HomeMy WebLinkAboutResolutions - No. 2016-28RESOLUTION NO. 2016-28
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE
CITY MANAGER TO EXECUTE FINANCIAL DOCUMENTS WITH
TIENDA DRIVE SENIOR APARTMENTS, L.P, EDEN HOUSING, INC.,
AND EDEN DEVELOPMENT, INC., FOR THE TIENDA DRIVE SENIOR
HOUSING PROJECT AT 2245 AND 2255 TIENDA DRIVE
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute all documents required to allow Tienda Drive Senior
Apartments, L.P., a California limited partnership, Eden Housing, Inc., a California nonprofit
public benefit corporation, and Eden Development, Inc., a California nonprofit public benefit
corporation to close escrow on the construction financing for the Tienda Drive Senior Housing
Project located at 2245 and 2255 Tienda Drive, to be known as the Tienda Drive Senior
Apartments, with any non -substantial changes recommended by the City Attorney. Those
documents include, but are not limited to, the following, which are collectively attached hereto
as Exhibit A:
• Assignment and Amendment of the Purchase and Development Agreement, by and
between Tienda Drive Senior Apartments, L.P. (hereinafter "Partnership"),
Eden Housing, Inc., and the City of Lodi (hereinafter "City");
• $494,536.00 Promissory Note, in favor of the City;
• $494,536.00 Dead of Trust, from the Partnership and accepted by City;
• Regulatory Agreement and Declaration of Restrictive Covenants, by and between City
and Partnership;
• Assignment and Amendment of that Purchase and Development Agreement, by and
between City, Partnership, and Eden Housing, Inc.;
• Memorandum of Development Agreement, by and between City, Partnership, and
Eden Housing, Inc.;
• Release and Termination, by and between City and Eden Housing, Inc.
• Release and Termination, by and between City and Eden Development, Inc.
• Estoppel Certificate from the City to Wells Fargo Affordable Housing Community
Development Corporation;
• Subordination Agreement, by and between the City, Partnership and the Wells Fargo
Bank, N.A.;
• Subordination Agreement, by and between the City, Partnership and California Housing
Finance Agency;
• Subordination Agreement, by and between by the City, Partnership and San Joaquin
County;
• Request for Notice from City directed to Wells Fargo Bank, National Association;
• Request for Notice from City directed to California Housing Finance Agency;
• Request for Notice from City directed to County of San Joaquin; and
• Escrow Instructions from City directed to North American Title Company.
BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize the City
Manager to execute and deliver any and all other documents and instruments and to do and
cause to be done any and all acts and things necessary or advisable for carrying out the
transactions contemplated by this Resolution.
Dated: March 2, 2016
I hereby certify that Resolution No. 2016-28 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held March 2, 2016, by the following vote:
AYES: COUNCIL MEMBERS — Johnson, Kuehne, Mounce, Nakanishi, and
Mayor Chandler
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
iii_
ity Clerk
Th 2r-eAita,04
NNIFE ;L . FERRAIOLO
2016-28
Exhibit A
ASSIGNMENT AND AMENDMENT OF THAT
PURCHASE AND DEVELOPMENT AGREEMENT
Tienda Drive Senior Apartments, 2245 and 2255 Tienda Drive, Lodi, CA
This Assignment and Amendment of that Purchase and Development Agreement
("Assignment and Amendment") is dated as of March 2, 2016 (the "Effective Date"), by and
among Tienda Drive Senior Apartments, L.P., a California limited partnership, its successors
and assigns ("Owner" or "Buyer"), Eden Housing, Inc., a California nonprofit public benefit
corporation, as Owner's predecessor in interest as described below ("Eden"), and the City of
Lodi, a California municipal corporation ("City").
RECITALS
A, Owner will acquire that certain property located at 2245 and 2255 Tienda Drive in
the City of Lodi, California, more particularly described as Exhibit A (the "Property") from its
sponsor Eden. Eden purchased the Property on July 30, 2010 from the City pursuant to that
certain Purchase and Development Agreement between the City and Eden dated as of July 28,
2010 (the "Original Purchase and Development Agreement"), a memorandum of which was
recorded July 30, 2010 as Document No 2010-098833 of San Joaquin County Records (the
"Memorandum of Purchase of Development Agreement"). The City and Eden entered into
the Original Purchase and Development Agreement to govern (i) the purchase of the Property
by Eden from the City and (ii) the development on the Property of two projects consisting of a
total of 78 rental housing units affordable to very low and lower income senior households, two
manager's units, and related improvements (the "Senior Project") by Eden or its approved
successors and assigns.
B. The purpose of this Assignment and Amendment is first to assign all Eden's
rights and obligations under the Original Purchase and Development Agreement to Owner and
Owner's assumption of the assigned rights and obligations from Eden, which is required for the
committed construction and permanent financing for the Senior Project, and second to amend
the Original Purchase and Development Agreement to amend and/or amend and restate certain
terms and conditions in the original document related to the development and financing of the
Senior Project which will now be constructed, owned and operated as one project consisting of
seventy-nine (79) units of rental housing affordable to low income senior households designed
for the physical and social needs of senior tenants, as well as one manager's unit and related
improvements (the "Development").
C. The Original Purchase and Development Agreement, as assigned to and
assumed by Owner and as amended herein by the City and Owner shall hereafter be referred to
as the "Development Agreement."
NOW THEREFORE, in consideration of the foregoing, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows,
SECTION ONE: COMPLETED PROVISIONS; ASSIGNMENT, ASSUMPTION AND CITY
CONSENT; DEFINED TERMS
1.1 Satisfaction of Provisions. Eden, the Buyer, and City agree that the following provisions
of the Original Purchase and Development Agreement have either been fully satisfied and
completed or are no longer applicable to the Development, and are of no further force or effect
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final
from and after the Effective Date and that no further action by any party shall be required and no
default thereunder shall be claimed by any party: Sections 2.1, 3.1 - 3.7, 3.9, 5.1, 5.2, 5.6, 8.3.1
—8.3.9, 8.11, 11.1.1, 12.23, and 12.24, Article 4, all provisions referring to HUD or Tax-exempt
bond financing, HUD 202 financing, including Exhibit!, and any other financing sources not
identified in Exhibit C and Exhibit 0, attached hereto and incorporated herein and all provisions
referring to CDBG and HOME Program requirements.
1.2 Assignment and Assumption. Eden hereby assigns to Buyer all of Eden's development
rights and all of its right, title and interest in and obligations under the Development Agreement,
and Buyer hereby accepts the above assignment and assumes, agrees and undertakes to
perform all of the obligations set forth in the Development Agreement.
1.3 City Consent. The City hereby consents to the assignment by Eden and the assumption
by the Buyer of the Development Agreement.
1.4 f=inal flans. The City will have received and approved the Final Plans for the
Development prior to the issuance of the building permits or the "permit ready letter."
SECTION TWO: DEFINED TERMS AND UPDATED EXHIBITS
2.1 Defined Terms. All terms not otherwise defined above or elsewhere herein, shall have
the meanings set forth in the Original Purchase and Development Agreement.
2.1.1 "Buyer" or "Owner" now means Tienda Drive Senior Apartments, L.P., a
California limited partnership, its successors and assigns.
2.1,2 "Certificate of occupancy" shall mean the second or later of the two certificates of
occupancy issued to Borrower by the City approving the two buildings in the
Development for occupancy,
2.1.3 "Development" now has the meaning set forth in Recital B.
2.1.4 "Effective Date" now means the date first set forth above in this Assumption and
Amendment.
2 1.5 "Parties" or "parties" now means Owner, Eden and the City.
