMA has recommended that the Agency be entitled to share in any net tax credit proceeds received by the developer. Given the developer's projected return from the project, and taking into consideration the fact that the developer must be provided with some incentive to apply for the tax credits, KMA recommended that any net tax credit proceeds be divided between the developer and the Agency on a 50-50 basis. Page thirty-three (33) of the loan agreement has language protecting the Agency should Associates Nine benefit from the syndication of tax credits. As currently drafted, the Agency is entitled to "no less than fifty percent (50%) of the net syndication proceeds." Redevelopment Agency Responsibilities The Agency will provide a $100,000 grant that is specifically earmarked for exterior improvements, which include landscaping, lighting, a recreation area, and rehabilitated carports. G4ia'Ltica nUm 4 MO/2 91 • The Agency will also provide a $446,000 loan in the foam of a forgivable, non -recourse second trust deed. This deferred payment loan will accrue interest at a rate of 150 basis points over the prime rate, but the Ioan and the accrued interest will be forgiven at the rate of 1130 per year over the 30 year compliance period. Developer Responsibilities The Developer will undertake rehabilitation improvements necessary to bring the project into compliance with City building code standards. The Developer must also provide additional exterior improvements as outlined above. • Rents on all 36 units will be restricted to the affordable level for households below 60% of median income ("low income"), as defined in the California Health and Safety Code Section 50053, for a period of thirty years. Unit Size~ _; -. 'Projected Dents Based On 1993 • , ' : ; . Income Standards 36 Two Bedroom $717 Rents will be adjusted annually when household income figures are published by HUD. As mentioned in a previous staff report, the City Council directed staff in 1992 to negotiate with Associates Nine as a follow-up to actions taken beginning in 1990 to improve the duality of life in the Florida -Utica neighborhood. The area has been steadily improving during the past two years due to the cooperative efforts of several City departments. A planned street improvement project will begin throughout the Florida -Yorktown area within forty-five days, further adding to the enhancement effort. Rehabilitation of 725 Utica will dramatically change the character of this neighborhood and at the same time, contribute to the Agency's replacement housing obligation. The Agency's financial involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal 98). Further, a majority of the funds allocated to this project can be used as matching funds for the HOME Investment Partnership Program. Redevelopment Housing Set Aside Funds budgeted for this project in the 1993-94 fiscal year. "fi«►Wicaz.ax 5 ► aS4119a I Loan Amortization Schedule ATTACHMENT #2 8127/97 %1) Page 1 LOAN AMORTIZATION SCHEDULE Loan,�mortized at 10% R,.S / z"Wc 1,t re Payment Payment Principal Date Number Amount Principal Intorest Balance Opening Balan-,e 446.000.00 512194 1 3,913.97 197.30 3,716.67 445,802.70 6/2194 2 3,913.97 198.95 3,715.02 445,603.75 7/2194 3 3,913.97 200.61 3,713.36 445,403.14 8/2194 4 3.913.97 202.28 3.711.69 445.200.86 9/2194 5 3,913.97 203.96 3,710.01 444,996.90 10/2194 6 3.913.97 205.66 3,708.31 444.791.24 1112/94 7 3,913.97 207.38 3,706.59 444,583.86 12/2194 8 3.913.97 209.10 3,704.87 444.374.76 1/2/95 9 3.913.97 210.85 3,703.12 444,163.91 212/95 10 3,913.97 212.60 3,701.37 443,951.31 312/95 11 3,913.97 214.38 3,699.59 443,736.93 4/2/95 12 3,913.97 216.16 3.697.81 443,520.77 VM5 13 3,913.97 217.96 3,696.01 443,302.81 612/95 14 3,913.97 219.78 3,694.19 443,083.03 712/95 15 3,913.97 221.61 3,692.36 442.861.42 8/2195 16 3,913.97 223.46 3,690.51 442.637.96 912/95 17 3,913.97 225.32 3.688.65 442,412.64 1012195 18 3.913.97 227.20 3.686.77 442.185.44 11/2195 19 3,913.97 229.09 3.684.88 441.956.35 1212195 20 3,913.97 231.00 3.682.97 441.725.35 112/96 21 3,913.97 232.93 3.681.04 441.492.42 2/2196 22 3,913.97 234.87 3,679.10 441,257.55 312/96 23 3,913.97 236.82 3,677.15 441.020.73 412/96 24 3.913.97 238.80 3,675.17 440.781.93 5/2/96 25 3.913.97 240.79 3,673.18 440,541.14 6/2196 26 3,913.97 242.79 3.671.18 440.298.35 7/2/96 27 3.913.97 244.82 3.669.15 440,053.53 8/2196 28 3.913.97 246.86 3.667.11 439.806.67 9/2/96 29 3.913.97 248.91 3.665.06 439,557.76 10/2/96 30 3,913.97 250.99 3.662.98 439.306.77 11/2196 31 3,913.97 253.08 3,660.89 439.053.69 12I2196 32 3,913.97 255.19 3,658.78 438.798.60 112197 33 3,913.97 257.32 3,656.65 438,541.18 2/2/97 34 3,913.97 259.46 3,654,51 438,281.72 312/97 35 3,913.97 261.62 3,652.35 438,020.10 412/97 36 3,913.97 263.80 3,650.17 437.756.30 512J97 37 3,913.97 266.00 3,647.97 437,490.30 6/2/97 38 3,913.97 268.22 3,645.75 437,222.08 7/2/97 39 3,913.97 270.45 3,643.52 436,951.63 812/97 40 3.913.97 272.71 3,641.26 436,678.92 912197 41 3,913.97 274.98 3,638.99 436.403.94 10/2/97 42 3,913.97 277.27 3,636.70 436.126.67 11/2197 43 3,913.97 279.58 3,634.39 435,847.09 1212/97 44 3,913.97 281.91 3,632.06 435.565.18 1/2198 45 3,913.97 284.26 3,629.71 435,280.92 212198 46 3,913.97 286.63 3,627.34 434.994.29 312198 47 3,913.97 289.02 3,624.95 434.705.27 4/2198 48 3,913.97 291.43 3,622.54 434,413.84 512/98 49 3,913.97 293.85 3,620.12 434,119.99 8127/97 ,. Page 2 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 6/2/98 50 3.913.97 296.30 3,617.67 433.823.69 712/98 51 3.913.97 298.77 3.615.20 433.524.92 Br2/98 52 3.913.97 301.26 3.612.71 433.223.66 9/2/98 53 3,913.97 303.77 3.610.20 432,919.89 10/2198 54 3,913.97 306.30 3.607.67 432,613.59 11/2/98 55 3,913.97 308.86 3.605.11 432,304.73 12C/98 56 3,913.97 311.43 3.602.54 431,993.30 1r2/99 57 3,913.97 314.03 3,599,94 431.679.27 2r2/99 58 3,913.97 316.64 3.597.33 431,362.63 3/2/99 59 3,913.97 319.28 3,594.69 431,043.35 4r2/99 60 3,913.97 321.94 3,592.03 430.721.41 5r2/99 61 3,913.97 324.62 3,589.35 430.396.79 6/2/99 62 3,913.97 327.33 3,586.64 430.069.46 7r2199 63 3,913.97 330.06 3,583.91 429,739.40 Br2/99 64 3,913.97 332.81 3,581.16 429,406.59 9r2/99 65 3,913.97 335.58 3,578.39 429,071.01 10/2199 66 3,913.97 338.38 3,575.59 428,732.63 11/2199 67 3,913.97 341.20 3,572.77 428,391.43 12r2199 68 3.913.97 344.04 3,569.93 428.047.39 112/00 69 3,913.97 346.91 3,567.06 427,700.48 2/2/00 70 3.913.97 349.80 3.664.17 427.350.68 3/2/00 71 3.913.97 352.71 3.561.26 426,997.97 412/00 72 3,913.97 355.65 3,558.32 426.642.32 512/00 73 3,913.97 358.62 3,555.35 426.283.70 6W00 74 3.913.97 361.61 3.552.36 425,922.09 7/2/00 75 3,913.97 364.62 3,549.35 425,557.47 8/2100 76 3.913.97 367.66 3,546.31 425,189.81 912/00 77 3.913.97 370.72 3.543.25 424.819.09 10/2100 78 3,913.97 373.81 3,540.16 424,445.28 11 /2100 79 3.913.97 376.93 3.537.04 424.068.35 1212/00 80 3,913.97 380.07 3.533.90 423,688.28 1/2/01 81 3.913.97 383.23 3,530.74 423,305.05 212/01 82 3.913.97 386.43 3,527.54 422,918.62 3/2/01 83 3.913.97 389.65 3.524.32 422.528.97 4/2/01 84 3.913.97 392.90 3.521.07 422,136.07 5/2/01 85 3.913.97 396.17 3.517.80 421,739.90 6/2/01 86 3,913.97 399.47 3.514.50 421.340.43 7/2/01 87 3.913.97 402.80 3.511.17 420,937.63 8/2/01 88 3.913.97 406.16 3,507.81 420,531.47 9/2101 89 3.913.97 409.54 3.504.43 420,121.93 10/2101 90 3.913.97 412.95 3,501.02 419.708.98 11/2101 91 3.913.97 416.40 3,497.57 419.292.58 1212/01 92 3.913.97 419.87 3.494.10 418,872.71 1/2102 93 3.913.97 423.36 3.490.61 418.449.35 2/2/02 94 3,913.97 426.89 3,487.08 418.022.46 312/02 95 3,913.97 430.45 3,483.52 417,592.01 412/02 96 3,913.97 434.04 3,479.93 417,157.97 5/2/02 97 3,913.97 437.65 3.476.32 416.720.32 612102 98 3,913.97 441.30 3.472.67 416,279.02 7/2102 99 3,913.97 444.98 3.468.99 415,834.04 812/02 100 3,913.97 448.69 3.465.28 415.385.35 8/27197 `. f Q Page 3 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 9M/02 101 3,913.97 452.43 3.461.54 414,932.92 1012102 102 3,913.97 456.20 3.457.77 414,476.72 1112/02 103 3,913.97 460.00 3,453.97 414.016.72 1212/02 104 3,913.97 463.83 3,450.14 413,552.89 1/2/03 105 3.913.97 467.70 3.446.27 413.085.19 2/2/03 106 3.913.97 471.59 3.442.38 412.613.60 312103 107 3,913.97 475.52 3,438.45 412,138.08 4/7J03 108 3,913.97 479.49 3.434.48 411,658.59 5/2103 109 3,913.97 483.48 3,430.49 411,175.11 612/03 110 3.913.97 487.51 3,426.46 410.687.60 7/2/03 111 3.913.97 491.57 3,422.40 410,196.03 8/2/03 112 3.913.97 495.67 3,418.30 409,700.36 912103 113 3.913.97 499.80 3,414.17 409,200.56 10/2/03 114 3,913.97 503.97 3.410.00 408.696.59 11/2/03 115 3,913.97 508.17 3,405.80 408.188.42 1212/03 116 -3,913.97 512.40 3,401.57 407.676.02 1/2104 117 3,913.97 516.67 3,397.30 407.159.35 2/2104 118 3,913.97 520.98 3.392.99 406.638.37 312/04 119 3.913.97 525.32 3.388.65 406,113.05 4/2/04 120 3,913.97 529.69 3,384.28 405,583.36 5/2104 121 3.913.97 534.11 3,379.86 405,049.25 6/2104 122 3,913.97 538.56 3,375.41 404.510.69 7/2/04 123 3,913.97 543.05 3.370.92 403.967.64 8/2/04 124 3.913.97 547.57 3.366.40 403,420.07 912/04 125 3,913.97 552.14 3.361.83 402,867.93 10/2/04 126 3,913.97 556.74 3,357.23 402,311.19 1112104 127 3,913.97 561.38 3.352.59 401,749.81 12/2/04 128 3,913.97 666.05 3.347.92 401,183.76 1/2105 129 3.913.97 570.77 3,343.20 400,612.99 2/2105 130 3.913.97 575.53 3,338.44 400,037.46 3/2/05 131 3,913.97 580.32 3,333.65 399,457.14 4/2/05 132 3,913.97 585.16 3,328.81 398,871.98 5/2/05 133 3,913.97 590.04 3.323.93 398.281.94 612/05 134 3.913.97 594.95 3,319.02 397,686.99 7/2/05 135 3,913.97 599.91 3,314.06 397,087.08 8/7./05 136 3,913.97 604.91 3,309.06 396.482.17 912/05 137 3,913.97 609.95 3,304.02 395.872.22 10/2/05 138 3,913.97 615.03 3,298.94 395,257.19 11/2/05 139 3,913.97 620.16 3,293.81 394,637.03 1212/05 140 3.913.97 625.33 3,288.64 394,011.70 1/2/06 141 3.913.97 630.54 3.283.43 393.381.16 2/2/06 142 3.913.97 635.79 3,278.18 392,745.37 3/2/06 143 3.913.97 641.09 3,272.88 392.104.28 4/2106 144 3,913.97 646.43 3,267.54 391,457.85 5/2106 145 3,913.97 651.82 3,262.15 390,806.03 612/06 146 3,913.97 657.25 3,256.72 390,148.78 7/2/06 147 3,913.97 662.73 3,251.24 389,486.05 8/2106 148 3,913.97 668.25 3,245.72 388,817.80 9/2/06 149 3.913.97 673.82 3,240.15 388,143.98 1012/06 150 3,913.97 679.44 3,234.53 387.464.54 1112/06 151 3,913.97 685.10 3.228.87 386,779.44 8/27/97 `. Page 4 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 12/2/06 152 3,913.97 690.81 3,223.16 386,088.63 112/07 153 3,913.97 696.56 3,217.41 385,392.07 212/07 154 3,913.97 702.37 3.211.60 384,689.70 3/2/07 155 3.913.97 708.22 3,205.75 383,981.48 4/2/07 156 3,913.97 714.12 3,199.85 383,267.36 5/2/07 157 3.913.97 720.08 3,193.89 382,547.28 612/07 158 3,913.97 726.08 3,187.89 381,821.20 7/2/07 159 3,913.97 732.13 3,181.84 381.089.07 8=7 160 3.913.97 738.23 3,175.74 380.350.84 9/2/07 161 3.913.97 744.38 3,169.59 379.606.46 1012/07 162 3.913.97 750.58 3,163.39 378.855.88 11/2/07 163 3,913.97 756.84 3.157.13 378.099.04 12/2/07 164 3,913.97 763.14 3,150.83 377,335.90 112/08 165 3,913.97 769.50 3.144.47 376,566.40 2/2/08 166 3,913.97 775.92 3,138.05 375,790.48 312/08 167 3,913.97 782.38 3,131.59 375,008.10 4/2/08 168 3,913.97 788.90 3,125.07 374,219.20 512/08 169 3.913.97 795.48 3,118.49 373.423.72 612108 170 3,913.97 802.11 3,111.86 372.621.61 712/08 171 3.913.97 808.79 3,105.18 371,812.82 812108 172 3.913.97 815.53 3,098.44 370,997.29 912108 173 3,913.97 822.33 3.091.64 370,174.96 1012/08 174 3,913.97 829.18 3.084.79 369,345.78 11/2/08 175 3.913.97 836.09 3.077.88 368,509.69 12/2/08 176 3.913.97 843.06 3.070,91 367.666.63 1/2/09 177 3.913.97 850.08 3.063.89 366,816.55 2/2109 178 3,913.97 857.17 3,056.80 365,959.38 3/2/09 179 3.913.97 864.31 3,049.66 365,095.07 4/2/09 180 3.913.97 871.51 3,042.46 364,223.56 5/2/09 181 3,913.97 878.77 3,035.20 363,344.79 6/2/09 182 3,913.97 886.10 3,027.87 362,458.69 7/2/09 183 3,913.97 893.48 3,020.49 361,565.21 6/2/09 184 3,913.97 900.93 3,013.04 360,664.28 9/2/09 165 3,913.97 908.43 3,005.54 359,755.85 10/2109 186 3,913.97 916.00 2.997.97 358,839.85 11/2/09 187 3,913.97 923.64 2.990.33 357,916.21 12/2109 188 3.913.97 931.33 2.982.64 356,984.88 1/2/10 189 3.913.97 939.10 2,974.87 356,045.78 2/2110 190 3,913.97 946.92 2,967.05 355.098.66 3/2/10 191 3,913.97 954.81 2,959.16 354.144.05 4/2/10 192 3,913.97 962.77 2,951.20 353,181.28 5/2/10 193 3,913.97 970.79 2,943.18 352,210.49 6/2/10 194 3,913.97 978.88 2.935.09 351,231.61 7/2/10 195 3,913.97 987.04 2.926.93 350,244.57 812/10 196 3.913.97 995.27 2,918.70 349,249.30 912/10 197 3.913.97 1.003.56 2,910.41 348,245.74 10/2/10 198 3.913.97 1.011.92 2,902.05 347,233.82 11/2110 199 3.913.97 1.020.35 2,893.62 346,213.47 12/2/10 200 3.913.97 1,028.86 2,885.11 345,184.61 1/2/11 201 3.913.97 1,037.43 2.876.54 344.147.18 2/2/11 202 3,913.97 1,046.08 2,867.89 343,101.10 8/27/97 Page 5 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 3/2/11 203 3,913.97 1,054.79 2,859.18 342,046.31 4/2/11 204 3,913.97 1,063.58 2,850.39 340,982.73 5/2/11 205 3,913.97 1,072.45 2,841.52 339,910.28 6/2/11 206 3,913.97 1,081.38 2,832.59 338,828.90 7/2/11 207 3,913.97 1,090.40 2,823.57 337,738.50 8/2/11 208 3,913.97 1,099.48 2,814.49 336,639.02 9/2/11 209 3,913.97 1,108.64 2,805.33 335,530.38 10/2/11 210 3,913.97 1,117.88 2,796.09 334,412.50 11/2/11 211 3,913.97 1,127.20 2,786.77 333,285.30 12/2/11 212 3,913.97 1,136.59 2,777.38 332,148.71 1/2/12 213 3,913.97 1,146.06 2,767.91 331,002.65 2/2/12 214 3,913.97 1,155.61 2,758.36 329,847.04 3/2/12 215 3,913.97 1,165.24 2,748.73 328,681.80 4/2/12 216 3,913.97 1,174.95 2,739.02 327,506.85 5/2/12 217 3,913.97 1,184.75 2,729.22 326,322.10 6/2/12 218 3,913.97 1,194.62 2,719.35 325,127.48 7/2/12 219 3,913.97 1,204.57 2,709.40 323,922.91 8/2/12 220 3,913.97 1,214.61 2,699.36 322,708.30 9/2/12 221 3,913.97 1,224.73 2,689.24 321,483.57 10/2/12 222 3,913.97 1,234.94 2,679.03 320,248.63 11/2/12 223 3,913.97 1,245.23 2,668.74 319,003.40 12/2/12 224 3,913.97 1,255.61 2,658.36 317,747.79 1/2/13 225 3,913.97 1,266.07 2,647.90 316,481.72 2/2/13 226 3,913.97 1,276.62 2,637.35 315,205.10 3/2/13 227 3,913.97 1,287.26 2,626.71 313,917.84 4/2/13 228 3,913.97 1,297.99 2,615.98 312,619.85 5/2/13 229 3,913.97 1,308.80 2,605.17 311,311.05 6/2/13 230 3,913.97 1,319.71 2,594.26 309,991.34 7/2/13 231 3,913.97 1,330.71 2,583.26 308,660.63 8/2/13 232 3,913.97 1,341.80 2,572.17 307,318.83 9/2/13 233 3,913.97 1,352.98 2,560.99 305,965.85 10/2/13 234 3,913.97 1,364.25 2,549.72 304,601.60 11/2/13 235 3,913.97 1,375.62 2,538.35 303,225.98 12/2/13 236 3,913.97 1,387.09 2,526.88 301, 838.89 1/2/14 237 3,913.97 1,398.65 2,515.32 300,440.24 2/2/14 238 3,913.97 1,410.30 2,503.67 299,029.94 3/2/14 239 3,913.97 1,422.05 2,491.92 297,607.89 4/2/14 240 3,913.97 1,433.90 2,480.07 296,173.99 5/2/14 241 3,913.97 1,445.85 2,468.12 294,728.14 6/2/14 242 3,913.97 1,457.90 2,456.07 293,270.24 7/2/14 243 3,913.97 1,470.05 2,443.92 291,800.19 8/2/14 244 3,913.97 1,482.30 2,431.67 290,317.89 9/2/14 245 3,913.97 1,494.65 2,419.32 288,823.24 10/2/14 246 3,913.97 1,507.11 2,406.86 287,316.13 11/2/14 247 3,913.97 1,519.67 2,394.30 285,796.46 12/2/14 248 3,913.97 1,532.33 2,381.64 284,264.13 1/2/15 249 3,913.97 1,545.10 2,368.87 282,719.03 2/2/15 250 3,913.97 1,557.98 2,355.99 281,161.05 3/2/15 251 3,913.97 1,570.96 2,343.01 279,590.09 4/2/15 252 3,913.97 1,584.05 2,329.92 278,006.04 5/2/15 253 3,913.97 1,597.25 2,316.72 276,408.79 8127/97 k.." Q Page 6 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance . 612/15 254 3,913.97 1,610.56 2,303.41 274,798.23 7/2/15 255 3,913.97 1.623.98 2.289.99 273,174.25 8/2/15 256 3,913.97 1,637.52 2,276.45 271.536.73 9/2/15 257 3,913.97 1.651.16 2.262.81 269,885.57 10/2/15 258 3,913.97 1,664.92 2.249.05 268,220.65 11/2/15 259 3.913.97 1,678.80 2,235.17 266,541.85 1212/15 260 3,913.97 1.692.79 2,221.18 264,849.06 112/16 261 3,913.97 1.706.89 2,207.08 263.142.17 2/2116 262 3,913.97 1,721.12 2.192.85 261,421.05 3/2116 263 3.913.97 1,735.46 2,178.51 259.685.59 4/2/16 264 3,913.97 1,749.92 2,164.05 257,935.67 5/2/16 265 3,913.97 1.764.51 2.149.46 256.171.16 6/2/16 266 3,913.97 1,779.21 2,134.76 254.391.95 712/16 267 3,913.97 1,794.04 2,119.93 252.597.91 8/2/16 268 3,913.97 1,808.99 2.104.98 250,788.92 9/2116 269 3.913.97 1,824.06 2.089.91 248.964.86 1012/16 270 3,913.97 1.839.26 2.074.71 247,125.60 11/2/16 271 3.913.97 1,854.59 2,059.38 245.271.01 12/2/16 272 3.913.97 1,870.04 2,043.93 243.400.97 1/2/17 273 3.913.97 1,885.63 2,028.34 241.515.34 2/2/17 274 3,913.97 1,901.34 2.012.63 239,614.00 3/2117 275 3,913.97 1,917.19 1,996.78 237,696.81 412117 276 3,913.97 1,933.16 1,980.81 235,763.65 512/17 277 3,913.97 1,949.27 1,964.70 233,814,38 6/2/17 278 3,913.97 1,965.52 1,948.45 231.848.86 712/17 279 3,913.97 1,981.90 1,932.07 229,666.96 812117 280 3,913.97 1.998.41 1.915.56 227,868.55 912/17 281 3.913.97 2,015.07 1,898.90 225,853,48 1012/17 282 3,913.97 2,031.86 1,882.11 223.821.62 11/2/17 283 3,913.97 2,048.79 1,865.18 221,772.83 1212/17 284 3,913.97 2,065.86 1,848.11 219,706.97 1/2/18 285 3,913.97 2,083.08 1,830.89 217,623.89 2/2/18 286 3,913.97 2,100.44 1,813.53 215.523.45 312118 287 3,913.97 2,117.94 1,796.03 213.405.51 4/2/18 288 3,913.97 2,135.59 1,778.38 211,269.92 512/18 289 3,913.97 2,153.39 1.760.58 209,116.53 612/18 290 3,913.97 2.171.33 1.742.64 206,945.20 7/2/18 291 3,913.97 2,189.43 1,724.54 204.755.77 812/18 292 3,913.97 2,207.67 1,706.30 202,548.10 912/18 293 3,913.97 2,226.07 1.687.90 200,322.03 1012/18 294 3,913.97 2,244.62 1,669.35 198,077.41 11/2/18 295 3.913.97 2,263.32 1,650.65 195.814.09 12/2/18 296 3,913.97 2,282.19 1.631.78 193,531,90 112/19 297 3,913.97 2.301.20 1,612.77 191.230.70 212/19 298 3,913.97 2,320.38 1.593.59 188,910.32 3019 299 3,913.97 2,339.72 1,574.25 186.570.60 412/19 300 3,913.97 2,359.21 1,554.76 184,211.39 512/19 301 3,913.97 2.378.88 1,535.09 181,832.51 6/2/19 302 3.913.97 2,398.70 1.515.27 179.433.81 712119 303 3.913.97 2,418.69 1,495.28 177.015.12 812/19 304 3,913.97 2.438.84 1.475.13 174,576.28 8127/97 V Page 7 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 912119 305 3,913.97 2,459.17 1,454.80 172,117.11 1012/19 306 3.913.97 2.479.66 1,434.31 169,637.45 1112/19 307 3,913.97 2.500.32 1.413.65 167,137.13 1212/19 308 3,913.97 2.521.16 1,392.81 164,615.97 112/20 309 3,913.97 2.542.17 1,371.80 162,073.80 212120 310 3,913.97 2,563.35 1.350.62 159.510.45 312/20 311 3.913.97 2,584.72 1,329.25 156,925.73 4/2120 312 3,913.97 2,606.26 1,307.71 164.319.47 5/2/20 313 3,913.97 2.627.97 1,286.00 151,691.50 6/2/20 314 3,913.97 2.649.87 1,264.10 149.041.63 7/2120 315 3,913.97 2.671.96 1.242.01 146,369.67 8/2/20 316 3.913.97 2,694.22 1.219.75 143.675.45 9/2120 317 3,913.97 2,716.67 1,197.30 140,958.78 10/2120 318 3,913.97 2.739.31 1.174.66 138.219.47 1112120 319 3,913.97 2.762.14 1,151.83 135.457.33 1212/20 320 3.913.97 2,785.16 1,128.81 132.672.17 112/21 321 3.913.97 2,808.37 1.105.60 129,863.80 212121 322 3.913.97 2,831.77 1,082.20 127,032.03 312/21 323 3,913.97 2,855.37 1,058.60 124,176.66 412/21 324 3,913.97 2.879.16 1.034.81 121,297.50 5/2/21 325 3.913.97 2,903.16 1,010.81 118.394.34 612/21 326 3.913.97 2,927.35 986.62 115,466.99 712/21 327 3.913.97 2,951.75 962.22 112.515.24 8/2/2i 328 3,913.97 2.976.34 937.63 109,538.90 9/2/21 329 3,913.97 3,001.15 912.82 106,537.75 10/2121 330 3,913.97 3,026.16 887.81 103.511.59 1112/21 331 3,913.97 3,051.37 862.60 100.460.22 1212/21 332 3.913.97 3,076.80 837.17 97.383.42 112122 333 3.913.97 3,102.44 811.53 94,280.98 212f22 334 3,913.97 3,128.30 785.67 91,152.68 3/2122 335 3,913.97 3,154.36 759.61 87,998.32 4/2/22 336 3,913.97 3.180.65 733.32 84,817.67 5/2/22 337 3.913.97 3.207.16 706.81 81,610.51 6/2/22 338 3.913.97 3.233.88 680.09 78.376.63 7/2/22 339 3,913.97 3,260.83 653.14 75,115.80 812122 340 3,913.97 3.288.00 625.97 71,827.80 912R2 341 3,913.97 3,315.40 598.57 68,512.40 1012122 342 3.913.97 3.343.03 570.94 65.169.37 11/2122 343 3,913.97 3.370.89 543.08 61,798.48 1212/22 344 3,913.97 3,398.98 514.99 58,399.50 112123 345 3.913.97 3,427.31 486.66 54,972.19 212123 346 3,913.97 3,455.87 458.10 51,516.32 3/2123 347 3,913.97 3.484.67 429.30 48,031.65 4/2/23 348 3,913.97 3.513.71 400.26 44,517.94 5/2/23 349 3,913.97 3,542.99 370.98 40.974.95 6/2123 350 3,913.97 3,572.51 341.46 37,402.44 712123 351 3,913.97 3.602.28 311.69 33,800.16 8/2/23 352 3,913.97 3,632.30 281.67 30,167.86 912123 353 3,913.97 3,662.57 251.40 26,505.29 10=3 354 3,913.97 3,693.09 220.88 22,812.20 1112123 355 3,913.97 3,723.87 190.10 19,088.33 8127/97 Page 8 LOAN AMORTIZATION SCHEDULE Loan Amortized at 10% Date Payment Number Payment Amount Principal Interest Principal Balance 12=3 356 3.913.97 3,754.90 159.07 15,333.43 1=4 357 3.913.97 3,786.19 127.78 11.547.24 212/24 358 3,913.97 3,817.74 96.23 7,729.50 3=4 359 3,913.97 3,849.56 64.41 3,879.94 4/2124 360 3,912.27 3,879.94 32.33 0.00 GRAND TOTAL 1,409,027.50 446.000.00 963,027.50 0.00 I ME Certificate of Compliance ATTACHMENT #3 ATTACHMENT NO. 9 CERTIFICATE OF CONTINUING PROGRMI COMPLIANCE CITY OF HUNTINGTON BEACH .725-733 Utica Avenue Period Covered 7-1-96 to 7-1-97 (Annual or monthly) The undersigned, Associates Nine, a California general partnership (the "Developer"), has read and is thoroughly familiar with the provisions of -the various Developer Loan Documents associated with the Developer's participation in the City of Huntington Beach's (the Issuer") Multifamily Housing Program, such documents including: 1. The Affordable Housing Agreement dated as ofll--22-96 among the Developer, the Issuer and (the Trustee; 2. The Loan Agreement dated as of 11-22-96 among the Developer, the Issuer and the Trustee; and . 3. The Developer Note dated as of 11-22-96 from the Developer to 'the Issuer and endorsed to the Trustee representing the Developer's obligation to repay its Developer Loan. 4. As of the date of this Certificate, the following percentages of completed residential units in the Development (i) are occupied by Lower Income Tenants (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Lower Income Tenant vacated such unit; as indicated: Total Units Completed 36 Number of Units Occupied 3y Lower Income Tenants: 55 Percent of Total Units Occupied by Lower Income Tenants: 97 (one unit occupied by manager) 11/04/93/s ;,lw.•.a,.1 & • 3 M Two Bedroom Apartments Held vacant for occupancy continuously since last occupied by Lower Income Tenant Vacant Units Unit Nos. .36 Rent Charged *680-70Qthiy percent Unit Nos. 0 percent Unit Nos. 5. No Determination of Taxability (as defined in the -Loan Agreement) has occurred and, to the Developer's knowledge, no event has occurred which, with the passage of time, would cause a Determination of Taxability to occur (or if such an event has occurred explain below the event and the steps being taken to remedy such event). The undersigned hereby certifies that the Developer is not in default under any of the terms.and provisions of the above documents. ASSOCIATES NINE By , H. c. stbvall Managing Partner "�3qa Mel Heckman Managing Partner a - Page 2 of 2 11/O4/93/s ASS 0 CIA 7 7,.'S NINE 94S Illlr Slr(,(-t Huntington Reat-Ir, CA 92648 (71-1) 536-2096 Dan Bruening 8-21-95 Dept. of Econ. Devel. City of Huntington Beach 2000 Main St. Huntington BeaO , Ca. 92648 Dear Dan, This letter is to certify that all current tenants (except the manager) meet the low income requirements described in Attachment #8, and as further delineated in the contract that Associates Nine has with the city of Huntington Beach concerning the units located at 725, 729, and 733 Utica Street, for the period from 7-1-96 to 7-1-97. H. C. ovall Mel --Heckman Managing Partners RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: 725-733 Utica Loan Agreement COUNCIL MEETING DATE: October 6, 1997 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution wlexhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable ContracUAgreement (wlexhibits if applicable) Si ned in full by the City Attome Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attome Not Applicable Certificates of Insurance (Approved by the Pity Attome Not Applicable Financial Impact Statement Unbud et, over $5,000 Not Applicable Bonds if applicable) Not Applicable Staff Report if applicable) Not Applicable Commission, Board or Committee Report If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not A !icable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORVMDED Administrative Staff Assistant City Administrator initial City Administrator initial City Clerk EXPLANATION FOR RETURN OF ITEM: RCA Author: -CE t ..r s KC r,Vi riry -... CITY OF HUNTINGTON 13ElI INTER -DEPARTMENT COMMUNICATION hA NUHTIYGfONtfAiH r �iN• ly i h:l aJ� TO: DISTRIBUTION UST FROM: CONNI£ BROCKWAY, CITY CLERK SUBJECT: COUNCIL ITEMS PENDING LOG DATE: 5/24/95 There are 40 items in the City Clerk's pending log so It Is Impossible to discuss each file with each project manager, therefore I have decided to distribute the attached pending log with your agenda Items highlighted. Please respond to this memo with a status report on your item. It no further action Is possible on your Item please obtain your department head's permission to direct the City Clerk to remove the item from the pending log and file away "as Is". Please respond by May 31, 1995. `�h 1 Ck t 5 IRV TEIVED MAY 2 4 1995 �:es�cbna.lpa.an�eai, , ��1 OF EC00 C VcLC.-►1.Et1S %%Mae ..WL PENDING LOG UP -DATED 5/22195 t � .- Tunose p SWtus. Department'Aorvd 1 2/4191 HoJly-Seacliff Parkland Dedication problem with corp, deed - to City Attorney Development Linear Park add deed restrictions - Bob Franklin various other deeds coming (Bill Holman) In future 2 12116191 FV School District Bushard Gym Buyout Original sent to escrow Community Services - Engle 3 1 C11 9/92 Performance Vs. City Settlement Agreement need original City Attorney 4 11092 County of Orange Storm Water Permit sent for signing DPW - Noble Implementation Agreement 5 415/93 Roadway Construction Grading of Gothard Landfill Need amended agreement DPW - Steve Site May 6 Yuri Ming Kao Property Exchange need recorded deed Administrative I Services Larkin 7 6121192 Security Capital Corp. NPDESP - National sent off for signing - needs Administrative Pollutant Discharge vendor's signature Services Agreement lease Elimination System Amadril purchase Program 8 8/16193 County of Orange Hazardous Material Sent to County for signing DPW - Webb Joint Powers 9 12120/93 O.C. Community 313-11 th Street Fell out of Escrow. 5/22195: Ecomonic r-�t Housing Corp Note re this coming from Development see dept head letter Runzel attached 10 12/20193 Civic Center Partners YorktowntLake Purchase need signatures Redevelopment Agreement - Kalser 11 1118/94 So. California Ediscn Agreement replace Need copy of Easement Water overhead electric facilities Deed for relocated SCE Operations wfunderground at facilities and copy of 'Ag rmt DeBow Garfield/Huntington CC-534 for Replcment of Overhd re Reservoir Hill Booster Sta Elea Facillies' 12 2r7/94 & County of Orange Federal Beach Erosion Agreement w/County for Community reaffirm Control signing Services Hagan 511/95 13 2128194 Seacliff Partners Holly-Seadiff Affordatle waiting for amended plan Community Housing Plan Development - Zelefsky 14 416/94 Kleinfelder consultant agrmt Central orig signatures from DPW Library expansion protect Kleinfelder to replace FAX Don Noble 5024 15 4/18/94 Service Works Quality Management Prog needs Insurance Adm - Silver 16 5/4194 Wittman ambulance billing prog Attorney change page and Fire Med Insurance needs atty Richard Kaump 1 stamp of opproval 1 158.9 17 6094 Assoc 9 rehab loan agrmt Waiting for Instructions Greg Brown EITAOC 1 725-733 Utica St 18 614194 KPMG Peat Marwick auditor-agrmt Needs insurance Finance I I Bob Sedlak 5/n955:00 PM CITY OF HUNTINGTON BEACH LJO V LV INTER -DEPARTMENT COMMUNICATION WNTINGTON BE401 TO; Ray S;Iver, Assistant City Administrator FROM: Connie Brockway, City Clerk G13 DATE: 813195 SUBJECT: Associates Nine Agreement Administration telephoned regarding the Associates Nine agreement approved by Council May 2, 1994. This agreement is on the City Clerk's Pending Log awaiting direction regarding date of agreement. There are several attachments to this agreement, one of which is Attachment No. 10 "Memorandum of Affordable Housing Agreement" which will require notarization of Associates Nine General Partners signatures. ,V,.,,` In reading the May 1994 RCA there were two resolutions referring to loan agreements, one between Agency and Associates Nine and one between the City and Associates Nine. is there supposed to be two loan agreements for this project and is the loan uj� ram-•-' . agreement referred to in the RCA the same as the "Affordable Housing Agreeme... We will await your reply and instructions. W` c.:� i b ►h Thanks RECEIV c AUG 117 1995 Eco; U=,Rre.s,yr or ot,.1c DEVEI~oFASE?gT 95-116C81kw She 13 RESOLUTION NO. 6590 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ASSOCIATES NINE WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier Redevelopment Project ("Project Area") authorize and direct the Redevelopment Agency of the City of Huntington Beach ("Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California Health and Safety Code Section 33670 (all section references herein are to the Health and Safety Code unless otherwise specified) for the purposes of increasing, improving and preserving the community's supply of low and moderate income Housing available at affordable housing cost to persons and families of low and moderate income, lower income, and very low income; and Pursuant to applicable law the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund");and Pursuant to Section 33334.2(e), in carving out its affordable housing activities the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low and moderate income to the extent those households cannot obtain housing at affordable costs on the open market; and Pursuant to Section 33334.2(g), City Council Resolution No. 6026 dated June 26,1989, and Agency Resolution No. 174 dated June 26,1999, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use will be of benefit to one or more of the project areas; and The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which -ftSoUneci.rsK wAtfmd thlV M 7 have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lower income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Affordable Housing Agreement ("Agreement") with Associates Nine,,a California general partnership - ("Developer"), for the rehabilitation of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The City Council has duly considered all terms and conditions of the proposed Agreement and believes that the rehabilitation of the Site pursuant to the subject Agreement is in the best interests of the City and the health, safety, and welfare of its residents; and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The City has considered the report of Agency staff on the proposed rehabilitation project to be carried out pursuant to said Agreement, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: . 1. - The City Council finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. " 2. - The City Council finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of lower income housing within the meaning of Section 33334.2. 3. - The City Council finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 2 44Vt«tAswdaua n wAffaa Hz&V4 znw 4. The City Council finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at an adjourned regular meeting thereof held on this 5th I day of July .1994. ATTEST: 1SC�i Agency Clerk REVIEWED AND APPROVED: Mayor APPROVED AS TO FORM: — =-A �- City Attorney r'—i 4-zL-9S- Ad )e-Ly_f✓ INITIATED AND APPROVED: Nam.. r ty Admnis to Director of Special ro)ccts 3 *j'An"noCWas IJiro-Afford FWa10UZM 6590 Res. No. 6590 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven, that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an reguular meeting thereof held on the 2nd of May. 1994, by the following vote: AYES: Councilmembers: Silva, Bauer, Robitaille, Moulton -Patterson, Winchell, Leipzig NOES: Councilmembers: Sullivan ABSENT: Councilmembers: None 4�vo� 4��- City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California RESOLUTION NO. 257 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ASSOCIATES NINE WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier Redevelopment Project ("Project Area") authorize and direct the Redevelopment Agency of the City of Huntington Beach ("Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California Health and Safety Code Section 33670 (ail section references herein are to the Health and Safety Code unless otherwise specified) for the purposes of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to persons and families of low and moderate income, lower income, and very low income; and Pursuant to applicable law the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund");and Pursuant to Section 33334.2(e), in carrying out its affordable housing activities the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of Iow and moderate income to the extent those households cannot obtain housing at affordable costs on the open market; and Pursuant to Section 33334.2(g), City Council Resolution No. 6026 dated June 26, 1989, and Agency Resolution No. 174 dated June 26, 1989, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use %Nzll be of benefit to one or more of the project areas; and The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which 4aWA&w_i d lone - AM. thS ffi n M have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lower income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Affordable Housing Agreement ("Agreement") with Associates Nine, a California general partnership ("Developer"), for the rehabilitation of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The Agency has duly considered all terms and conditions of the proposed Agreement and believes that the rehabilitation of the Site pursuant to the subject Agreement is in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The Agency has considered the report of Agency staff on the proposed rehabilitation project to be carried out pursuant to said Agreement, NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Agency finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. 2. The Agency finds and determines tliat expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of lower income housing within the meaning of Section 33334.2. 3. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 2 -C&WA, ciatoKne-ARs wsrou:yM4 257 1` . W 4. The Agency finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. 5. The Chairrnan of the Agency is hereby authorized to execute the Agreement on behalf of the Agency. A copy of the Agreement when executed by the Agency shall be placed on file in the office of the Secretary of the Agency. 6. The Executive Director of the Agency (or his or her designee) is hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to carry out and implement the Agreement and to administer the Agency's obligations, responsibilities and duties to be performed under the Agreement and related documents. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting thereof held on this 2nd day of May , 1994 ATTEST: Agency Clerk REVIENVED AND APPROVED: ve Chairman APPROVED AS TO FORM: A=,Counsel -�..e V- zx--Yq � _V_fV INITIATED AND APPROVED: Director of Special Projects 3 4W,WAwadaws Krim - Aft Fbs 104 IM 257 V Res. No. 257 STATE OF CALIEVRNIA ) CO[TNI'Y OF ORANGE ) CITY OF IR1NPII=M REUX) I, COMM i3Ii =K&Y, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO ICY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agetrzy of the City of Huntington Beach at a meeting of said Redevelopment Agency -held on the 2nd day of ny , 19 94, and that it was so adopted by the following vote: Silva, _Dauer, Robitaille, Moulton -Patterson, Winchell, Leipzig_ Sullivan_.. .. None ea 14 s ad 4 —Zd Clerk of the Redevel oilm' en gency of the City of Huntington Beach, Ca. REQUEST FOR REDEVELOPMENT AGENCY ACTION Date: May 2, 1994 Submitted to: Honorable Mayor and City Council Membersd APPROVED BI' CJW COUNCIL Submitted by: Michael T. Uberuaga, City Administrator '19 9 :.P L Prepared by: Mike Adams, Director of Special Projects ' crnrct�xK Subject: AFFORDABLE HOUSING REHABILITATION LOAN ACREENIENT: 725-733 MCA ANTNUE s 7 Consistent with Council Policy? JXJ Yes J J New Policy or Exception � � /-&J 4S9a Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: ;�� u `� .ty-cc..tv�¢�•eP�y-eti �-r.��y..oa� see►-�.� tis-.4c-a-�r.z. ��-ru.�.c.«� w,� SIATENIENI OE ISSUE _Z e f'rt 7w .rct ,Cep a - �1u� X_ . OtQw _..a c� / .lc e�.�1u- s VC aIi f rQa 1 �� 1] b • oar �2:Ee_ � w� On Apirilr4, E�94, the Redevelopment Agency appro d a o b e houstns re a ilrtatton loan agreement N,.ith the owners of a 36 unit residential complex located at 725-733 Utica Avenue. On April 6, 1994, the Agency voted to reconsider the April 4th action and then rescinded that approval and continued the item for two meetings in order for additional information to be presented. On April 12, 1994, a special meeting of the Florida -Utica Task Force Nvas held to discuss the affordable housing loan agreement. After considerable discussion, the Task Force voted to support the project, although there were two dissenting votes. _f � aC�i�iT�`►i l7:lt tTC7� Staff recommends that the Counci ]-Red evelopment Agency take the following action: Motion to 1. "Approve Resolution No. oI 57 approving a loan agreement between the Redevelopment Agency of the City of Huntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." 2. "Approve Resolution No. G 59U approving a loan agreement between the City of Huntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." ` j Discussion at the April 6th Council meeting produced three major areas of concern about the affordable housing loan agreement: 1.) the configuration of the Associates Nine partnership prior to negotiations with the city verses the present structure ; 2.) the rationale behind the forgivable loan; 3.) and the potential effect of tax credits on the project's annual income. Associates Nine Partnership Prior to October 1, 1991, the Utica Avenue apartments were the flash point for many of the problems in the Florida -Utica area. Mel Heckman and Sam Stoval were part of the original partnership, but only held a VI interest each in the property and did not have management control. When they became aware of the numerous problems that were plaguing the property, they assumed control in October of 1991. Not long after, Mr. Heckman and Mr. Stovall began informal discussions with city staff about the possibility of financial assistance for The property. Staff began these discussions with Mr. Heckman and Mr. Stovall because of their increased involvement with the property, and also because of their efforts to increase their respective shares of the partnership. By May of 1992, Mr. Stovall and Mr. Heckman had increased their interest in the partnership to 1/4 each, or 1/2 of the total partnership interest in the property. As the chronology of events indicates (Attachment No. 1), Mr. Stovall and Mr. Heckman were instrumental in cleaning -up the Utica property while actively participating in the Florida -Utica Task Force. They cooperated with the police department by making citizen arrests and by providing the police with a free apartment for use as a temporary substation. After the good faith efforts made by Mr. Heckman and Mr.Stovall, staff felt comfortable in approaching the City Council for formal approval to negotiate. On September $, 1992, the Council directed staff to formalize negotiations «pith Associates Nine. S446,000 Forgivable Loan Keyser Marston Associates (KMA), the Agency's financial consultants, determined the amount of financial assistance based on the economic detriment to the project that is created when rental units are price -restricted. This analysis, known as the "affordability gap", measures the difference between the market rents and the restricted rents. KMA concluded (Attachment No. 2) that the imposition of income restrictions on all 36 units would result in $446,000 in lost revenues to the project in net present value terms. The $446,000 loan takes the form of a forgivable, non -recourse second trust deed. This trust deed, along with covenants and a promissory note, is recorded as a lien against the property. The loan and the accrued interest ( which accrues at a rate of 150 basis points over the prime rate) lAill be forgiven at the rate of 1/30 per year over the 30 year compliance period, but the principal balance plus accrued interest would be due if a defwalt occurs, or if the property is transferred to %dia mic=2.