2.1 .6 "Property" now means the real property described in Exhibit A, which is the same
property previously described in Exhibits A-1 and A-2. The Parties acknowledge
that the reference to "Pages 79 and 80" in Exhibits A-1 and A-2 was a scrivener's
error and should have been "Page 79." The Parties hereby agree that all
references to "Pages 79 and 80" in any Loan Document is to be read as "Page
79."
2.1.7 "Note" now means the Promissory Note for the City Loan, a draft of which is
attached hereto and incorporated herein as Exhibit L.
2,2 Exhibits: Exhibits A, C, D, E, F, G and H attached hereto and incorporated herein, shall
replace in their entirety Exhibits A, C, D, E, F, G and H attached to the Original Purchase and
Development Agreement, respectively. Exhibit L and M attached hereto and incorporated
herein is hereby added to the Development Agreement. Exhibits B, I and J of the Original
Purchase and Development Agreement are hereby omitted from the Development Agreement:
Exhibit A: Legal Description
Exhibit C: Approved Development Budget.
Exhibit D: Financing Plan
Exhibit E: Schedule of Performance
Exhibit F: Scope of Development
Tienda_Assignment Amendment to PDA
rev 2,18.16 Final 2
Exhibit G Site Plan
Exhibit H: Insurance Requirements
Exhibit K: Memorandum of Development Agreement
Exhibit L: Form of Promissory Note for City Loan
Exhibit M. Investor Limited Partner Required Provisions
3. SECTION THREE: CITY LOAN
In order to assist with the financing of the Development, the City has approved a construction
and permanent loan in the principal amount of Four Hundred Ninety -Four Thousand Five
Hundred Thirty -Six Dollars ($494,536.00) (the "City Loan") to Buyer funded from a portion of
the local development impact fees paid by Buyer on or prior to the closing of the City Loan.
3.1 City Loan Terms. Subject to satisfaction of the conditions set forth in Section 3.3 below
and for the purposes set forth in Section 3.2 below, the City shall make the City Loan which
shall be a nonrecourse loan, bearing zero percent (0%) interest, payable only from residual
receipts, and maturing on the 55thanniversary of the date the final certificate of occupancy is
issued for the Development, on such additional terms as may be more fully set forth in this
Assignment and Amendment and/or the Promissory Note in substantially the form attached
hereto as Exhibit L.
3.2 Use of Funds. Buyer shall use the City Loan proceeds for predevelopment and con-
struction costs, which may include but not be limited to: surveyor, consultant and legal fees; and
costs related to the closing of the Loan (such as title, escrow and other closing costs and fees).
3.3 Conditions for Disbursement. The City shall disburse the Loan proceeds to Buyer when
all the following conditions to disbursement have been satisfied:
3.3.1 Executed City Loan Documents. The Buyer has delivered to the City an
executed original of this Assignment and Amendment and the Promissory Note, and certified
copies of the recorded documents listed in subsection 3.3.2 below.
3.3.2 Recorded Documents. The recording of the Deed of Trust securing the City
Loan, a Memorandum of Development Agreement in the form attached as Exhibit K, and the
Regulatory Agreement and Declaration of Restrictive Covenants restricting the use of the
Property in accordance with Section 7,2 of the Development Agreement.
3 3.3 Title Policy. The issuance by a title company satisfactory to the City of an ALTA
loan policy of title insurance ("City Title Policy") in the amount of the City Loan, insuring the City
that the lien of the City Deed of Trust is subject only to such liens, conditions, encumbrances,
restrictions, easements and exceptions as the City may approve in writing and containing such
endorsements as the City may reasonably require, with the cost of the City Title Policy to be
paid by the Buyer.
3.3.4 Formation Documents. The Buyer has delivered to the City a copy of each of the
following: (i) the amended and restated limited partnership agreement with the investor limited
partner of the Buyer; (ii) certificate of limited partnership; and (iii) formation documents of the
general partner and the member of the general partner; and (iv) authorizing resolutions
reasonably requested by the City.
3.3.5 Insurance Coverage. The Buyer has delivered to the City evidence of insurance
coverage in accordance with the City's current insurance requirements set forth in Exhibit H.
3.3.6 Construction Contract and Bonds. The Buyer has delivered to the City copies of
the following Development documents: Final plans and specifications for the Development; the
general contractor's construction contract that the Buyer has entered into for construction of the
Tienda_Assignment Amendment to PDA
rev 2 1$.16 Final 3
Development; and one hundred percent (100%) labor and material (payment) bonds and
performance bonds.
3.3.7 Updated Approved Development Budget. The Buyer has delivered to City an
updated Approved Development Budget (Exhibit C) showing that the undisbursed proceeds of
the Loan, together with other funds or firm commitments for funds that the Buyer has obtained in
connection with the Development, are not less than the amount necessary to pay for the
construction of the Development.
3.3.8 Land Use Approvals and Building Permit. The Buyer has secured all land use
approvals for the Development and the building permits for the Development have been issued
or are ready to issue.
3.3.9 Construction Loans/Limited Partner investment. The Buyer's other construction
loans and limited partnership investment shall be substantially ready to close, meaning
substantially all documents are submitted to escrow or executed by Buyer.
3.3.10 Draw Re nest. The City has received a written draw request from the Buyer
setting forth the proposed uses of funds consistent with the Approved Development Budget, the
amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost
incurred or to be incurred. When a disbursement is requested to pay the general contractor in
connection with improvements on the Property, the written request shall be accompanied by (i)
certification by the Buyer's architect reasonably acceptable to the City that the work for which
disbursement is requested has been completed; (ii) a copy of the inspection report prepared by
the construction lender's inspector, and (iii) lien releases and/or mechanics lien title insurance
endorsements reasonably acceptable to the City. The Buyer shall deliver to Buyer's other
construction lenders copies of all disbursement requests following approval and execution by
the City.
The City acknowledges that Buyer's senior construction lender shall require the Loan fully
disbursed prior to the senior construction lender's disbursement of the senior construction loan.
Buyer and the City anticipate the City Loan to be disbursed in one disbursement through escrow
for the construction loan closing.
3.4 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision
herein, the City shall have no obligation to disburse or authorize the disbursement of any portion
of the City Loan proceeds following the failure of any of the Buyer's representations and
warranties made in connection with the City Loan to be true and correct in all material respects
when made or the occurrence of an Event of Default under the Development Agreement or any
of the City Loan Documents, which remains uncured beyond any applicable cure period.
SECTION FOUR: OTHER PROVISIONS
4,1 Further Amendments. The parties agree that the following sections in the Original Purchase
and Development Agreement (the "Development Agreement") are hereby modified, deleted,
restated and/or replaced as provided below:
2.1 Representations and Warranties. As of the Effective Date, Buyer hereby
represents and warrants to Seller as follows:
2.2.1 Organizalio,n. Buyer is a duly organized, validly existing limited
partnership, is in good standing under the laws of the State of California, and has the
power and authority to own its property and carry on its business as now being
conducted.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 4
2.1.2 Authority of the Buyer. Buyer has full power and authority to execute and
deliver this Development Agreement and the necessary documents or instruments,
pursuant to this Development Agreement and to perform and observe the terms and
provisions of all of the above.
2.1.3 Authority of Persons Executing Documents. This Development
Agreement and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Development Agreement have been or will be
executed and delivered by persons who are duly authorized to execute and deliver the
same for and on behalf of Buyer, and all actions required under the Buyer's
organizational documents and applicable governing law for the authorization, execution,
delivery and performance of this Development Agreement and all other documents or
instruments executed and delivered, or to be executed and delivered, pursuant to this
Development Agreement, have been duly taken.
2.1.4 Valid Binding Agreements. This Development Agreement and all other
documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when
so executed and delivered constitute, legal, valid and binding obligations of the Buyer
enforceable against -it in accordance with their respective terms.