&c 2 ma5an4 a new owner who wishes to remove the affordability restrictions. Non -recourse simply means that should a default occur, the security for the loan would be limited to the value of the project at the time of the default. Conventional real estate loans are considered non -recourse loans --that is, the property is the security for the loan, not the individual or entity who owns the property. The proposed deal is structured so that 1/30 of the principal and accrued interest is forgiven annually, but only after a review by staff for continued compliance with the loan agreement. Review of two major areas will occur: first, the incomes of the families living at the property (Loan Agreement, pages'5-33) will be reviewed to make sure that they do not exceed 60% of median income; secondly, the overall condition of the property will be assessed to make sure that the building and improvements are adequately maintained (Loan Agreement, pages 33-35; plus Attachment No. 7); . One other area w111 be reviewed as well: the use or sale of low income housing tax credits. Staff has verified with the first mortgage lender on the property, World Savings, that the property could not refinance, or qualify for a property improvement loan, based on the current 301/0 vacancy rate and the projected loan to value and income to debt ratios. This statement is consistent with the current real estate lending climate. S100,000 Grant KMA also agreed with staff that the project warrants a $100,000 grant to fund the pgtiQn rehabilitation work, which includes landscaping, security lighting, passive area, sport court and so on. These exterior improvements will greatly enhance the neighborhood while providing a secondary benefit to the project. Low Income I[ousing Tax Credits (LIIITC) Low Income Housing Tax Credits are available under both federal and California law. Owners of eligible projects can apply for these credits, which are then used to reduce income tax liability. These credits may also be syndicated (sold) to other investors. Where tax credits are awarded, they can only be taken over a ten year basis and under very strict conditions. Though the Utica project appears to qualify for tax credits, there is absolutely no guarantee that credits will be awarded --approval is not automatic. In California, state and federal credits are awarded by the California Tax Credit Allocation Committee (CTCAC). Competition for tar credits is intense, with CTCAC awarding credits to projects that provide the most benefits to low income persons (those at 50% of median income and below). Attachment number three provides a more detailed discussion of tax credit process. Attachment number four is a memorandum from Keyser Marston (dated April 20, 1994) that discusses the tax credit issue --as it relates to the Utica project --in more detail. An excerpt from that report states, in part, that aticeutkaM2_&C 1 f"S.1 ..94 assuming tax credits are awarded to the project, the gross value %vould be equal to 9% of the allowable costs paid annually over a ten year period. Assuming the developer would syndicate... the net value would be diminished to approximately 50% of the gross credit amount. For the Utica Avenue project, the ... credit is estimated to have a net value of approximately $250,000. KMA goes on to point out that The application process for tax credits is extremely competitive, and syndicators typically attempt to invest in larger scale projects than the proposed Utica Avenue apartment rehabilitation. Given both these factors, there is no guarantee that the proposed project %ill be awarded tax credits or that they would be salable in the marketplace. In recognition of this fact, KMA eliminated the proceeds of the low Low Income Housing Tax Credits from the financial analysis of the project performed in May of 1993. KMA concludes that It has been KMA's historical experience that small scale projects will often test the market by applying for tax credits, simply because there is not a large up front investment required to compile an application. Therefore, to protect the Agency's financial interests in the proposed project, and to prevent the developer from receiving excess assistance, KMA has recommended that the Agency be entitled to share in any net tax credit proceeds received by the developer. Given the developer's projected return from the project, and taking into consideration the fact that the developer must be provided with some incentive to apply for the tax credits, KMA recommended that any net tax credit proceeds be divided between the developer and the Agency on a 50-50 basis. Page thirty-three (33) of the loan agreement has language protecting the Agency should Associates Nine benefit from the syndication of tax credits. As currently drafted, the Agency is entitled to "no less than fifty percent (50%) of the net syndication proceeds." un:O - V14 till 0114!1 Redevelopment Agency Responsibilities The Agency mill provide a $100,000 grant that is specifically earmarked for exterior improvements, which include landscaping, lighting, a recreation area, and rehabilitated carports. "iamican2AX 4 ru5,S94 • The Agency mill also provide a $446,000 loan in the form of a forgivable, non -recourse second trust deed. This deferred payment loan will accrue interest at a rate of I50 basis points over the prime rate, but the loan and the accrued interest will be forgiven at the rate of 1130 per year over the 30 year compliance period. Developer Responsibilities • The Developer %vill undertake rehabilitation improvements necessary to bring the project into compliance with City building code standards. The Developer must also provide additional exterior improvements as outlined above. • Rents on all 36 units mill be restricted to the affordable level for households below 60% of median income ("low income"), as defined in the California Health and Safety Code Section 50053, for a period of thirty years. Unit Size Projected Rents Based On 1993 Income Standards 36 Two Bedroom $717 Rents will be adjusted annually when household income figures are published by HUD. As mentioned in a previous staff report, the City Council directed staff in 1992 to negotiate with Associates Nine as a follow-up to actions taken begirming in 1990 to improve the quality of life in the Florida -Utica neighborhood. The area has been steadily improving during the past two years due to the cooperative efforts of several City departments. A planned street improvement project will begin throughout the Florida -Yorktown area %ithin forty-five days, further adding to the enhancement effort. Rehabilitation of 725 Utica will dramatically change the character of this neighborhood and at the same tune, contribute to the Agency's replacement housing obligation. The Agency's financial involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #8). Further, a majority of t'te funds allocated to this project can be used as matching funds for the HOME Investment Partnership Program. Redevelopment Housing Set Aside Funds budgeted for this project in the 1993-94 fiscal year. ► icivic".&C 5 ra5,7A4 i ALT,EM TEL_IVF ACTION: The City Council may motion to: 1. Direct staff to continue negotiations with Associates Nine. 2. Approve the loan agreement %%pith amendments. AMCIINIENTS: 1. Chronology of Events 2. Affordability Gap Analysis From Keyser Marston Report 3. Low Income Housing Credits --Orrick, Herrington & Sutcliffe 4. Memorandum from Keyser Marston Dated April 20, 1994 Addressing Tax Credits 5. Request for Agency Action Dated March 21, 1994; Approved April 4, 1994; Retracted April 6, 1994 MTU:MA:GB:gb tsi:luAm 6 U25n .4 �WW - ) 3_/02/� LO I &!� ,a del"�p permits and not later than the Conmen ement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of 4 revised Orange County median income figures by the United States Department of Housing and Urban Development. M Selection of Tenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who ar not recipients ("non Section 8 Recipients") of federal certific ties or vouchers for rent subsidies pursuant to the existing p 9gram under Section 8 of the United States Housing Act of 1937 o its successor ("Section 8 Program"). In the event that Deve per is unable to rent an available unit to a non -Section 8 Red Tent, then Section 8 Recipients may be considered as tenant . If the Developer is still unable to rent the available unit, th Agency may, at its sole option, identify a lower income household o occupy the available unit. (f) receives Low Income Housing . If the Developer Credits for the rehabilitation project, no less than fifty percent (50%) of the net syndication proceeds must be used to reduce the outstanding Agency Loan balance on the Project. WNIM-T0—:0TA4iAMIMuiA0 411 The Developer shall maintain thV improvements on the Site during the Affordability Period in ac\fa with the Declaration of Covenants, Conditions and Rns (Attachment No. 7). If at any the Developto adequately maintain such areas, and such condition isected after 02/23/94 -33- •_ ' , � ASSOCIATES 1V1Av.) 943 1 1th Strect 11unfington Beach, CA 92648 �p , (714) S16-29QG April 7, 1994 Greg Brawn Development Specialist/Project Manager Department of Community Development City of Huntington Beach 2000 Main St. Huntington Beach, Ca. 92648 Dear Greg: The following ifi a chronoloW—of Events concerning -the rehaw, of our Utica Apartments beginning in November 1991, and leading to the approval and subsequent retraction of approval. I hope it will be of some value to you. 11-1-80 Associates Nine formed and Utica property acquired 10-1-91 Mel. and Sam assume mgmt. of Utica property 11-?-91 Began discussions w/Pat Spencer, Greg and Dan Bruening regarding rehab program 11-6-91 Mtg. of Assoc, Nine partners to gain authorization for negotiations with city TASK FORCE MEETINGS ONCE EACH WtMl - Sam or Mel always in attendance. Some members of staff always there. Proposed rehab discussed and explained often; support assured by task force members 11-91 to sum er 193 - Managers made many citizen's arrests at the. property for trespassing and drug dealing. Narcotics officers called in m--my times to make arrests. Portable police station located in front of apts. for one week qn two different occasions. 5-6-92 Ltr. from Pat Spencer to Affordable Housing Task Force concerning Utica rehab 5-14-92 Officers open a poli ubstatio n Apt. #61 729 Utica 10-7-92 Proposed -Deal Points letter from -Greg Brown 5-11-93 101A financial analysis report and subsequent mtg. with them and staff including Paul D'Allessandro) 5-25-93 KMA revised analysis 6-29-93 First draft UTICA REHAB AGREEMENT (followed by several mtgs between staff, K. Reynolds, T. Jacobs, Mel, Sam and Paul D'Alessandro) A\-�_ eA�c� o \\\\ e & 2. 9-13-93 Second Draft (Additional ma-?tings) 11-4-93 Third Draft P13Adl tings) 1 23-94 Four ra�yt (f�n�l revision) 3-21-94 Project placed on Council agenda but carried over to 4-4-94 due to crowded agenda 4-4-94 Redev Agcy approves agreement 4-6-94 Redev Agcy retracts approval Sincerely, H. tovall �✓ �..� 46.�.,,� duo. -�' TABLE 2 COMPARATIVE INCOME ANALYSIS 1000/, OF UNITS @ LOW INCOME (60% MEDIAN) UTICA AVENUE APARTMENT REHABILITATION HUNTINGTON BEACH, CALIFORNIA -- NET INCOME BEFORE DEBT SERVICE-- 100% MARKET INCOME RATE UNITS RESTRICTIONS DIFFERENCE YEAR 1 $34,893 $29.561 $5,332 YEAR 2 41,920 33,433 8,488 YEAR 3 49,229 37,371 11,858 YEAR 4 56,831 41,376 15,454 YEAR 5 64,736 45,448 19,288 YEAR 6 72,958 49,586 23,372 YEAR 7 81,508 53,790 27,718 YEAR 8 _ 90,401 58,060 32,340 YEAR 9 99,649 62,395 37,253 YEAR 10 109,267 66,796 42,471 YEAF. 11 119,270 71,260 48,009 YEAR 12 129,672 75,788 53.884 YEAR 13 140,492 80,378 60,113 YEAR 14 151,743 65,030 66,713 YEAR 15 163,445 89,742 73,703 YEAR 16 175.615 94,513 81,102 YEAR 17 188,272 99,341 88,931 YEAR 18 201,435 104,225 97.210 YEAR 19 215,124 109.162 105,962 YEAR 20 229,362 114,151 115,211 YEAR 21 244,168 119,189 124,979 YEAR 22 259,667 124,274 135.293 YEAR 23 275,582 129.403 146,179 YEAR 24 292,237 134,573 157,664 YEAR 25 309,559 139,780 169,778 YEAR 26 327,573 145,022 182,551 YEAR 27 346,308 150.294 196,015 YEAR 28 365,793 155,592 210.201 YEAR 29 386,057 160.911 225.146 YEAR 30 407.131 166.247 240,884 NPV @ 10% DISCOUNT RATE S446,000 9CoiPCE, K"SEA tA+lFlMON ASSOMTES. INC. FILENAYI. Ur)CA. % LIAY.IM:ALW �VACfMM 13 condition of Lhe sE�•�est !cs 2llatxtion C'JLAC hxs hi5tosica!1ti• liven pricrin• to h, .:sir.c }J:nws. ` A cin , count;•, housing au;horiry or r:.Jevelopment agency may not issue bon.4s for multi �.: r.: i' _�e i«uer �25 r'tl cp-:_:.i i::f, rr :a:i, n as .p,, .;:bL }�•'zw. and the state trmsurer hats certified to the legislanire that such information has been filed. Certain repors we n•pically required to be tiler on a periodic basis by developers with the issuers of housing bonds. f. Advantages. Loeser interest Rates. Because Lie : x-exempt interest rate on multifa^ni!;• housing revenue bores is passed through the lows to the developer, a developer will pay a lower rase of interest on its loam L'tan would ; e available from con;en:ional monease lenders. l: ner Loan Terms. Lea-.s mz, e from ^rocPetJs of :multif--Rv ho •smv L L .. r ...... �... , L a rerer . vnds c a e �r to-,:.s as lc: A� as • s, :''to,.gh they 2- ;.s_JI; ;ss for terms cf twenty to thirty years, which is longer than is t}•pically available for conve-aiO al lov.s. g. Disadvantzges. Procedural requirements. The procer_ral requirements for obtaining financing from a nul:ifLnily housing bond Frogs.-t (in _' a stare imposed re0sunrement for add'►-: ono spc�r-i�_•, such 2s a Itne- of c-:::: or parar:ee) can be compl;'ca:e3 and lime con sl:t' ine. Occupancy requirements and income lirruts. The occuYancy reyuirernens mar income li.:,is imposed by state and federal law to qualify the multifamily housing bond Freg:z_n 2s legal Fund tax-exe-n t may or may n :: be more stringent than aa}• immpcsed by the ge;err en:al entity under L':e zoning cr the permit Process on Z^}� housing de; e.c er,s ::- d,ess cf L7e me:.'tod us— :a ce il'te Project. De; el,�t e: s rya; cenclure that such restrictions z-e too costly. 3. %Otis' LNCONIE HOUSL�G CREDITS a. General. BoLh federal and California state law establish low income housing tax credit Frogra.:.s. Under L'te pro€moors, owners of projects can apply for credits against federal and state tax liability. Because a tax credit is subtracted directly from Ltie amount of taxes, it results in a dollar -for -dollar reduc:ion in tl' a taxes owed by a trope.:; owner. 0u-ners of 5uali`}•ing low income hot:s:ng projects L'tat have received a credit allocaacn c^en syndicate and *sell" 'their tax c:edhs to investors who conu'sbu:e equity funding to a project in exchW7ge for a Fo~ie- cf U. t:X ore dit a.-t3 rel_'ed ec.,r.C,..iC bene:is. The :-% cs%ors' `•.:nds a: a use to finz-+_e a ; roject•s corstrvction or to pro% ide financing for its c-'Crational Costs. Illfi: Cq vko JW3 Cs :6 Mer^q%,e L S4.6he v b. Dticription Of U%4- Income Housing Tax Credit Programs. Tax credits ale available under bo:.'t federal and California law. Alt.'.ough the objective of both the federal and t'.e s.a;e programs is to increase the supply of I; w income housing, a stale has imp: s:d additional requirements on state programs. The California Tax Credit Ailocation Comminee (CTCAC) administers both the federal and the state tax credit programs. Because the federal tax laws is extremely detailed, only the general features of bc:h ;.he federal Lid s:_.e rr;gra:ns zre described below. The additional requirements impLs:.d by the state program^. are discussed separa:ely_ Developers should consult with their tax a.visors for additional information. C. General Federal and State Criteria. Tice general federal and state criteria for low income housing tax credit prograrns is summarized below•. (i) Eligible Projects. As stated above, only rental housing projects are eligible for tax credits under the federal vid state programs. Tax credits a:e provided for the projects involving: (a} new cc-structionx () substantial rehabilitation; (e) certain Types of acquisition; or (d) cer.ain motes of federal subsidies. Tax credits are awarded to the owners of t;:e }reje`t bwcea cn ;.he "eli=role basis" of the project, which is the construction (or rehabilita.ion) aid development costs of the project, exclusive of land ccs*s. (ii) Volume Cap. Both the federal vclume cal and the State volume cap cn credits are manated by CTCAC. Developers of eligible projects must apply to CT CAC for and receive a.-i xlloratiCn..:f crtdis to atr.:ally take t`,e credit arainst their taxes. Newly consu µ ._:d projects—,,;;st rtzeive an allocation of tzx credits before December 31 of the yez. which e rrcjw i `rs "placed in service", whic:i in t s .�. t mac a generally means en the t r p je:t has received a cz ,ificaie of occupancy. In those few cases Lev, a }•rojz`t bcr:g scq;:ired is eligible for credits for Lhe acquisition costs, the tax credits must be obtained before December M of the vear in which the project is '=;'area. Because of intense co:nre•ition fcr the credits. CTCAC awards credits to projects that provide greater benefits to low- income persons. The proceJures for the allocation are described below in pan d. . Once a project has received an allocation of credits, the credits may be taken in each of the ten wears of the credit period, provided that the project continues to meet the targeting requirements. - Federal tax law allows tax credits to be claimed without an allocation where a project is financed with tax-exempt bond proceeds to the extent of either (a) the an.ount of the eligible basis which is taken in account for the private activity• volume car allocated by the CDLAC tSee Chapter 111.1)1 or N the entire qualified basis if at least sevenry 1"0 t 1 of the aggregate basis of the Project (includirp t`e ;'e:id:.^.r 's-tj any is :, t:,1ed ;o be "�.:nctiorall� rcla 4 r a.nd subord:::3ted) is f rannced with Lhe pr oce:ds of tax exerr; t hnn. ds. tione_heless. eu nets c f such p. ojtcts m_st ar;'.N' to CTCAC to .e;=:\ ; "he c: e;;it documentation. Fea!v l an.a, S Vmt lc -A -@,,. `Ls: Pt' -.OM ceilings be "set aside" for projeCu own=;':y nonprofit orra:.;.za:icns (r;:a:irtsd 501(c)(3) or 501(c)(4) organizations). State law further requires gnat to en;y percent (20 %) of born the federal and state tax credit ceilings be set aside for n:ra] proje:.s and that IWO percent (:%) of Lhe federal an3 state tax credit ceilings be set aside for small develo, meat ,rejects. (jii) Amount or Credit. A prc e.:t that maintains low income units as al ordable ren-al for lots' income persons for up to thirty years. in compliance with federal tax law and federal requi.emer.ts, may ta1;e Ln MX Credit 2gai:.st income fcr 10 yers. The actual a.^tount of Lhe tax credit vz:ies.. For a'.I new bu ldi: gs ani 1.%.."...ngs Lhzt receive substa_n-W re` 'kM-Vion' the ar•nount cf Lie total tzx c:e; it is ey::al to seventy per cent (70%) present value (or approximately 9 v per year) of the 'qualified basis." For acquired projects t-':at do not qualil%, for r=ks*=ial rehabilitation tax credits and projects U� at receive federal subsidies, tl' a anount of the total = cr:4it is L11; y ger cent (50 R l present vzvtae (cr arrrcxi—.ate;v K per year) of the qualified basis. Projez:s to:aced in areas desigrat-" as dit-5c.. t development areas or in qualified cens_s tracts mzy qualify for a sreci:l rLle incrers?rg eeir quz!if►ed basis to cne hundred. chin► • per cent (130 %) of expend i ores. Ba,"S i "L Wis is L't el:£ible tzs;s 1i.^.1es L'1e "err+1C5' le 1'7=06—n." The 'atrlica:'le fraztion" represents ' e percenure of Lhe p:oi=teat is treed by low-incorne tera.-s. a ;ual to Lhe lesser of the :centzge cf kv-i;tcorne uric or .Lhe peftenta_e of residential floor space dedicated to lea' -income units. - If t ert is a : w:;crc.1 in ^ :2iir'ted r is i:t L7 yea,- (': eca :se. fcr example e is a red'sciion In •.he r.uml er of ::s -.nted to lcx-:nco:ne ire:s:ns}. ere is a method for recarruring a ,cr.ica of Lhe previously used credit. Ellzible Buis. The elizible basis of a project is the adjusted basis of the improvements at .he close of business of Lhe first taxable year in which Use tax credit is a:located. b;o land costs a:e included in eligible basis. t ial R lia'�ilitati^tt. Where L' a total cost of rehabilitating low income unis within a pro)= o\'er a twenty -four rnonuh period equa!s S3,000 or more per unit, L'te rehabilitation is treated as a sera:ate new project. Acouisitiens. A project at was acquired and reha'.+ hated may qualif; for a tax crwit On!y if ;z) ei:.her h has been at least tea years j:..._ ._ ♦•a ..e da a she w 6t last pleCeJ !1 w\ IBC -I t !C Lf t:e most tozent substantial rchabihtmicn of the building or a 111-65 Cti+-Vm ?. A C".k. M -'vwa A %QL-b", waiver is granted by the Se_-re:.a.�' of tube Treasury and c1) Lhe tc':Gl cent expended in re.`.abilhxing icw in:crne units -a -hit. a project CVV a twenty-four month period eq malls «,WO per unit or more (S2,(M in the case of a project with a waiver ;-cm Lhe Sec -eta.-}• or 1-he Trea_su-0. FtJergi r• n • ,)" ' &,i . Projects that reserve a ltaera; subsidy, which is defined by federal lain to include the use of any tax exempt bond proceeds. m2y quali?N• for a tax credit of Chia►• per cent (30 S) present Value of L':s qua,: Jed basis. The CL:aiifei basis of a project that receives a federal grant must be reduced ry the amount of Lhe t rant. (iv) Minimwn Low Income Requirements. A minimum percentare Of units must be OCCL'pted by low income households for a project to qualify to receive a tax credit. EiL�er (i) twenry per cent (20 %) of Lhe units must be occupied by households whose incomes are at fifry per cent (50%) or less of med'XI income (adjusted for family size) or (ii) forty per cent (05) of the uniu must be set aside for households are at sixty per cent (60%) or less of the median (adjusted for family size). The project owner must choose which of tw-o options will apply to Lhe project. In addition. Lhe maximum rent charged for the 1cw"-income units cannot excp,.e"4 thin• per cent (30 115',) of the elected mLxj,-num incc.:�e. Incomes are a-"-us.ed for 1.L .i:}• size. Projects must maintain these ,..::i.:t::.:t levels Chroughout . a f f.een vezr compliance period. w"iLh an additior.all ft:Zeen }•ears extended use period. Ritere a project fails to ..+_intz.-n its rninir: = level in any given ti'ew, it ear -tot any tax credits 1.^. that }•eL.. :.ties a. p!v to prvje= 1, w-l;i.;m s,z'.e tax credit is soueht: via} state tax crtSi-s will o�Wbe ziocated to rr:iect� that z:e e'.igible fur a.."-ece've fey era! :_x stet :-s� � tY ; ;�) s:x crw:s ::e :c;:e, .•'er a period of four years. (c) thesta:e com?'.jli=ce period is t+:il'.�' yea:s ifCr ail projects w't ,,.e: r...eiti•m.....,..er;~ cr a.7., s:.,}: tax , ::. (..) :.. r naximurn a.':i.^�::i of 5,a:e c: e-li s iS :...:i,6-, to h;. i1' ter cent r,:) basis for projects rxeivir:, Lhe seven-y per cent. (70%) s'..4.era1 t=x C.'-d;. :ate ar.: thirteen per cent (13 r) of qualified basis for projects receiving t}+e thirty per cent (30 ti) federal tax credit rate. d. Procedures. Federal laav requires states to establish qualified allocation plans that set forth criteria to determine local housing priorities and to give preference to projects serving the lowest income tenants and to those projers obligated to serve lowv income ttnants for the longest periods. Each stare rr:eives a a esil ^wed amnual federal tax credit ceiling. which is calculated by multiplying the State's Population by S 1.25. The s:31e tax credit ceiling is S35.000.0(:� per year. The state tea: c tdh ceiling may increrse .n any Eiven year if there were unused tax Credits from, t::e prz.maus .car. II1-66 CM -412 10.n -.' .:L 4n•,ave t S:a:e law designated the CTCAC zs :.`.e :::v hoes.-g credit zgency to implement the fe.:::2.t and state tax Cre`lt pr.-vz :s. In ..ter to =-th-e t;x credits, Lhe follcA•ing t1hreshold requirements must be satisfied at :}e time an' application is submir•ed to CTCAC: (i) a need must be shown for ]oa-i:,tome housing in Lhe comnnunity or region --he- .s •.^. a anv •O :-e�:-..C) «.w. . r:♦ : w .... r..r...� ...r .ir...L for Lhe srt ject must be sufficient to cornYleie z_13 operas.: the proje:t: (Hi) Lhere must be enforceable financing commitments (e!Lher fo: constriction or for pernivent financing) for at lerst 50 of the total estimated cost of Lie project. (iv) Lhe sponsor must have and must maintain control of the site for project; IM ta'ie project must comply with all zpphc_b!e local land use and zoning ordiran:es: (vi) the irojett development tears must de.:.crs:rate the experience and financial capa::.%- to ens -um the project will be completed and will be operand for Lhe required period: �.d (vii) L'e amount of tar credit applied for must be necessary for Lhe financial feasibi!i y of the project and its viability as a low income housing project during the required period. Currently. the CTCAC estpbflshes r::ter n•cles during which zrplicadons may be ;fled and considered. O,-Jy complete 2--t::::'.gible applica-dons will be evaluated and rarIed a;•er the close of each cycle. The point categories established by the CTCAC for evaluation of application is as follcws: . Strvice Tenznts wiLh LoG-es: Inzomes 30 points Se.-irg Qualified Tenants :cr Ungest Period 25 points Special heeAs: A. Large Families 25 points B. Homeless.?r?_^s6tioral 15 points These categories are r..c::ccl;r exdusiiye. . At -Risk Projects 20 points LCC20 or Owner 10 points . Special Tenant Amenities 5 points . Project Location 5 points When an application is approved, a ce:.r.in dollar amount of the tax credit ceiling is "reserved" for Lhe project. When the project as proposed in t+he application is placed in service. assuming it is completed within required time lines, a final financial feasibility review is cc:rnpleted to determine Lhe exact tax r. ed:t amount needed for the project. The exact Unount depends on actual certified costs 4rid the credit rate effective in the month U�e prcj--zt is placed in service. ;:i•6- 'cw-vn 1w) C+n L Hw-mews i S-m_W, V C. LOAN &N-D GRANT PROGRAIIS OF THE CALIFORNIA DEPARTAiEN7 OF HOUSING AND CONMUNITY DEVELOPMENT The following is a descriptive Iist of programs operated and administered by the California Department of Housing and Cor.•..:tunky Development (CDHCD) that can be used to provide housing. Aldhough many of these programs do not irvolve tax-exempt financing, they may be of benefit for particular developments. The information contained in this section has been reproduced from a publication entitled Loan onj Grant Programs for the DA sion of Communiry Affairs, March 1991, State of California, Derarrrrenr of Housing and Cornmu by Development, with the permission of the CDHCD. Because dhe information is subject change. readers are advised to call CDHCD directly to obtain information about a paricular program. 1. HONICEOWNERSI P CONSTRUCTION. a. Caliromia HorneoK-nersWp Assistance Program (CHAP) Purpose: To zssist low and median -income families to act,ieve hone-c-u-nership. I�•pe & Terms of Assistance: Program assis.ance is in &,e form of an equity sharing mortgage participation loan, whereby the state provides loans of up to ford• -nine per cent (409S) of the purchase price of a horse with the balance fininced ._y a Private lender. The buyer provides a small down r=_�•ment and pays clesir.2 tests. Whvi the home is sold, tare state loan amount and a proportional share of tie a:e repaid to tl' a CHAP revolvine loan fund. Eligible Activities: Home purchase by renters who might be disr':aced by condomi ;jm or stock cow er.--.ive c^,.^. e:s..a; Brace purchase I.V no'•t'r�o.e park residents when the park is converted to a ccndominium or a stock coop era..;ve: buyers of factcry-built housi^g or mobilehomes developed on permanent found_tiors; aad development or purchase of resident -owned r:..bilehome parks by nonpro;it corporations. Eligible Applicants: Local eoyern^:ents, Indi2-n Reseryatiens, and norrrcfit corporations. Application Procedure: Requests for Proposals are issued as funds become available. • Authority: Health and Safety Code Section 50775 et seq., Statutes of 1979, Chapter 1043. Contact: (916) �"5-0110. W-6s C,-, .9O1 -w.-1. 1'-,--V-1 J 1--1-, =zz;z KE ' ES7 ATTAR 14 Y+ E Y S E R N,I A R S T O N ASSOCIATES 1 ti C, 32C Sm- M CXAP-2 A%Wt� 71. S_ -L 3410 La A WZZ:J t, CA:►rax"A 2111622.104E TAX 20/622-5204 Date: PAX TRANSMITTAL Pleats Deliver the Following Paget to: FIrm: - . C: A --ma is U:: pit Er -A -t Fes:Dwe Dr.szFwwe: FIwai paxY Lax Am— I Ca:11'a+ E.1i-=Js 11 K AT"'x&r M. H&Ac S,w D;r a CCU,= W. ,1:vt:1 F-46: I. Wr.uaxv, SAN Ft.0 P.-.3= A. j e+.inr Krm T.LL—. "CYr.ar Kart Est F:.*ii Dwisi L Ca::zt Total Humber of Past (Including trarienittlt shoot): ror Your hvview 0 For Ycvr G F.Y.I. © For Yc-.r Flats Hard copy to to!Eow via: �3 Fl:st-class Ms'.1 L' t: essan;sr C Fscsm; Exprost ❑ V411, N% Fc4w it all lnOlcpled Feyes cl this lrensmission are r:,, raceivec succrss!ully, please Confect us 1.mmed;a;aly at f717) .22-!095. T`rrk4-C:.,. �t Operator: _ -; i' ' ___„ __ na:elvino Fax a: 01 KSYSER MIARSTON ASSOCIATES INC. PJa[ :S'L`► ��: 5�:—� G><e,� A•..�:[.5_.-[ :c5- ictar�t.�-.,r.; 2:3/622-605 ►Ar 213/62:•5204 L^► A Ysr-*r ;Uni .x_ ! Bl--T: CA:V1P, F. Hx:n.'I X z X 0 R A Y D 0X SAO;DA:3 Ran.r J. Wm—.itc SAX FJ AN::I:J A )tut KrYus .:Mz--r:r C Xguy KA—Mr. Pat Spencer, Pout `E.0 vury Director of Housing and Building Department of Co=unity Developoen* - City of Huntington Beach FRO`;: KSYSBR ir.STOh ASSOCIATES, INC. SUBJBcl: Utica Avenue Apa, ;.wen is Impact of Low Income Housing Tax Credits DATE: April 20,. 1994 Keyser Marston Associatss, Inc. (M) presented i financial a.-Mlysis of the proposed Utica Xvenue apart=ents rehabilitation project in 'a memarardum dated Hay 11, 1593. Based on the anticipated project costs and engo'_ng revenues, K*'.A---cl::ded that the project warranted financial assietatca tctalli&-Ag :546,000. A prizary consideration in the analysis was the fact that the developer will be required to i_pcse income restrictions on the project for a 30 year period. As a Wezns of ensuring that thR Agancy assistance is used to offset the economic detriment caused by these income restrictions, KMA reco=ended that $446, 000 of the assistance be structured as a loan, which Would then be forgiven on a proportionate basis annually over the life of the income restriction term. In that manner, if the developer defaults on the terms of the agreerant, the outstanding balance of the loan, plus accrued interest would bscoze i=ediately due and payable. As a part of the financial analysis of the project, Kv.A factored in the value created by Federally issued Low Inca»e Housing Tax Credits. These credits are desicn*i to encourage the develop=ent of affordable housing for very-lcw and low income housn::olds by providing an additional source of capital for qualified projects. The program awards tax credits on a co...re,.itive basis to develcpars of affordable rental housing projects that =set specific criteria. Page 2 Typically Low Inccwe Housing Tax Credits are bold by h to corporate or individual investors through public syndication. These investors hanefit from the tax purchasing an c nership interest in a tax credit housing pieces of =ultiple projects included in a syndication turn, such investors take an equivalent credit against liability ever a ten-ysar period. developer or private credits by project or pool. In their tax Assuming tax credits are awarder to the project, the cross value would be equal to 9% of the allowable costs peid annually ever a. ten-year paricd. . Assuming the developer would Syndicate the credits, the net value would be diminished to approximatsly 501 of the gross credit =Unt. rcr the Utica Avenue Apartment project, the Low Income Housing Tax Credit is estimated to have a net value of approximately S250,000. The epplicaticn process for tax credits is extrewely competitive, and syndicators typically atte=pt to invest in ltrgar scale projects than the proposed Utica Vanua apt tment rehabilitation. Given both these factors, here is no guarantee that the proposad project will be awarded tax credits cr that they would be saleable in the warket pl_ce. In racognithn of this fact, kfA eliminated the proceeds of the Lov lnccre :sousing Tax Credits from tha financial analysis of the project rerfcrned in way of 1993. It has been XNk s hictcrical experience that s_.al- scale projects will often test the market by a;;1y_a= for tax credits, sirply because there is not a large upf_:nt investment required to co=pile an applica:.icn. Therafers, to rrotert trm Agency's financial interests in the proposed project, and to prevent the developer from receiving excess assistance, IC ak has recc=andad that the Agency be entitled to share in any net tax credit proceeds received by the developer. Given the developer's projected return from the project, and taking into consideration the. fact that the developer = s t be provided With some incentive to apply for the tax credits, KYA recoLmended that any net tax credit proceeds be dividad between the developer and the Agency on a 50-50 basis. xxxrlp 24067.0003 4MI MP U REQUEST FOR REDEVELOPMENT AGENCY ACTION Date: March 21, 1994 Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrator i t Prepared by: Mike Adams, Director of Special Project Subject: LOAN AGREEMENT: 725-733 UTICA AVENUE /Z 55 Consistent with Council Policy? [XJ Yes [ I New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: 3/-x1/9 q- - -4 4,/v h Al, '` STATENIE `NT OF ISSUE: VN ylYllq �PfPIWM ct"0&Z&.lJ On September 8,1992, the City Council authorized staff to negotiate a financial assistance package with the o%%mers of a 36 unit residential complex located at 725-733 Utica Avenue. After nearly one and a half years of protracted negotiations, an agreement has been reached %ith Associates Nine, the partnership that owns the property. Staff recommends that Council take the following action: Motion to "Approve Resolution No. Q?S5 Approving a loan agreement between the Redevelopment Agency of the City of Iiuntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." 2. "Approve Resolution No. 45717 approving a loan agreement between the City of Huntington Beach and Associates Nine, a California general partnership, calling for the expenditure of no more than $546,000 in housing set aside funds in exchange for thirty-six units of affordable housing for households earning below 60% of the Orange County median income, for a period of thirty years." ANALYSIS: As mentioned above, the City Council directed staff in 1992 to negotiate with Associates Nine as a follow-up to actions taken beginning in' 1990 to improve the quality of life in the Florida -Utica neighborhood. The area has been steadily improving during the past two years due to the cooperative efforts of several City departments. A planned street improvement project ,%ti711 begin throughout the Florida -Yorktown area within forty-five days, further adding to the enhancement effort. Rehabilitation of 725 Utica will dramatically change the character of this neighborhood and at the same time, contribute to the Agency's inclusionary housing obligation. Special Projects Division staff and Associates Nine have concluded negotiations, and have agreed to the following deal points: Redevelopment Agency Responsibilities The Agency will provide a $100,000 grant that is specifically earmarked for exterior improvements, which include landscaping, lighting, a security system and rehabilitated carports. • The Agency will also provide a $446,000 loan in the form of a forgivable, non -recourse second trust deed. This deferred payment loan will accrue interest at a rate of 150 basis points over the prime rate, but the loan and the accrued interest %Nil] be forgiven at the rate of J/30 per year over the 30 year compliance period. Developer Responsibilities • The Developer will undertake rehabilitation improvements necessary to bring the project into compliance with City building code standards. The Developer must also provide additional exterior improvements as outlined above. • Rents on all 36 units will be restricted to the affordable level for households below 60% of median income ("low income"), as defined in the California Health and Safety Code Section 50053, for a period of thirty years. Unit Size Projected Rents Based On 1993 Income Standards 36 Two Bedroom $725 Rents %,,ill be adjusted annually when household income figures are published by HUD. Project Economics Keyser Marston Associates (KMA), the Agency's financial consultants, determined the amount of financial assistance based on the economic detriment to the project that is created when rental units are price -restricted. This analysis, knov ri as the "affordability gap", measures the utiaJlilew" dm 2 rm32 1 94 difference between between the market rents and the restricted rents. KMA concluded that the imposition of income restrictions on all 36 units would result in $446,000 in lost revenues to the project in net present value terms. KMA also agreed with staff that the project warrants a $100,000 grant to fund the rehabilitation work, which includes landscaping, security lighting and so on. The City Attorney, in a memorandum dated November 8,1993, asked that the issue of the liability limitation be discussed in this staff report so that the Agency will be fully aware of the Agency's limited remedies should a trust deed default occur. As the agreement is currently drafted, the deferred loan is structured as a non -recourse second trust deed. This simply means that should a default occur, the security for the loan would be limited to the value of the project at the time of the default. As Keyser Marston's analysis (June 25, 1993 KMA memorandum, page 2) points out The goal of structuring the $446,000 in assistance as a loan rather than a grant is to create a financial penalty to the property owner if the project falls out of compliance with the income restrictions. The assistance is meant to be a grant if the income restrictions are complied with over the life of the agreement. As such, it would not be appropriate for the Agency to require the property owner to accept personal Iiability in addition to securing the loan with a second trust deed. Staff agrees with KMA's conclusions and recommends that the non -recourse loan arrangement remain in place. The Agency's financial involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #8). Redevelopment Housing Set Aside Funds budgeted for this project in the 1993-94 fiscal year. The City Council may motion to: Direct staff to continue negotiations with Associates Nine. 2. Approve the loan agreement with amendments. udawricwts.aa 3 na32194 ATTACHtii .NITS: 1. Redevelopment Agency Resolution No. and City Council Resolution No. 2. Section 33433 Report 3. Loan Agreement Between the Agency and Associates Nine 4. Location and Site Maps: 725-733 Utica Avenue 5. Keyser Marston Associates Project Analysis Dated May 11, 1993 6. Keyser Marston Associates Project Analysis Dated June 25, 1993 7. RCA Dated September 8, 1992 MTU:MA:GB:gb uuca uticam doe 4 W32194 RESOLUTION NO. 6579 A: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ASSOCIATES NINE WHEREAS, California Health and Safety Code Section 33334 2 and the Redevelopment Plan for the Main -Pier Redevelopment Project ("Project Area") authorize and direct the Redevelopment Agency of the City of Huntington Beach ("Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California Health and Safety Code Section 33670 (all section references herein are to the Health and Safety Code unless otherwise specified) for the purposes of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to ,f persons and families of low and moderate income,`lower income, and very low income; and Pursuant to applicable law the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund");and ` Pursuant to Section 333342(e), in carrying out its affordable housing activities the Agency is authorized to provide subsidies to or for the benefit of very low income and lower r income households, or persons and families of low and moderate income to the extent those households cannot obtain housing at affordable costs on the open market; and 1 Pursuant to Section 333342(g), City Council Resolution No. 6026 dated June 26, 1989, and Agency Resolution No. 174 dated June 26,1989, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use will be of benefit to one or more of the project areas; and \ The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which Mta/AuociNa Wesq 23M have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lower income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Affordable Housing Agreement ("Agreement') with Associates Nine, a California general partnership ("Developer"), for the rehabilitation of affordable rousing on a site located outside the Project Area ("Site"), as described in the Agreement; and The City Council has duly considered all terms and conditions of the proposed Agreement and believes that the rehabilitation of the Site pursuant to the subject Agreement is in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The City has considered the report of Agency staff on the proposed rehabilitation project to be carried out pursuant to said Agreement, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. The City Council finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. 2. The City Council finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of lower income housing within the meaning of Section 33334.2. 3. The City Council finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 2 41a/Anwauv NineMIN MA M 4. The City Council finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at an adjourned regular meeting; thereof held on this 4th day of April . 199'. Mayor ATTEST: APPROVED AS TO FORM: r 7uG r- City y Clerk 41 ty 3 ogng REVIEWED AND APPROVED: WTUTED AND APPROVED: Admnistrator Director o Special Projects 3 41m;Aw6sue Wkn*VIMM Res. No. 6579 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular Meeting thereof held on the 4th day of Apri i , I9 9a , by the following vote: AYES: Councilmembers: Silva, Bauer, Robitaille, Moulton -Patterson, Winchell, Leipzig, Sullivan NOES: Councilmembers: None ABSENT: Councilmembers: None City Clerk and ex-officio drerk of the City Council of the City of Huntington Beach, California RESOLUTION NO. _ 255 . ; A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORD,XBLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ASSOCIATES NINE WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier RedevelopmentProject ("Project Area") authorize and direct the Redevelopment Agency of the City of Huntington Beach ("Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California Health and Safety Code Section 33670 (all section references herein are to the Health and Safety Code unless otherwise specified) for the purposes of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to persons and families of low and moderate income, lower income, and very low income; and Pursuant to applicable law the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund");and Pursuant to Section 33334.2(e), in carrying out its affordable housing activities the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low and moderate income to the extent those 1 ` households cannot obtain housing at affordable costs on the open market; and Pursuant to Section 33334.2(g), City Council Resolution No. 6026 dated June 26, 1989, and Agency Resolution No. 174 dated June 26, 1989, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use .trill be of benefit to one or more of the project areas; and The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lower income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Affordable Housing Agreement ("Agreement") with Associates Nine, a California general partnership ("Developer"), for the rehabilitation of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The Agency has duly considered all terms and conditions of the proposed Agreement and believes that the rehabilitation of the Site pursuant to the subject Agreement is in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The Agency has considered the report of Agency staff on the proposed rehabilitation project to.be carried out pursuant to said Agreement, NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Agency finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. 2. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of lower income housing within the meaning of Section 33334.2. 3. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 2 4/Res/Assoeistes Nind02/23/94 4. The Agency finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. 5. The Chairman of the Agency is hereby authorized to execute the Agreement on behalf of the Agency. A copy of the Agreement when executed by the Agency shall be placed on file in the office of the Secretary of the Agency. 6. The Executive Director of the Agency (or his or her designee) is hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to carry out and implement the Agreement and to administer the Agency's obligations, responsibilities and duties to be performed under the Agreement and related documents. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting thereof held on this _4th day of aril , 1994.. ATTEST: 4 f� f Agency Clerk Chairman APPROVED AS TO FORM: AY?- � ensel F�3e/f/ en AND APPROVED: INITIATED ANIQ APPROVED: V� 1 xecutive Director Director btSpec2 rojects 3 41WAno6uad HfinaV3l9 M w Res. No. 255 STATE OF CALIFORNIA ) C XVrY OF ORANGE ) CITY OF IRMING1M BEACH) I, CalM BMHIW, Clerk of the Padevelopme_nt Agency of the City of Huntington Beach, California, DD ICY CEFaIFY that the foregoing resolution was duly adopted by the Rede`selopwmt Agency of the City of guntingtcn Beach at a meeting of said Redevelopment Agency -held on :.the 4th daY of Aril , 1994 , and that it was so adopted by the following vote: Silva, Bauer, Robitaille, Moulton -Patterson, Winchell, Leipzig, Sullivan IK ES: Members: Clerk of the Redevelcpm4ot Agency of the City of Huntington Bead, Ca. �� ` et � `r_FL e-rr;5t- 1f�� The past months I have been following the progression of events in Huntington Beach. The Agenda for the 3/21/94 Council Meeting, Item IF-7, addresses a Loan Agreement between Associates Nine and the City. This Item was held over for the 4/4/94 Meeting. These texts are addressing the problem of the lack of Affordable Housing and the "Loan" to Associates Nine. Friday, 4/1, an article appeared in the Los Angeles Times, the orange County Focus Section, basically using the same text. As one reads these, one receives the impression this is a standard "loan". In reality, the contract between the City and Associates Nine reads: The Agency will provide a $100,000 Grant, (an out right gift), and also provide a $446,000 loan in the form of a FORGIVABLE, non -recourse second trust deed. NO INTEREST -- NO RETURN OF PRINCIPAL. The property this LOAN is to rehabilitate is located at 725-733 Utica Avenue. This property became a drug dealers' haven frequented by drug users, vhich has cost money and time in EXTRA police patrol, as well as police equipment, and which up until most recently was a chronic problem. It has cost the City a small fortune already! It is UNCONSCIONABLE to reward investors who have not cared enough to maintain a livable property. The City claims these investors will, upon the receipt of the funds, maintain this property to meet City Codes. They have not done so in the past, but the City states it will enforce these codes from now on. Why hasn't the City enforced these codes in the past, and what gives them the impression they will be able to enforce these same codes in the future? Many long-term property owners in Huntington Beach have maintained their property without requesting Grants and Forgivable Loans from the City. This is a slap in the face to these who have over the years been a credit to the City and not a blightt Appeasement and gifts will no more solve drug, behavioral and maintenance problems than putting bars on windows stops crime!! As long as Huntington Beach City officials ~consider rewarding the L non -productive at the expense of the productive, and refuse to protect the hard working and honest citizens against their criminal aggressors, we will be unable to reverse the DOWNWARD SPIRAL our City is facing - both ECONOMICALLY AND MORALLY. We want accountability for tax funds; %HERE and W'" our City funds benefit. Sincerely, Barbara Kimbrough v 19361 Beach Blvd. Huntington Beach, CA 92643 Tel: 536-2832 Home 935--7668 work �... ........ --------- -- April 81 1994 Dear Councilomber: Enclosed is the article I read at the City Council Meeting April 41 1994, for your perusal. My concerns cover many facets of the AFEUWAK E pOUSING AGRMNM (Rehabilitation of 724-733 Utica). My understanding is taxes are to be used for "public purposes". When there are a few who have the potential for bernefitting ex- cessively and the general populace benefitting little, one should take a closer look at the situation. I understand the city is under pressure to come in line with state law in regards to affordable houusing• but should this be clone with tau payers money as you have in mind? Once this money is gone - it is gonei There is no recompense if this venture should fail. Does the city intend to pay off the current service debt (1st Trust Deed) if this should not come about as you have hoped? Or do we just forget the matter and proceed. If there were some compensation to the City, in turn the City could help another party as the need arises. Having been told it is extremely difficult to bring an erring property owner 'in line, meeting the codes of the City", what has dhanged in the future in the Utica situation that allows us --- �- —ta do thiB? None of the Ordinances or -codes are chw)ging. — -- _ At the last meeting I attended where the project was discussed in detail, there was great miscmc3erstanding as to what should be done with the *car -port* area. We were told the police would like it one wayt the tenants another, and no one really knew What was to be cone. Therefore, what is the cost? One last stateummt; I do not knave the investors involved in this project, therefore► this is not a personal issue; I can neither gain or lose anything in this situation. I am question- ing the viedom of the use of taxpayers money in this manner. S e1y. � Barbara Kinbrough 19361 Beach Blvd Hmtington Beach, CA 92648 KENNETH A. REYNOLDS, AICP 9421 LEILANt DRIVE HUNTINGTON BEACH, CA 92646 (714) 962-4271 March 11,1994 Redevelopment Agency City of Huntington Beach P. O. Box 190 Huntington Beach, CA 92648 Subject: Utica Avenue Apartment Re-hab Honorable Agency Members: Transmitted herewith is a project briefing package that includes a rendered site plan along with an outline that delineates major elements of the subject rehab. We have worked for over two years with your staff and consultants on this project. All issues related to planning, fire, police, public works, legal and affordable mousing have been resolved. The Affordable Housing Agreement is now ready for your approval. Respectfully submitted AZJL K. A. Reynolds CITY PLANNING DEVELOPMENT PROPERTY MANAGEMENT A k".,i KENNETH A. REYNOLDS, AICP 9421 LEILANI DRIVE HUNTINGTON BEACH, CA 92646 (714) 962-4271 UTICA APARTMENT RE-HAB PROJECT BRIEFING LOCATION: 725, 729 and 733 Utica Avenue BUILDINGS: 3-12 unit two story apartments UNIT SIZE: All 2 bedroom, 1 bath, living room and kitchen with dinette PARKING: 29 carports with storage 7 open spaces SERVICES & UTILITIES: Laundry room plus central hot water AMENITIES: Tot lot, community garden and sport court LANDSCAPE: Interior side yards - all new landscape Front yards - all new landscape back of sidewalk OFFSITE IMPROVEMENTS: New driveway and new 5 foot sidewalk adjacent to curb FINANCING: $446,000 30 year Agency loan for apartment re-hab $100,000 grand for amenities, landscape, carport re-hab and new carports AFFORDABILITY: 30 years for lower income households, which is 60% of Orange County's median income CITY PLANNING DEVELOPMENT PROPERTY MANAGEMENT ~ / _ - '---'--- ' /�--'— ' ---'�--------> old ..e .71 Mai tam - r RRy ATSA ',%1ENS NO. 2 " SUMMARY REPORT PURSUANT TO-r„ SECTION 33433 OF THE 9 1993 CALIFORNIA COMMUNITY REDEVELOPMENT LAW-AUG 4 ON AN vcPMR EN I U€ AFFORDABLE HOUSING AGREEMENT C06SIdl1N" DEVElOPf' E--,; BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ASSOCIATES NINE This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Affordable Housing Agreement ("Agreement") between the Agency and Associates Nine ("Developer") related to the rehabilitation of the 36 unit apartment complex located at 725, 729 and 733 Utica Avenue. While this transaction does not involve the conveyance of property from the Agency to the Developer, it does entail the provision of Agency financial assistance to effect the creation of income restricted units._ This report describes and specifies: 1. The responsibilities being accepted by the Developer and the Agency, as outlined in the Agreement. 2. The cost of the proposed Agreement to the Agency, which includes the cost of providing a grant plus a deferred and forgivable loan to the project. 3. The reasons for the provision of Agency assistance. A. SALIENT POINTS OF THE AGREEMENT 1. Developer Responsibilities Under the terms of the proposed Agreement, the Developer must accept the following responsibilities: a. The Developer must undertake rehabilitation improvements necessary to bring the project into compliance with city building code standards. The Developer must also provide additional exterior improvements including landscaping, lighting, a security system, and reconstructed carports. b. For a thirty year period, the rents on all 36 units will be restricted to the affordable level for low income households as defined in California Health and Safety Code Section 50053. C. If the Developer selects Section 8 certificate holders as tenants, the rental revenue received from the tenant plus the Federal subsidy cannot exceed the rent level defined �l for low income households in the California Health and Safety Section 50053. d. The Developer must meet all other conditions and requirements contained in the Agreement. 2. Agency Responsibilities The Agency is responsible for, and shall commit the following to the project: a. The Agency must provide a $100,000 grant specifically earmarked for exterior improvements including landscaping, lighting, a security system and reconstructed carports. b. A $466, 000 loan must be Made to the Developer in the form of a forgivable non -recourse second trust deed. The deferred payment loan will accrue interest at a rate of 150 basis points over the prime rate. The loan, plus accrued interest, is to be forgiven at a rate of 1130 per year over the 30 year compliance period. If the project ceases to comply with the affordability standards during the 30 year term, the loan, plus accrued interest, will become due and payable. B. COST OF THE AGREEMENT TO THE AGENCY Based on the assumption that the project remains in compliance with the Agreement terms, the estimated costs of the Agreement to the Agency are as follows: Grant $100,000 Deferred Payment Loan 466,000 Total Cost to Agency $566,000 C. REASONS FOR THE PROVISION OF AGENCY ASSISTANCE Keyser Marston Associates, Inc. (KMA) analyzed the development economics of the proposed project to assess the need for Agency financial assistance. In a memorandum dated May 11, 1993, KMA concluded that the proposed rehabilitation of the 36 unit apartment complex warrants $100,000 in assistance to effect the optional rehabilitation work, which consists of landscaping, lighting, a security system and reconstructed carports. In addition, the KMA analysis concluded that the imposition of income restrictions on all 36 units would result in $446,000 in lost revenues to the project in net present value terns. Therefore, the KMA analysis concluded that the project demonstrates the need for $566,000 in public financial assistance. 7'ACF; .SENT NO. 4 cAnF= RK'rO%71 34 lO115 725-733 UTICA AVE. REHABILITATION SPECIAL PROJECTS DIVISION I�w wrws eye. � 1 1 1 1 1 1 1 I ...r pw) ''._..i'A ►4. �. is' (SA tog --- ip Lr AIM M ---- r..wr.+w.�r• t.„ on COO@ � ; 1 I I M,+•b. �vrr,raw mhm Iw% (»>.++ V ,W-I . v}. N C+.MMK uv�CA ApAHIrmF=H'T RF=�aQC3 4 *.A -A. AM M AT�.;HMENT NO. 5 KeyserNl l arstonAssoci atesI nc. Richard L.. &xti 500 South Grand Avenue. Suite 1;.S0 Cabin E. Hollis,11 Lzs Angeles. California 90MI Kathleen H. klead 213. 622-W95 Fax 213. 622-5204 S_NNDIEGO61q'94'_-0 M) Heinz A. Schilling SA N FR A NCISCO 415198.311.SO Timothy C. Kelly A. Jerry Keyw Kate Earle Funk Robert J. ► etmore Michael Conlon Denise E. Conlev TO: FROM: SUBJECT: DATE: MEMORANDUK Mr. Pat Spencer, Director of Housing and Building Huntington Beach Department of Community Development KEYSER MARSTON ASSGCIATES, INC. Utica Avenue Apartments May 11, 1993 Pursuant to your request, Keyser Marston Associates, Inc. (KMA) has performed a preliminary analysis of the proposed rehabilitation of the apartment complex located at 725, 729 and 733 Utica Avenue in the City of Huntington Beach. The purpose of the KMA analysis is to quantify the financial detriment associated with imposing income restrictions on 1001 of the units in the project. This analysis identifies the net present value of the income anticipated to be lost as a result of the income restrictions. BACKGROUND Associates Nine has acquired 36 existing two -bedroom rental units and is proposing to rehabilitate them to meet the City building code standards, and to provide some additional amenities. Additionally, the developer is proposing to restrict the rents on 100% of the units for a thirty year period. In return, the developer is requesting that the Redevelopment Agency provide a $100,000 grant for exterior improvements, and a $500,000 deferred payment loan to be forgiven at the completion of a 30-year compliance period. ANALYSIS KMA determined the economic detriment associated with imposing income restrictions on the units by comparing the net operating income projected for the income restricted project to the net operating income assuming no income restrictions are applied. RralEstatePrcd'+elc+l+mcntS EvaluationSenices LIM Page 2 Market Rents Projection To assist in estimating the market rate rents achievable at the subject site, KMA performed a survey of two -bedroom apartment units located in the City of Huntington Beach (Table 1) . The average rent for the two -bedroom units surveyed is $.88 per square foot. The average rent for the two -bedroom units under 1,000 square feet is $.91 per square foot. Based on the rental survey results, the 800 square foot units in the proposed project could achieve rents in the range of $700 to $730 per month. This rent rate is within the range currently being achieved by the project, indicating that the proposed rehabilitation will not increase the project's income. Affordable Rents Projection To determine the maximum affordable rents, KMA utilized the California Health and Safety Code Section 50053 definition, which allows households to allocate 30% of their gross income to housing related expenses. Low income units may be rented to any household earning between 51% and 80% of the Orange County median income level. very low income units may be rented to any household earning between 0% and 50% of the median income level. The very low income rents are set at a level affordable to households earning 50% of the County median income and the low income rents are set at 60% of the County median income, as adjusted for household size. Based on Health and Safety Code standards, the affordable rents were calculated assuming three persons per two -bedroom unit. The maximum allowable rents, based on the 1993 income levels and net of a $45 per month utility allowance, is $590 for the very low income units and $717 for the low income units. The allowable rent at the low income standard is within the range of the currently achievable market rents. Thus, it is assumed that restricting the units to low income households will not initially create a financial detriment to the project. Comparatively, the very low income rents are $110 to $140 lower than the current market rents. Table 2 presents comparative cash flow projections for the project assuming no income restrictions are applied, then assuming all of the units are restricted to low income households. For - the purposes of this analysis, it was assumed that future rent escalations will average 4% annually for the market rate units, and 3% annually for the income restricted units. As such, the gap between the rents achievable for market rate units versus the income restricted rents is anticipated to increase over time. After deductions for vacancies and ongoing operating expenses, the difference in net operating income during the first year is estimated at approximately $5,300, increasing to approximately KeyyrNarstonASsociatesInc. M Page 3 $240,900 in the thirtieth year. The net present value of the foregone revenues, 'otherwise known as the affordability gap, is estimated at $446,000. CONCLUSIONS/RECOMMENDATIONS The proposed project demonstrates both an affordability gap caused by the income restrictions and a feasibility gap associated with the rehabilitation costs. While it is clear that the majority of the rehabilitation improvements are necessary to bring the project into compliance with city building code standards, it appears that ±$100,000 of the rehabilitation costs are to be expended on optional improvenents including landscaping, lighting, security system and reconstructed carports. Inasmuch as these improvements are not anticipated to significantly increase the project value, the $100,000 in costs can be considered a feasibility gap. As discussed previously in this analysis, the affordability gap is estimated at $446,000. When the $100,000 feasibility gap is included, the total financial detriment is $556,000. Based on the results of this analysis, KMA recommends that the following economic terms be incorporated into the affordable housing agreement: 1. The Agency will provide a $100,000 grant specifically earmarked for landscaping, lighting, a security system and reconstructe3 carports. 2. The City will construct the off -site improvements necessary to serve the project. 3. The developer will restrict the rents on all 36 units to the affordable level for low income households as defined in California Health and Safety Code Section 50053. Section 8 certificate holders will not be allowed to occupy the units. The affordability restrictions shall remain in place for 30 years. 4. The Agency will provide a $446,000 deferred payment loan, accruing interest at a rate of 150 basis points over the prime rate. The loan, plus accrued interest, will become due and payable if the project ceases to comply with the affordability standards during the 30-year term. If the project remains in compliance throughout the 30-year terra, the loan plus interest will be forgiven at the conclusion of the term. 5. If the developer receives Low Income Housing Tax Credits for the acquisition/rehabilitation of the project, 50% of the net syndication proceeds must be used to reduce the Agency's $446,000 loan to the project. Key erNMarstonAssOciatesInc. Page 4 The preceding terris represent the basic economic conditions recommended by KY -A. In the event the affordability covenants are changed, the results of this analysis must be modified accordingly. KHHAP 93321.HT8 14067.0003 _ _ K r T ton A C 'at In TABLE 1 • TWO BEDROOM APARTMENT RENTAL. SURVEY UTICA AVENUE APARTMENT REHABILITATION HUNTINGTON BEACH, CALIFORNIA L ATI N BANBURY CROSS 16761 VIEWPOINT LANE CALIFORNIA 6242 WARNER AVE CASA DEL SOL 21661 BROOKHURST HARBOUR LIGHTS 16700 SAYBRK HUNTINGTON BREAKERS 21270 BEACH HUNTINGTON GARDENS 4901 HEIL AVE HUNTINGTON HIGHLANDER 16162 SHER LANE HUNTINGTON 8400 EDINGER HUNTINGTON VISTA 21551 13ROOKHURST LAMPLIGHTER 16102 SPRINGDALE LOS ARBOLITOS 8450 ATLANTA AVE LOS BRISAS 16552 SELL CIRCLE SOURCE: KEYSER MARSTON ASSOCIATES. INC FILENAME APTSURVVEY; MAY.1D03; EJH TOTAL SQUARE RENT AGE UNITS FEET RENT PER SF 1976 NIA 820 $695 $0.85 820 760 0.93 926 725 0.78 926 775 0.84 1972 232 980 $840 $0.86 1973 448 1,112 $950 $0.85 1967 342 1,100 $955 $0.87 1,100 975 0.89 1,100 995 0.90 1986 NIA 994 $1,020 $1.03 994 1.045 1.05 994 1,070 1.08 1967 209 1,120 $800 $0.71 1966 178 960 $620 $0.85 960 830 0.86 1,146 915 0.80 1976 NIA 900 $860 80.96 900 870 0.97 1,026 915 0.89 1,026 925 0.90 1973 220 1,025 $910 $0.89 1,125 930 0.83 1969 63 920 $725 $0.79 920 775 0.84 1774 208 978 $935 $0.96 1,121 995 0.89 1973 63 1,200 $945 $0.79 TABLE 2 COMPARATIVE INCOME ANALYSIS 100% OF UNITS @ LOW INCOME (60% MEDIAN) UTICA AVENUE APARTMENT REHABILITATION HUNTINGTON BEACH, CALIFORNIA -- NET INCOME BEFORE DEBT SERVICE-- 10O% MARKET INCOME RATE UNITS R STRICTIONS DIFFERENCE YEAR 1 $34,693 $29.561 $5,332 YEAR 2 41,920 33,433 8,488 YEAR 3 49,229 37,371 11,858 YEAR 4 56,831 41,376 15,454 YEAR 5 64,736 45,448 19,288 YEAR 6 72,958 49,586 23,372 YEAR 7 81,508 53,790 27,718 YEAR 8 90,401 58,060 32,340 YEAR 9 99,649 62,395 37,253 YEAR 10 109,267 _ _ 66,796 42,471 YEAR 11 119.270 71,260 48,009 YEAR 12 129,672 75,788 53,884 YEAR 13 140,492 80,378 60,113 YEAR 14 151,743 85,030 66,713 YEAR 15 163.445 89,742 73.703 YEAR 16 175,615 94,513 81,102 YEAR 17 188,272 99,341 88,931 YEAR 18 201,435 104,225 97,210 YEAR 19 215,124 109.162 105.962 YEAR 20 229,362 114,151 115,211 YEAR 21 244,168 119.189 124,979 YEAR 22 259.567 124,274 135,293 YEAR 23 276,582 129.403 146.179 YEAR 24 292,237 134,573 157,664 YEAR 25 309,559 139,780 169,778 YEAR 26 327,573 145,022 182.551 YEAR 27 346,308 150,294 196,015 YEI�R 28 365.793 155,592 210,201 YE/,R 29 386,057 160,911 225,146 YEbR 30 407,131 166,247 240,884 NPV @ 10% DISCOUNT RATE $446,000 SOLPW,E- KEYSER MARSTON ASSOCIATES, INC. F1LEF"F- TICASD%; MAY. iM. RLW ATTF'hIENT NO. 6 KeyserMarstonAssociatesInc Fichard L. Botti ;W South Grand Avenue. Suite 1-W Calvin E. Hollis. If Des Angeles. California 9(0 1 Kathleen H. Head 213.622-809j; Fax 213 622-�20.1 SAN DIEGO61Q Q42•0SO P f1einzA.Schilling RUeEIV- SA%F FRANCISCO 31c. WS-30-t1 1993 Timothy C. Kelly A. Jerry Keyser Kate Earle Funk LiLrtkrilh'C�l U� Robert J. Wetmore M E M O R A N D U rXAwJNfTY DEVE10?g5S Michael Conlon Denise E. Cc-%nle% TO: Mr. oat Spencer, Lirsetor o:: Houc ing and :3uildio:L:, city of Huntington Beach Department of Community Development FROM: KEYSER MARSTON ASSOCIATES, INC. SUBJECT: Utica Avenue Apartments — Recommended Deal Point Modifications DATE: June 25, 1993 As a follow-up to our meeting with the owners of the Utica Avenue Apartments project, Keyser Marston Associates, Inc. (KMA) offers the following recommendations related to the structuring of the proposed financial assistance package. The recommendations set forth in this memorandum reflect the clarification of the various issues discussed in the KMA financial analysis dated May 11, 1993. BACKGROUND Associates Nine has acquired a 36 unit apartment complex located at 725, 729 and 733 Utica Avenue, and is proposing to rehabilitate the units as well as providing additional security features, covered parking spaces and an upgrading of the outdoor common areas. Additionally, the property owner has agreed to restrict the rents on all 36 units for a 30-year period. In return, the property owner is proposing that the Huntington Beach Redevelopment Agency provide $600,000 in direct financial assistance to the project. To identify the warranted level of Agency assistance, KMA performed a financial feasibility analysis for the proposed project. In a memorandum dated May 11, 1993, KMA outlined the findings of the analysis, with particular emphasis placed on the quantification of the lost rental revenues related to the imposition of income restrictions over a 30-year period. The KMA analysis concluded that the project economics create the need for a $100,000 grant plus a $446,000 forgivable loan. RealEstatePmdewk prnentSE%afuationStn-icec Mw Page 2 DEAL POINT MODIFICATIONS In a meeting with the property owner and the City staff, a number of the outstanding issues discussed in the KMA financial analysis were clarified. At this time, KMA offers the following modifications to the deal points recommendations provided in our original analysis: 1. Agency Assistance The KMA financial analysis included the -recommendation that $100,000 in grant assistance be specifically earmarked for lanA cca?ing, lighting,- a een:Firity s;•stem arv! rn.c?.nstructed carports. It was further our recommendation that a $446,000 deferred payment loan, accruing interest at a rate of 150 basis points over the prime rate, be provided to eliminate the detrimental impact of restricting the project rents over a 30- year period. It was the FJ4A recommendation that if the project remains in compliance with the affordability covenants throughout the 30-year terra, the $446,000 loan plus accrued interest would be forgiven. At this time, we offer the following modifications to that recommendation: a. The original KMA recommendation provided for the $446,000 loan to be forgiven at the end of the 30-year term. We are modifying this recommendation to allow for the loan, plus accrued interest, to be forgiven at a rate of 1130 per year over the 30-year compliance period. b. The $446,000 loan should be a non -recourse second trust deed. Under this structure, the security for the loan would be limited to the project; the property owners would not assume personal liability for the obligation. The goal.'of structuring the-$446,000 in assistance as a loan rather than a grant is to create a financial penalty to the property owner if the project falls out of compliance with the income restrictions. The assistance is meant to be a grant if the income restrictions are complied with over the life of the agreement. As such, it would not be appropriate for the Agency to require the property owner_to'accept personal liability in addition to securing the loan with a second trust deed. C. The Agency's second trust deed should only be junior to the amount of the first trust deed placed on the property at the time of this Agreement. If the property owner wishes to procure additional debt at a later date, any amount in excess of the original first trust deed must be subordinated to the Agency's second trust deed. Vie} serMarstQnAss*ate51 nc, Page 3 2. Rehabilitation Loan The KMA analysis of warranted financial assistance to the proposed project was focused primarily on the issues of the economic detriment caused by the income restrictions being imposed, and the extraordinary improvements the Agency is asking the property owner to make on the project. It has subsequently come to our attention that the City/Agency also has a rehabilitation loan program available for multi -family projects. There is currently a $54,000 gap between the KMA estimate of war=Lrterl f,na-.ci¢:l assistance and the developer's assistarce request; it is possible that this gap could be filled using the rehabilitation loan program. However, in the event the City/Agency chooses to provide these rehabilitation loan funds, it should be done on the basis of a standard loan structure, i.e., the loan plus interest compounded at an agreed upon rate should be amortized over a fixed period of time. This loan is not a forgivable instrument. 3. Project Tenancy It was KMA's original recommendation that the rents on all 36 units be restricted to the affordable level for low income households as defined in California Health and Safety Code Section 50053. Section 8 certificate holders were specifically excluded from occupying units in the project. The rationale for this recommendation is that the Section 8 program provides the property owner with monthly financial assistance equal to the difference between the affordable rent for the low income tenant and the established fair market rent. As such, the property owner does not experience a loss in rental income related to the Section 8 units, and thus providing Agency financial assistance -te).thase units would constitute a double subsidy. The property owner expressed concern that excluding Section 8 certificate holders would limit the marketability of the units, and may result in vacancies that cannot be filled with eligible tenants. That could create a situation whereby the project would be placed in default, and the developer would be forced to repay the $466,000 loan plus accrued interest. To avoid that eventuality, KMA recommends that the following tenant selection priority be established by the Agency: a. Qualifying low income tenants would receive first priority. If a qualifying tenant cannot be found after the property owner has used his best efforts, as defined in the Affordable Housing Agreement, the following tenant groups can be targeted in the order presented below. _ _ _ Ke}"cer�iarctor AssociatesInc, Page 4 b. Section 8 certificate holders can be selected as tenants. However, it must clearly be stated in the Affordable Housing Agreement that the total rental revenue received by the property owner for the unit cannot exceed the rent level defined for low income households in California Health and Safety Code Section 50053. It must be specifically conveyed in the Agreement that the sum of the tenant's rent payment and the Federal subsidy cannot total more than the rent revenues received from the low income units that are not receiving outside subsidies. c. If vacancies still exist after selecting tenants in the two.greups described above, the City/Agency should have the right to identify low income households to occupy the units. This is an option for the City/Agency, rather than an obligation. If the property owner is still unable to fill the vacancies after exhausting the pool of households described in "a" through "c" above, he should be allowed to rent the unit on the open marketplace. However, the procedure outlined above must be followed for each unit as it is vacated. Therefore, even if units have been rented on the marketplace under the conditions of the Agreement, when it is vacated the property owner must proceed through steps "a" through "c" to rent the unit to a new tenant. If the property owner follows each of the procedures outlined in this section, he should not be declared in default of the Agreement if a unit is not rented to a low income household. The preceding memorandum outlines the recommended modifications to the terms presented in the K A analysis dated May 11, 1993. The balance of the recon, mendations delineated in that memorandum remain in force. It is important to note that the deal structure points described in this memorandum are extremely specific in their intent. As such, it is imperative that. the Affordable Housing Agreement provide explicit direction as to how these terms will be implemented and enforced. KHH.•Ip 93"9.HBP 14a67.WO3 _ - KeyserNimston,AssodatesInc, REQUES (219) ATTAC6'",,.,JT NO. 7 r FOR CITY COUNCIL ACTION Date September 8, 1992 Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administra , �— Prepared by: Mike Adams, Community Development Direcl� Subject: FLORIDA/UTICA ENHANCEMENT AREA/ APPROVED BY CITY COU:`ICIL 36 UNIT REHABILITATION PROPOSAL 19_.... 1 : Consistent with Council Policy? [ ] Yes [ ] New Policy or Excep i CITY CLERK Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: Mounting problems in the residential area bounded by Beach Boulevard, Utica Avenue, Florida Street and Yorktown Avenue, together with complaints from area residents, prompted the City Council to form an Area Task Force for the purpose of developing strategies to combat crime and the rampant drug trafficking that was overtaking the area. Headed by the Chief of Police, this task force was made up of staff members from the departments of Community Development, Economic Development, Community Services and the City Attorney's Office. It's first meeting was held on September 4, 1990. A public meeting was also held the same month, and the task force has been meeting monthly ever since. Early efforts in the Florida -Utica neighborhood were focused on an increased police presence and code enforcement activities. A larger section of the area was designated a neighborhood enhancement area by HUD in 1990 so that Community Development Block Grant (CDBG) funds could be designated for housing, rehabilitation and public improvements. Also, the CDBG funded Operation LOGOS Program has been active in the area by clearing away trash and removing graffiti from public property. Currently, the above listed activities have been supplemented by neighborhood watch meetings; an intensive three week police presence in October of 1991; the well -publicized creation of an office for use by the police at 729 Utica Avenue; and enhanced lighting, along with infrastructure improvements are planned within the neat year. Pin CJRK As a follow-up to the Utica/Florida Task Force recommendations, staff have had meetings with owners of the run-down and crime ridden 36 unit apartment complex located at 725, 729 and 733 Utica Street. These meetings have resulted in a staff supported proposal by the owners to participate in a neighborhood enhancement effort. This proposal is as follows: 1) make available, through use of Redevelopment set aside funds, a low interest deferred loan for the purpose of completely rehabilitating all 36 units; 2) provide a grant to construct and install landscaping, irrigation system, fencing, yard lights, security system, childrens recreational area and reconstructed carports. ECOMMENDATION: Motion to: 1. "Authorize Community Development staff to negotiate, subject to City Council approval action, a financial assistance plan together with the appropriate agreements between the City and owners of the 36 unit residential complex located at 725-733 Utica Street." ANALYS I : This proposal together with the City's recent commitment of the use of Community Development Block Grant (CDBG) funds to upgrade certain public improvements (street lighting, sidewalks, parkway trees, etc.) will produce a completely new image for the neighborhood and controlled living environment for the tenants. In return for the City's investment, an Owner Participation Agreement (OPA) and a Loan Agreement will be designed conditioning specific requirements such as a thirty (30).year covenant assuring tenant affordability at the very -low level, and specific language requiring escrowed deferred maintenance funds and that professional management be provided responsibility for daily property management and tenant control. Staff has estimated the total cost for this on -site rehabilitation effort to be approximately $600,000, of which approximately $100,000 would be in the form of a conditional grant and approximately $500,000 as a deferred loan. Allocation of these funds will be subject to a specific Finding of Benefit Resolution for use of Redevelopment Set -A -Side funds outside of adopted Redevelopment Project Areas. In order to be consistent with past Finding of Benefit, this specific Resolution will be heard in conjunction with proposed contractural agreements. It is anticipated that there will be no tenant evictions through the rehabilitation construction, rather relocation to existing vacant units. RCA 9/l8/92 -2- (3827d) 1"Op' This proposal was presented to the City's Affordable Housing Task Force at their May 6th meeting and was unanimously supported. Of course, a public hearing before the City Council will be required at the time an Owner Participation Agreement is submitted for approval. Adopted FY 92/93 Florida%Utica Rehabilitation Capital Improvement Funds MTU:MA: »jr RCA 9/18/92 -3- (3827d) KENNETH A. REYNOLDS, AICw,� 9421 LEILANI DRIVE HUNTINGTON BEACH, CA 92646 (714) 962-4271 March 11, 1994 Redevelopment Agency City of Huntington Beach P.O. Box190 Huntington Beach, CA 92648 Subject: Utica Avenue Apartment Re-hab Honorable Agency Members: Transmitted herewith is a project briefing package that includes a rendered site plan along with an outline that delineates major elements of the subject rehab. We have worked for over two years with your staff and consultants on this project. All issues related to planning, fire, police, public works, legal and affordable housing have been resolved. The Affordable Housing Agreement is now ready for yobr approval. Respectfully submitted K. A. Reynolds CITY PLANNING DEVELOPMENT PROPERTY MANAGEMENT J •+ k.w:ENNETH X-REYNOLDS, AICP 9421 LEILANI DRIVE HUNTINGTON BEACH, CA 92646 (714) 962-4271 UTICA APARTMENT RE-HAB LOCATION: BUILDINGS: UNIT SIZE: PARKING: SERVICES & UTILITIES: AMENITIES: LANDSCAPE: OFFSITE IMPROVEMENTS: FINANCING: AFFORDABILITY: PROJECT BRIEFING 725, 729 and 733 Utica Avenue 3-12 unit two story apartments All 2 bedroom, 1 bath, living room and kitchen with dinette 29 carports with storage 7 open spaces Laundry room plus central hot water Tot lot, community garden and sport court Interior side yards - all new landscape Front yards - all new landscape back of sidewalk New driveway and new 5 foot sidewalk adjacent to curb $446,000 30 year Agency loan for apartment re-hab $100,000 grand for amenities, landscape, carport re-hab and new carports 30 years for lower income households, which is 60% of Orange County's median income �.Wl CITY PLANNING DEVELOPMENT PROPERTY MANAGEMENT _ as elf^MM�ryi FaF G t«r•1 twi (wl �ww uwpnrs ' Nw'(w1 yv.r• I .A� MI fbM A h1 fri ft •Iww.Mn.r+..-.� iir .�.fw_ ,: , wr hlf — �.c+ pR ' .'..I...Y.1rfNi { n-r M a++r• 7• j 1} I.� j rr X i .r + .1 /7«M4 a�wr.y �•1 aw+ar4¢ai Wft• ,'.