2.1.5 No Breach of Law or Agreement. Neither the execution nor delivery of
this Development Agreement nor any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Development Agreement, nor
the performance of any provision, condition, covenant or other terms hereof or thereof,
will conflict with or result in a breach of any statute, rule or regulation, or any judgment,
decree or order of any court, board, commission or agency binding on Buyer, or any
provision of the organization documents of Buyer, or will conflict with or constitute a
breach of or a default under any agreement to which Buyer is a party, or will result in the
creation or imposition of any lien upon any assets or property of Buyer, other than liens
established pursuant hereto.
2.1.6 Compliance With Laws; Consent and Approvals. The construction of the
Development will comply with all applicable laws, ordinances, rules and regulations of
federal, state and local governments and agencies and with all applicable directions as
of time of building permit issuance, rules and regulations of the fire marshal, health
officer, building inspector and other officers of any such government or agency.
2.1.7 Pending Proceedings. Buyer is unaware of a known default under any
law or regulation or under any order of any court, board, commission or agency, and
there are no known claims, actions, suits or proceedings pending or, to the knowledge of
Buyer, threatened against or affecting Buyer, at law or in equity, before or by any court,
board, commission or agency which might, if determined adversely to Buyer, materially
affect Buyer's ability to perform its obligations contemplated by this Development
Agreement.
2.1.9 Taxes. Buyer and its subsidiaries have filed all federal and other material
tax returns and reports required to be filed, and have paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them
or their income or their properties otherwise due and payable, except those which are
being contested in good faith by appropriate proceeds and for which adequate reserves
have been provided in accordance with generally accepted accounting principles. Buyer
has no knowledge of a proposed tax assessment against Buyer or any of its subsidiaries
Tienda_Assignment Amendment to PDA
rev 2.18 16 Final 5
that could, if made, be reasonably expected to have a material adverse effect upon the
assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or
prospects of Buyer and its subsidiaries, taken as a whole, which would be expected to
result in a material impairment of the ability of Buyer to perform under this Agreement.
6.3.9 Certificate of Completion. The following is added at the end of Section 6.3.9:
"Upon the execution, delivery and recordation of the Certificate of Completion, Buyer shall have
no further obligations under Article 6 of this Agreement."
7.3 Regulatory Agreement. The Regulatory Agreement referenced in Section 7.3
shall hereafter refer to the Regulatory Agreement entered into with the City, and not the County.
8.3 Records. All references to HUD's right to inspect and copy all books, records
and accounts are no longer applicable and shall hereafter be disregarded for any and all
purposes under the Development Agreement.
8.6.1. Maintenance and Damafte. Any lien arising under the terms and conditions of
Section 8.6.1 relating to maintenance and damage of the Development shall be subject to and
subordinate to mortgages, deeds of trust or other security interests executed for the sole
purpose of obtaining funds to develop the Property as authorized herein.
9.1.4.6 Right of Seller to Cure Security Interest Default. All costs and expenses incurred
by Seller in curing a default shall be reasonable and any lien arising under the terms and
conditions of Section 9.1.4.6 relating to funds expended by the City to cure a default shall be
subject and subordinate to mortgages, deeds of trust or other security interest executed for the
sole purpose of obtaining funds to develop the Property as authorized herein.
12.9 Notices. Address of Buyer is hereby changed to:
Tienda Drive Senior Apartments, L.P.
c/o Eden Investments, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Facsimile: (510) 582-6523
With a copy to Owner's investor limited partner at the address set forth in Exhibit M.
12.22 Investor Limited Partner Provisions. The provisions required by Borrower's
investor limited partner set forth in Exhibit M attached hereto are hereby incorporated by this
reference herein and made a part hereof.
12.24 Memorandum of Development Aoreen ent. Concurrently with the closing of the
City Loan, the parties shall record the Memorandum of Development Agreement in the form
attached hereto as Exhibit K.
12.25 Approval of the City. Any approval rights of the City under the Development
Agreement shall not be unreasonably withheld, conditioned or delayed.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 6
IN WITNESS WHEREOF, the Parties have executed this Assignment and Amendment of that
Purchase and Development Agreement as of the date first written above.
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
f J
;Janice D .Magrlich, City Attorney
[Signatures continue on the next page; the balance of this page is intentionally left blank.]
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 7
TIENDA DRIVE SENIOR APARTMENTS, L.P., a California limited partnership
By: Tienda Drive Senior Apartments LLC, General Partner
By: Eden Investments, Inc,, sole member/manager
By:
Linda Mandolini, President
EDEN HOUSING, INC., a California nonprofit public benefit corporation
By:
Linda Mandolini, President
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 8
Exhibit A: LEGAL DESCRIPTION OF PROPERTY
Real property in the City of LODI, County of SAN.JOAQUIN, State of CALIFORNIA, described as
follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS,
APN: 027-410-24 and 027-410-25
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 9
Combined Exhibit C: Approved Development Budget
and Exhibit D: Financing Plan
on following page
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 10
TIENDA DRIVE SENIOR APARTMENTS
Preliminary Budget (2/18/16)
SOURCES:
San Joaquin County CDBG and HOME 1,124,669
MHSA Loan 740,000
City Loan 494,536
AHP 790,000
LP Equity 19,594,895
Deferred Developer Fee 550,092
Construction Loan 16,712,940
Total 40, 007,132
USES:
Land Acquisition 630,000
Acquisition Legal/title and holding costs 35,000
Unit Construction 13,752,580
Solar PV 200,000
Escalation Contingency 1,438,508
Owner's Hard Cost Contingency 769,554
Impact Fees 1,276,639
Permits 103,958
Architecture 855,000
Survey and Engineering 161,300
Construction Management 75,000
Soft Cost Contingency 110,000
Predevelopment Interest 40,000
Construction Period Taxes 70,000
Construction Loan interest 657,884
Construction Lender Costs and Legal 75,000
Construction Loan Fee 100,278
Owner Legal 116,000
Market Study 20,000
Syndication Consultant 40,000
MHSA Fees 21,110
Course of Construction Insurance 125,000
Marketing 80,000
Furniture 80,000
Audit 20,000
Title - construction closing 30,000
Title - perm loan dosing 5,000
Reserves
Services Reserve 709,000
Operating Reserve 209,379
Tax Credit Allocation Committee Fees 88,002
Developer Fee 1,40Q000
Construction Loan Repayment 16,712,940
Tota I 40,007,132
Exhibit E: Schedule of Performance
Completion of the Predevelopment No Tater than March 21, 2016
Activities set forth in Article 5
Close of Construction Financing
Commencement of Construction
Construction Completion
100% Occupancy
No later than March 21, 2016.
Within 21 days after the Close of Construction
Financing or the earlier of the construction
commencement date required by the
California Tax Credit Allocation Committee or other
Project financing source.
Within 24 months of commencement of construction.
Within 6 months of construction completion.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 11
Exhibit F: Scope of Development
(Project Name and Description)
Tienda Drive Senior Apartments: The new construction of two wood -framed apartment
buildings, each building is to two -stories, and elevator -served. The buildings will consist
of 80 units targeting low-income seniors aged 62 and over. The unit mix includes 79
one -bedrooms and 1 two-bedroom manager's unit. Eight (8) units will be set aside for
formerly homeless individuals diagnosed with a mental illness. The property will also
feature a central 1,200 square foot community room with kitchen. Additional common
amenities include two laundry rooms, courtyard space, and on-site management and
social services.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 12
Exhibit G: Site Plan
on following page
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 13
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SITE ELAN NOTES
A1.00
Exhibit H: City Insurance Requirements
on following pages
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 14
Insurance Requirements to be provided by the City of Lodi prior to the close of escrow.
Exhibit K: Memorandum of Development Agreement
North American Title Company
Escrow No 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE § 27383
APN 027-410-24 & 027-410-25
MEMORANDUM OF DEVELOPMENT AGREEMENT
(2245 and 2255 Tienda Drive, Lodi, CA)
This Memorandum of Development Agreement dated as of March 2, 2016,
modifies that Memorandum of Purchase and Development Agreement recorded July 30,
2010 as Document No. 2010-098833 of San Joaquin County Records (the "Original
Purchase and Development Agreement") to disclose that unrecorded Assignment
and Amendment of that Purchase and Development Agreement of even date herewith,
by and among Tienda Drive Senior Apartments, L.P., a California limited partnership
("Owner"), Eden Housing, Inc., as Owner's predecessor in interest, and the City of Lodi,
a California municipal corporation ("City").
The real property in the City of Lodi, County of San Joaquin, State of California,
described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD
ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN
COUNTY RECORDS
(the "Property") shall be developed, owned, maintained, and operated pursuant to the
terms of the above -referenced Original Purchase and Development Agreement, as
amended by the Assignment and Amendment of that Purchase and Development
Agreement, hereinafter referred to as the "Development Agreement."
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 15
This Memorandum of Development Agreement, which may be executed in counterparts,
is executed as of the date written above.
TIENDA DRIVE SENIOR APARTMENTS, L.P.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC, General
Partner
By: Eden Investments, Inc., sole
member/manager
By
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
Janice D. Magdich, City Attorney
EDEN HOUSING, INC., a California nonprofit
public benefit corporation
By:
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 16
Exhibit L: Form of Promissory Note for City Loan
on following pages
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 17
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$494,536.00
Lodi, California
March 2, 2016
FOR VALUE RECEIVED, TIENDA DRIVE SENIOR APARTMENTS, L.P., a
California limited partnership (the "Borrower"), having its offices at 22645 Grand Street,
Hayward, CA 94541, hereby promises to pay the CITY OF LODI, a California municipal
corporation (the "City"), the principal amount of Four Hundred Ninety -Four Thousand Five
Hundred Thirty -Six Dollars ($494,536.00) or so much thereof as inay be advanced by the City
from time to time pursuant to the Development Agreement referred to below, in the manner
provided below. No interest shall accrue on the outstanding principal balance of this Note,
except as provided in Section 4 below.
This Promissory Note (this "Note") has been executed and delivered pursuant to and in
accordance with that certain Assignment and Amendment dated as of the date hereof, and
executed by and between Borrower and City, which Assignment and Amendment amends that
certain Purchase and Development Agreement dated as of June 28, 2010 between the City and
Eden Housing, Inc., which was assumed by Borrower. The Purchase and Development
Agreement, as amended, is referred to herein as the "Development Agreement." This Note is
subject to the terms and conditions of the Development Agreement which is by this reference
incorporated herein. Capitalized terms used but not defined herein shall have the meaning
ascribed to such terms in the Development Agreement,
1. Payments.
a. Annual Payments. Commencing on the May 151 following the issuance of
the final Certificate of Occupancy, and continuing every May 151 thereafter until the full
repayment of the Loan or the maturity date (defined below), Borrower shall pay to the City, the
City's Proportionate Share of Residual Receipts (defined below).
i. "City's Proportionate Share of Residual Receipts" shall mean the City's
proportion of the "Lenders' Share of Residual Receipts" (defined below) payable to the City,
which shall be the principal amount of the Loan actually disbursed divided by the sum of the
original principal amounts actually disbursed of all loans approved by the City as part of the
Financing and payable on a "residual receipts" basis which may also be called "net cash flow,"
"surplus cash," or other similar term. The "Lenders' Share of Residual Receipts" shall mean
fifty percent (50%) of the Residual Receipts and the "Borrower's Share of Residual Receipts"
shall be retain fifty percent (50%) of the Residual Receipts.
As of the date of this Note, the prorata percentage sharing of the Lender's Share of
Residual Receipts, assuming full disbursement of the following loans, is expected to be:
CaIHFA: 31.37% based on a $740,000.00 M1 -ISA loan; County: 47.67% based on the
$1,124,669.15 County loan; and City of Lodi: ("City") 20.96% based on a $494,536.00 City
loan.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 18
ii. 'Residual Receipts" in a particular calendar year shall mean the amount by
which Gross Revenue exceeds Annual Operating Expenses.
iii. "Annual Operating Expenses" with respect to a particular calendar year
shall mean the following costs reasonably and actually incurred for operation and maintenance of
the Project to the extent that they are consistent with an annual independent audit performed by a
certified public accountant using generally accepted accounting principles: property taxes and
assessments imposed on the Project; debt service currently due on a non -optional basis
(excluding debt service due from residual receipts or surplus cash of the Project) on loans
associated with the development of the Project; Call -IEA 0.42% MASA servicing fee; property
management fees and reimbursements, not to exceed fees and reimbursements which are
standard in the industry; partnership management fees and asset management fees including all
fees paid to Borrower's investor limited partner, if any, in the amount of Thirty -Three Thousand
Five Hundred Dollars ($33,500) increasing by three percent (3%) annually during the fifteen
year "Tax Credit compliance period and after the expiration of the fifteen year compliance period,
in the amount of Twenty -Five Thousand Dollars ($25,000) which amount will increase by three
percent (3%) annually commencing on the first anniversary of the expiration of the tax credit
compliance period, and such other reasonable fees as may be approved by the City at the time the
tax credit syndication occurs; organizational costs (e.g,, annual franchise tax payments) and costs
associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary
course of business; premiums for property damage and liability insurance; utility services not
paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair
of the Project; any annual license or certificate of occupancy fees required for operation of the
Project; security services; advertising and marketing; cash deposited into reserves for capital
replacements of the Project in an amount required by the Project financing and the tax credit
syndication (or any greater amount approved by the City); cash deposited into a reasonable
operating reserve required by the Project financing and the tax credit syndication (or any greater
amount approved by the City); payment of any previously unpaid portion of the Developer Fee
not exceeding a cumulative developer fee in the maximum amount of One Million Four Hundred
Thousand Dollars ($1,400,000); on-site service provider fees and reimbursements for tenant
social services at the Project; extraordinary operating costs specifically approved by the City;
payments of deductibles in connection with casualty insurance claims not normally paid from
reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally
paid from reserves, and other ordinary and reasonable operating expenses not listed above.
Annual Operating Expenses shall not include the following: depreciation, amortization,
depletion or other non-cash expenses; any amount expended from a reserve account; and any
capital cost with respect to the Project, as determined by the accountant for the Project.
iv, "Gross Revenue" with respect to a particular calendar year shall mean all
revenue, income, receipts, and other consideration actually received from operation and leasing
of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid
by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units,
deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental
adjustments to leases or rental agreements; proceeds from vending and laundry room machines;
the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not
used to rebuild the Project; and condemnation awards for a taking of part or all of the Project for
a temporary period not used to restore the Project following such condemnation. Gross Revenue
Tienda_Assignment Amendment to PDA
rev 2,18,16 Final 19
shall not include tenants' security deposits, loan proceeds, capital contributions or similar
advances.
c. Statement. No later than May 1 s` of each year following the issuance of
the certificate of occupancy for the Project, Borrower shall provide to the City Borrower's
calculation of Residual Receipts for the previous calendar year, accompanied by such supporting
documentation as the City may reasonably request, including without limitation, an independent
audit prepared for the Project by a certified public accountant in accordance with generally
accepted accounting principles. No later than December 1 S' of each year following issuance of
the final certificate of occupancy for the Project, Borrower shall provide to the City a projected
budget for the following calendar year which shall include an estimate of Residual Receipts.
d, Application of Payments.. Payments shall be applied first to accrued
interest, if any, and then to the outstanding principal balance.
e. "Perin, Notwithstanding any other provision of this Note, principal and
interest, if any, payable pursuant to this Note shall be fully repaid within fifty-five (55) years
from the date the final certificate of occupancy is issued for the Project, but in no event shall the
maturity date be later than July 15, 2073 (the "Maturity Date").