+• 4, r4 4 r LAWRENCE D. & EARLEEN A. SCHLEY 6692 HARBOR KEY CIRCLE HUNTINGTON BEACH, CA 92648 (714)536-8651 November 17, 1993 Mr. Mike Adams Director of Special Projects City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Dear Mr. Adams: Please accept this letter as our authorization for Horace Stovall and/or Melvin Heckman to act in our stead on any matters concerning the property known as 725-729-733 Utica Street, Huntington Beach. AP #025-191-29 025-191-28 025-191-31 Thank you for your consideration in this matter. Sincerely, � Z . V"' awrence D. Schley �Q Earleen A. Schley February 7, 19942 To: The City of Huntington Beach From: Harold J. Wiegmann, Partner of Associates Nine. Subject: Utica Redevelopment Project. I authorize H.C. Stoval and Mel Heckman to represent me in all negotiations with the City of Huntington Beach with regards to the subject project. i ar ll J Wiegmannartne � � V 4 T0. The City of Huntington Beach FROM: Leon E. Eggers and Margaret J. Eggers, Partners in Associate Nine RE: Utica Redevelopment Project We, the undersigned, authorize H. C. Stovall and Mel Heckman to represent us in all negotiations with the City of Huntington Beach With regard to the Utica Redevelopment Project. -4 AP-1- Leon E. Eggers iargare J. rs A-cffy TRUCK INSURANCE EXCHANGE I1' " 'RIM CERTIFICATE AS TO EVIDENCE r - INSURANCE THIS -IS NOT AN INSURANCE POLICY. THIS IS ONLY A VERIFICATION OF INSURANCE. IT DOES NOT IN ANY WAY AMEND, EXTEND OR ALTER THE COVERAGE PROVIDID BY THE POLICIES LISTED BELOW. Named Insured .ASSOCIATES NINE 01487 90 32 Address .DBA: SEA AIR APARTMENTS 97 66 323 POt-cy0"(ron. bia0. -C/P H C STOVALL 948 11 TH STREET Agent 901`[Y e • Leib. HUNTINGTON BEACH, CA 92648 Policy a•CARGO This is to certify that policies for the above named insured are in force as follows: Pa -Cy e - Wong ComP- OWNED AUTO- MOBILES, IF COVERED TNPAT017 Certificate As To Evidence Qf} nsurance shall expire sixty days from 12:01 A M., II , 19 , unless cancelled prior to such date by written notice to the named insured. __R4( Please issue a Permanent Certificate COVERAGE COMBINED LIMITS OF LIABILITY COYEREa COVEREDNOT rt LIAlIrtITY ❑ ® Owned Bodily Injury S 1000 eoch person ❑ ® Hired $ ,000 eoch occurrence ® 0 Non -Owned Employer's Non -Ownership Property Damage $ ,000 each occurrence Contingent liability Single limit liability for Coveroges checked X above i OOO , .000 each occurrence GENERAL LIABILITY MSC - OLT Bodily Injury $ ,000 each person f s Owners & Contractors $ ,000 each occurrence ® ❑ Contractual e $ ,000 annual oggregate products so e Elevators Products and/or Property Damage $ $ ,000 each occurrence annual aepote Completed Operations , VOV ggr pr*dvcneee .r Single limit liability for Coverages h d• M IV!? ,y , ... 'y 's. v •-•' '"� $ 1,000 each occurrence $ 1000 onnuaI aggregate ,000 prodvcn e e e ❑ ® CARGO $ ,00D each vehicle $ ,000 each occurrence ❑ ® WORKERS CdMPENSAp� t� t �o©: Statutory y • Inc uaes Goods or Products Warranty Writlen"lease ot- retiiises, Easement Agreement, Municipal Or inane Agreement, Sidetrack Agreement, rElEvatar or.Escpiafo nntenance Agreement only, unless accompanied by specific endorsement Drovidina add;tioc47C-&n*actuA veraae_ / pD..c..eed Drxr.peun V I„Iow ❑ ,�3,ved PACI ( YEAR, MAKE, TYPE OF BODY, lOA TYflIV I IDENTIFICATION NUMBER Umbrella liability POLICY NUMBER LAST 1 DIGITS SHOWN $ ,000 retained limit $ each occurrence $ aggregate If this Interim Certificate As To Evidence Of Insurance is to be cancelled prior to the expiration date, we shall provide 30 days advance notice in writing to whom this certificate is issued. Certificare issved to: t Nome NAMED AS ADDITIONAL INSURED: Lease Numb Loaf, And 'REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Address .C/O GREG BROWN 'SPECIAL PROJECT DIVISION 2000 MAIN STREET Countersigned :. Nat AkPkaJNQTD&.BEACH, CA 92648 Authmaed Represer•ro,n,s e M f In Texas the aggregate also applies to owners and contractors protective, contractual and/or completed operations. W-05T41-9212251w/2000/t20DP NTEDPiV_3A D-01 1001 k.i 1k.d' CITY OF HUNTINGTON BEACH 2000 MAIN STREET RISK MANAGEMENT DIVISION FOUIRM91:7i M- ey M., In order to comply with City Council Resolution No. 6277, you are required to provide proof of Workers' Compensation insurance. -If you have no employees, this form must be signed and returned to the Risk Management Division, 2000 Main Street, Huntington Beach, CA 92648. DECLARATION OF NON -EMPLOYER STATUS I certify that in the performance of the activity or work for which this permit is issued, I shall not employ any person in any manner so as to become subject to California Workers' Compensation insurance requirements. I authorize the City of Huntington Beach to ircmnediately and retroactively revoke the license or permit issued under this declaration if I hire any employee or become subject to the provisions of the laws requiring Workers' Compensation insurance. NAME AND ADDRESS OF COMPANY OR APPLICANT APPLICANT'S SIGNATURE DATE TITLE LOCATION SIGNED OVA' �f ic-•r ��y ��'l t i : C¢ F216 9- ' TELEPHONE NUMBER ( 71if ) S-34- , Za94 -rxe Ag euc I-Cc.4 rL-s ?v Two 7ZS) 7 2,ej Ahvo C.4 4P2_&rte 753 a b t14 11 r/o .e' i1A4 rt_ 1 r4-77 Q A) /}T J #Lvrr36w�,, DRUG USE Is y A8DSE Fo , j& CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 RISK MANAGEMENT DIVISION In order to comply with City Council Resolution No. 6277, you are required to provide proof of Workers' Compensation insurance. -If you have no employees, this form nust be signed and returned to the Risk Management Division, 2000 Main Street, Huntington Beach, CA 92648. DECLARATION OF NON -EMPLOYER STATUS I certify that in the performance of the activity or work for which this permit is issued, I shall not employ any person in any manner so as to become subject to California Workers' Compensation insurance requirements. I authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued under this declaration if I hire any employee or become subject to the provisions of the laws requiring Workers' Compensation insurance. NAME AND ADDRESS OF COMPANY OR APPLICANT 45,So GmTe-,-S Ali.ve� wk 7 APPLICANT'S SIGNATURE * DATE TITLE LOCATION SIGNED !' �C* f,24 SFd' TELEPHONE NUMBER f i3o rr�lteZ47657 7D 7716- iY� �c./T Tlc�✓ 47- A7v13 '733 Gfbe4' A el #44, V DRUG USE Is .1 OVUM 1 PLEASE COMPLETE THIS INFOrION RECORDING REQUESTED BY: AND WHEN RECORDED MAIL 70: TITLE OF DOCUMENT: Nol-dc Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder G;1:� 11[[['11; No Fee � 19970315241 i :42pm 07/02/ 97 005 26010212 26 25 NO3 6 7.00 15.00 0.00 0.00 0.00 0.00 THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording lee applies) '0 059-TITLE PAGE (R7195) 2 -45 V L 49C ua u� 00 c u a� O r. w A4o U uv� W4Jo P In u FE� Wr aQ oa Ir ON Ln "tot Zo 94 49 41 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street ; Huntington Beach, Ca. 92648 Attn: City Clerk NOTICE Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder No Fee 19970270748 12:25pm 06/12/97 005 24006638 24 24 N12 5 7.00 12.00 0.00 0.00 0.00 0.00 (Space above for recorder.) A. An "Affordable (lousing Agreement" vas entered into by and beriveen the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and ASSOCIATES NINE, a California general partnership (the "Developer") dated as of _, , a copy of which is on file writh the Agency as a public record at its offices at 2000 Kia'n Street, Huntington Beach, California (the "Agreement"), and is incorporated h ein by reference. Y444*1� a �21 199 to B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the rehabilitation project pursuant to the Agreement, which certificate shall be in such form as to permit it to be recorded in the Recorders Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the rehabilitation required by the Agreement., D. The Agency has conclusively determined that the rehabilitation of the housing units on the real property described in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has been satisfactorily completed. NOW THEREFORE, - 1. As provided in the Agreement, the Agency does hereby certify that the ' -.rehabilitation of the housing units on the Site has been fully and satisfactorily performed _ sand completed. This document is solely for the `ex-Exempt•Covernment Agency official buainoss of the City CITY OF HUNTINGTON BEACH of Huutin.�:Lon Beach, as contem- -_Connie Crockway, CMC Pagel of3 plated under Goverment Code City Clerkj:4- Aprre:Ctic `Atmch6 See. 6103 and should be recorded Bys < free of chAr-- putt City Clerk 2. Nothing contained in this instrument shall modify in any other way any other provisions of the Agreement. IN WITNESS WHEREOF, the Agency has executed this certificate this ZZ4 day of Nsyeo0cr , 199. ATTEST: Agency Clerk REVIEWED -AND APPROVED: Executive Director REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: I)t'-c — 4al— Chairman APPROVED AS TO FORM: ¢4/ �ge�cy Attorney�� ►; �b ,,���[[r.•-��i'�-off b INIT ATED AND APPROVED: C- 47, e4 Director of Economic Development The Owner of the Project is Associates 9, and the Date of Completion of the Project is 6/07/96. Page 2 of 3 GA-96Agree: Utica:AttacM EXHIBIT "A" TO CERTIFICATE OF COMPLETION FOR REHABILITATION PROJECT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: - Parcel 1 The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 3 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The Vest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Page 3 of 3 G:4-96Agree: U6=Atwch6 ."`• CALIFORNIA ALL-PURPOACKNOWLEDGMENT State of County of tvy 4 L i YjL4- _ On a�00AVJIt-e- r _ before me, L&v,,rti A, Us zv% t Noi -rti CL L Aare Name rw TOO of OncXW 0.9.. ;w» Dw. Nash Piubhn personally appeared a � e SU_ t V-r tj ct �►.A C -n n t e. &ro - - r Nerne(s) d Svner(s) personally known to me _OR— m proved-to-mew4bebasiszf`satisfactory -evidence to be the person(g) whose nameCs)1MOsubscribed to the within Instrument and acknowledgedto me that Wsl�e t�fie}� executed the - same in his/tTe heirauthorized capacity(p), and that by hislher(!! er ignature6) on the Instrument the person4- , tAURAA.Pt UON i or the en rty upon behalf of which the perso(Wacted, omr-mWon flOW63 executed the instrument. WfVofpry pubrrt: — CalfrarNa Or2PuNI COUMY My Comm. Eores jU 23.1M WITNESS: rriy hand and official seat, 2mayt PTIONAL Though the Information below Is not required bylaw, prove valJabte to persons relying on the document and mould prevent hau?ulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: N}'hk�� AssoC.zu4 N tA-e- Document Date:_ (T�� _ _ Number of Pages:! Signer(s) Other Than Named Above: ��X�lI2 �% t✓L�S�_ _ Capacity(les) Claimed (bey Signer(s) Signer's Name: �U� JGL ( l t ra h LE En Individual Corporate Officer Title(s): Partner --- ❑ Limited ❑ General Attomey-in-Fact Trustee GuardiaMairwt'n onservator Other: Signer Is Representing: Top of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner -- ❑ Limited ❑ Attomey-in-Fact ❑ Trustee ❑ General ❑ Guardia%or Conservator r - 10' Other. +790 detA CAZe-Ct Top of thumb here Signer Is Representing: ZeActrr-Lcrx�t,�'J- �I,r�fi 01994 1.&0" NMrf Associa0m • 8M Rarrrnat Are.. P.A. Box 718s • cwwVa Park, CA V1309-T1 &1 Prod. No. 5907 Fkader. W lb"rve 1e00.6'6 M7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of On fiJ}/41 ! 1 I / / before me, fley��►e�. W 'pare - jj�/ NW*" Tiro or .er la q , *Jan* Do@. Nol ry PdW) � personally appeared , __�� �� Namafal ar S.orxgel rpersonaliy known tome ,, to be the personM whose named istire subscribed to the within instrument and acknowledged to me that heltie" executed the same in hisAierH+�eir authorized capacity(}ee), and that by t4'AY87CE E JOHPSON his/heri'hcirsignatureH on the instrument the person(Q, Z COMM. It 991935 a; NotayA ic—CaQfornla or the entity upon behalf of which the person(M acted, ORANGE COUNTY executed the instrument. MY COMM. EADkM MAY 11,1997 WITNESS my hand and official seal. LI- _ OPTIONAL Though the information below is not required by Jaw, R may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of C Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: _ ❑ individual ❑ Corporate Officer Title(s): ❑ Partner -- ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee © guardian or Conservator P`Dther: c� ' Signer Is Representing: .i i Top of thumb here Signer's Name: Cl11 11 Cl L Number of Pages: :�3 Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attomey-in-Fact Trustee Guardian or Conservator Other: -- —. — -- Signer Is Representing: � -r Top of thumb here 0 1995 N moral Np1ary Assoda+ion • 8236 Ftemmer Ave.. P.O. Box 7184 • Cano9a Par%. CA 91309.7184 Prod- No. $907 Aeader Can TWFrea 1 400-876.6827 MM ATTACHMENT NO. 1 Parcel 1 The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The Vest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Attachment 1 Page 1 of I G:4-96Agme:Utica:Attach S 1�k RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: £aeeWivve-Bimeter Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder 11111111111111 Jill No Fee 19970315242 1; 42pm 07/02/97 005 26010212 26 25 M10 7 7.00 18.00 0.00 0.00 0.00 0.00 CAL ) (Space above this line for Recorder's use.) MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memorandum"), dated for identification purposes as of May 2, , is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ("Agency") and ASSOCIATES NINE, a California general partnership ("Developer"). 1. Affordable Housing Agreement. Agency and Developer have executed an Affordable Housing Agreement (the "Agreement") dated for identification purposes as of May 2, 1996, which concerns and is binding upon the current and future owners of that certain real property located in the City of Huntington Beach, County of Orange, State of California, more fully described in the Exhibit "A" attached hereto and incorporated herein by this reference. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail. Tax -Exempt -Government. Agency,, CITY OF HUNTINGTON BEACH Connie Brockway, CMG City Clerk By: I�IRutY City Clerk Page 1 of 3 G:4-96Agree:Utica:Attach 10 This document is solely for the official business of the City of Huntington Beach, as contem— plated under Government Code Sec. 6103 and should be recorded free of charge. IN WITNESS WHEREOF, the parties have executed this Memorandum by and through their authorized officers pursuant to the Affordable Housing Agreement dated May-1,49%. yLj��s ct,19 94. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairman ATTEST: - - - APPROVED AS TO FORM Agency Clerk r �enc�; Attorney _ lJfJ" f�`tl'I � b 1� IE1fb REVTEWEIZAND APPROVED: INITIATED AND APPROVED Qzz� Executive Director Director of Econo is Development ASSOCIATES NINE, a California general partnership *'41'rZ6 .e5� t�r7zee Horace C. Stovall General Partner Melvin R. Heckman General Partner Page 2 of 3 G:4-96Agrcc:Utica-Attach 10 N �'d EXHIBIT "A" TO MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel I The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The Nest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Page 3 of 3 G:4-95Ag.mc:Utica:Attach 10 CALIFORNIA ALL-PURPOSYACKNOWLEDGM ENT State of County of 0IraY>ae- on I'l rD before me, Liura A, f `f 15M, Nt) Pt t L Dare ;ams and Tape o1 OKcw (�' lary Dos. ary Pudc� personally appeared 10-tre, S"i.a- (ViLVN !l ,(/�CS�,�LIV�C� 1 , Name(a) of sq+erta) �rsonally known to me -- O tis€actory-evidence to be the person{s'j� whose name 9*0 subscribed to the within instrumen and a:knowledged to me that tte,'sh a executed the same in Wie hh - -authorized capaci ie , and that by 4iis:+tteri�signature(s) on the instrument the persor� LAURAA.NELSON or the entity upon behalf of which the person s�acted, ' ConvriWon #1MU63 executed the instrument. e t Notary pwr, — Callornla ORANGE COUNTY My Comm. Expires.hi 27,1949 WITNESS and and official seal. Notary `OPTIONAL Though the information below is not required by law, it may prove va.uable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: T Number of Pages: Signer(s) Other Than Named Above: Dound ei Capacity(ies) Claimed b ,Signer(s) Signer's ner's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian r Conservator - Other: t,,?1 Top of MUM Imere Signer Is Representing: 4 f a4.C� [Itmw e. S fvtW Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ GuardiarA or Cons rvator s - �ther: d1 /° Y Top Of th.imb here Signer Is Representing: u 0 Mi National Notary Assoaatgn • SM Rem W Ave. P.O. Box 7184 • Canoga Park. CA 91309.7186 Prod. No. 5907 Reader. CaP Toe•Free i40"78-88Z7 SUBSCRIBING -WITNESS CERTIFICATE State of 7. SS. County of �-- MAYBfl E L JOHNSON z`• COMM. * 991M + Not Public — COGforrtia ORANGE COV?M ftrfy Comm. Elpiros wY i i. w �fl./"lllJ.r.!✓l .!l,/tJlll if ./�ll.JJ!J,/✓1 .11 ✓' l .rf s On this theVA,9 day of IY4WAAI� 19-U—, bi�fore me. the undersigned Notary Public. personally, appeared �t�L� _ (name of subscribing witness), 06ersonally known to me 0 proved la me on the oathlaffirmalion of triarne of credible witness who identifies subscribing witness), a credible witness whom I know personally, to be the person whose name is subscribed to the within instrurnent as a witness thereto, who, being by me duty sworn,de oses and says that {Ma:rie}was present and saw (name of principal signer not appea" before Notary), the same person described in and whose name is subscribed to the within and annexed in• strument as a party theretu. exec.�ute the same. and that sari atfii�ants1Ihscr�bed .,r fy�__ _ (lai&Uix) - name to the within instnament as a witness at the request of 7_GA .-- yf1 (rrame of principal signer again) (Notary's signature) # ATTENTION NOTARY: Althmo the ini moon requested bebw is OPTIONAL, it cauW prevw fraudilent atisovnerd of the cwftate to "7M document, THIS CERTIFICATE Title or Type of Document d _ MUST BE ATTACHED Number of Pages Date of Document _J_J/�2 _ 6 TO THE DOCUMENT DESCRIBED AT RIGHT: Signer(s) Other Than Named Above 01994 NATIONAL NOTARY ASSOCIATION • me Remmet Arne • Canoga Perk, CA 91 MO.7184 CALIFORNIA ALL-PURPOS ACKNOWLEDGMENT F59 -- "w State of County of Q6�x�,2J . On1M— before me, , Vale Name and Tft d OriKer ., :lane Dos. Nmry Pubhn personally appeared��. Narnefsl of Spnegs} C — W-<roved to me on the basis of satisfactory evidence to be the persons} whose name(4 isJafe subscribed to the within instrument and acknowledged to me that helms executed the same in hisf�+erl#�eir authorized capacity(ies}, and that by VAYB^�E GJOOr3 hislh'ttsetrsignature(s} on the instrument the person4y, Gio, COMtM.094t>;35or the enti u on behalf of which the erson acted, !.dory PebGc -- CdtamitY p PORAlVGECOUN'Yexecuted the instrument. Comm. Exr*es MAY 11.1997 WITNESS my hand and official seal. OPTIONAL Though the information below is nct required by law, It may prove valrable to persons relying on the document and could prevent fraudulent removal and reattachment of tt•is form to another document. Description of Attached Document Title or Type of Document: Document Date:. f fT4zg(,z Number of Pages: ,Y Signer(s) Other Than Named Above: _ Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer �t1e(s): Partner — ❑limited L General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator _ ❑ Other: lop o1 Inumb here Signer Is Representing: Signer's Name: ❑ Individual ❑ Corporate Officer Titie(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: 1pp d n1u^o we Signer Is Representing: 0 1995 NE oW Norary Asspcown • 8236 Rwdr*i Ave.. P.O Box 7184 + Canoga Park, CA 9M9.7184 Prod_ No. 5X7 Peonler: Cae ToPT00 I-ODO-PS48V CALIFORNIA ALL-PURPa ACKNOWLEDGMENT State of , County of On _5??au� 7, l9 9 7 before me, �a D re Nam* and TdW or rr,cer 1e g . -.1ane Roe. Noay Pu66C'J personally appeared .. _ . _ _ , Names) of S-gner(s) 9;�rersonally known tome 4DR__ to be the person(e) whose name(r) islartsubscribed to the within instrument and acknowledged to me that he/9hertf�. executed the r MAYSOCE L JOHNSON same in his#terftheir authorized capacity(", and that by = V corhm * 991M hisA*99;&-signatureH on the instrument the personH, Notaq Pw;c — caffrornia or the entity upon behalf of which the person fs} acted, O,?AN ;E COur,Tr executed the instrument. �+ 1� Comm- Expires L-Ay 11. 1997 WITNESS my hand and official seal. -o??2 74- -"A-- Spnal of fwary Puck OPTIONAL Though the information below is not required by law, It may prove valuable to persons relying on the document and could prevent fra.ldulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:�.�,,., yL Document Date: /9lo Number of Pages: �3 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: LE ■ Individual Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator r ❑ Other top o1(humb here Signer Is Representing: two. Signer's Name: Ia Individual Corporate Officer Title (s): Partner — ❑ Limited ❑ General Attomey-in-Fact Trustee Guardian or Conservator Other Signer Is Representing: Top of 0`urrb here 0 191•i Na,xxW Notary Assatiahon • e236 Rerrmet Ave. P.O. Box 7104 -Canoga Park. CA 91309.7154 Prod. No. 5907 Reorder. Cal Tom -Free 1-0OC-875-SW IJ, ' r CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY bAl . CITY CLERK June 25, 1997 Gary L. Granville, County Clerk -Recorder P. 0. Box 238 Santa Ana, CA 92702 Enclosed please find a Declaration of Covenants, Conditions and Restrictions, Deed of Trust with Assignment of Rents, Memorandum of Affordable House Agreement and Notice of Completion For Rehabilitation Project (to be re -recorded In able to have all documents recorded concurrently, see note on side of Notice of Completion) and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. U Please conform the enclosed copies of the documents and return to this office In the enclosed self-addressed stamped envelope. Connie Brockway, CMC City Clerk Enclosures: Notice of Completion For Rehabilitation Project, Declaration of Covenants, Condi+.ions and Restrictions Deed of Trust with Assignment of Rents Memorandum of Affordable Housing Agreement.,- g:Vollowupldeedltr.Associates Ninetc iTNephonr 714636-52Z7] -CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK COyNIE BROCKWAY CITY CLERK June 5, 1997 Gary L. Granville, County Clerk -Recorder P. O. Box 238 Santa Ana, CA 92702 CALIFORNIA 92648 Enclosed please find Notice of Completion for Rehabilitation Project to be recorded and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. Please conform the enclosed copy of the Notice and return to this office in the enclosed self-addressed stamped envelope. 67t4�� &4 Connie Brockway, CHIC City Clerk Enclosures g:Vollowupldeedltr:Associates Nine ITNa phone: 714.536-5227) CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK May 14, 1997 Gary L. GranvilIe, County Clerk -Recorder P. O. Box 238 Santa Ana, California 92702 CALIFORNIA 92648 Enclosed please find a Declaration of Covenants, Conditions, and Restrictions, Deed of Trust with Assignment of Rents, Memorandum of Affordable Housing Agreement and Certificate of Completion for Rehabilitation to be recorded and returned to the City of Huntington Beach, Redevelopment Agency, Office of the City Clerk, 2000 Main Street, Huntington Beach, California 92648. Please conform the enclosed copies of the documents and return to this office in the enclosed self-addressed stamped envelope. i Connie Broc"ay, CMC City Clerk CB:jc Enclosures 1. Declaration of Covenants, Conditions, and Restrictions 2. Deed of Trust with Assignment of Rents 3. Memorandum of Affordable Housing Agreement 4. Certificate of Completion for Rehabilitation Project g1follo%&upASSOC. 9 jc c (Telephone: 714-536-5227) ATTACHMENT NO.2 Huntington Beach, 1994 1. Affordable Housij]g Agreement. This Promissory N e is made and delivered pursuant to and in implementation of an Affordable Housing Ag ement by and between the REDEVELOPMENT AGENCY OF THE CITY OF 11 TON BEACH, a public body corporate and politic (the "Holder") and ASSOCIATES , a California general partnership (the 'Borrower"), dated , 1994 (the "Agree t"), a copy of which is on file as a public record with the Holder and is incorporated her ' by reference. The Agreement provides for the rehabilitation of certain housing units owne y the Borrower, and for the payment of moneys by the Holder to the Borrower upon ce n events therein set forth. The Borrower acknowledges that but for the execution of thi romissory Note, the Holder would not enter into the Agreement. Unless definitions of terms a expressly set out at length herein, each term shall have the same definition as set forth in th Agreement. 2. Promise -to -Pay. Upo ayment of thc "Agency Loan" to Borrower pursuant to Section 6 of the Agreement, Borra, •r promises to pay Holder at the office of the Agency in Huntington Beach, California, or t such other place as the Holder may designate in writing, the principal sum of Four Hundred arty -six Thousand Dollars ($446,000) (the "Note Amount"). 3. Compound interest shall be charged by the Agency on the portion of the Note Amount rem ' ing unpaid, from the date of the disbursement of the Note Amount until the date which is t rty (30) years from the date of the disbursement of the Note Amount, at the prime rate of the Francisco office of the Federal Reserve Bank which is prevailing on the date this Agreement s approved and adopted by the Agency, plus one and one-half percent (1.5%). 4. (a) No payments of principal and interest shall be required during the term of the loan. the date which is 30 years from the date of the disbursement of the Note Amount, the Bono -er shall repay the entire Note Amount plus all interest earned thereon, except as hereina r provided. (b) The full amount of this Promissory Note, with all interest accrued thereon, shall be immeidately due and payable upon the Developer's uncured default of the Agreement and/or this Promissory Note. Attachment 2 Page 1 of 4 G:4-96Agrce:U1ica:A1tach2 (c) Provided that the Developer remains in compliance with the affordability provisions of the Agreement, this Promisory Note shall be forgiven, and no payment required, as follows: (1) Each year following the adoption of this Agreement, on the anniversary date thereof, the Agency will determine whether or not the Developer has complied with the affordability requirements of the Agreement. (2) If the Agency finds that the Developer has complied, an amount equivalent to one -thirtieth (1/30) of the Note Amount, plus accrued interest, shall be forgiven from repayment. (3) If the Agency finds the Developer has not complied, the Developer shall be considered to be in default of the Agreement, and the provisions of the Agreement relating to defaults shall be applicable. (4) The determination of compliance shall be made in the Agency's sole discretion. 5. Prepayment. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 6. Non -Waiver. Failure to exercise any right the Holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subsequent default. 7. Waiver of Presentment. etc. The Borrower and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Note and consent that the holder hereof may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, by agreement between the Holder and Borrower, and such consent shall not alter or diminish the liability of any person or the enforceability of this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action of proceeding to recover any sum herein provided for, no defense of adequacy of security, or that resort must first be had to security or to any other person shall be asserted. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. 8. Collection Costs. If any attorney is engaged by the Holder to enforce or construe any provision of this Note or the Deed of Trust, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action or proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Holder, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. Attachment 2 Page 2 of 4 G:4-95Agr cc Ut ica: A ttach2 k../ 9. Security of Note. This Note is secured, l= alia, by a Deed of Trust (the "Deed of Trust") of even date herewith executed by Borrower covering property Iocated in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. 10. . No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 11. BusinessEurnose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for business or commercial purposes as set forth in the Agreement and not for any personal, family or household purposes. 12. Not iQC. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the ([older to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 13. Default. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default of the Agreement or in any other instrument executed by Borrower or any guarantor in favor of the Holder, the Holder may at its election and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Holder elects to declare default as stated herein, then this Note shall bear interest after default at the discount rate of the San Francisco office of the Federal Reserve Bank which is prevailing immediately prior to default, plus five percent (5%), and the Holder may take such action under the law or under these security documents securing this Note as Holder may determine necessary to enforce its rights hereunder. Attachment 2 Page 3 of 4 G:4-96Agree:Ut1ca: Attach2 L 14. Early Payment Requirement. Reference is made to the Deed of Trust for the right of the Beneficiary thereunder to accelerate the indebtedness evidenced by this Note. IN WITNESS HEREOF, this instrument has been executed as of the date set forth below. Dated: ,1994 Attachment 2 Page 4 of 4 ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner Melvin R. Heckman General Partner G.4-46Ag=c.Udca:Attach2 ATTACHMENT NO.9 CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE CITY OF HUNTINGTON BEACH 725-733 Utica Avenue Period Covered (Annual or monthly) The undersigned, Associates Nine, a California general partnership (the "Developer"), has read and is thoroughly familiar with the provisions of the various Developer Loan Documents associated with the Developer's participation in the City of Huntington Beach's (the Issuer") Multifamily Housing Program, such documents including: 1. The Affordable Housing Agreement dated as of among the Developer, the Issuer and (the Trustee; 2. The Loan Agreement dated as of among the Developer, the Issuer and the Trustee; and 3. The Developer Note dated as of from the Developer to the Issuer and endorsed to the Trustee representing the Developer's obligation to repay its Developer Loan. 4. As of the date of this Certificate, the following percentages of completed residential units in the Development (i) are occupied by Lower Income Tenants (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Lower Income Tenant vacated such unit; as indicated: Total Units Completed Number of Units Occupied by Lower Income Tenants: Percent of Total Units Occupied by Lower Income Tenants: Attachment 9 Page 1 of 2 G:4-Agrce:Utica:AtMch9 Two Bedroom Apartments Unit Nos. Rent Charged Held vacant for occupancy continuously since last occupied by Lower Income Tenant percent Unit Nos. Vacant Units percent Unit Nos. 5. No Determination of Taxability (as defined in the Loan Agreement) has occurred and, to the Developer's knowledge, no event has occurred which, with the passage of time, would cause a Determination of Taxability to occur (or if such an event has occurred explain below the event and the r..eps being taken to remedy such event). The undersigned hereby certifies that the Developer is not in default under any of the terms and provisions of the above documents. Attachment 9 Page 2 of 2 ASSOCIATES NINE By G:4-Agrcc:Ut1ca:Attach9 M ATTACHMENT NO. 10 RECORDING REQUESTED BY } AND WHEN RECORDED MAIL TO: } Redevelopment Agency of the ) City of Huntington Beach } 2000 Main Street ) Huntington Beach, CA 92648 ) Attention: Executive Director ) (Space above this line for Recorder's use.) This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memorandum"), dated for identification purposes as of , 1994, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ("Agency") and ASSOCIATES NINE, a California general partnership ("Developer"). I. Affordable Housing Agreement. Agency and Developer have executed an Affordable Housing Agreement (the "Agreement") dated for identification purposes as of 1994, which concerns and is binding upon the current and future owners of that certain real property located in the City of Huntington Beach, County of Orange, State of California, more fully described in the Exhibit "A" attached hereto and incorporated herein by this reference. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. 2. Pu=se of Memorandum. This Memorandum is prepared for recordation purposes only, and in no %%ay modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail. Attachment 10 Pagel of 3 G:4-95Agr":Utica:Attach 10 The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic Dated: Dated: Dated: ATTEST: Agency Clerk ASSOCIATES NINE, a California general partnership Dated: Dated: Attachment 10 Page 2 of 3 By: Chairman By: Executive Director By: Director of Special Projects APPROVED AS TO FORM: City Attorney Agency General Counsel Horace C. Stovall General Partner Melvin R. Beckman General Partner Q4-96Agmc:Utica:Attach1 0 V EXHIBIT "A" TO MEMORANDUR-i OF AFFORDABLE HOUSING AGREEMENT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1 The Nest 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The West 50 feet of the Fast 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Attachment 10 Page 3 of 3 G.4-96Agee: Utica:Adach l4 AFFORDABLE HOUSING AGREEMENT (Rehabilitation of 725-733 Utica) by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, AGENCY, and ASSOCIATES NINE, a General Partnership, DEVELOPER. G-.4-95A&m-.U6cw-Covtspag AFFORDABLE, HOUSING AGREEMENT (Rehabilitation of 725-733 Utica) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into this a�� 2n& day ofMety, 1996, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and ASSOCIATES NINE, a California general partnership (the "Developer"). The Agency and the Developer hereby agree as follows: Gmawem allu :121 (a) The Agency is required by California Health and Safety Code Section 33334.2, sS =., to expend a certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. (b) This Agreement provides for the rehabilitation of a Thirty-six (36) unit rental housing project (the "Project") located at 725, 729, and 733 Utica Avenue within the City of Huntington Beach. All of the units (the "Affordable Units" will be available pursuant to this Agreement for Lower Income Households at an Affordable Rent (as those terms are defined in Section 27 hereof) for a period of thirty (30) years. (c) In consideration for the Developer's rehabilitation and operation of the Project and the Affordable Units, this Agreement provides that the Agency shall make available certain financial assistance in the form of a low interest loan and a grant. z. THR C17'Fi The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached g:4:96agreewticanainagre NE hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the city's redevelopment efforts due to the creation of affordable housing within the city. The Developer owns fee simple title to the entire Site. ' :: : ZI►1 (a) The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, California Health and Safety Code Section 33000, fS s=. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency," as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. (b) The Developer The Developer is Associates Nine, which is a California general partnership. The principal office and mailing address of the Developer for the purposes of this Agreement is: Associates Nine 94811th Street Huntington Beach, CA 92648 F� gAMagrecutimmainagre V The Developer represents and warrants to the Agency as follows: (a) The Developer is a duly established general partnership and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (b) The Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no material pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which any of its property is or may become subject, which has not been fully disclosed in the documentation submitted to the Agency which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, relating to the dissolution or liquidation of the Developer, and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Developer to carry out its obligations hereunder. C] gA96agree:utica:mainagre kI Each of the foregoing items (a) to (d), inclusive, shall be deemed to be an ongoing representation and warranty. The Developer shall advise the Agency in writing if there is any material change pertaining to the matters set forth or referenced in the foregoing items (a) to (d). :a9 •►� :• • •' The qualifications and identities of the Developer and its general partners are of particular interest and concern to the City and the Agency. It is because of these qualifications and identities that the Agency has entered into this Agreement with the Developer. Consequently, except as expressly set forth in this Agreement, no person, whether a voluntary or involuntary successor in interest of the Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign or transfer all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency shall approve such a transfer upon receipt by the Developer of (a) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (b) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (c) the Agency receives evidence acceptable to the Agency that either (1) the transferee has experience in the ownership, operation and management of rental housing developments such as the Project without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (2) the transferee agrees to retain a property management firm with the experience and record described in Section 5(c)(1) above. Written approval of the Agency shall also be required prior to any and all changes 4 g:4:96agreewtica:mainagre v whatsoever in the identity of the person in control of the Developer, including any change in, or addition of, general partners of the Developer. The voluntary or involuntary sale or transfer of any general partnership interest of the Developer shall be deemed to constitute an assignment for the purposes of this Section 5 and the written approval of the Agency shall be required prior to effecting such a transfer. Any purported transfer, voluntary, involuntary, or by operation of law, except with the prior written consent of the Agency in accordance with this Section 5, shall constitute a default of Developer and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Section 5 to the contrary, Agency approval of an assignment of this Agreement, or any interest therein, or an assignment of a general partnership interest or limited partnership interest in the Developer, shall not be required in connection with any transfer of an interest in the Developer so long as the existing general partner of the Developer retains operational and managerial control over rehabilitation of the Site, provided that such transfer does not affect more than forty-nine percent (44%) of the existing general partnership interest in the Developer and the Developer shall remain responsible for the obligations of the Developer hereunder. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. 3 g:4:96agree:utica:msinagre Subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Four Hundred Forty-six Thousand Dollars ($446,000) (the "Agency Loan"). The loan funds shall be disbursed and administered by the Agency. The loan funds will be released in various increments as the rehabilitation and construction costs are submitted to the Agency for payment. (a) The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 2 hereto, which is incorporated herein. The Promissory Note shall accrue compound interest at the prime rate of the San Francisco office of the Federal Reserve Bank which is prevailing on the date this Agreement is approved and adopted by the Agency, plus one and one-half percent (1.5%). The term of the Agency Loan shall be thirty (30) years. The term of the Agency Loan may be extended upon mutual agreement of the parties, evidenced by a written amendment to this Agreement. The Developer shall make no monthly payments during the tern of the Loan. (b) The entire loan balance, including principal and interest, shall be due in full upon the thirtieth (30th) anniversary of the Agency Loan, except as provided herein below. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 3 hereto, which is incorporated herein. The Developer shall execute and deliver a copy of the Promissory Note and 0 g:4:96agreewtimmainagre M the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at its own expense, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. (c) Provided that the Developer remains in compliance with the affordability provisions of this Agreement, the Agency Loan shall be forgiven, and no repayment required, as follows: (1) Each year following the adoption of this Agreement, on the anniversary date thereof, the Agency will determine whether or not the Developer has complied with the affordability requirements of this Agreement. (2) If the Agency finds that the Developer has complied, an amount equivalent to one -thirtieth (1/30) of the Loan Amount, plus accrued interest, shall be forgiven from repayment. (3) If the Agency finds the Developer has not complied, the Developer shall be considered to be in default of this Agreement, and the provisions of this Agreement relating to defaults shall be applicable. sole discretion. (4) The determination of compliance shall be made in the Agency's Subject to the terms of this Agreement, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000). Such payment shall be inconsideration for the Developer's 7 g:4:96agree:utica-mainagre agreement to provide housing to Lower Income Households at an Affordable Rent (as those terms are defined in Section 27 hereoO, and to provide a high quality level of construction materials and amenities in the rehabilitation and construction of landscaping, irrigation, fencing, lighting, security system, recreational area and reconstructed carports, as set forth in this Agreement and the attachments hereto. The grant funds shall be disbursed and administered by the Agency. The grant funds will be released in various increments as the costs for the items referenced in this Section 8 are submitted to the Agency for payment. At its option, the Agency shall have the right to review and approve the plans and specifications for the Project as set forth in Sections 10 through 13 hereof. A minimum of three bids from qualified contractors will be required for each item, or major building system, to be replaced, repaired or otherwise rehabilitated or reconstructed. Such bids will be submitted to the Agency prior to the award of any bid by the Developer. The Agency reserves the right to reject any bid obtained by the Developer and require the Developer to re -bid any item. 1 �' • ; .:t .