3. Deed of Trust. This Note is secured by that Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing (the "Deed of Trust") of even date herewith which shall
be recorded on the Property in the Official Records of the County of San Joaquin.
4. Default Rate. Upon the occurrence of an Event of Default (defined below),
interest shall automatically accrue without notice at a rate equal to the lesser of the maximum
rate permitted by law or ten percent (10%) per annum (the "Default Rate"). When Borrower is
no longer in default, the Default Rate shall no Longer apply, and the interest rate shall once again
be the zero percent (0%) rate specified in the first paragraph of this Note. The imposition or
acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note
or prevent City from exercising any of its other rights or remedies.
5. Manner and Place of Payment. Payments shall be mailed to the City of Lodi, P.O.
Box 3006, T.,odi, CA 95241-I910, or delivered to City Hall, located at 221 West Pine Street,
Lodi, CA 95240, or at such other place as the holder hereof may inform Borrower in writing, in
lawful money of the United States.
6. Waiver; Attorneys' Fees. Borrower waives presentment for payment, demand,
protest, and notices of dishonor and of protest; the benefits of alI waiveable exemptions; and all
defenses and pleas on the grounds of any extension(s) of the time of payment or of any due date
under the Note, in whole or in part, whether before or after maturity and with or without notice.
Borrower hereby agrees to pay all costs and expenses, including reasonable attorney's fees,
which may be incurred by the holder hereof in the enforcement of the Note, the Development
Agreement, Regulatory Agreement, and the Deed of Trust or any term or provision of any of
such documents.
7. Acceleration, The entire balance of the obligation shall be immediately due and
payable in the event Borrower fails to make payments due under this Note following not less
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 20
than fifteen (15) day notice and cure period or in the Event of Default as defined in and subject
to applicable notice and cure provisions in the Development Agreement, the Deed of Trust,
Regulatory Agreement, or in the event the Project is refinanced, sold, transferred or conveyed in
any manner, or if Borrower reorganizes, modifies its structure or transfers the Project as a
portion of its assets without the written consent of or otherwise approved by the City. This loan
is not assumable without the prior written approval of the City, except by an affiliate of Eden
Housing, Inc. Neither acceptance by the City of the payments provided for herein nor any failure
by the City to pursue its legal and equitable remedies upon default shall constitute a waiver of
the City's right to, require prompt payments when due of all principal and interest, if any, owing
or to declare a default and exercise all of its rights under this Note, the Deed of Trust, Regulatory
Agreement, and Development Agreement.
8. Prepayment. Borrower shall have the right to prepay without penalty all or any
part of the obligation evidenced by this Note.
9. Nonrecourse Obligation. Except as expressly provided in the second paragraph of
this section 9, the Borrower, the Borrower's officers, directors, partners, employees and agents,
shall not have any direct or indirect personal liability for payment of the principal of, or interest,
if any, on this Note or the performance of the covenants of the Trustor under the Deed of Trust
securing this Note. The sole recourse of the City with respect to the principal of, or interest, if
any, on this Note and defaults by the Borrower in the performance of its covenants under the
Deed of Trust shall be to the property securing the indebtedness evidenced by this Note. No
judgment, or execution thereon, entered in any action, legal or equitable, on this Note or the
Deed of Trust shall be enforced personally against the Borrower, its officers, directors, partners,
employees or agents, but may be enforced only against the property described in the Deed of
Trust and such other or further security as, from time to time, may be hypothecated for this Note;
provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or
impair the enforcement against all such security for this Note by the City, or (b) be deemed in
any way to impair the right of the City to assert the unpaid principal amount of this Note as
demand for money within the meaning and intendment of Section 431.70 of the California Code
of Civil Procedure or any successor provision thereto.
The foregoing limitation of liability is intended to apply only to the obligation for the
repayment of the principal of, and payment of interest, if any, on this Note and the performance
of Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing
contained herein is intended to relieve the Borrower of personal liability for (1) fraud or willful
misrepresentation; (2) the failure to pay taxes, assessments or other charges which may create
liens on the Property that are payable or applicable prior to any foreclosure under the Deed of
Trust (to the full extent of such taxes, assessments or other charges); (3) the fair market value of
any personal property or fixtures removed or disposed of by Borrower other than in accordance
with the Deed of Trust; (4) the misapplication of any proceeds under any insurance policies or
awards resulting from condemnation or the exercise of the power of eminent domain or by
reason of damage, loss or destruction to any portion of the Property; (5) the Borrower's
indemnification obligations, if any, under the Development Agreement; and (6) payment to the
City or any senior lender any rental income or other income arising with respect to the Property
received by the Borrower and not applied in accordance with the Deed of Trust or Development
Agreement or other Project loan documents evidencing other Project loans approved by the City,
after the City has given notice to the Borrower of the occurrence of an Event of Default.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 21
10. Assignment. The City's rights under this Note may be assigned by the City in its
sole discretion.
11. No Offset. The Borrower hereby waives any rights of offset it now has or may
hereafter have against the City, its successors and assigns, and agrees to make the payments
called for herein in accordance with the terms of this Note.
TIENDA DRIVE SENIOR APARTMENTS, L.P., a California
Limited partnership
I3y: Tienda Drive Senior Apartments LLC, its General Partner
By: Eden Investments, Inc., its sole Member/Manager
13y:
Linda Mandolini, President
Approved as to form:
City of Lodi, a California municipal corporation
By
Janice D. Magdich, City Attorney
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 22
EXHIBIT M
INVESTOR LIMITED PARTNER REQUIRED PROVISIONS
This Exhibit M is attached to and made a part of the Assignment and Amendment
of that Purchase and Development Agreement by and among Tienda Drive Senior
Apartments, L.P., a California limited partnership ("Borrower"), Eden Housing, Inc., a
California nonprofit public benefit corporation, and the City of Lodi, a California municipal
corporation (referred to as the "Lender" in this Exhibit M), The Borrower (sometimes
referred to in this exhibit as the "Partnership"), through its limited partner, is providing
equity for the development of the Project. The agreement of limited partnership governing
the Borrower, as it may be amended and/or amended and restated from time to time, is
referred to herein as the "Partnership Agreement." All capitalized terms used, but not
defined, in this Exhibit M shall have the meaning ascribed to such term in the
Development Agreement.
The Low Income Housing Tax Credit financing for the development of the
Project requires the admission of an investor limited partner in Borrower ("Limited
Partner"), and as a condition to becoming a limited partner in the Borrower which
benefits Borrower and Lender, Limited Partner requires that the Lender and Borrower
grant certain protections to Limited Partner under the Development Agreement and the
documents evidencing or securing the City Loan, including without limitation, the
Promissory Note, Deed of Trust, and the Regulatory Agreement and Declaration of
Restrictive Covenants between Borrower and the Lender (collectively, the "City
Documents").
Lender and Borrower hereby agree that (i) each the following covenants, terms
and conditions shall be part of and shall modify or supplement each of the City
Documents notwithstanding any term or provision set forth in any of the City Documents
to the contrary, and (ii) that in the event of any inconsistency or conflict between the
covenants, terms and conditions of the City Documents and this Exhibit M, including
without limitation the terms and provisions set forth in Article 10 and Article 12 of the
Original Purchase and Development Agreement, that each of the following covenants,
terms and conditions set forth herein in this Exhibit M shall supersede, control and prevail:
1.For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner prior to exercising
remedies under the City Documents, Lender will give Limited Partner a copy of any
written notice it gives to Borrower under the City Documents at the following address:
Wells Fargo Affordable Housing Community
Development Corporation, MAC D1053-170
301 South College Street, 17th Floor
Charlotte, NC 28288
Attention: Director of Asset Management
With copy to:
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 23
Joel Hjelmaas, Counsel
Wells Fargo Bank, N.A.
MAC X2401 -06T
1 Home Campus, 6th Floor
Des Moines, IA 50328-0001
Or such other address that the Limited Partner shall send to Lender in
accordance with Section 12.9 of the Development Agreement.
Changes of addresses for Notices and any changes in the Limited Partner or a
change to an entity other than Wells Fargo Affordable Housing Community Development
Corporation shall be effective without an amendment to this Exhibit M, or if an
amendment is required by the Lender, such amendment may be approved by the City
Manager or his or her designee, and such amendment need not be recorded to be
effective.
2. Limited Partner shall have the same right as Borrower to cure or
remedy any default hereunder within the cure period provided to Borrower
extended by an additional sixty (60) days; provided however, if the default is of
such nature that the Limited Partner reasonably determines that it is necessary to
replace the general partner of Borrower in order to cure such default, then the cure
period shall be extended until the date sixty (60) days following the removal of the
general partner of Borrower, and such cure shall be accepted or rejected on the
same basis as if tendered by Borrower.
3. If Limited Partner presents payment or otherwise cures a monetary or
non -monetary default within the cure periods set forth in the City Documents, Lender
will accept such action as curing the respective default under the City Documents.
4. For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner, Lender agrees that the
Limited Partner may sell, transfer, assign or otherwise dispose of all or any part of its
interest in Borrower to an entity controlled by an affiliate of Wells Fargo Bank, N.A.,
without Lender's prior written consent, and such transfer, assignment or other
disposition will not trigger an Event of Default or any due on sale or acceleration
provisions under the City Documents.
5. Lender will permit Limited Partner to remove the general partner of
Borrower in accordance with Borrower's partnership agreement, provided that Lender
gives its prior written approval that the substitute general partner is acceptable to
Lender in its reasonable discretion. An affiliate of Wells Fargo Bank, National
Association is an acceptable substitute general partner, and does not require Lender's
prior written approval. Such transfers will not trigger an Event of Default or any due on
sale or acceleration provisions under the City Documents.
6. Lender will permit insurance and condemnation proceeds to be used to
rebuild the Project provided that sufficient funds are available from other sources to
effectively rebuild the Project.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 24
7. Lender has not and will not cross -default or cross-collateralize the City
with any loan made with respect to another property,
8. Lender will not materially modify the City Documents without Limited
Partner's prior written consent.
9. No Third Party Beneficiaries. Wells Fargo Affordable Housing Community
Development Corporation, its affiliates, successors and assigns, as the Limited Partner of the
Borrower, is a third party beneficiary to the Development Agreement, pursuant to the terms and
conditions thereof.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 25
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$494,536.00
Lodi, California
March 2, 2016
FOR VALUE RECEIVED, TIENDA DRIVE SENIOR APARTMENTS, L.P., a
California limited partnership (the "Borrower"), having its offices at 22645 Grand Street,
Hayward, CA 94541, Hereby promises to pay the CITY OF LODI, a California municipal
corporation (the "City"), the principa! amount of Four Hundred Ninety -Four Thousand Five
Hundred Thirty -Six Dollars ($494,536.00) or so much thereof as may be advanced by the City
from time to time pursuant to the Development Agreement referred to below, in the manner
provided below. No interest shall accrue on the outstanding principal balance of this Note,
except as provided in Section 4 below.
This Promissory Note (this "Note") has been executed and delivered pursuant to and in
accordance with that certain Assignment and Amendment dated as of the date hereof, and
executed by and between Borrower and City, which Assignment and Amendment amends that
certain Purchase and Development Agreement dated as of June 28, 2010 between the City and
Eden 1 -lousing, Inc., which was assumed by Borrower. The Purchase and Development
Agreement, as amended, is referred to herein as the "Development Agreement." This Note is
subject to the terns and conditions of the Development Agreement which is by this reference
incorporated herein. Capitalized terms used but not defined herein shall have the meaning
ascribed to such terns in the Development Agreement,
1. Payments.
a. Annual Payments. Commencing on the May 1s1 following the issuance of
the final Certificate of Occupancy, and continuing every May 1s1 thereafter until the full
repayment of the I.,oan or the maturity date (defined below), Borrower shall pay to the City, the
City's Proportionate Share of Residual Receipts (defined below).
"City's Proportionate Share of Residual Receipts" shall mean the City's
proportion of the "Lenders' Share of Residual Receipts" (defined below) payable to the City,
which shall be the principal amount of the Loan actually disbursed divided by the sum of the
original principal amounts actually disbursed of all loans approved by the City as part of the
Financing and payable on a "residual receipts" basis which may also be called "net cash flow,"
"surplus cash," or other similar term. The "Lenders' Share of Residual Receipts" shall mean
fifty percent (50%) of the Residual Receipts and the "Borrower's Share of Residual Receipts"
shall be retain fifty percent (50%) of the Residual Receipts.
As of the date of this Note, the prorata percentage sharing of the Lender's Share of
Residual Receipts, assuming full disbursement of the following loans, is expected to be:
Call -117A: 31.37% based on a $740,000,00 MRSA loan; County: 47.67% based on the
$1,124,669.15 County loan; and City of Lodi: ("City") 20.96% based on a $494,536.00 City
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 1
loan.
ii. "Residual Receipts" in a particular calendar year shall mean the amount by
which Gross Revenue exceeds Annual Operating Expenses.
"Annual Operating Expenses" with respect to a particular calendar year
shall mean the following costs reasonably and actually incurred for operation and maintenance of
the Project to the extent that they are consistent with an annual independent audit performed by a
certified public accountant using generally accepted accounting principles: property taxes and
assessments imposed on the Project; debt service currently due on a non -optional basis
(excluding debt service due from residual receipts or surplus cash of the Project) on loans
associated with the development of the Project; CaII:IFA 0.42% MRSA servicing fee; property
management fees and reimbursements, not to exceed fees and reimbursements which are
standard in the industry; partnership management fees and asset management fees including all
fees paid to Borrower's investor limited partner, if any, in the amount of Thirty -Three Thousand
Five Hundred Dollars ($33,500) increasing by three percent (3%) annually during the fifteen
year Tax Credit compliance period and after the expiration of the fifteen year compliance period,
in the amount of Twenty -Five Thousand Dollars ($25,000) which amount will increase by three
percent (3%) annually commencing on the first anniversary of the expiration of the tax credit
compliance period, and such other reasonable fees as may be approved by the City at the time the
tax credit syndication occurs; organizational costs (e.g., annual franchise tax payments) and costs
associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary
course of business; premiums for property damage and liability insurance; utility services not
paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair
of the Project; any annual license or certificate of occupancy fees required for operation of the
Project; security services; advertising and marketing; cash deposited into reserves for capital
replacements of the Project in an amount required by the Project financing and the tax credit
syndication (or any greater amount approved by the City); cash deposited into a reasonable
operating reserve required by the Project financing and the tax credit syndication (or any greater
amount approved by the City); payment of any previously unpaid portion of the Developer Fee
not exceeding a cumulative developer fee in the maximum amount of One Million hour Hundred
"Thousand Dollars ($1,400,000); on-site service provider fees and reimbursements for tenant
social services at the Project; extraordinary operating costs specifically approved by the City;
payments of deductibles in connection with casualty insurance claims not normally paid from
reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally
paid from reserves, and other ordinary and reasonable operating expenses not listed above.