-MG The Site shall be rehabilitated as provided in the Scope of Rehabilitation (Attachment No. 5). The Developer shall commence and complete construction of such rehabilitation by the respective times established therefor in the Schedule of Performance (Attachment No. 4) subject to Section 34 of this Agreement. The development shall include any plans and specifications submitted to City and/or Agency for approval, and shall incorporate or show compliance uith all applicable mitigation measures. 8 g A-16agrea cutica:mainagre 11. SITE PLAN The Developer shall prepare and submit to the Agency for its approval Design Drawings and a Site Plan and related documents containing the overall plan for rehabilitation of the Site in sufficient detail to enable the Agency to effectively evaluate the proposal for relationship of structures to landscape, physical and environmental considerations and conformity to the requirements of this Agreement. The Developer agrees to consolidate the site into a single parcel, and shall take all necessary steps, including the preparation and recording of a new parcel map, to accomplish the lot consolidation. The Agency shall review such submissions for approval. The Site shall be rehabilitated as established in this Agreement and such documents except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Rehabilitation which is attached to this Agreement as Attachment No. 5 end incorporated herein. By the time set forth therefor in the Schedule of Performance (Attachment No. 4), the Developer shall prepare and submit to the City construction dm Brings, landscape plans, and related documents for rehabilitation of the Site for building permit(s). During the preparation of all drawings and plans, staff of the Agency, City, and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the Agency. The staff of Agency, City, and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and 9 g:4:9$agreemimmainagre M speedy consideration. The Developer shall be obligated to obtain all City approvals required for the rehabilitation project. The Agency and the City shall have the right of planning review, including plan check, of all plans and submissions, including any changes therein. The Agency shall approve or disapprove such plans and submissions within the same time periods established by the City for its review of construction and architectural plans and submissions. During each stage of the processing for Developer Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 4). If the Developer desires to make any substantial changes in the rehabilitation plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the rehabilitation plans, as modified by the proposed change, conform to the requirements of Section 12 of this Agreement and the Scope of Development (Attachment No. 5) the Agency and the City shall approve or reject the proposed change and notify the Developer in writing within such periods as are established by the City for its review of such changes to construction and architectural plans and specifications. Such changes in the plans shall, in no event, be deemed approved by the Agency or the City without such an actual approval. 10 g:4:96agree mica:mainagre All the costs of site preparation, planning, designing and constructing the rehabilitation project shall be borne solely by the Developer from the funds administered by the Agency and disbursed to the Developer by the Agency Loan and the Grant. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. Upon completion of the Project, the Developer shall submit to the Agency a detailed and itemized report of its costs of rehabilitation. The Developer shall promptly begin and thereafter diligently prosecute to completion the work of the Project, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 4), subject to Section 34 of this Agreement. MOM 91oil A'/i►1i1iRWAINO]910y"I"aova i7:luvI:yem1`►fyU;7:�'211 The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorneys` fees and costs), which may be caused by any of the Developer's acts, omissions or failures to act under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined 11 g:4:96agreewtica:mainagre single limit policy, including contractual liability, as shall protect the Developer, City, Agency, and their officers, agents and employees from claims for such damages. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency (and their respective officers, agents, and employees) as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at Ieast thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing vvnth any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall Ee furnished by the Developer at the time set forth therefor in the Schedule of Performance (Attachment No. 4). The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Before commencement of construction or rehabilitation of any buildings, structures or other works of improvement upon the Site or related offsite improvements, the 12 9:4:96agreemiea:mainagre Developer shall, at its own expense, take all actions necessary and proper to secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, rehabilitation or work. It is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections necessary to obtain a building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meets the requirements of the City Code. The Developer agrees and acknowledges that it shall be responsible for the cost of any such environmental review and clearance as may be deemed necessary or appropriate in connection «tith the processing of land use entitlements with respect to the Site. WANOW"MONMEW For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to all portions of the Site without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the rehabilitation project, so Iong as they comply r"1th all safety rules. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall indemnify and hold the Developer and its partners, employees and agents harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 18. 13 g:4:96agree:utimmainegre "Mr The Developer agrees to place and maintain on the Site during construction of the rehabilitation project one (1) sign indicating the respective roles of the Developer and the Agency in the Project. The cost of the sign shall be borne solely by the Developer. •kX114M X" IFAIr ZrAlinr Im *Val a Kam The Developer shall carry out the construction of the Project in conformity with all applicable laws, including all applicable federal and state labor standards. 1 :►r r ut.; rr► 110.1.4 WRIOLORKII r; The Developer, for itself and its successors and assigns, agrees that during the construction of the Project provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. RIMEWIM :161-34M I cl►f 03 a�t► The Developer shall pay prior to delinquency all ad valorem taxes and assessments on the Site. Prior to issuance of a Certificate of Completion pursuant to Section 23, except for encumbrances allowed pursuant to this Agreement, the Developer shall not place on the Site or any Part thereof any mortgage, trust deed, encumbrance or lien. Prior to issuance of a Certificate of Completion pursuant to Section 23, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. After the issuance of a Certificate of Completion, the restrictions set forth in the prior two sentences shall terminate and be of no further force or effect. Nothing herein contained shall be deemed to prohibit the 14 g:4:96agree:muccmainagre Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. ;• r•.: �t. r;:i. : • r r ; Men•; r: Illyn:•e Prior to the Developer's prepayment of the Agency Loan, the Developer shall not, except as permitted by this Agreement (including without limitation Section 5), without prior written approval of the Agency, which approval shall not be unreasonably withheld, make any total or partial sale, transfer, conveyance, assignment of lease of the whole or any part of the Site or of the buildings or structures on the Site. The Agency shall approve such a transfer upon receipt by the Developer of (a) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (b) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (c) the Agency receives evidence acceptable to the Agency that either (1) the transferee has experience in the ownership, operation and management of rental housing developments such as the Project without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section 22(c)(1) above. This prohibition shall not be deemed to prevent a transfer of a general or limited partnership interest in the Developer, provided that a general or limited partner of the Developer does not convey more than forty-nine percent (49%) of its partnership interest, and each partner of the Developer shall retain at least fifty-one percent (5 l %) of its original ownership of the Partnership. IS g:4:96agree:utimmainagre 41111191311 >r MIKIIUTWM Within thirty (30) days after completion of all construction and rehabilitation required by this Agreement to be completed by the Developer upon the Site in conformity with this Agreement, submission of a detailed and itemized report of its costs of the rehabilitation project and request for a Certificate of Completion, the Agency shall furnish the Developer with a "Certificate of Completion." Such Certificate shall be substantially in the form of Attachment No. 6 attached hereto and incorporated herein. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction and rehabilitation required by this Agreement upon the Site and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall be bound by the covenants contained in the "Declaration of Covenants, Conditions and Restrictions" (Attachment No. 7), Section 27 of this Agreement, and other documents establishing covenants on the Site in accordance %%ith the provisions of this Agreement. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion for the Project after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency has refused or failed to furnish a Certificate of Completion. The statement shall also contain 16 g:4:96agreemimmainagre k..) Agency's opinion of the actions that the Developer must take to obtain a Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing additional money loaned to finance the Project, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the Califon Civil Code Section 3093. Additional mortgages or deeds of trust are to be permitted before completion of the Project, but only for the purpose of securing loans of funds to be used for the Project. The Developer shall notify the Agency in advance of any such additional mortgage or deed of trust if the Developer proposes to enter into the same before completion of the Project. The words "mortgage" and "trust deed" as used hereinafter shall not include sale and leaseback. The Developer shall not enter into any such conveyance for financing or refinancing without the prior v,-ritten approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial or lending institution or other acceptable person or entity. Any subsequent encumbrances shall be subordinated to the Agency's Trust Deed as pro -tided for herein. RXIMER—ONUMMI MIMMUFAIN3 s 111 (a) Definitions For the purposes of this Section 25, the following terms shall have the meanings herein specified: 17 g:4:96agree wtimmainagre (1) The term "Hazardous Materials" shall mean (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of I980 (42 U.S.C. Section 960I gI =.), as amended from time to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by the Carpenter -Presley -Tanner Hazardous Substance Account Act (California Health and Safety Code Sections 25300 gI =.), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) poly -chlorinated biphenyls; (v) petroleum, oil, gasoline (refined and unrefined) and their respective by-products and constituents; and (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental regulation (as defined in Section 25(a)(3) of this Agreement) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. (2) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the date of this laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer or the Site. 18 9:4:96agreemimmainagre r •r rr r I r6r r k u r Notwithstanding the obligation of Developer to indemnify Agency pursuant to this Section 23 or any other obligations of the Developer pursuant to this Agreement, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state or local government.-►1 agency or political subdivision or any Governmental Requirements with respect to the entire Site, and (ii) all actions necessary to make full economic use of the Site for the purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination regardless of when such Hazardous Materials or Hazardous Materials Contamination were introduced to the Site and regardless of who is responsible for introducing such Hazardous Materials or Hazardous Materials Contamination to the Site (the "Site Remediation"). The Site Remediation shall include, but not be limited to, investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work required. The Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. The Developer's obligations under this Section 25 shall be referred to as the "Site Remediation" and shall survive the issuance of the Certificate of Completion. WEEP= : •r rr Tio •�nr Developer hereby represents and %varrants to the Agency that, to the best of its knowledge: 19 Q:4:96agreemica:mainagre �J (1) No Hazardous Materials or hazardous Contamination exist or are located on, in or under the Site. (2) No portion of the Site is being used or, to Developer's best knowledge after diligent inquiry, has ever been used prior to Developer's ownership or occupancy thereof, for the disposal, storage, treatment, processing or other handling of Hazardous Materials and the Site is not affected by any Hazardous Materials Contamination. (3) No asbestos or asbestos -containing materials have been installed, used, incorporated into, or disposed of on the Site. (4) No polychlorinated biphenyls are located on or in the Site, in the form of electrical transformers, fluorescent light fixtures wiith ballasts, cooling oils, or any other device or form. (5) No underground storage tanks are located on the Site or were located on the Site and subsequently removed or filled. (6) No investigation, administrative order or notice, consent order and agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination is pending or, to Developer's best knowledge after diligent inquiry, threatened, with respect to the Site or the existing operations thereon. (7) The Site and its existing uses comply and, to Developer's best knowledge after diligent inquiry, their prior uses at all times have complied with all applicable Governmental Requirements relating to environmental matters or Hazardous Materials. There is no condition on the Site which is in violation of any applicable Governmental Requirements relating to Hazardous Materials, and Developer has received no communication from or on 20 g:4:96agree:uti¢a:mainagre behalf of any federal, state or local governmental authority or agency that any such condition exists. The Site is not currently on and, to Developer's best knowledge after diligent inquiry, have never been on any federal or state "Superf ind" list, and Developer is not aware that the Site is anticipated or threatened to be placed on such list. (8) True and correct copies of all (i) Developer's internal inspection reports with respect to the Site, (ii) environmental audits, reports and studies received by Developer which concern the Site, and (iii) inspection reports conducted during the last two years from each applicable regulatory authority with respect to the Site in the possession or control of Developer, have been delivered to Agency. Developer shall deliver to Agency within five (5) days of Developer's receipt thereof all environmental reports, audits or studies, internal inspection reports and regulatory inspection reports, which concern the Site generated or received by Developer prior to the repayment in full of the Promissory Note. (d) Indemnification Developer shall save, protect, defend, indemnify and hold harmless Agency from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of (i) the ownership of all or any part of the Site, (ii) any act or omission on the part of either Agency or Developer, or their agents, employees, contractors or 21 g:4:96agree: utica:mainagre V invitees, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination, (iv) the environmental condition of the Site, and (v) any Liabilities incurred under any Governmental Requirements relating to Hazardous Materials. Developer's obligations under this Section 25 shall survive after the issuance of the Certificate of Completion, and shall be a covenant running with the land in perpetuity, binding on all successors and assigns of Developer's interest in either this Agreement or the Site. TOOK-Offa •a .. The Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent i%ith the highest standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. (f) Environmental Inquiries The Developer shall notify the Agency, and provide to the Agency a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site: Notices of violation, notices to comply, citations, inquiries, clean- up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and the Developer shall report to the 22 9:4:96agree:utica:mainag►e �I Agency, as soon as possible after each incident, any unusual, potentially important incidents, including but not limited to, the following: (1) All required reports of releases of hazardous materials, including notices of any release of l lazardous Material as required by any Governmental Requirement; (2) All fires; (3) AlI instances where asbestos has been or may be disturbed by repair work, tenant improvements or other activities in buildings containing asbestos; authorities; (4) All notices of suspension of any permits; (5) All notices of violation from Federal, State or local environmental (6) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; (7) All orders under the Porter -Cologne Act, including corrective action orders, cease and desist orders, and clean-up and abatement orders; (8) Any notices of violation from OStiA or Cal -OSHA concerning employees' exposure to Hazardous Materials; (9) All complaints and other pleadings filed against the Developer and/or the Agency relating to the Developer's storage, use, transportation, handling or disposal of Hazardous Materials on the Site. In the event of a release of any Hazardous Materials into the environment, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all 23 g:4:96agreewtica:mainagre reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Agency, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof that, during construction and thereafter, the Developer, such successors and such assignees, shall use, operate and maintain the Site in conformity with this Agreement and shall devote the Site to uses specified in this Agreement for the periods of time specified therein. 27. AEFORDA13LE RENTAL HOUSING (a) Number of I Jaits. The Developer covenants and agrees to rehabilitate a total of thirty-six (36) multifamily housing units on the Site in conformance NAth the Scope of Rehabilitation (Attachment No. 5). The Developer agrees to make available, restrict occupancy to, and rent all of the units to "Lower Income households" at an "Affordable Rent" (the "Affordable Units") "Lower Income Household" shall mean a household earning not greater than sixty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety fo& Section 50079.5. 24 g:4:96a greemliea:mainagre "Affordable Rent" shall have the meaning set forth in Health and Safety �i Section 50053, as further defined in subparagraph (e) of this Section 27. (b) Mration of Affordability Requirements. The Affordable Units shall be subject to the requirements of this Section 27 for thirty (30) years, beginning on the date of the Agency's issuance of u Certificate of Completion for the Project (the "Commencement Date") The duration of this requirement shall be known as the "Affordability Period." The Affordability Period may be extended upon mutual agreement of the parties, evidenced by a written amendment to this Agreement. All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer shall execute, acknowledge and deliver to the Agency a "Declaration of Covenants, Conditions and Restrictions," in the form of Attachment No. 7 hereto and incorporated herein (the "Declaration"), which sets forth all of the requirements of this Section 27 of the Agreement in recordable form. The Developer consents to the recording of the Declaration in the official records of Orange County, California. (c) Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 8 hereto or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant renting an Affordable Unit is a Lower Income Household, and meets the eligibility 25 g:4:96agreewtica:mainagre �j tequirements established for the certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: pay periods. (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent (2) obtain a true copy of an income t,ax return from the tenant for the most recent tar year in which a return was filed. the tenant. (3) obtain an income verification certification from the employer of (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Lower Income Household shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no Ionger qualified as a Lower Income Household, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Lower Income 26 g:4:96agreemica:mainagre �,W, Household. Such new tenant shall then constitute a Lower Income Household for the purposes of this Section 27, and until such next available unit is rented to such tenant, the former Lower Income Household who has ceased to qualify as such shall be deemed to continue to be a Lower Income Household for the purposes of this Section 27. The Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 9 hereto or such other form as may be provided by the Agency. ! nr r . • r r i e �& -mg, - ,_ eimmiiimul7i�T�iTfl Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-six (36) Affordable Units required to be rented to Lower Income Households shall be established at one -twelfth (1112) of thirty percent (30%) of sixty percent (60%) of Orange County median income, less an established utility allowance, as annually determined and published by the United States Department of Housing and Urban Development. The maximum monthly rental amount for each Affordable Unit to be rented to Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Lower Income Household which is a "Section 8 Recipient," as defined therein ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Lower Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such 27 g:4:96agremutimmainagre c-� Section 8 Unit is vacated and rerented to a Lower Income Household which is not a Section 8 Recipient, then upon the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual fousehold Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) Bedroom unit and three (3) persons if it is a two (2) bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Lower Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Further, in no event shall the rent by the Developer exceed the rent level defined for Low Income Households in Health and Safety Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the 28 gA96agreemimmainagre % r -a M publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. (e) SclectiallTenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who are not recipients ("non Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States housing Act of 1937 or its successor ("Section 8 Program"). In the event that Developer is unable to rent an available unit to a non -Section 8 Recipient, then Section 8 Recipients may be considered as tenants. If the Developer is still unable to rent the available unit, the Agency may, at its sole option, identify a lower income household to occupy the available unit. (f) Low Income_Hgusing Ta.K Credits. If the Developer receives Low Income Housing Tax Credits for the project and those credits are applied to reduce the income tax liability of the Developer, no less than fifty percent (50%) of the tax savings must be returned to the Agency to reduce the outstanding Agency Loan balance on the Project. u � ► s u ►� : ►11 u : 1►���I► � The Developer shall maintain the improvements on the Site during the Affordability Period in accordance with the Declaration of Covenants, Conditions and Restrictions (Attachment No. 7). If at any the Developer fails to adequately maintain such areas, and such condition is not corrected after expiration of ninety (90) days from the date of written notice from the Agency, the Agency may (but shall not be obligated to) perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. 29 g:4:96agree mica:rnainagre Issuance of a Certificate of Completion by the Agency shall not affect Developer's obligations under this section. The Agency, for itself and for the City and other public agencies, at their sole risk and expense, shall have the right to enter the Site or any part thereof which is owned or controlled by the Developer, at all reasonable times, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer. Upon receipt of such notice, the Developer agrees to cooperate with the Agency in making the Site available for inspection by the Agency and/or City. Developer acknowledges and agrees that in the event that if for any reason the Developer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain entry to and inspect the Site. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding upon and for the benefit and in favor of the Developer and the Agency, their respective successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Agreement and the Declaration of Covenants, Conditions and Restrictions (Attachment No. 7) shall remain in effect until the expiration of the Affordability Period defined in Section 27 of this Agreement. The covenants against racial discrimination shall remain in perpetuity. 30 g:4:96agreemica:mainagre The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for those benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. After issuance of a Certificate of Completion for the Project, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the Site shall cease and terminate as to that portion of the Site for which the Certificate of Completion is issued, excepting only the provisions listed below which shall survive as follows: (a) Sections 18, 26 to 29, inclusive, relating to uses, maintenance and access. (b) Section 16 (relating to indemnification and insurance) shall remain in effect in accordance with the terms and conditions set forth therein. (c) Sections 43 and 44 (relating to rights and remedies) shall remain in effect to the extent necessary to enforce other provisions of this Agreement. (d) The Promissory Note (Attach.-nent No. 2), and all provisions contained in or referred to in documents to be recorded pursuant to this Agreement, including without limitation the Deed of Trust (Attachment No. 3), and the Declarations of Covenants, Conditions and Restrictions (Attachment No. 7). 31 g:4:96agree: Utica: mainagre V UNNEFT, i Is I I►: ��► The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of anv person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein coveyed, not shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation unth reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, 32 g:4:96agree: Utica: mainagre r � sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his , or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, Iessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, Iessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, v"nthout regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in 33 g:4:96agreewtica:mainagre interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. M ZRIKOMIUMIRMYMI NIMMIMIUM 0 Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by band (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy or overnight delivery service, to the principal offices of the Agency and the Developer. Such written notices, demands and communications may be sent in the same manner to the Agency and the Developer at the addresses provided pursuant to Section 3. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or sent by telecopy, shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail, and shall be deemed received on the next business day after it is sent if delivered by overnight delivery service. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. 34 g:4:96agreewtimmainagre l 1:1001tej allCOMMON ► ! ! I IST • W 1.4 MICRO GREGO In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties, acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or the City other than in respect to the zoning of the Site to allow development of the Developer Improvements); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. NoMithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Any requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. 0r , l\ts CO r r ! r; 0 No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the 35 C*96agreewflca:mainagre Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. In the evert of any default by the Developer under the terms of the Deed of Trust, no general partner of the Developer shall be personally liable for any amount which may become due to the Agency as a result of such default. 36. DEFAULTS Subject to the extensions of time set forth in Section 34, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings for damages or specific performance against the party in default until thirty (30) days after giving such notice in the case of monetary defaults or defaults reasonably capable of being cured within thirty (30) days, provided that such party immediately commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy %%ith diligence. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. WANEff M rIL1r[IN • rr► In addition to any other rights or remedies and subject to the restrictions in Section 36, either party may institute Iegal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of 36 g:4:96agreewtica:maina9re this Agreement. Legal actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. %T*jMV1MQ 21 W IFIRCOMIJIMM110 Wixela 9 1110 In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon its General Partner or in such other manner as may be provided by law. E, r1XMMFRffl I I RVA N 1 Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or 37 g:4:96agreewtimmainagre deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. �a[figns-74%1091-0741UVrx" � IN THE EVENT THAT THE DEVELOPER IS IN DEFAULT OF ITS OBLIGATIONS PURSUANT TO SECTION 27 OF THIS AGREEMENT, AND HAS NOT CURED SUCH DEFAULT WITHIN THE TIME REQUIRED BY SECTION 36 OF THIS AGREEMENT, THE AGENCY SHALL BE ENTITLED TO OBTAIN PAYMENT IN THE AMOUNT OF THE AGENCY GRANT WHICH HAS BEEN DISBURSED PURSUANT TO SECTION 8 OF THIS AGREEMENT, PLUS THE IMMEDIATE REPAYMENT OF THE AGENCY LOAN, PRINCIPAL AND INTEREST EARNED THEREON. IN THE EVENT OF SUCH DEFAULT PURSUANT TO SECTION 27 OF THIS AGREEMENT, THE AGENCY WOULD SUSTAIN DAMAGES BY REASON THEREOF WHICH WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE DELAY OR FAILURE OF THE AGENCY AND THE CITY TO PROVIDE AFFORDABLE HOUSING AS REQUIRED BY THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND THE CITY GENERAL PLAN, AND THE LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL AFFORDABLE HOUSING TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE AGENCY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL THE SUM SET FORTH HEREIN, AND THE AGENCY SHALL BE ENTITLED TO SUCH AMOUNT AS A TOTAL OF ALL 38 g:4.96agree:utica:mainagre LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY. IN THE EVENT THAT THE DEVELOPER SHOULD CHALLENGE THE APPLICABILITY OR EFFICACY OF THIS PARAGRAPH OR IF THIS PARAGRAPH SHOULD BE HELD VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAW. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY TIiEIR IN LS BELOW: Developer's Initials Agency's Initials By: y;420aa_ .. (a) Damages. If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the applicable period after service of the notice of default as set forth in Section 36, the defaulting party shall be liable to the other party for any damages caused by such default, except as provided in Sections 43(c) or 43(d) herein. (b) SMcific Performance. Subject to the applicable cure provisions contained in Section 36 herein, if either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve %%Titten notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the applicable cure period as set forth in Section 36, the nor, -defaulting party at its option may thereafter (but not before) see specific performance of terms of this Agreement. 39 g:4:96agreewtimmainagre (c) Termination by the Devclomr Prior to Completion. In the event that prior to the Issuance of a Certificate of Completion the Developer is not in default of the Agreement and the Agency is in default of the Agreement and has not cured or commenced to cure such default mithin the time period set forth in Section 36 hereof, then subject to the applicable cure provisions contained in Section 36 herein, at the option of the Developer, thirty (30) days after written notice thereof is delivered to the Agency all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall have any further rights against or liability to the other with respect to this Agreement. (d) Tgmynation by the Agency Prior to Completion. In the event that prior to the issuance of the Certificate of Completion the Agency is not in default of this Agreement and: (1) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (2) There is a change in the ownership of the Developer contrary to the provisions of Section 5 hereof; or (3) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor and such default or failure shall not be cured within the applicable cure period as set forth in Section 36 hereof; or (4) The Developer is otherwise in default under this Agreement and has not cured or commenced to cure such default «ithin the applicable time period set forth in Section 36 herein; 40 g:4:95agreemica:mainagre Then, at the option of the Agency, within the applicable cure period as set forth in Section 36 hereof, after written notice thereof is delivered to the Developer, this Agreement shall be terminated, and thereafter neither party shall have any further rights against the other under this Agreement. (a) Termination and Damages. After the issuance of the Certificate of Completion, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve Nwitten notice of such default upon the defaulting party. If the default is not cured by the defaulting party %',Rhin the time set forth in Section 36 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. (b) Action for Specific Performance. After the issuance of the Certificate of Completion, if either the Developer or the Agency defaults under any of the provisions of this Agreement the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 36 hereof, the nondefaulting party at its option may institute an action for specific performance of the terms of this Agreement. The Agency shall not be liable for any real estate commissions, broker's fees, or finder's fees which may accrue by means of this Agreement or the Developer's rehabilitation of the Site. The Developer agrees to hold harmless the Agency from such commissions or fees as are alleged to be due from the party making any such representations. 41 gA.96agree mica:mainagre ' f �\ I I e 100 a W1 i The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Developer. u 1 :: ► 1 u IIAT;7Ci9l tTU-0 The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this Agreement in the form of the "Memorandum of Agreement" attached hereto as Attachment No. 10 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the execution of this Agreement. ►� 1 11.4 ff4xcj t u q►� This Agreement includes pages 1 through 49 and Attachments 1 through 10, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstances 42 g:4:96agreewtimmainagre where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution REST OF PAGE INTENTIONALLY LEFT BLANK 43 g*96agreemicrmainagre and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been approved and adopted by the Agency. IN WITNESS WHEREOF, the Agency and the Developer have caused this Agreement to be executed by and through their authorized officers on this day ofMan 1996. ASSOCIATES NINE, a California general partnership By: ®' Horace C. Stovall General Partner By: Melvin R. Heckman General Partner ATTEST: Agency Clerk INITIATED AND APPROVED: P&J e w/w Director of f ea"arose de*f ®wurt f " REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: — Chairman APPROVED AS TO FORM: .r- c Fo/ A e c General Counsels ll I is I y t kel I � REVIEWED -AND APPROVED: am gza.421Ae a a CJ�►y Executive Director 44 g:4:96agree:utica:mainagre CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT ft State of -pulp County of Cry. n� On T.�(kI'�t,Y7 (P i ��1� before me, Data hum E Name erw title o1 Ker ie.p 'Jane Doe. dK� personally appeared �t'�'� a'-j Narb(s) ai s7wis) L.C:krsonaily known to me — -evidence to be the person whose name@ wo-subscribed to the within instrument and acknowledged to me that he executed the same in NsAlw. i authorized capaci le , and that by hisltw,' ei ignaturaM on the instrument the person(s), tAtlRAA.ht;tSON or the entity upon behalf of which the persotlapacted, Q'01W Common1 lOW6,7 zexecuted the instrument. Notary Public-- caoforrlla ORANGE COUMY Comm. Expiry JU 23. IM WITNESS m .hand •and official seal. 5'flnalure o1 Notary Pubwc OPTIONAL Though the Information below is not required by law, it may prove valuable to persons dying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: t,e& Cer 1- nt. f Capacity(ies) Claimed Signers) Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner-0 Limited ❑ General ❑ Attomey-in-Fact C Trustee C Guardian or Conservator '`jam Other 41�,a%OVILvL Sop o1 murnb here Signer Is Representing: _ ?25 -133 UrI&L Number of Pages: Mean" Pee6.,,1. bXLr&. Signer's Name: &G�'La:n ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian r Consery for a r Cher f� top or thuma here Signer Is Representing: 0 1995 Na Tonal Notary AssoC*kon • 8236 Aemmet Ave., P.O. Bow 7184 • Canoga Park. CA 913D9.7184 Prod. No. 5907 Reorder. Car TolTme 1. M-8764W CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT kw. State of _ County of On '_1 g 9�7 before me, - iz- _ cc � Dare Name and , a o! Offcer (e.Q.. Jane . Notary personally appeared4 , �1amels) of SQnerlsj 9-061'rsonally known to me — IM797-ot sa is ac orybe the personH whose name(e)f isFate-subscribed to the within instrument and acknowledged to me that hehhe44" executed the same in hisA�;� authorized capacity(ee), and that by _ NAYM CF L.JCH;SON his/her/their signature) on the instrument the person(.c), ` rt ' COMM. # W1M � or the entity upon behalf of which the person(s) acted, Notary PuNic — CaTomio MANGE COexecuted the instrument. UNTY MV Cornm- EX;*Q5 NAY 11,14D7 WITNESS my hand and official seal. V S"106 of Notary PulAc OPTIONAL Though the information below is not required by law, it may prove va.'uabte to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: _ _ v-eolp74 DocumentDate: Number of Pages: Signer(s) Other Than Named Above: , Capacity(ies) Claimed by Signer(s)d�� Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ;XI❑ Guardian or Conservator:- a-,-6ther:. Top of thumb here Signer Is Representing: Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General 0 Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: TOP of thumb we I Signer Is (Representing: 0 1995 N.tonal Notary AssOdem - 8236 Rer" Ave., PO. Box 7184 - Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder. CON ToN-Fr" 14OD-675-5827 ATTACHMENT NO.3 RECORDING REQUEST BY AND } WHEN RECORDED RETURN TO: } } Redevelopment Agency of the City ) of Huntington Beach } 2000 Main Street } Huntington Beach, CA 92648 ) Attn: Executive Director } (Space Above this Lhc for Recorders Use) THIS DEED OF TRUST is made this day of 1994, by and bet%veen ASSOCIATES NINE, a California general partnership (the "trustor"), whose address is: 948 1 Ith Street, Huntington Beach, California 92648 and FIRST AMERICAN TITLE INSURANCE COMPANY, (the "TRUSTEE"), whose address is 114 East Fifth Street, Santa Ana, California 92701, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "BENEFICIARY"). WITNESSETH: That Trustor Irrevocably, Grants Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein. TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Four Hundred Forty-six Thousand Dollars ($446,000) with interest thereon according to the terms of a Promissory Note of even date Attachment 3 Page 1 of 12 G:4-96Agrce:Utica:Attach3 herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or wAmers of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on . 