Annual Operating Expenses shall not include the following: depreciation, amortization,
depletion or other non-cash expenses; any amount expended from a reserve account; and any
capital cost with respect to the Project, as determined by the accountant for the Project.
iv. "Gross Revenue" with respect to a particular calendar year shall mean all
revenue, income, receipts, and other consideration actually received from operation and leasing
of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid
by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units,
deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental
adjustments to leases or rental agreements; proceeds from vending and laundry room machines;
the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 2
used to rebuild the Project; and condemnation awards for a taking of part or all of the Project for
a temporary period not used to restore the Project following such condemnation. Gross Revenue
shall not include tenants' security deposits, loan proceeds, capital contributions or similar
advances.
c. Statement. No later than May 1' of each year following the issuance of the
certificate of occupancy for the Project, Borrower shall provide to the City Borrower's calculation of
Residual Receipts for the previous calendar year, accompanied by such supporting documentation as the
City may reasonably request, including without limitation, an independent audit prepared for the Project
by a certified public accountant in accordance with generally accepted accounting principles. No later
than December 1" of each year following issuance of the final certificate of occupancy for the Project,
Borrower shall provide to the City a projected budget for the following calendar year which shall include
an estimate of Residual Receipts.
d. Application of Payments, Payments shall be applied first to accrued
interest, if any, and then to the outstanding principal balance.
e, Term. Notwithstanding any other provision of this Note, principal and
interest, if any, payable pursuant to this Note shall be fully repaid within fifty-five (55) years
from the date the final certificate of occupancy is issued for the Project, but in no event shall the
maturity date he later than July 15, 2073 (the "Maturity Date").
3. Deed of Trust. This Note is secured by that Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing (the "Deed of Trust") of even date herewith which shall
he recorded on the Property in the Official Records of the County of San Joaquin.
4. Default Rate. Upon the occurrence of an Event of Default (defined below),
interest shall automatically accrue without notice at a rate equal to the lesser of the maximum
rate permitted by law or ten percent (10%) per annum (the "Default Rate"). When Borrower is
no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again
be the zero percent (0%) rate specified in the first paragraph of this Note. The imposition or
acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note
or prevent City from exercising any of its other rights or remedies.
5, Manner and Place Of Payment. Payments shall be mailed to the City of Lodi, P.O.
Box 3006, Lodi, CA 95241-1910, or delivered to City Hall, located at 221 West Pine Street,
Lodi, CA 95240, or at such other place as the holder hereof may inform Borrower in writing, in
lawful money of the United States,
6. Waiver; Attorneys' Fees. Borrower waives presentment for payment, demand,
protest, and notices of dishonor and of protest; the benefits of all waiveable exemptions; and all
defenses and pleas on the grounds of any extension(s) of the time of payment or of any due date
under the Note, in whole or in part, whether before or after maturity and with or without notice.
Borrower hereby agrees to pay all costs and expenses, including reasonable attorney's fees,
which may he incurred by the holder hereof in the enforcement of the Note, the Development
Agreement, Regulatory Agreement, and the Deed of Trust or any term or provision of any of
such documents.
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 3
7. Acceleration. The entire balance of the obligation shall be immediately due and
payable in the event Borrower fails to make payments due under this Note following not less
than fifteen (15) day notice and cure period or in the Event of Default as defined in and subject
to applicable notice and cure provisions in the Development Agreement, the Deed of `frust,
Regulatory Agreement, or in the event the Project is refinanced, sold, transferred or conveyed in
any manner, or if Borrower reorganizes, modifies its structure or transfers the Project as a
portion of its assets without the written consent of or otherwise approved by the City. This loan
is not assumable without the prior written approval of the City, except by an affiliate of Eden
Housing, Inc. Neither acceptance by the City of the payments provided for herein nor any failure
by the City to pursue its legal and equitable remedies upon default shall constitute a waiver of
the City's right to require prompt payments when due of all principal and interest, if any, owing
or to declare a default and exercise all of its rights under this Note, the Deed of Trust, Regulatory
Agreement, and Development Agreement.
8. Prepayment. I3orrower shall have the right to prepay without penalty all or any
part of the obligation evidenced by this Note.
9. Nonrecourse Obligation. Except as expressly provided in the second paragraph of
this section 9, the Borrower, the Borrower's officers, directors, partners, employees and agents,
shall not have any direct or indirect personal liability for payment of the principal of, or interest,
if any, on this Note or the performance of the covenants of the "Trustor under the Deed of Trust
securing this Note. The sole recourse of the City with respect to the principal of, or interest, if
any, on this Note and defaults by the Borrower in the performance of its covenants under the
Deed of Trust shall be to the property securing the indebtedness evidenced by this Note. No
judgment, or execution thereon, entered in any action, legal or equitable, on this Note or the
Deed of Trust shall be enforced personally against the Borrower, its officers, directors, partners,
employees or agents, but may be enforced only against the property described in the Deed of
Trust and such other or further security as, from time to time, may be hypothecated for this Note;
provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or
impair the enforcement against all such security for this Note by the City, or (b) be deemed in
any way to impair the right of the City to assert the unpaid principal amount of this Note as
demand for money within the meaning and intendment of Section 431.70 of the California Code
of Civil Procedure or any successor provision thereto.
The foregoing limitation of liability is intended to apply only to the obligation for the
repayment of the principal of, and payment of interest, if any, on this Note and the performance
of Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing
contained herein is intended to relieve the I3orrower of personal liability for (1) fraud or willful
misrepresentation; (2) the failure to pay taxes, assessments or other charges which may create
[lens on the Property that are payable or applicable prior to any foreclosure under the Deed of
Trust (to the full extent of such taxes, assessments or other charges); (3) the fair market value of
any personal property or fixtures removed or disposed of by Borrower other than in accordance
with the Deed of Trust; (4) the misapplication of any proceeds under any insurance policies or
awards resulting from condemnation or the exercise of the power of eminent domain or by
reason of damage, loss or destruction to any portion of the Property; (5) the Borrower's
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 4
indemnification obligations, if any, under the Development Agreement; and (6) payment to the
City or any senior lender any rental income or other income arising with respect to the Property
received by the Borrower and not applied in accordance with the Deed of Trust or Development
Agreement or other Project loan documents evidencing other Project loans approved by the City,
after the City has given notice to the Borrower of the occurrence of an Event of Default.
10. Assignment. The City's rights under this Note may be assigned by the City in its
sole discretion.
1 I. No Offset. The Borrower hereby waives any rights of offset it now has or may
hereafter liave against the City, its successors and assigns, and agrees to make the payments
called for herein in accordance with the terms of this Note.
TIENDA DRIVE SENIOR APARTMENTS, L.P., a California
limited partnership
By: Tienda Drive Senior Apartments LLC, its General Partner
By: Eden Investments, Inc., its sole Member/Manager
By:
Linda Mandolini, President
Approved as to form:
City of Lodi, a California municipal corporation
!BY
Janice D. Magdich, City Attorney
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 5
North American Title Company
Escrow No. 54605-1032123-10
RECORDING REQUESTED IRY
AND WHEN RECORDED MAIL. TO:
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE § 27383
APN 027-410-24 & 027-410-25
Space above this line for Recorder's use.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(Construction and Permanent)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING ("Deed of Trust") is made as of March 2, 2016, by Tienda Drive Senior
Apartments, LP., a California limited partnership ("Trustor") to North American Title Company as
trustee ("Trustee"), for the benefit of the City of Lodi, a California municipal corporation
("Beneficiary").
RECITALS
A. Trustor owns fee simple title to the land commonly identified as 2245 and 2255
Tienda Drive in the City of Lodi, San Joaquin County, California, more particularly described in
Exhibit A attached hereto and incorporated herein by this reference (the "Land"). Trustor
intends to construct, own and operate an affordable senior residential development on the Land
(the "Project" or "Improvements").