1994, (hereinafter the "Agreement"), including without limitation, the payment of liquidated damages pursuant to Section 42 of the Agreement. 4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. The loan secured hereby is being obtained for the purpose of financing rehabilitation improvements on said property. Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance Attachment 3 Page 2 of 12 GA-46Ag cc-Ucica:Attach3 with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation; (c) to replace any work or materials unsatisfactory to Beneficiary within f fteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; (f) not to permit any stop notice claims to be presented to Beneficiary. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all times with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a Ioss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be deiivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the Ioan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such Attachment 3 Page 3 of 12 G:4-96Agtce:Udca:Attach3 lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when due, all special assessments for public improvements; (c) when due, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior to superior hereto, and (d) in exercising any such Attachment 3 Page 4 of 12 G:4-96Agree:Utica:Attach3 powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys` fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 8. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. Attachment 3 Page 5 of 12 G:4-96Agree:Ltica:Attach3 V 10. That at any time, or from time to time, without Iiability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map or plat thereof, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 11. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive payoff of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re -assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Agency the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Agency any duty to produce rents from the property affected by this Trust Deed, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, repaid, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues and profits is not contingent upon, and may be exercised without ]possession of, the property affected by this Trust Deed. Agency confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Agency may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. Attachment 3 Page b of 12 G:4-96Agrce:Utica:Anach3 This right to collect rents, issues and profits shall not grant to Agency or Trustee the right to possession, except as othenvise provided herein; and neither said right, nor termination of the License, shall impose upon Agency or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attomeys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be an affirmation by Beneficiary of any tenancy, Ieasc or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "Ieaschold estate;" (b) Trustor shall not amend, change or modify his leaschold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby Attachment 3 Page 7 of 12 GA-96Agrec:Utica:Anach3 shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by Iaw following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful money of the United States, payable at time of saler Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive payoff of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expense of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee Attachment 3 Page 8 of 12 G:4-96Agrce:U ica.A1tach3 shall apply the proceeds of sale to payment, first, all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee prcdecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That tHs 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, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine sender includes the feminine and/or neuter, and the singular number includes the plural. 19. The property secured by this Deed of Trust is income producing property consisting of four units or more. Trustor agrees to file with Beneficiary, at Beneficiary's request, yearly, on or before the 15th day of January of each year, a written operational report. Such operational report shall contain a brief but complete statement of the year's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable change, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for an}, other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's Attachment 3 Page 9 of 12 G:4-96A8rce:Udca:Attach3 records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 24. This Deed of Trust is subordinate to the Deed of Trust recorded December 31, 1985 as Document No. 523941 of Official Records of Orange County, California, securing the amount of $1,300,000.00; Beneficiary World Savings and Loan; Trustee Goldenwest Financial Corporation; Trustor Associates Nine, a California general partnership. All other encumbrances on the property, if any, shall be subordinate to this Deed of Trust. 25. That in the event of any default by the Trustor under the terms of this Deed of Trust, no general partner of the Trustor shall be personally liable for any amount which may become due to the Beneficiary as a result of such default. 26. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. Attachment 3 Page I0 of 12 G:4-96Agmc:Utica:AMch3 M THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Attachment 3 Page 1 I of 12 ASOCIATES NINE, a Clifornia general partnership Horace C. Stovall General Partner Melvin R. Heckman General Partner G:4-46Agrze:U ica:Atnach3 V EXHIBIT "A" TO DEED OF TRUST All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1 The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof Parcel 3 The Nest 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Attachment 3 Page 12 of 12 G:4 96Agree:Utica:Attach3 ATTACHMENT NO.4 I. Execution pfAareement Within thirty (30) days bY Avecy. The Agency after the date of execution shall approve and execute and submission of five (5) this Agreement and shall copies of this Agreement by deliver one (1) copy the Developer. Thereof to the Developer. 2. Submission of Preliminary Completed. Site Plan. Developer submits its Preliminary Site Plan to the Agency. 3. Agency Review of Site Plan. Completed. The Agency shall approve or disapprove the Preliminary Site Plan. 4. Completed Plan Application. Developer submits full and complete Site Plan application to Agency. •: Documentation. •► :ll" 0 111mroll-NU a I C1eN mrael• 111j IN 1 ► its am as 6. Submission of Comolete Developer shall submit to the City complete Construction (working) Drawings and a Landscaping Plan. Attachment 4 Pagel of 3 Within thirty (30) days after final C.U.P. approval. G:4A6Agrce:Udca:Anach4 7. City Review of Complete Within eighteen (18) days Drawings axid . The after submittal. City shall review the Complete Construction (working) Drawings, the Preliminary Landscaping PIan, and provide comments. S. Revisions, ifLay. Developer Within thirty (30) days shall prepare revised after receipt of City's Construction (working) comments. Drawings as necessary, and submit them to City for review. 9. Final Review and Complete Within eighteen (1 S) days Drawings. The City shall after submittal by approve the revisions Developer. submitted by the Property Owner provided that the revisions necessary to accommodate the City's comments have been made; said approvals constitute the last City approvals required in order for the Property Owner to pull building permits. 10. CommencemenUf Within thirty (30) days Construction. Developer after the City's issuance shall commence of building permits. construction of property rehabilitation. Attachment 4 Page 2 of 3 G:4-96Agrce:Utica:Attach4 11. Comnletion of Construction. Developer shall complete construction of all of the rehabilitation improvements. Subject to any delays pur- suant to Section 34 of the Agreement, the Developer is to use due diligence to complete the project within twelve (12) months after the start of the rehabilitation improvements; however, provided the Developer may request up to three (3) one (1) month extensions to be granted by the Director of Speical Projects. Approval for such three extensions (but no other extensions) is not to be unreasonably withheld; provided that, notwithstanding the foregoing, construction shall be completed not later than eighteen (18) months after the earlier of (i) the commencement of the rehabilitation improvements; or (ii) the time established in this Agreement for the commencement of construction of rehabilitation improvements. WA 0 0 MO r Q * , y 12. Disbursement ofAgencv Loan. The Agency shall disburse the Agency Loan. 13. Disbursement of Ayencv Sl=. The Agency shall disburse the Agency Grant. Per progress payment schedule. Per progress payment schedule. 14. Submission of Income Within thirty (30) days Certification. after execution of the Agreement; end annually thereafter to be submitted on July 1, for the duration of the Agreement. Attachment 4 Page 3 of 3 G:4-96Agrcc:Utica:Attach4 MW ATTACHMENT NO.5 The project is a 36 unit multifamily housing development located at 725-729 Utica Avenue, and is composed entirely of two bedroom apartments that are in average to below average condition. Improvements planned include the rehabilitation of both the interior and exterior of the buildings, rehabilitation of the existing carports, new landscaping, and the installation of a "passive" recreation area. All rehabilitation work will conform to Housing Quality Standards and all other applicable building codes, standards, and regulations. Attachment 5 Page 1 of I Q4-96Agrec: UVca:Attach5 ATTACHMENT NO.6 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO. ) } ) } (Space above for recorder.) A. An "Affordable Mousing Agreement" was entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and ASSOCIATES NINE, a California general partnership (the "Developer") dated as of ,1994, a copy of which is on file with the Agency as a public record at its offices at 2000 Main Street, Huntington Beach, California (the "Agreement"), and is incorporated herein by reference. B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the rehabilitation project pursuant to the Agreement, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the rehabilitation required by the Agreement. D. The Agency has conclusively determined that the rehabilitation of the housing units on the real property described in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has been satisfactorily completed. NOW THEREFORE, Attachment 6 Page 1 of 3 G:4-96Agr": Utica:Attach6 IM 1. As provided in the Agreement, the Agency does hereby certify that the rehabilitation of the housing units on the Site has been fully and satisfactorily performed and completed. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the Agreement. IN WITNESS WHEREOF, the Agency has executed this ccrtificate this day of , 19_ REDEVELOPMENT AGENCY OF TI IE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Clerk Attachment 6 Page 2 of 3 G:4-96Agree;Utica:Attach6 "qw v EXHIBIT "A" TO CERTIFICATE OF COMPLETION FOR REHABILITATION PROJECT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1 The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2 Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3 The West 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Attachment 6 Page 3 of 3 G:4-96Agm: U6ca:Attach6 ATTACHMENT NO.7 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) } } } } } 1 (Space above for recorder.) This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF fIUNTINGTON BEACH THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS (the "Declaration") is entered into this — day of ,1994, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), and ASSOCIATES NINE,, a California general partnership (the "Developer") A. The Developer is fee owner of record of that certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". The Site is the subject of an Affordable Housing Agreement (the "Agreement") for the rehabilitation, operation and maintenance of an affordable housing project. B. The Agreement provides for the execution and recordation of this document. Except as otherwise expressly provided in this Declaration, all terms shall have the same meanings as set forth in the Agreement. NOINT, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS FOLLOWS: Attachment 7 Page 1 of 11 GA-96Agree: Utica:Attach7 0 :2KI163011 � (a) Number of Units. The Developer covenants and agrees to rehabilitate a total of thirty-six (36) multifamily housing units on the Site in conformance with the Scope of Rehabilitation (Attachment No. 5 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent all of the units to "Lower Income Households" at an "Affordable Rent" (the "Affordable Units"). "Lower Income Household" shall mean a household earning not greater than sixty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety CD& Section 50079.5. "Affordable Rent" shall have the meaning set forth in Health and Safety C-oQ Section 50053, as further defined in subparagraph (e) of this Section 27. (b) Dy.ration of A,f fQrdabili Rcnuirements. The Affordable Units shall be subject to the requirements of the Agreement and this Declaration of Covenants, Conditions and Restrictions for thirty (30) years, beginning on the date of the Agency's issuance of a Certificate of Completion for the Project (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." The Affordability Period may be extended upon mutual agreement of the parties, evidenced by a written amendment to the Agreement. All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer consents to the recording of this Declaration in the official records of Orange County, California. (c) Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 8 to the Agreement or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant renting an Affordable Unit is a Lower Income Household, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paych.-ek stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. Attachment 7 Page 2 of 11 GA-96Agrce:Utica: Attach? (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Lower Income Household shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Lower Income Household, the next available unit of comparable size must be rented to (or held vacant and available for i.*nmediate occupancy by) a Lower Income Household. Such new tenant shall then constitute a Lower Income Household for the purposes of the Agreement and this Declaration and until such next available unit is rented to such tenant, the former Lower Income Household who has ceased to qualify as such shall be deemed to continue to be a Lower Income Household for the purposes of this Declaration and the Agreement. The Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 9 to the Agreement or such other form as may be provided by the Agency. (d) Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-six (36) Affordable Units required to be rented to Lower income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Orange County median income, less an established utility allowance, as annually determined and published by the United States Department of Housing and Urban Development. The maximum monthly rental amount for each Affordable Unit to be rented to Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Lower Income Household which is a "Section 8 Recipient," as defined therein ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Lower Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Lower Income Household which is not a Section 8 Recipient, then upon the next vacation of an Actual Household Size Unit, such vacated Actual Attachment 7 Page 3 of 11 G:4-96Agnee:Udca- Attach? Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two (2) bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Lower Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Further, in no event shall the rent by the Developer exceed the rent level defined for Low Income Households in Health and,Safety_Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. Further, in no event shall the rent charged by the Developer exceed the level defined for Lower Income Households in Health R Safety Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUNI RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: n.c maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. (e) &lection of Tenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who are not recipients ("non Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor ("Section 8 Program"). In the event that Developer is unable to rent an available unit to a non -Section 8 Recipient, then Section 8 Recipients may be considered as tenants. If the Developer is still unable to rent the available unit, the Agency may, at its sole option, identify a lower income household to occupy the available unit. (f) . If the Developer receives Low Income Housing Tax Credits for the rehabilitation project, no Iess than fifty percent (50%) of the net syndication proceeds must be used to reduce the outstanding Agency Loan balance on the Project. Attachment 7 Page 4 of I 1 G:4-95Agrce:Utica:Attach7 11 Wel 4014 1 u I I► FAV I to]► The Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: (a) To use, devote, operate and maintain the Site and each part thereof, for the purposes and the residential uses specified in the Agreement. (b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run NNith the land." (2) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation or any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the Iessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation vdth reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (3) In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with references to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." Attachment 7 Page 5 of I I GA-96AgrcvUtica:Anach7 The Site shall be occupied, used and maintained as follows: (a) Each dwelling unit shall be used only for private apartment dwelling purposes, with appurtenant facilities, and for no other purposes. (b) All signs on the property shall conform with all ordinances and other regulations of the City. (c) The Developer and the occupants shall not permit or suffer anything to be done or kept upon said premises which will increase the rate of insurance on any building, or on the contents thereof, or impair the structural integrity thereof or which «ill obstruct or interfere with the rights of other occupants, or annoy them by unreasonable noises or otherwise, nor shall any occupant commit or permit any nuisance on the premises or fail to keep the premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. The Developer shall comply with all of the requirements of all governmental authorities with respect to the premises. If by reason of the occupancy or uses of the premises the rate of insurance on the Site shall be increased, the Developer shall become personally liable for the additional insurance premiums. (d) There shall be no structural alteration, construction or removal of any building, fence or other structure on the Site (other than repairs or rebuilding permitted herein) without the approval of the City or the Agency and in accordance with the City Code. (e) The Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor. The Developer shall not permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or any recreational vehicle (camper unit, camper shell detached from a private passenger vehicle, motor home, trailer, boat trailer, mobilehome or other similar vehicle, except when parked within an enclosed parking space), boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle upon any portion of the Site, including parking spaces. The Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Site, including parking spaces, except for emergency repairs thereto and then only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept anywhere on the Site. The Developer shall have the right to remove, at the tenant's expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. In addition, all provisions of the Huntington Beach Municipal Code, including amendments thereto, shall apply. Attachment 7 Page 6 of I I G:496Ag c:Utica:Attach7 Occupancy of each dwelling unit shall be restricted to occupancy standards set forth in the Huntington Beach Municipal Code or state standards, as are effective or as may be effective or amended. The Developer shall not be permitted to lease or rent any dwelling unit thereon for transient or hotel purposes. Any lease or rental agreement covering an apartment shall provide that the terms of the lease or rental agreement shall be subject in all respects to the provisions of this Declaration of Conditions, Covenants and Restrictions and that any failure by the lessee to comply with the terms of such documents shall be a default under the lease or rental agreement. All Ieases and rental agreements shall be in writing. All prospective tenants/occupants of the Site shall make application through the Developer. To the extent permitted by law, the City of Huntington Beach and the Agency shall have the right of entry, at reasonable business hours and upon no Iess than twenty-four (24) hours advance notice, onto the Site to inspect for the need for repairs or maintenance. Entry onto the Site or into any unit for other than emergency repairs may be made only after such advance notice and request for entry. if request for entry is denied or the Site or any applicable unit is unoccupied, the City or Agency may apply for an appropriate warrant or other order from a court of appropriate jurisdiction. MEEKWO-3 1► No part of the Site shall at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with a conversion to such ownership or uses. Other than obtaining a final subdivision map on the Site and a final subdivision public report from the California Department of Real Estate, the Developer shall not take any steps in connection with a conversion of the Site to a condominium ownership, or with a conversion of the Site to "timeshare" ownership. POW 1111143Tn"Ili W. NeW The exterior areas of the Site shall be kept free of rubbish, debris and other unsightly or unsanitary materials. Exterior yard areas and parking areas shall be kept free of deterioration, including. potholes, cracks in asphalt so as to become uneven, unsightly surface conditions, weeds growing through asphalt. Perimeter fencing, landscaping and irrigation system shall be routinely inspected and maintained in good condition. Each occupant of the Site shall have the affirmative obligation to prevent what might by considered a fire hazard or a condition dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract Attachment 7 Page 7 of U G:4-96ASme:Utica:Attach7 MA EWA from the aesthetic and property values of neighboring dwelling units and properties. The following minimum performance standards for the maintenance of buildings, yards, and landscaping shall be adhered to by the Developer: (a) Landscaping on the Site shall be absent of the following: (1) Lawns with grasses in excess of six (6) inches in height. (2) Untrimmed hedges. (3) Trees, shrubbery, la,%ms and other plant life dying from lack of water or other necessary maintenance. (4) Trees and shrubbery grown uncontrolled without proper pruning. (5) Vegetation so overgrown as to be likely to harbor rats or vermin. (6) Dead, decayed or diseased trees, weeds and other vegetation. (7) Inoperative irrigation system(s). (b) Yard areas shall be maintained so as to be absent of the following: (1) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (2) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (3) Unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public streets and common areas. (c) No building, wall or fence may be left in an unmaintained condition so that any of the following exist: (1) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state of partial construction. condition as to: (2) Unpainted buildings or buildings with peeling paint in such a i. Cause dry rot, warping and termite infestation; or ii. Constitute an unsightly appearance that detracts from the aesthetic or property values of neighboring properties. Attachment 7 Page 8 of 11 0:4-96AgreeXtica:Attach7 (3) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. (4) Damaged garage doors that may become inoperative or unsafe to operate. (5) Graffiti remaining on any portion of the property for a period exceeding 72 hours. (6) Building interiors and exteriors shall be maintained to meet standards of similar residential property in the City of Huntington Beach. The City of Huntington Beach ("City") and the Agency shall be made parties to this Declaration for the limited purpose as specified herein as follows: (a) Changes or amendments to this Declaration must be submitted for City and Agency review and approval. (b) In the event of inaction by the Developer, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. (c) The City and Agency are hereby granted the express power to enforce all laws and ordinances of tre State of California and/or the City on yards, structures, and private parking areas within the Site. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. (d) The City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendment(s) shall be deemed approved, unless that time period is extended by mutual agreement of all parties. Attachment 7 Page 9 of I 1 GA-96Agrce:Ut ica: Attach? (a) Right ofEntry. To the extent permitted by law, Developer hereby acknowledges and intends and thus grants to the City, through the City's duly authorized agents or employees, the right to enter upon the Site for the following purposes: (1) Inspection, maintenance and repair of the Site. (2) Enforcement of local traffic and/or parking regulations. (b) Mmhuaernents oMly Expenditures. Alt costs and expenses incurred by the City arising out of its inspection, maintenance and repair of the Site, as provided hereinabove ("City Maintenance Costs"), shall be charged as an expense of the Developer and shall be paid within ten (10) days of receipt of an invoice for same. (c) Assessments and Lien Rights of the City. If City Maintenance Costs are not paid within thirty (30) days from the date due, said unpaid costs and expenses shall become a special assessment against the Site and, upon confirmation by the City Council, shall be collected in the same manner as real property taxes and shall be subject to the same penalties, procedures and sale in case of delinquency as is provided for real property taxes. ufiUQ:3 4 WAR101814 ':• (a) If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shalt not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. (b) This Declaration shall be construed in accordance with the laws of the State of California. (c) In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. (d) The Developer shall be required to take all reasonable steps necessary to insure that each tenant and all assignees, and transferors have knowledge of all terms and conditions of this Declaration. � . it="011 The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any successor in interest to the Site, or any part thereof, for the benefit of and in favor of the Agency, its successor Attachment 7 Page 10 of 11 GA-96Agrcc:lhica:Anach7 7 and assigns, and the City of Huntington Beach. All the covenants contained in this Agreement shall remain in effect for the Affordability Period, and shall automatically terminate and be of no further force or effect after such time except for the covenants against discrimination contained in Section 2 hereof, which shall remain in effect in perpetuity IN WITNESS WHEREOF, the Agency and the Developer have executed this Declaration of Conditions, Covenants and Restrictions. public Dated: Dated: Dated: ATTEST: Agency Secretary ASSOCIATES NINE, a Califomia general partncrship Dated: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a body corporate and politic By: Chairman By: Executive Director By: Director of Special Projects APPROVED AS TO FORM: City Attorney Agency General Counsel Horace C. Stovall General Partner Melvin R. Heckman General Partner Attachment 7 Page 11 of 11 GA-96Agrcc:U6ca: Attach] ATTACHMENT NO.8 CERTIFICATE OF ELIGIBILITY Part I e - General Info 01jon 1. Project Name 3. Name of Lender Part II - - Unit Information 7. Unit 8. Number of Number of Address Bedrooms Occupants 2. Project Location 4. Landlord's Name 9. Monthly Payment 10. Part III - - Affidavit j�f Renter I, , and I, , as applicants for rental of a Lower Income Unit in the above -described Project, do hereby represent and warrant as follows: A. (My/Our) adjusted income (anticipated total annual income) does not exceed: Attachment 8 Pagel of S GA 95AgTcc:Udr-a:Auach8 L9 () $ (60% of Orange County Median Income) The following computation includes all income (Uwe) anticipate receiving for the 12- month period beginning on the date (I/%ve) execute a rental agreement for a Lower Income Unit or the date on which (I/we) will initially occupy such unit, whichever is earlier. 1. For the renter and all family members include: (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation,worker s compensation and severance pay (before payroll deductions) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying the unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse Subtotal (a) - (0 J=: portion of above items which are income of a family member who is less than 18 years old or a full-time student ( ,) Total Eligible Income N=: The followring items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; Attachment 8 Page 2 of 5 GA-96Agrce:Utica:Attach8 government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. As of the first day of occupancy of the unit which (1,1we) propose to rent (a) either (myself/ourselves) or at least one other occupant of the unit is not an individual enrolled as a full-time student during each of five (5) calendar months during the calendar year in which occupancy of the unit begins at an educational institution which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof or (b) if all of the occupants of the unit will be individuals described in (a), either (myself/ourselves) or one other occupant of the unit is a husband or wife entitled to make a single return jointly of Federal income taxes. 3. This affidavit is made with the knowledge that it will be relied upon by the Landlord to determine maximum income for eligibility and (Uwe) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 4. (I/We) will assist the Landlord in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto copies of federal income tax returns for the past two years. 5. (I/We) acknowledge that (I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Redevelopment Agency of the City of Huntington Beach to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. Attachment 8 Page 3 of 5 GA-95A&nc-.0 ica:Anach8 W (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Applicant SUBSCRIBED AND SWORN before me this day of , (Notary Seal) Notary Public in and for the State of My Commission Expires: INCOME VERIFICATION (for employed persons) The undersigned employee has applied for rental of a dwelling unit located in a redevelopment housing project in the City of Huntington Beach. Every income statement of a prospective purchaser must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compeimtion received on a regular basis. Annual wages Overtime Bonuses Attachment 8 Page 4 of 5 G:4A6Agrcc: Utica:Attach8 Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant permission to disclose my income to the Agency and ... . the Project Operator, in connection with my proposed rental of a dwelling unit located in their project. Signature Date Please send to: Attachment 8 Page 5 of 5 G A-Mgmc: Utica: Attach g ATTACHMENT NO. 2 Huntington Beach, California .)22 gf j.19R5 , - 19 9�- 1. f This Promissory Note is made and livered pursuant to and in implementation of an Affordable Hou ing Agreement by and between the REDEVELOPMENT AGENCY OF THE C OF HUNTINGTON BEACH, a public body corporate and politic (the 'Holder") and ASSOCIATES NINE, a California ge eral partnershi (the "Borrower"), dated SL, -1994 (the "Agreement"), -'a copy of which is on Jeile as a public r cord with the Holder and is incorporated herein by reference. a Agreement provides for the rehabilitation of certai housing units owned by the Borrower, and for the payment of mo ys by the Holder to the Borrower upon certain events therein set orth. The Borrower acknowledges that but for the execution o this Promissory Note, the Holder would not enter into the Agre ent. Unless definitions of terms are expressly set out at lengt herein, each term shall have the same definition as set forth in he Agreement. 2. Promise to Pay. Upon p .ent of the "Agency Loan" to Borrower pursuant to Section 6 of th Agreement, Borrower promises to pay Holder at the office Xf the Agency in Huntington Beach, California, or at such other pl %(th as the Holder may designate in writing, the principal suFour Hundred Forty-six Thousand Dollars ($446,000) "Note Amount"). 3. Intgrest Rate. Compound interes shall be charged by the Agency on the portion of the Note Amount emaining unpaid, from the date of the disbursement of the Note mount until the date which is thirty (30) years from the date the disbursement of the Note Amount, at the prime r e of the San Francisco office of the Federal Reserve Bank whi is prevailing on the date this Agreement is approved and adopte by the Agency, plus one and one-half percent (1.5%). 4. Principal and Interest, Payments. (a) No payments of principal and interest shall be required during the term of the loan. On the date whit is 30 years from the date of the disbursement of the Note Amou t, the Borrower shall repay the entire Note Amount plus all inte est earned thereon, except as hereinafter provided. (b) The full amount of this Promissory Note, with all interest accrued thereon, shall be immeidately due and \ payable upon the Developer's uncured default of the Agreement and/or this Promissory Note. Attachment No. 2 - Page 1 of 4 11/04/93:sg (c) Provided that the Developer remains in compliance with the affordability provisions of the Agreement, this Promisory Note shall be forgiven, and no payment required, as follows: (1) Each year following the adoption of this Agreement, on the anniversary date thereof, the Agency will determine whether or not the Developer has complied with the affordability requirements of the Agreement. (2) If the Agency finds that the Developer has complied, an amount equivalent to one -thirtieth (1/30) of the Note Amount, plus accrued interest, shall be forgiven from repayment. (3) If the Agency finds the Developer has not complied, the Developer shall be considered to be in default of the Agreement, and the provisions of the Agreement relating to defaults shall be applicable. (4) The determination of compliance shall be made in the Agency's sole discretion. 5. Prepayment. Privilege is reserved to make prepayments of principal on this dote without penalty or fee. 6. Non,lqayerr. Failure to exercise any right the Holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subsequent default. 7. Waiver of Presentment — etc. The Borrower and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Note and consent that the holder hereof may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, by agreement between the Holder and Borrower, and such consent shall not alter or diminish the liability of any person or the enforceability of this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action of proceeding to recover any sum herein provided for, no defense of adequacy of security, or that resort must first be had to security or to any other person shall be asserted. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. 8. Collection Costs. If any attorney is engaged by the Holder to enforce or construe any provision of this Note or the Deed of Trust, or as a consequence of any default or event of default hereunder, with or without the filing of any legal Attachment No. 2 - Page 2 of 4 11/04/93:sg 1 action or proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Holder, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 9. Security 4f Note. This Note is secured, jntpr, alia, by a Deed of Trust (the "Deed of Trust") of even date herewith executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. 10. Mazimum Interest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of,this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 11. Business Purpose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for business or commercial purposes as set forth in the Agreement and not for any personal, family or household purposes. 12. No-tice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the Holder to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 13. fit. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default of the Agreement or in any other instrument executed by Borrower or any guarantor in favor of the Holder, the Holder may at its election and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Holder elects to declare default as stated herein, then this Note shall bear interest after default at the discount rate of the San Francisco office of the Federal Reserve Bank which is prevailing immediately prior to Attachment No. 2 - Page 3 of 4 11/04/93:sg default, plus five percent (5%), and the Holder may take such action under the law or under these security documents securing this Note as Holder may determine necessary to enforce its rights hereunder. 14. Early Payment Requirement. Reference is made to the Deed of Trust for the right of the Beneficiary thereunder to accelerate the indebtedness evidenced by this Note. IN WITNESS HEREOF, this instrument has been executed as of the date set forth below. Dated: ASSOCIATES NINE, a California general partnership 1994 swc �7--e— Horace C. Stovall General Partner Melvin R. Heckman General Partner Attachment No. 2 - Page 4 of 4 11l04t93:sg RECORDING IEQUEST BY AND WHEN RECORDED RETURN TO: Redevelopment\Bach y of the City } of Huntington2000 Main StrHuntington BeA 92648Attn: Executrector } (Space this Line for Recorder's Use) THIS DEED OF TRUST 's made this day of 1994, by and between ASSO ATES NINE, a California general partnership (the "trustor") whose address is: 948 llth Street, Huntington Beach, California 92648 and FIRST AMERICAN TITLE INSURANCE COMPANY, (the "TRU EE"), whose address is 114 East Fifth Street, Santa Ana, Cali rnia 92701, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGT BEACH, a public body corporate and politic (the "BENEFICIARY"). WITNESSETH: That Trustor I evocably, Grants Transfers and Assigns, to Trustee, in Trust, ith Power of.Sale, that property in the City of Huntington ach, County of Orange, State of California, described legal irk the Legal Description attached hereto as Exhibit "A" and in rPorated herein. TOGETHER WITH: (a) all building improvements and fixtures, now or hereafter placed thereo iI being understood and agreed that all classes of property a tac ed or unattached used in connection herewith shall be deeme fi tures, (b) rents, issues and profits thereof, (c) any water ri ht and/or stock are appurtenant or pertain to said land, and d) all sums of money payable on the purchase price of said p p ty secured by a lien thereon or payable under any agreement r the sale thereof, SUBJECT, HOWEVER, to the right, power a d authority hereinafter given to and conferred upon Benefici y to collect and apply such rents, issues and profits, and all s of money payable on the purchase price of said property sec r d by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Four Hundred Forty-siX Vhousand Dollars ($446,000) with interest thereon according to tiZk terms of a Promissory dote of even date herewith, made by Tru r, payable to the order of the Beneficiary and extensions or renewals thereof. Attachment No. 3 -- Page 1 of 13 11/04/93:sg 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on 1994, (hereinafter the "Agreement"), including without limitation, the payment of liquidated damages pursuant to Section 42 of the Agreement. 4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. Attachment No. 3 - Page 2 of 13 11/04/93:sg The loan secured hereby is being obtained for the purpose of financing rehabilitation improvements on said property. Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; (f) not to permit any stop notice claims to be presented to Beneficiary. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all times with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall•be responsible for such insurance or for the collection of any Attachment 3 - Page 3 of 13 11/04/93/s insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine= or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. _Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when due, all special assessments for public improvements; (c) when due, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustoz's request or that of any successor.in interest to Trustor as the Beneficiary may deem reasonable. Attachment No. 3 - Page 4 of 13 11/04/93/s If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of 'interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears, to be prior to superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable Sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 5. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. Attachment No. 3 - Page 5 of 13 11/04/93/s 7. That,,should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 8. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby. Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. 10. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map or plat thereof, (c) join in granting any easement thereon, (d) join in any Agreement subordinating the lien or charge hereof. 11. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. Attachment No. 3 -- Page 5 of 13 11/04/93/s 12. That, upon written request of.Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive payoff of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re -assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Agency the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Agency any duty to produce rents from the property affected by this Trust Deed, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, repaid, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Agency confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Agency may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Agency or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Agency or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered Attachment No. 3 - Page 7 of 13 11/04/93/s to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from, time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of -declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate;" (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and Attachment No. 3 - Page S of 13 11/04/93/s distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, Secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive payoff of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at Attachment No. 3 - Page 9 of 13 11/04/93/s any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expense of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That 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, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. Attachment No. 3 - Page 10 of 13 11/04/93/s 19. The property secured by this Deed of Trust is income producing property consisting of four units or more. Trustor agrees to file with Beneficiary, at Beneficiary's request, yearly, on or before the 15th day of January of each year, a written operational report. Such operational report shall contain a brief but complete statement of the year's income and expenses of such property, a list of all vacancies, and a statement of any material change in the.property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable change, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered -to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Attachment No. 3 - Page 11 of 13 11/04/93/s Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts shooing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 24. This Deed of Trust is subordinate to the Deed of Trust recorded December 31, 1985 as Document No. 523941 of Official Records of orange County, California, securing the amount of $1,300,000.00; Beneficiary World Savings and Loan; Trustee Goldenwest Financial Corporation; Trustor Associates Nine, a California general partnership. All other encumbrances on the property, if any, shall be subordinate to this Deed of Trust. 25. That in the event of any default by the Trustor under the terms of this Deed of Trust, no general partner of the Trustor shall be personally liable for any amount which may become due to the Beneficiary as a result of such default. 26. Any notice which any party hereto may desire or be required to give to the other party shall be -in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner `_r ,�- OA_ee� Melvin R. Heckman General Partner This document is part of a larger document that was approved as to form by the City Attorney's Office. Attachment No. 3 - Page 12 of 13 11/04/93/s CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of . County of �e IrQ'r On R OAA 1 Z , before me, l au-i'Gc /� . Cod Nara oN TMie of Omar le.p.,'Jam Doa. Notary PubWj personally appeared 1rQ.Ge. C . 5 -f-o ,,rc_Q a" Ae,I Lr r •r► je . H a elm ma.n Name(B) of Sv"s) R - proved to me on the basis f satisfactory evidence to be the personCo whose nam,6090subscribed to the within instrument and a-Knowted a to me that he4hTVGyexecutecl the same in hi the' uthorized capaclies and that b his/fheritheir signature soon the instrument the persod ss lAURAATrFUM or the entity upon behalf of which the person so acted, Corrimbdoni1066263 executed the instrument. • `+ Notory Public -� CcifOrNo ORANGE COUNtY mycomm. Exore9M23.1999 WITNESS my hand and official seat. e `~ 2� -- syna!ur. a Nonry Pic D T1D11IAL Though the information below is not required by low, h may prove val;lable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: o� l ruSf V/lb Document Date: kV�r� Number of Pages: Signer(s) Other Than Named Above: Y24 Capacity(ies) Claimed by Signer(s) Signer's Name: 1-6ra-c e (1, 5�ruzztl ❑ Individual ❑ Corporate Officer Title(s): Partner — ❑ Limited 06eneral ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: _ 0VMsc1� Signer's Name: AA V.1 h A. we_ *1 ❑ Individual ❑ Corporate Officer �tle(s): Partner -- ❑ Limited 05eneral ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator r :` ❑ Other. 7TOpr t+urno we Signer Is Representing:`=` ~~ 41 0 1994 N bond Notary Aswciahon • UX AaMftW Ave.. P.O. Box 7184 • Canopa Park CA 913D9.7184 Prot. No. 5907 Raorter. Cal TWFree 1.8004764W EXHIBIT "A" TO DEED OF TRUST All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1: The west 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2: Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3: The West 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per -map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. 11/04/93/s e prop Coun atta Hous oper ATTACHMENT NO. 7 RECORDING REQUESTED BY } AND WH RECORDED MAIL TO: } } } } ) (Space above for recorder.) This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH THIS DECLARATION OF COVEN TS, CONDITIONS, AND RESTRICTIONS (the "Declaration") is entered into this Z day of 02 , 1994, by and between the REDEYE OPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body orporate and politic (the "Agency"), and ASSOCIATES NINE, , a California general partnership (the "Developer"). E L A. The Developer is fee owner of record of that certain real erty (the "Site") located in the 'ty of Huntington Beach, ty of Orange, State of California gally described in the shed Exhibit "A". The Site is the ubject of an Affordable ing Agreement (the "Agreement") for he rehabilitation, ation and maintenance of an affordabl housing project. B. The Agreement provides for the exe ution and recordation of this document. Except as otherwise expressJanings provided in this Declaration, all terms shall have the same as set forth in the Agreement. NOW, THEREFORE, THE AGENCY AND THE DEVILOPER AGREE AS FOLLOWS: \ Attachment No. 7 - Page 1 of 12 11/04/93/s j Q1181111M,• (a) Number of Units. The Developer covenants and agrees to rehabilitate a total of thirty-six (36) multifamily housing units on the Site in conformance with the Scope of Rehabilitation (Attachment No. 5 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent all of the units to "Lower Income Households" at an "Affordable Rent" (the "Affordable Units"). "Lower Income Household" shall mean a household earning not greater than sixty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health DDd Safety She Section 50079.5. "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph (e) of this Section 27. (b) Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of the Agreement and this Declaration of Covenants, Conditions and Restrictions for thirty (30) years, beginning on the date of the Agency's issuance of a Certificate of Completion for the Project (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." The Affordability Period may be extended upon mutual agreement of the parties, evidenced by a written amendment to the Agreement. All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer consents to the recording of this Declaration in the official records of Orange County, California. (c) Incomegf Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 8 to the Agreement or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant renting an Affordable Unit is a Lower Income Household, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: Attachment No. 7 - Page 2 of 12 11/04/93/s (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Lower Income Household shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Lower Income Household, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Lower Income Household. Such new tenant shall then constitute a Lower Income Household for the purposes of the Agreement and this Declaration and until such next available unit is rented to such tenant, the former Lower Income Household who has ceased to qualify as such shall be deemed to continue to be a Lower Income Household for the purposes of this Declaration and the Agreement. The Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 9 to the Agreement or such other form as may be provided by the Agency. (d) Determination of Affgrdable Rent fgr the Affordable Ups. Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-six (36) Affordable Units required to be rented to Lower Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Orange County median income, less an established utility allowance, as annually determined and published by the United States Department of Housing and Urban Development. The maximum monthly rental amount for each Affordable Unit to be rented -to Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Lower Income Household which is a "Section 8 Recipient," as defined therein ("Section 8 Unit"), the maximum monthly rental amount for Attachment No. 7 - Page 3 of 12 11/04/93/s the next Affordable Unit rented to a Lower Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Lower Income Household which is not a Section 8 Recipient, then upon the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two (2) bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Lower Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Further, in no event shall the rent by the Developer exceed the rent level defined for Low Income Households in ealt _an Safety Code Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged.to a non -Section 8 Recipient. Further, in no event shall the rent charged by the Developer exceed the level defined for Lower Income Households in Hgalth & Safety Code Section 50053. If the tenant is'a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXINMI RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR DIARKMET RENT AMOUNT. Developer Initials: `0� The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Conmencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. (e) Selection of, Tenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who are not recipients ("non Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor ("Section 8 Program"). In the event that Developer is unable to rent an available unit to a Attachment 7 - Page 4 of 12 11/04/93/s non -Section 8 Recipient, then Section 8 Recipients may be considered as tenants. If the Developer is still unable to rent the available unit, the Agency may, at its sole option, identify a lower income household to occupy the available unit. (£) LQw Income Housing Tax Credits. If the Developer receives Low Income Housing Tax Credits for the rehabilitation project, no less than fifty percent (50%) of the net syndication proceeds must be used to reduce the outstanding Agency Loan balance on the Project. �•I � i ,�i M@(OR The Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: (a) To use, devote, operate and maintain the Site and each part thereof, for the purposes and the residential uses specified in the Agreement. (b) Nat to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In'deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sea, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through Attachment No. 7 - Page 5 of 12 11/04/93/s them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation or any person or group of persons, on account of sea, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (3) In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sea, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with references to .the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3 . USE _RESTRICTIONS The Site shall be occupied, used and maintained as follows: (a) Each dwelling unit shall be used only for private apartment dwelling purposes, with appurtenant facilities, and for no other purposes. (b) All signs on the property shall conform with all ordinances and other regulations of the City. (c) The Developer and the occupants shall not permit or suffer anything to be done or kept upon said premises which will increase the rate of insurance on any building, or on the contents thereof, or impair the structural integrity thereof or which will obstruct or interfere with the rights of other occupants, or annoy them -by unreasonable noises or otherwise, nor shall any occupant commit or permit any nuisance on the premises or fail to keep the Attachment No. 7 - Page G of 12 11/04/93/s premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. The Developer shall comply with all of the requirements of all governmental authorities with respect to the premises. If by reason of the occupancy or uses of the premises the rate of insurance on the Site shall be increased, the Developer shall become personally liable for the additional insurance premiums. (d) There shall be no structural alteration, construction or removal of any building, fence or other structure on the Site (other than repairs or rebuilding permitted herein) without the approval of the City or the Agency and in accordance with the City Code. (e) The Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor. The Developer shall not permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or any recreational vehicle (camper unit, camper shell detached from a private passenger vehicle, motor home, trailer, boat trailer, mobilehome or other similar vehicle, except when parked within an enclosed parking space), boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle upon any portion of the Site, including parking spaces. The Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Site, including parking spaces, except for emergency repairs thereto and then only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept anywhere on the Site. The Developer shall have the right to remove, at the tenant's expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. In addition, all provisions of the Huntington Beach Municipal Code, including amendments thereto, shall apply. 5. OCCuPAN, occupancy of each dwelling unit shall be restricted to occupancy standards set forth in the Huntington Beach Municipal Code or state standards, as are effective or as may be effective or amended. The Developer shall not be permitted to lease or rent any dwelling unit thereon for transient or hotel purposes. Any lease or rental agreement covering an apartment shall provide that the terms of the lease or rental agreement shall be subject in all respects to the provisions of this Declaration of Conditions, Covenants and Restrictions and that any failure by the lessee to comply with the terms of such documents shall be a default under the lease or rental agreement. All leases and rental agreements shall be in writing. All prospective tenants/occupants of the Site shall make application through the Developer. Attachment No. 7 - Page 7 of 12 11/04/93/s To the extent permitted by law, the City of Huntington Beach and the Agency shall have the right of entry, at reasonable business hours and upon no less than twenty-four (24) hours advance notice, onto the Site to inspect for the need for repairs or maintenance. Entry onto the Site or into any unit for other than emergency repairs may be made only after such advance notice and request for entry. if request for entry is denied or the Site or any applicable unit is unoccupied, the City or Agency may apply for an appropriate warrant or other order from a court of appropriate jurisdiction. :� •� No part of the Site shall at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with a conversion to such ownership or uses. Other than obtaining a final subdivision map on the Site and a final subdivision public report from the California Department of Real Estate, the Developer shall not take any steps in connection with a conversion of the Site to a condominium ownership, or with a conversion of the Site to "timeshare" ownership. *A 0313 • W-V 4 0 The exterior areas of the Site shall be kept free of rubbish, debris and other unsightly or unsanitary materials. Exterior yard areas and parking areas shall be kept free of deterioration, including:_ potholes, cracks in asphalt so as to become uneven, unsightly surface conditions, weeds growing through asphalt. Perimeter fencing, landscaping and irrigation system shall be routinely inspected and maintained in good condition. Each occupant of the Site shall have the affirmative obligation to prevent what might by considered a fire hazard or a condition dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract from the aesthetic and property values of neighboring dwelling units and properties. The following minimum performance standards for the maintenance of buildings, yards, and landscaping shall be adhered to by the Developer: (a) Landscaping on the Site shall be absent of the following: (1) Lawns with grasses in excess of six (6) inches in height. (2) Untrimmed hedges. (3) Trees, shrubbery, lawns and other plant life dying from lack of water or other necessary maintenance. Attachment No. 7 - Page 8 of 12 11/04/93/s (4) Trees and shrubbery grown uncontrolled without proper pruning. (5) Vegetation so overgrown as to be likely to harbor rats or vermin. (6) Dead, decayed or diseased trees, weeds and other vegetation. (7) Inoperative irrigation system(s). (b) Yard areas shall be maintained so as to be absent of the following: (1) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (2) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (3) Unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public streets and common areas. (c) No building, wail or fence may be left in an unmaintained condition so that any of the following exist: (1) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state of partial construction. (2) Unpainted buildings or buildings with peeling paint in such a condition as to: i. Cause dry rot, warping and termite infestation; or ii. Constitute an unsightly appearance that detracts from the aesthetic or property values of neighboring properties. (3) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. (4) Damaged garage doors that may become inoperative or unsafe to operate. Attachment No. 7 — Page 9 of 12 11/04/93/s (5) Graffiti remaining on any portion of the property for a period exceeding 72 hours. (6) Building interiors and exteriors shall be maintained to meet standards of similar residential property in the City of Huntington Beach. 9, AGENCY AND CITY iNUT OE REVIEW AND ENFORCEMENT The City of Huntington Beach ("City") and the Agency shall be made parties to this Declaration for the limited purpose as specified herein as follows: (a) Changes or amendments to this Declaration must be submitted for City and Agency review and approval. (b) In the event of inaction by the Developer, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. (c) The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City on yards, structures, and private parking areas within the Site. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. (d) The City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendment(s) shall be deemed approved, unless that time period is extended by mutual agreement of all parties. (a) Right of Entry. To the extent permitted by law, Developer hereby acknowledges and intends and thus grants to the City, through the City`s duly authorized agents or employees, the right to enter upon the Site for the following purposes: Attachment No. 7 - Page 10 of 12 11/04/93/s (1) Inspection, maintenance and repair of the Site. (2) Enforcement of local traffic and/or parking regulations. (b) ReimbUragMent5 of City Expenditurea. All costs and expenses incurred by the City arising out of its inspection, maintenance and repair of the Site, as provided hereinabove ("City Maintenance Costs"), shall be charged as an expense of the Developer and shall be paid within ten (10) days of receipt of an invoice for same. (c) Assessments and Lien Rights of the City. If City Maintenance Costs are not paid within thirty (30) days from the date due, said unpaid costs and expenses shall become a special assessment against the Site and, upon confirmation by the City Council, shall be.collected in the same manner as real property taxes and shall be subject to the same penalties, procedures and sale in case of delinquency as is provided for real property takes. RRREFrWVR:*110JU• -;• •� (a) if any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it.shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. (b) This Declaration shall be construed in accordance with the laws of the State of California. (c) In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys fees and costs. (d) The Developer shall be required to take all reasonable steps necessary to insure that each tenant and all assignees, and transferors have knowledge of all terms and conditions of this Declaration. 12. Runs_w-ith the Land The covenants and agreements established in this Agreement shall, without regard to technical classification and designation. be binding on the Developer and any successor in interest to the Site, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of Huntington Beach. All the covenants contained in this Agreement shall remain in effect for Attachment No. 7 - Page 11 of 12 11/04/93/s the Affordability Period, and shall automatically terminate and be of no further force or effect after such time except for the covenants against discrimination contained in Section 2 hereof, which shall remain in effect in perpetuity IN WITNESS WHEREOF, the Agency and the Developer have executed this Declaration of Conditions, Covenants and Restrictions. Dated: JLOk Dated: Dated: ATTEST: Agency Sepretar , W City Attorney Agency General Counsel Dated: 3—/r yT REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By. 4a, C airman LAxecutive Director O By: t- Y '4� Director of ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner Ike. elvin R. Heckman General Partner Attachment No. 7 - Page 12 of 12 11/04/93/s I ALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of W►u-A County of C9V 4Ln: On Y VLC (—I 1 ( 1 "1 � before me, l���fL� i� . P\i�_�5�� ?�o�� 1" v-u, Ddie Name and Tide of Maw (e-p., 'Jane Dos, Notary PLOO personally appeared Ca.-.0t MeA yl n e_Lw1.4_V N t) d s9n29%) ,personally known to me -- ebasis oi-satisfactery-evkWnce-to be the person(s�) whose namet� Woosubscribed to the within instrument and acknowledged to me that he rs el xecuted the same in here hi' authorized capacit tom, and that by his/herAheir signalu(ep on the instrument the persod sp tAUQAA.NaSON or the entity upon behalf of which the perscjs>cted, r Cot1•mMWon 110"263 executed the instrument. Publi c lic — CotWNO ORANGECOUNN WITNESS hand and official seal. %1W Comm. Dirac .M 23.19W sww" of Notary Pubk Though the information below is not required bylaw, !t may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment o•` this form to another document. Description of Attached Document Title or Type of Document: --Ze eA a-ra-1 '&-o c L' o tl�la: 5� Ens f (e5fr,chtks Document Date: 3 Number of Pages: 1 Z Signer(s) Other Than Named Above: YL-Oya— Capacity(les) Claimed by Signer(s) Signer's Name: RDrac4 C. Sf-D%r411 ❑ Individual ❑ Corporate Officer jptle(s): HYPartner — 0 Limited "eneral O Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer 1s Representing: Signer's Name: Ale-1 +-i g. 0 ez-kw,czn O Individual C Corporate Officer Ti le(s): s rtner — ❑ Limited Eteneral ❑ Attomey-in-Fact ❑ Trustee Ell ❑ Guardian or Conservator . t - ❑ Other. I Top of rutnu flare Signer is Representing: 0 1994 No +anal N0sry Aswci*bon • 8M PAmmet Ave.. P_d. Box 7184 + Canoga Pam CA OTWO.7184 Prod_ No. SW7 Reader. Cal Tog -Free 1-OM764W .j ATTACHMENT NO. 10 R1:0;e RECORDING \R4 Y } AND WHEN RL TO: ) } Redevelopmof theCity of Huach2000 Main Huntington92648 ) Attention: ) (Space above for recorder.) This MEMORANDUM OF AFFORDAB E HOUSING AGREEMENT ("Memorandum"), dated for identification purpose as of _ITJR_SY _Z _ - , 1994, is entered into by and between thk REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ("Agency") and ASSOCIATES NINE, a California neral partnership ("Developer"). 1. Affordable.,Houging Aareement, Agency and Developer have eem executed an Affordable Housing Agrnt (the "Agreement") dated for identification purposes as of , 1994, which concerns and is binding upon the Curren and future owners of that certain real property located in the Ci of Huntington Beach, County of Orange, State of California, m e fully described in the Exhibit "A" attached hereto and incorpora ed herein by this reference. All of the terms, conditions, rovisions and covenants of the Agreement are incorporated in this morandum by reference as though written out at length herein, and th Agreement and this Memorandum shall be deemed to constitute a s ngle instrument or document. 2. Purnose pf Mgmgjapdum. This Memorandu is recordation purposes only, and in no way modifi s conditions, provisions and covenants of the Agre of any inconsistency between the terms, condition covenants of this Memorandum and the Agreement, t conditions, provisions and covenants of the Agree Attachment No. 10 - Page 1 of 2 prepared for the terms, meat. In the event provisions and terms, m nt shall prevail. 11/04/93/s The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. Dated: Dated: Dated: ATTEST: Agency Clerk 71 !6 P41k 5-1711o. City Attorney P-d- Agency General Counsel Dated: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: — /"�W' Chairman B -Executive- Director By: &—W 0, - 95K Director of rojects 25e w.- ASSOCIATES NINE, a California general partnership Horace C. Stovall General Partner Melvin R. Heckman General Partner Attachment No. 10 - Page 2 of 2 11/04/93/s EXHIBIT "A" TO MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1: The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2: Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3: The West 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Exhibit "A" to Attachment No. 10 11/04/93/s CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of ra,ng'�= On QcL4 V1 I t q%1 before me, �.&Lr(' A - N�� N o E� 001e Nome ure Tme d Oflow (e.p-.'Jane Doe. Nauy Pubwj personally appeared E61r"_ c," Me-ki in R. IAee�'rna el 1-00) 01 svrer4a) personally known to me -- sisatsatist�.:tuid8ace to be the persona whose nam6)Wr®subscribed to the within instrument and acknowledged to me that executed the same in h4le(��authorized capaci ), and that by his/her/theirsignatureos on the instrument the persorKs or the entity upon behalf of which the perso&) acted, LAURAA.NO" executed the instrument. Comm don f 1OW63 QPIW Notary Pullc — colkrr a oiMCECOMN WITNESS m hand and official seal. Comm. Expires Jul 23.1 s+�.u,r. of Notary Puar r AL Though the information below 1s not required by law, it may prove valuable to persons reVng on the document and could prevent fraudulent removal and reattachment or this form to another document. Description of Attached Document Title or Type of Document: V11e1tIt O Document Date: let)3 S�LL Number of Pages: 3 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: 1-6r'ace. 6. Sfckra-lt ❑ Individual ❑ Corporate Officer Lz'' i'artner — ❑ Limited Bteneral - ❑ Attomey-in-Fact ❑ Trustee _ 11 ❑ Guardian or Conservator dt ` - ❑ Other. Top of Inure here Signer Is Representing: F Signer's Name: 0,te-lu,", P_ t4ecLw-an ❑ Individual ❑ Corporate Officer Ttle(s): P'Partner — ❑ Limited eneral ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other �Top�lhwnio Signer Is Representing: N 0 1994 Waal Notary AuoCf9eon • 8236 Renrnel Ave.. P.O. Box 7184 • Can09e Perk. CA 91309.7184 Prod. No. 5907 Re~. Cal; Tol lmo 14W4?5-W7 1 v � 0'� WVA 0, RZOA E.Z., L, Z m d 3. = AFFORDABLE _ HOUSING AGREEMENT (Rehabilitation of 725-733 Utica) by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, and ASSOCIATES NINE,\a General Partnership, 0 AGENCY, DEVELOPER. TALE OF !CONTENIS 1. Purpose of Agreement 2. The Site 3. Parties to the Agreement 4. Developer Covenants as to Solvency S. Prohibition Against Change in Ownership, Management and Control of Developer 6. Agency Loan 7. Note and Deed of Trust 8. Agency Grant 9. Agency Review of Rehabilitation Plans 10. Scope of Rehabilitation 11. Site Plan 12. Construction Drawings and Related Documents 13. Approval of Plans, Drawings, and Related Documents 14. Cost of Rehabilitation 15. Work Schedule 16. Bodily Injury and Property Damage Insurance 17. City and Other Governmental Agency Permits. 18. Rights of Access 19. Local, State and Federal Laws 20. Antidiscrimination During Construction 21. Taxes, Assessment, Encumbrances and Liens 22. Prohibition Against Transfer of the Site, the Buildings or Structures Thereon 23. Certificate of Completion 24. No Additional Encumbrances Except Mortgages or Deeds of Trust i 02/23/94 25. Environmental Matters 26. Use in Conformance with Agreement 27. Affordable Rental Housing 28. Management and Maintenance 29. Rights of Access 30. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction- 31. Nondiscrimination 32. Notices, Demands and Communications Between the Parties 33. Conflicts of Interest 34. Enforced Delay; Extension of Times of Performance 35. Nonliability of Officials and Employees of the Agency 36. Defaults 37. Institution of Legal Actions 38. Applicable Law 39. Acceptance of Service of Process 40.• Rights and Remedies Are Cumulative 41. Inaction Not a Waiver of Default 42. Liquidated Damages 43. Remedies and Rights of Termination Prior to Completion A. Damages B. Specific Performance C. Termination by the Developer Prior to Completion D. Termination by the Agency Prior to Completion 44. Remedies of the Parties for Default After Completion (a) Termination and Damages (b) Action for Specific Performance 45. No Agency Liability for Real Estate Commissions 46. Successors in Interest ii 02/23/94 47. Memorandum of Agreement 48. Entire Agreement 49. Waivers 50. Time for Acceptance of Agreement by Agency Attachment No. Z Site Map and Legal Description Attachment No. 2 Promissory Vote Secured by Deed of Trust Attachment No. 3 Deed of Trust with Assignment of Rents Attachment No. 4 Schedule of Performance Attachment No. 5 Scope of Rehabilitation Attachment No. 6 Certificate of Completion of Rehabilitation Attachment No. 7 Declaration of Covenants, Conditions and Restrictions Attachment No. 8 Certificate of Eligibility Attachment No. 9 Certificate of Continuing Program Compliance Attachment No. 10 Memorandum of Affordable Housing Agreement iii 02/23/94 AFFORDABLE HOUSING AGREEMENT (Rehabilitation of 725-733 Utica) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into this day of 0._ 1,MaLa± 19 S, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and ASSOCIATES NINE, a California general partnership (the "Developer"). The Agency and the Developer hereby agree as follows: (a) The Agency is required by California Health and Safety Code Section 33334.2, pft Zeq., to expend a Certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. (b) This Agreement provides for the rehabilitation of a Thirty-six (36) unit rental housing project (the "Project") located at 725, 729, and 733 Utica Avenue within the City of Huntington Beach. All of the units (the "Affordable Units" will be available pursuant to this Agreement for Lower Income Households at an Affordable Rent (as those terms are defined in Section 27 hereof) for a period of thirty (30) years. (c) In consideration for the Developer's rehabilitation and operation of the Project and the Affordable Units, this Agreement provides that the Agency shall make available certain financial assistance in the form of a low interest loan and a grant. 02/23/94:sg -1- 2. THE SITE The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the city's redevelopment efforts due to the creation of affordable housing within the city. The Developer owns fee simple title to the entire Site. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, California Health and Safety Code Section 33000, at sea. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency," as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. (b) The_pev_e1QpeT The Developer is Associates Nine, which is a California general partnership. The principal office and mailing address of the Developer for the purposes of this 02/23/94:sg -2- Agreement is: follows: Associates Nine 948 llth Street Huntington Beach, CA 92648 The Developer represents and warrants to the Agency as (a) The Developer is a duly established general partnership and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (b) The Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no material pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which any of its property is or may become subject, which has not been fully disclosed in the documentation submitted to the Agency which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, relating to the dissolution or liquidation of the Developer, and there is no 02/23/94:sg -3- action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Developer to carry out its obligations hereunder. Each of the foregoing items (a) to (d), inclusive, shall be deemed to be an ongoing representation and warranty. The Developer shall advise the Agency in writing if there is any material change pertaining to the matters set forth or referenced in the foregoing items (a) to (d). '*•: • ," Radii AD I aremia-im" 0 Ion "A MRAU r The qualifications and identities of the Developer and its general partners are of particular interest and concern to the City and the Agency. It is because of these qualifications and identities that the Agency has entered into this Agreement with the Developer. Consequently, except as expressly set forth in this Agreement, no person, whether a voluntary or involuntary successor in interest of the Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign or transfer all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency shall approve such a transfer upon receipt by the Developer of (a) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (b) an opinion of counsel of the transferee 02/23/94:sg -4- that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (c) the Agency receives evidence acceptable to the Agency that either (1) the transferee has experience in the ownership, operation and management of rental housing developments such as the Project without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (2) the transferee agrees to retain a property management firm with the experience and record described in Section 5(c)(1) above. Written approval of the Agency shall also be required prior to any and all changes whatsoever in the identity of the person in control of the Developer, including any change in, or addition of, general partners of the Developer. The voluntary or involuntary sale or transfer of any general partnership interest of the Developer =shall be deemed to constitute an assignment for the purposes of this Section 5 and the written approval of the Agency shall be required prior to effecting such a transfer. Any purported transfer, voluntary, involuntary, or by operation of law, except with the prior written consent of the Agency in accordance with this Section 5, shall constitute a default of Developer and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Section 5 to the contrary, Agency approval of an assignment of this Agreement, or any interest therein, or an assignment of a general partnership interest or limited partnership interest in 02/23/94:sg -5- the Developer, shall not be required in connection with any transfer of an interest in the Developer so long as the existing general partner of the Developer retains operational and managerial control over rehabilitation of the Site, provided that such transfer does not affect more than forty-nine percent (49%) of the existing general partnership interest in the Developer and the Developer shall remain responsible for the obligations of the Developer hereunder. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. 6. AGENCY,OAN Subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Four Hundred Forty-six Thousand Dollars ($446,000) (the "Agency Loan"). The loan funds shall be disbursed and administered by the Agency. The loan funds will be released in various increments as the rehabilitation and construction costs are submitted to the Agency for payment. (a) The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 2 hereto, which is incorporated herein. The Promissory Note shall accrue compound interest at the prime rate of the San Francisco office of the Federal Reserve Bank which is 02/23/94:sg -6- prevailing on the date this Agreement is approved and adopted by the Agency, plus one and one-half percent (1.5%). The term of the Agency Loan shall be thirty (30) years. The term of the Agency Loan may be extended upon mutual agreement of the parties, evidenced by a written amendment to this Agreement. The Developer shall make no monthly payments during the term of the Loan. (b) The entire loan balance, including principal and interest, shall be due in full upon the thirtieth (30th) anniversary of the Agency Loan, except as provided herein below. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 3 hereto, which is incorporated herein. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at its own expense, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. (c) Provided that the Developer remains in compliance with the affordability provisions of this Agreement, the Agency Loan shall be forgiven, and no repayment required, as follows: 02/23/94:sg -7- (1) Each year following the adoption of this Agreement, on the anniversary date thereof, the Agency will determine whether or not the Developer has complied with the affordability requirements of this Agreement. (2) If the Agency finds that the Developer has complied, an amount equivalent to one -thirtieth (1/30) of the Loan Amount, plus accrued interest, shall be forgiven from repayment. (3) If the Agency finds the Developer has not complied, the Developer shall be considered to be in default of this Agreement, and the provisions of this Agreement relating to defaults shall be applicable. (4) The determination of compliance shall be made in the Agency's sole discretion. Subject to the terms of this Agreement, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000). Such payment shall be in consideration for the Developer's agreement to provide housing to Lower Income Households at an Affordable Rent (as those terms are defined in Section 27 hereof), and to provide a high quality level of construction materials and amenities in the rehabilitation and construction of landscaping, irrigation, fencing, lighting, security system, recreational area and reconstructed carports, as set forth in this Agreement and the attachments hereto. The grant funds shall be disbursed and administered by the Agency. 02/23/94:sg -8- The grant funds will be released in various increments as the costs for the items referenced in this Section 8 are submitted to the Agency for payment. ' : �_ • :1211 LAO 0 0 6 IIA 0 • At its option, the Agency shall have the right to review and approve the plans and specifications for the Project as set forth in Sections 10 through 13 hereof. A minimum of three bids from qualified contractors will be required for each item, or major building system, to be replaced, repaired or otherwise rehabilitated or reconstructed. Such bids will be submitted to the Agency prior to the award of any bid by the Developer. The Agency reserves the right to reject any bid obtained by the Developer and require the Developer to re -bid any item. The Site shall be rehabilitated as provided in the Scope of Rehabilitation (Attachment No. 5). The Developer shall commence and complete construction of such rehabilitation by the respective times established therefor in the Schedule of Performance (Attachment No. 4) subject to Section 34 of this Agreement. The development shall include any plans and specifications submitted to City and/or Agency for approval, and shall incorporate or show compliance with all applicable mitigation measures. 11. SITE PLAtd The Developer shall prepare and submit to the Agency for its approval Design Drawings and a Site Plan and related 42/23/94:sg -9- documents containing the overall plan for rehabilitation of the Site in sufficient detail to enable the Agency to effectively evaluate the proposal for relationship of structures to .landscape, physical and environmental considerations and •conformity to the requirements of this Agreement. The Developer agrees to consolidate the site into a single parcel, and shall take all necessary steps, including the preparation and recording of a new parcel map, to accomplish the lot consolidation. The Agency shall review such submissions for approval. The Site shall be rehabilitated as established in this Agreement and such documents except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Rehabilitation which is attached to this Agreement as Attachment No. 5 and incorporated herein. III -• ; • I 1 t:fuel-Mil D ; M!W611104d By the time set forth therefor in the Schedule of Performance (Attachment No. 4), the Developer shall prepare and submit to the City construction drawings, landscape plans, and related documents for rehabilitation of the Site for building permit(s). During the preparation of all drawings and plans, staff of the Agency, City, and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the Agency. The staff of Agency, City, and the Developer shall communicate and consult informally as frequently as is necessary 02/23/94:sg -10- to insure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration. The Developer shall be obligated to obtain all City approvals :required for the rehabilitation project. The Agency and the City shall have the right of planning review, including plan check, of all plans and submissions, including any changes therein. The Agency shall approve or disapprove such plans and submissions within the same time periods established by the City for its review of construction and architectural plans and submissions. During each stage of the processing for Developer Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the .City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 4). If the Developer desires to make any substantial changes in the rehabilitation plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the rehabilitation plans, as modified by the proposed change, conform to the requirements of Section 12 of this Agreement and the Scope of Development (Attachment No. 5) the Agency and the 02/23/94:sg -II-- City shall approve or reject the proposed change and notify the Developer in writing within such periods as are established by the City for its review of such changes to construction and architectural plans and specifications. Such changes in the plans shall, in no event, be deemed approved by the Agency or the City without such an actual approval. All the costs of site preparation, planning, designing and constructing the rehabilitation project shall be borne solely by the Developer from the funds administered by the Agency and disbursed to the Developer by the Agency Loan and the Grant. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. Upon completion of the Project, the Developer shall submit to the Agency a detailed and itemized report of its costs of rehabilitation. BOREBUTNIql4ir • 1 _ The Developer shall promptly begin and thereafter diligently prosecute to completion the work of the Project, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 4), subject to Section 34 of this Agreement. The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including 02/23/94:sg -12- accidental death (including reasonable attorneys' fees and costs), which may be caused by any of the Developer's acts, omissions or failures to act under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined single limit policy, including contractual liability, as shall protect the Developer, City Agency, and their officers, agents and employees from claims for such damages. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency (and their respective officers, agents, and employees) as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing with any insurance maintained by the Agency or 02l23194:sg -13- City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Developer at the time set forth therefor in the Schedule of Performance (Attachment No. 4). The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Before commencement of construction or rehabilitation of any buildings, structures or other works of improvement upon the Site or related offsite improvements, the Developer shall, at its own expense, take all actions necessary and proper to secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, rehabilitation or work. It is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections necessary to obtain a building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meets the requirements of the City Code. The Developer agrees and acknowledges that it shall be responsible for the cost of any 02/23/94:sg -14- such environmental review and clearance as may be deemed necessary or appropriate in connection with the processing of land use entitlements with respect to the Site. For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to all portions of the Site without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the rehabilitation project, so long as they comply with all safety rules. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall indemnify and hold the Developer and its partners, employees and agents harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 18. The Developer agrees to place and maintain on the Site during construction of the rehabilitation project one (1) sign indicating the respective roles of the Developer and the Agency in the Project. The cost of the sign shall be borne solely by the Developer. • WO zi WEI an The Developer shall carry out the construction of the Project in conformity with all applicable laws, including all applicable federal and state labor standards. 02/23/94:sg -15- The Developer, for itself and its successors and assigns, agrees that during the construction of the Project provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sea, marital status, handicap, national origin or ancestry. : The Developer shall pay prior to delinquency all ad valorem taxes and assessments on the Site. Prior to issuance of a Certificate of Completion pursuant to Section 23, except for encumbrances allowed pursuant to this Agreement, the Developer shall not place on the Site or any part thereof any mortgage, trust deed, encumbrance or lien. Prior to issuance of a Certificate of Completion pursuant to Section 23, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. After the issuance of a Certificate of Completion, the restrictions set forth in the prior two sentences shall terminate and be of no further force or effect. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. 02/23/94:sg -16- Prior to the Developer's prepayment of the Agency Loan, ;:-the Developer shall not, except as permitted by this Agreement (including without limitation Section 5), without prior written approval of the Agency, which approval shall not be unreasonably withheld, make any total or partial sale, transfer, conveyance, assignment of lease of the whole or any part of the Site or of the buildings or structures on the Site. The Agency shall approve such a transfer upon receipt by the Developer of (a) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (b) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (c) the Agency receives evidence acceptable to the Agency that either (1) the transferee has experience in the ownership, operation and management of rental housing developments such as the Project without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section 22(c)(1) above. This prohibition shall not be deemed to prevent a transfer of a general or limited partnership interest in the Developer, provided that a general 02/23/94:sg -17- or limited partner of the Developer does not convey more than forty-nine percent (49%) of its partnership interest, and each partner of the Developer shall retain at least fifty --one percent (51%) of its original ownership of the Partnership. OBI' Within thirty (30) days after completion of all construction and rehabilitation required by this Agreement to be completed by the Developer upon the Site in conformity with this Agreement, submission of a detailed and itemized report of its costs of the rehabilitation project and request for a Certificate of Completion, the Agency shall furnish the Developer with a "Certificate of Completion." Such Certificate shall be substantially in the fora. of Attachment No. 6 attached hereto and incorporated herein. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction and rehabilitation required by this Agreement upon the Site and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall be bound by the covenants contained in the "Declaration of Covenants, Conditions and Restrictions" (Attachment No. 7), Section 27 of this Agreement, and other documents establishing covenants on the Site in 02/23/94:sg -18- accordance with the provisions of this Agreement. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion for the Project after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency has refused or failed to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions that the Developer must take to obtain a Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing additional money loaned to finance the Project, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code Section 3093. Additional mortgages or deeds of trust are to be permitted before completion of the Project, but only for the purpose of securing loans of funds to be used for the Project. The Developer shall notify the Agency in advance of any such additional mortgage or deed of trust if the Developer proposes to enter into the same before completion of the Project. The words "mortgage" and "trust deed" as used hereinafter shall not include sale and leaseback. The Developer shall not enter into 02/23/94:sg -19- any such Conveyance for financing or refinancing without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial or lending institution or other acceptable person or entity. Any subsequent encumbrances shall be subordinated to the Agency's Trust Deed as provided for herein. UIA I 1 0 ag!_ " For the purposes of this Section 25, the following terms shall have the meanings herein specified: (1) The term "Hazardous Materials" shall mean (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 P& =q.), as amended from time to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by the Carpenter -Presley --Tanner Hazardous Substance Account Act (California Health and Safety Code Sections 25300 gtzj=.), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) poly- chlorinated biphenyls; (v) petroleum, oil, gasoline (refined and unrefined) and their respective by-products and constituents; and (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental regulation (as defined in Section 25(a)(3) of this Agreement) either requires special handling in its use, transportation, generation, collection, storage, handling, 02/23/94 -20- treatment or disposal, or is defined as "hazardous" or harmful to the environment. (2) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the date of this Agreement) emanating from the Site. (3) The term "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or ,instrumentality exercising jurisdiction over the Agency, the Developer or the Site. Notwithstanding the obligation of Developer to indemnify Agency pursuant to this Section 25 or any other obligations of the Developer pursuant to this Agreement, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state or local governmental agency or political subdivision or any Governmental Requirements with respect to the entire Site, and (ii) all actions necessary to make full economic use of the Site for the 02/23/94 -21- purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination regardless of when such Hazardous Materials or Hazardous Materials Contamination were introduced to the Site and regardless of who is responsible for introducing such Hazardous Materials or Hazardous Materials Contamination to the Site (the "Site Remediation"). The Site Remediation shall include, but not be limited to, investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work required. The Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. The Developer's obligations under this Section 25 shall be referred to as the "Site Remediation" and shall survive the issuance of the Certificate of Completion. Developer hereby represents and warrants to the Agency that, to the best of its knowledge: (1) No Hazardous Materials or Hazardous Contamination exist or are located on, in or under the Site. (2) No portion of the Site is being used or, to Developer's best knowledge after diligent inquiry, has ever been used prior to Developer's ownership or occupancy thereof, for 02/23/94 -22- the disposal, storage, treatment, processing or other handling of Hazardous Materials and the Site is not affected by any Hazardous Materials Contamination. (3) No asbestos or asbestos -containing materials have been installed, used, incorporated into, or disposed of on the Site. (4) No polychlorinated biphenyls are located on or in the Site, in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or any other device or form. (5) No underground storage tanks are located on the Site or were located on the Site and subsequently removed or filled. (6) No investigation, administrative order or notice, consent order and agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination is pending or, to Developer's best knowledge after diligent inquiry, threatened, with respect to the Site or the existing operations thereon. (7) The Site and its existing uses comply and, to Developer's best knowledge after diligent inquiry, their prior uses at all times have complied with all applicable Governmental Requirements relating to environmental matters or Hazardous Materials. There is no condition on the Site which is in violation of any applicable Governmental Requirements relating to Hazardous Materials, and Developer has received no communication from or on behalf of any federal, state or local 02/23/94 -23- governmental authority or agency that any such condition exists. The Site is not currently on and, to Developer's best knowledge after diligent inquiry, have never been on any federal or state "Superfund" list, and Developer is not aware that the Site is anticipated or threatened to be placed on such list. (8) True and correct copies of all (i) Developer's internal inspection reports with respect to the Site, (ii) environmental audits, reports and studies received by Developer which concern the Site, and (iii) inspection reports conducted during the last two years from each applicable regulatory authority with respect to the Site in the possession or control of Developer, have been delivered to Agency. Developer shall deliver to Agency within five (5) days of Developer's receipt thereof all environmental reports, audits or studies, internal inspection reports and regulatory inspection reports, which concern the Site generated or received by Developer prior to the repayment in full of the Promissory Note. (d) ,Indemnification Developer shall save, protect, defend, indemnify and hold harmless Agency from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or 02/23/94 -24- suffered by Agency by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of (i) the ownership of all or any part of the Site, (ii) any act or omission on the part of either Agency or Developer, or their agents, employees, contractors or invitees, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination, (iv) the environmental condition of the Site, and (v) any Liabilities incurred under any Governmental Requirements relating to Hazardous Materials. Developer's obligations under this Section 25 shall survive after the issuance of the Certificate of Completion, and shall be a covenant running with the land in perpetuity, binding on all successors and assigns of Developer's interest in either this Agreement or the Site. The Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the highest standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 02/23/94 -25- 1 • ! L = wow! • The Developer shall notify the Agency, and provide to the Agency a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site: Notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and the Developer shall report to the Agency, as soon as possible after each inLident, any unusual, potentially important incidents, including but not limited to, the following: (1) All required reports of releases of hazardous materials, including notices of any release of Hazardous Material as required by any Governmental Requirement; (2) All fires; (3) All instances where asbestos has been or may be disturbed by repair work, tenant improvements or other activities in buildings containing asbestos; (4) All notices of suspension of any permits; (5) All notices of violation from Federal, State or local environmental authorities; (6) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; 02/23/94 -26- (7) All orders under the Porter -Cologne Act, including corrective action orders, cease and desist orders, and clean-up and abatement orders; (8) Any notices of violation from OSHA or Cal -OSHA concerning employees* exposure to Hazardous Materials; (9) All complaints and other pleadings filed against the Developer and/or the Agency relating to the Developer's storage, use, transportation, handling or disposal of Hazardous Materials on the Site. In the event of a release of any Hazardous Materials into the environment, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Agency, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof that, during construction and thereafter, the Developer, such successors and such assignees, shall use, operate and maintain the Site in conformity with this Agreement and shall devote the Site to uses specified in this Agreement for the periods of time specified therein. 02/23/94 -27- (a) umber of Units. The Developer covenants and agrees to rehabilitate a total of thirty --six (36) multifamily housing units on the Site in conformance with the Scope of Rehabilitation (Attachment No. 5). The Developer agrees to make available, restrict occupancy to, and rent all of the units to "Lower Income Households" at an "Affordable Rent" (the "Affordable Units"). "Lower Income Household" shall mean a household earning not greater than sixty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health -and -Safety .0 Section 50079.5. "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph (e) of this Section 27. • r • . . .. • - i - Affordable Units shall be subject to the requirements of this Section 27 for thirty (30) years, beginning on the date of the Agency's issuance of a Certificate of Completion for the Project (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." The Affordability Period may be extended upon mutual agreement of the parties, evidenced by a written amendment to this Agreement. All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, 02/23/94 -28- and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer shall execute, acknowledge and deliver to the Agency a "Declaration of Covenants, Conditions and Restrictions," in the form of Attachment No. 7 hereto and incorporated herein (the "Declaration"), which sets forth all of the requirements of this Section 27 of the Agreement in recordable form. The Developer consents to the recording of the Declaration in the official records of Orange County, California. (c) ,income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 8 hereto or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant renting an Affordable Unit is a Lower Income Household, and meets the eligibility requirements established for the certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. 02/23/94 -29- (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Lower Income Household shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Lower Income Household, the neat available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Lower Income Household. Such new tenant shall then constitute a Lower Income Household for the purposes of this Section 27, and until such neat available unit is rented to such tenant, the former Lower Income Household who has ceased to qualify as such shall be deemed to 02/23/94 -30- continue to be a Lower Income Household for the purposes of this Section 27. The Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 9 hereto or such other form as may be provided by the Agency. Affordable --Units. Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-six (36) Affordable Units required to be rented to Lower Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Orange County median income, less an established utility allowance, as annually determined and published by the United States Department of Housing and Urban Development. The maximum monthly rental amount for each Affordable Unit to be rented to Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Lower Income Household which is a "Section 8 Recipient," as defined therein ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Lower Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual 02/23/94 -31- Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Lower Income Household which is not a Section 8 Recipient, then upon the neat vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two (2) bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Lower Income household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Further, in no event shall the rent by the Developer exceed the rent level defined for Low Income Households in Health and Safety Cede Section 50053. If the tenant is a Section 8 Recipient, the sum of that Tenant's rent payment and the federal subsidy may not be greater than the rent charged to a non -Section 8 Recipient. THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: J44b 0- The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building 02/23/94 -32- permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. (e) Selection of. Tenants. Developer shall use its best efforts to rent the Affordable Units to qualifying tenants who are not recipients ("non Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor ("Section 8 Program"). In the event that Developer is unable to rent an available unit to a non - Section 8 Recipient, then Section 8 Recipients may be considered as tenants. If the Developer is still unable to rent the available unit, the Agency may, at its sole option, identify a lower income household to occupy the available unit. (f) Low Income Housing Tax. Credits. If the Developer el " ` receives Low Income Housing Tax Credits for the project and those credits are applied to reduce the income tax liability of the Developer, no less than fifty percent (50.k) of the tax savings must be returned to the Agency to reduce the outstanding Agency Loan balance on the Project. 28. MANAGEMENT AND MAINTENANCE The Developer shall maintain the improvements on the Site during the Affordability Period in accordance with the Declaration of Covenants, Conditions and Restrictions (Attachment No. 7). If at any the Developer fails to adequately maintain such areas, and such condition is not corrected after 02/23/94 --33- expiration of ninety (90) days from the date of written notice from the Agency, the Agency may (but shall not be obligated to) perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. Issuance of a Certificate of Completion by the Agency shall not affect Developer's obligations under this section. 29. RIGHTS OF ACCESS The Agency, for itself and for the City and other public agencies, at their sole risk and expense, shall have the right to enter the Site or any part thereof which is owned or controlled by the Developer, at all reasonable times, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer. Upon receipt of such notice, the Developer agrees to cooperate with the Agency in making the Site available ..for inspection by the Agency and/or City. Developer acknowledges and agrees that in the event that if for any reason the Developer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain entry to and inspect the Site. 30. EFFECT OFYIOLATION OF —THE MMS ND EBOVI IONS U THIS AGREEMENT AFTER COMPLETION OF REHABILITATION The covenants established in this Agreement shall, without regard to technical classification and designation, be binding upon and for the benefit and in favor of the Developer 02/23/94 -34- and the Agency, their respective successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Agreement and the Declaration of Covenants, '..' Conditions and Restrictions (Attachment No. 7) shall remain in effect until the expiration of the Affordability Period defined in Section 27 of this Agreement. The covenants against racial discrimination shall remain in perpetuity. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for those benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. After issuance of a Certificate of Completion for the Project, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the Site shall cease and terminate as to that portion of the Site for which the Certificate of Completion is issued, excepting only the provisions listed below which shall survive as follows: (a) Sections 18, 26 to 29, inclusive, relating to uses, maintenance and access. 02/23/94 -35- (b) Section 16 (relating to indemnification and insurance) shall remain in effect in accordance with the terms and conditions set forth therein. (c) Sections 43 and 44 (relating to rights and remedies) shall remain in effect to the extent necessary to enforce other provisions of this Agreement. (d) The Promissory Note (Attachment No. 2), and all provisions contained in or referred to in documents to be recorded pursuant to this Agreement, including without limitation the Deed of Trust (Attachment No. 3), and the Declarations of Covenants, Conditions and Restrictions (Attachment No. 7). KIMONO r ' M k NOORI The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or 02/23/94 -36- ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sea, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein coveyed, not shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein Covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sea, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, 02/23/94 -37- occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with 'reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 02/23/94 -38- Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy or overnight delivery service, to the principal offices of the Agency and the Developer. Such written notices, demands and communications may be sent in the same manner to the Agency and the Developer at the addresses provided pursuant to Section 3. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or sent by telecopy, shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail, and shall be deemed received on the next business day -'after it is sent if delivered by overnight delivery service. 33. CONFLICT No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. 02/23/94 -39- In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or the City other than in respect to the zoning of the Site to allow development of the Developer Improvements); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Any requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. 02/23/94 -40- i 0 40 WdKOW0914 too i MM no MR Millm-WIRTOM I low, goo 1.1114M No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. In the event of any default by the Developer under the terms of the Deed of Trust, no general partner of the Developer shall be personally liable for any amount which may become: due to the Agency as a result of such default. 36. P-M=S Subject to the extensions of time set forth in Section 34, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings for damages or specific performance against the party in default until thirty (30) days after giving such notice in the case of monetary defaults or defaults reasonably capable of being cured within thirty (30) days, provided that such party immediately commences to cure, correct or remedy such failure or delay and 02/23/94 -41- completes such cure, correction or remedy with diligence. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Up Welan• In addition to any other rights or remedies and subject to the restrictions in Section 36, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Legal actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 38. APPLICABLE LAW The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 39. ACCERTAir.E.OF SERVICE In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon its General Partner or in such other manner as may be provided by law. 02/23/94 -42- Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. IN THE EVENT THAT THE DEVELOPER IS IN DEFAULT OF ITS OBLIGATIONS PURSUANT TO SECTION 27 OF THIS AGREEMENT, AND HAS NOT CURED SUCH DEFAULT WITHIN THE TIME REQUIRED BY SECTION 36 OF THIS AGREEMENT, THE AGENCY SHALL BE ENTITLED TO OBTAIN PAYMENT IN THE AMOUNT OF THE AGENCY GRANT WHICH HAS BEEN DISBURSED PURSUANT TO SECTION 8 OF THIS AGREEMENT, PLUS THE IMMEDIATE REPAYMENT OF THE AGENCY LOAN, PRINCIPAL AND INTEREST EARNED THEREON. IN THE EVENT OF SUCH DEFAULT PURSUANT TO SECTION 27 OF THIS AGREEMENT, THE AGENCY WOULD SUSTAIN DAMAGES BY REASON THEREOF WHICH WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE DELAY OR FAILURE OF THE AGENCY AND THE CITY TO PROVIDE AFFORDABLE HOUSING AS REQUIRED BY THE 02/23/94 -43- CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND THE CITY GENERAL PLAN, AND THE LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL AFFORDABLE HOUSING TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE AGENCY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL THE SUM SET FORTH HEREIN, AND THE AGENCY SHALL BE ENTITLED TO SUCH AMOUNT AS A TOTAL OF ALL LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY. IN THE EVENT THAT THE DEVELOPER SHOULD CHALLENGE THE APPLICABILITY OR EFFICACY OF THIS PARAGRAPH OR IF THIS PARAGRAPH SHOULD BE HELD VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAW. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR INITIALS BELOW: �-- —� Developer's Initials Agency's Initials By: QN�'TCxc.l� �p_�- 02/23/94 -44- MOM (a) Damages. If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the applicable period after service of the notice of default as set forth in Section 36, the defaulting party shall be liable to the other party for any damages caused by such default, except as provided in Sections 43(c) or 43(d) herein. (b) Species Performance. Subject to the applicable cure provisions contained in Section 36 herein, if either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the applicable cure period as set forth in Section 36, the non -defaulting party at its option may thereafter (but not before) see specific performance of terms of this Agreement. TOMFUM On .! In the event that prior to the Issuance of a Certificate of Completion the Developer is not in default of the Agreement and the Agency is in default of the Agreement and has not cured or commenced to cure such default within the time period set forth in Section 36 hereof, then subject to the applicable cure provisions contained in Section 36 herein, at the option of the Developer, thirty (30) days after written notice thereof is 02/23/94 -45- delivered to the Agency all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall have any further rights against or liability to the other with respect to this Agreement. the event that prior to the issuance of the Certificate of Completion the Agency is not in default of this Agreement and: (1) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (2) There is a change in the ownership of the Developer contrary to the provisions of Section 5 hereof; or (3) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor and such default or failure shall not be cured within the applicable cure period as set forth in Section 36 hereof; or (4) The Developer is otherwise in default under this Agreement and has not cured or commenced to cure such default within the applicable time period set forth in Section 36 herein; Then, at the option of the Agency, within the applicable cure period as set forth in Section 36 hereof, after written notice thereof is delivered to the Developer, this Agreement shall be terminated, and thereafter neither party 02/23/94 -46- shall have any further rights against the other under this Agreement. (a) Termination and Damgaes. After the issuance of the Certificate of Completion, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 36 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. (b) Action for specific Performance. After the issuance of the Certificate of Completion, if either the Developer or the Agency defaults under any of the provisions of this Agreement the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 36 hereof, the nondefaulting party at its option may institute an action for specific performance of the terms of this Agreement. The Agency shall not be liable for any real estate commissions, broker's fees, or finder's fees which may accrue by means of this Agreement or the Developer's rehabilitation of the Site. The Developer agrees to hold harmless the Agency from such commissions or fees as are alleged to be due from the party making any such representations. 02/23/94 -47- The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Developer. The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this Agreement in the form of the "Memorandum of Agreement" attached hereto as Attachment No. 10 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the execution of this Agreement. 004"Um.TeK, A4,'1-wk0Q This Agreement includes pages 1 through 46 and Attachments 1 through 10, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 49. WAIVERS All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the 02/23/94 -46- Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstances where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been approved and adopted by the Agency. 02/23/94 -49- IN WITNESS WHEREOF, the Agency and the Developer have caused this Agreement to be executed officers on this day of ASSOCIATES NINE, a California general partnership Horace C. Stovall 91121195 General Partner by and through their authorized -11994-1 Jqq 5. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic BY Y• / —C . 4Z--7� Melvin R. Heckman gllgfgS Executive i ctor General Partner ATTEST: _ Agency Clerk INITIATED ANW APPROVED: irect r of Special Projects APPROVED AS TO FORM: �Agency General Counsel P-JL- a- tq-gs 02/23/94 -50- CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT Ift5907 State of County of On (ZA%c d,- /a, t215 before me, Ce wv2t4��_ � ; a DATE NAME. MU f ICER - E G.. -JANE DOE. NOT& PUBLIC' personally appeared e - NAME(S) OF SIGNER(S) $personauy own t • C�]~�ved to me on the basis of satisfactory evidence to be the person(p) whose nameUs isfare subscribed to the within instrument and ac- Yt1RiCE L JOHNSON i 991a3b 1 epLtf Nolary Pub%--Calltomia ol?ANGE COUNK, 1p Comm. Evt%Irec UAV l 1.T9 10AYOi10E L JOMDON COWA& # 9916% Notary Fuse — c4iffe 110 ORANGE C XORY Q01MV Coeur. E9*a MAY 11.1997 kno►vledged to me that he/she/they executed the same in their authorized capacity(ies , and that by hi-s/hefltheir signatureW on the instrument the person[s�, or the entity upon behalf of which the person(s� acted, executed the instrument. WITNESS my hand and official seal. mcf Rom. .•L a .�� LL.�i. eNOTARY OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUAL ❑ CORPORATE OFFICER �-,/ TM.E(8) L� PARTNER(S) 1❑:LIMITED l� r,ENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIAWCONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: NAME OF PERSON(S) OR EM1EE)) - _S ._ -� J_� , DESCRIPTION OF ATTACHED DOCUMENT 59. r TITLE OR DO s ' 54 NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED C1993 NATIONAL NOTARY ASSOCIATION • VW Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309.7184 ATTACHMENT NO. 1 Parcel 1: The West 50 feet of the East 250 feet of Block 2108, EASTSIDE VILLA TRACT, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Parcel 2: Block 2108 of the EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Maps, in the office of the County Recorder of said Orange County. EXCEPT the East 250 feet thereof. Parcel 3: The West 50 feet of the East 200 feet of Block 2108 of EASTSIDE VILLA TRACT, as per map recorded in Book 4, Page 65 of Miscellaneous Maps, in the office of the County Recorder of said Orange County. Attachment No. 1 11/04/93:sg ATTACHMENT NO. 4 0 0*0* 5M# 43•I%&IIC4jM 1. Execution of Agreement Within thirty by Agency. The Agency after the date shall approve and execute and submission this Agreement and shall copies of this deliver one (1) copy the Developer. Thereof to the Developer. 2. Submission of Preliminary Completed. ,Eitg PlAn. Developer submits its Preliminary Site Plan to the Agency. 3. Agency-Teview of.Site_ lan. Completed. The Agency shall approve or disapprove the Preliminary Site Plan. 4. Submission,ofComplete_Site Completed Plan Application. Developer submits full and complete Site Plan application to Agency. 5. Preparation of CEO A Documentation. Exempt. 5. Submission of Comnlete rop$truction Drawings ana Landscaping Plan. Developer shall submit to the City complete Construction (working) Drawings and a Landscaping Plan. (30) days of execution of five (5) Agreement by Within thirty (30) days after final C.U.P. approval. Attachment No. 4 - Page I of 3 11/04/93/s Attachment No. 4 Schedule of Performance 7. City Rgvigw of CQMVlMte Drawings-and,Plans. The City shall review the Complete Construction (working) Drawings, the Preliminary Landscaping Plan, and provide comments. Within eighteen (18) days after submittal. $. Revisions._ifanY. Developer Within thirty (30) days shall prepare revised after receipt of City's Construction (working) comments. Drawings as necessary, and submit them to City for review. 9. Einal_Review _and_Complete Drawings. The City shall approve the revisions submitted by the Property Owner provided that the revisions necessary to accommodate the City's comments have been made; said approvals constitute the last City approvals required in order for the Property Owner to pull building permits. MEN *_p- : 0 to 40 WTV 0 to) 10. Commencenent of Construction. Developer shall commence construction of property rehabilitation. Attachment No. 4 11/04/93/s Within eighteen (18) days after submittal by Developer. Within thirty (30) days after the City's issuance of building permits. - Page 2 of 3 Attachment No. 4 Schedule of Performance 11. Developer shall complete construction of all of the rehabilitation improvements. IV. OEERAIJONS PHASE 12. Loan, The Agency shall disburse the Agency Loan. 13. Disbursem0„ to of _Agency Grant. The Agency shall disburse the Agency Grant. 14. Submission f Income CQrtification. Attachment No. 4 11/04/93/s Subject to any delays pur- suant to Section 34 of the Agreement, the Developer is to use due diligence to complete the project within twelve (12) months after the start of the rehabilitation improvements; however, provided the Developer may request up to three (3) one (1) month extensions to be granted by the Director of Speical Projects. Approval for such three extensions (but no'other extensions) is not to be unreasonably withheld; provided that, notwithstanding the foregoing, construction shall be completed not later than eighteen (18) months after the earlier of (i) the commencement of the rehabilitation improvements; or (ii) the time established in this Agreement for the commencement of construction of rehabilitation improvements. Per progress payment schedule. Per progress payment schedule. Within thirty (30) days after execution of the Agreement; and annually thereafter to be submitted on July 1, for the duration of the Agreement. - Page 3 of 3 ATTACHMENT NO. 5 The project is a 36 unit multifamily housing development located at 725-729 Utica Avenue, and is composed entirely of two bedroom apartments that are in average to below average condition. Improvements planned include the rehabilitation of both the interior and exterior of the buildings, rehabilitation of the existing carports, new landscaping, and the installation of a "passive" recreation area. All rehabilitation work will conform to Housing Quality Standards and all other applicable building codes, standards, and regulations. Attachment No. 5 - Page 1 of 1 11/04/93/s