13. Beneficiary and Trustor have entered into a Development Agreement (defined in
that Memorandum of Development Agreement dated as of March 2, 2016 and recorded
concurrently herewith), pursuant to which Beneficiary has agreed to provide a loan to Trustor in
the amount of Four Hundred Ninety -Four Thousand Five Hundred Thirty -Six Dollars
($494,536.00) (the "Loan") for the purpose of assisting with the financing of the Project. To
evidence Trustor's obligation to repay the Loan, "Trustor has delivered to Beneficiary a
Promissory Note dated as of March 2, 2016, in the original principal amount of $494,536.00 (the
"Note").
C. As a condition precedent to the making of the Loan, Beneficiary has required that
Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien
and security interest in the Property (defined below) to secure repayment of the Note and
performance of Trustor's obligations under the Loan Documents (defined below).
Tienda City Deed of Trust $494,536 Loan
rev 2,18.16 Final
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, it is agreed as follows.
1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment
and performance of the Secured Obligations defined and described in Section 2, Trustor hereby
irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the
benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title
and interest which Trustor now has or may later acquire in and to the Land, and all of the
following, whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or
constructed on the Land ("Improvements" or "Project");
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires
and other rights used in connection with the Land or the Improvements or as a means of access
thereto, whether now or hereafter owned or constructed or placed upon or in the Land or
improvements and all existing and future privileges, rights, franchises and tenements of the
Land, including all minerals, oils, gas and other commercially valuable substances which may be
in, under or produced from any part of the Land, and all water rights, rights of way, gores or
strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or
adjoining the Land and Improvements (collectively, "Appurtenances");
c. All machinery, equipment, fixtures, goods and other personal property of the
Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or
hereafter located at or used in connection with the Land, the Improvements or Appurtenances,
and all improvements, restorations, replacements, repairs, additions or substitutions thereto
(collectively, "Equipment");
d. All existing and future leases, subleases, licenses, and other agreements relating to
the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases"),
all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other
payments which may now or hereafter accrue or otherwise become payable thereunder to or for
the benefit of Trustor, including but not limited to security deposits (collectively, "Rents");
e. All insurance proceeds and any other proceeds from the Land, improvements,
Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made
with or other security deposits given to utility companies, all claims or demands relating to
insurance awards which the Trustor now has or may hereafter acquire, including all advance
payments of insurance premiums made by Trustor, and all condemnation awards or payments
now or later made in connection with any condemnation or eminent domain proceeding
("Proceeds");
f. All revenues, income, rents, royalties, payments and profits produced by the
Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired
by Trustor ("Gross Revenues");
g. All architectural, structural and mechanical plans, specifications, design
documents and studies produced in connection with development of the Land and construction of
the Improvements (collectively, "Plans"); and
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final
2
h. All interests and rights in any private or governmental grants, subsidies, loans or
other financing provided in connection with development of the Land and construction of the
Improvements (collectively, "Financing").
All of the above -referenced interests of Trustor in the Land, Improvements, Project,
Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as
hereby conveyed to Trustee or made subject to the security interest herein described are
collectively referred to herein as the "Property." The Property shall not include the Operating
Reserve funded under the partnership agreement of Trustor.
2, Obligations Secured. This Deed of Trust is given for the purpose of securing payment
and performance of the following (collectively, the "Secured Obligations"): (1) all present and
future indebtedness evidenced by the Note and any amendment and/or restatement thereof,
including principal, interest and all other amounts payable under the terms of the Note; (ii) all
present and future obligations of Trustor to Beneficiary under the Loan Documents (defined
below); (iii) all additional present and future obligations of Trustor to Beneficiary under any
other agreement or instrument acknowledged by Trustor (whether existing now or in the future)
which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations
of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or
extensions of any of the foregoing, whether evidenced by new or additional documents; and (v)
reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's
interests under this Deed of Trust or any other Loan Document as such may be modified,
supplemented, amended, renewed or extended. The Note, the Development Agreement, this
Deed of Trust, and the Regulatory Agreements and Declaration of Restrictive Covenants dated of
even date herewith that shall be recorded concurrently herewith against the Land for the benefit
of Beneficiary, and any and all amendments, restatements, modifications and extensions of any
of the foregoing are hereafter collectively referred to as the "Loan Documents."
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely,
presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue,
income and proceeds of the Property. This is an absolute assignment and not an assignment for
security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents,
royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to
any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary
may terminate such license without notice to or demand upon Trustor and without regard to the
adequacy of any security for the indebtedness hereby secured, and may either in person, by
agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property
or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including .
those past due and unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such
order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits,
revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary
takes possession of the Property. The entering upon and taking possession of the Property, the
collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not
cure or waive any default or notice of default hereunder or invalidate any act done pursuant to
such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the
Property and/or is collecting and applying Rents as permitted under this Deed of Trust,
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 3
Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every
right and remedy afforded any of then under this Deed of Trust and at law or in equity,
including the right to exercise the power of sale granted hereunder. Regardless of whether or not
Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements,
Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for
performing any obligation of Trustor under any Lease, shall not be liable in any manner for the
Property, or the use, occupancy, enjoyment or operation of any part of it unless due to the willful
misconduct or gross negligence of Beneficiary, and shall not be responsible for any waste
committed by 'Trustor, lessees or any third parties, or for dangerous or defective condition of the
Property or any negligence in the management, repair or control of the Property. Absent
Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period
exceeding one month.
4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the
Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The
parties acknowledge that some of the Property may be determined under applicable law to be
personal property or fixtures. To the extent that any Property may be or be determined to be
personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security
interest in all such Property to secure payment and performance of the Secured Obligations. This
Deed of Trust constitutes a security agreement under the California Uniform Commercial Code,
as amended or recodified from time to time (the "UCC"), covering all such Property. To the
extent such Property is not real property encumbered by the lien granted above, and is not
absolutely assigned by the assignment set forth above, it is the intention of the parties that such
Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for
the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be
modified or supplemented) of the Land and improvements.
5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes
Beneficiary, as secured party, to file such financing statements and amendments thereof and such
continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and
preserve Beneficiary's security interest in the Property and Rents, without requiring any signature
or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and
costs that Beneficiary may incur in filing such documents in public offices and in obtaining such
record searches as Beneficiary may reasonably require. If any financing statement or other
document is filed in the records normally pertaining to personal property, that filing shall not be
construed as in any way derogating from or impairing this Deed of Trust or the rights or
obligations of the parties under it.
Everything used in connection with the Property and/or adapted for use therein and/or which is
described or reflected in this Deed of Trust is, and at all times and for all purposes and in all
proceedings both legal or equitable shall be regarded as part of the estate encumbered by this
Deed of Trust irrespective of whether (i) any such item is physically attached to the
Improvements, (ii) serial numbers are used for the better identification of certain equipment
items capable of being thus identified in a recital contained herein or in any list filed with
Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so
filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the
proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain
proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present
Ticnda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 4
or future lease or rights to income growing out of the use and/or occupancy of the property
conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way
altering any of the rights of Beneficiary as determined by this instrument or impugning the
priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention
in any financing statement is declared to be solely for the protection of Beneficiary in the event
any court or judge shall at any time hold, with respect to the matters set forth in the foregoing
clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be
effective against a particular class of persons, including but not limited to the federal government
and any subdivisions or entity of the federal government.
6. f=ixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing
pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is
being recorded as a fixture financing statement and filing under the UCC, and covers property,
goods and equipment which are or are to become fixtures related to the Land and the
Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real
estate records of San Joaquin County and shall also operate from the date of such filing as a
fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This
Deed of Trust shall also be effective as a financing statement covering minerals or the like
(including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to
be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under
the UCC.
7. Trustor's Representations; Warranties and Covenants; Rights and Duties of the Parties.
7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor
lawfully possesses and holds a fee simple interest in the Land and the Improvements when
constructed or installed, (ii) Trustor has good and marketable title to all of the Property; (iii)
other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and
authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of
record and senior liens permitted pursuant to the Loan Documents as shown on the title policy
approved by Beneficiary or otherwise approved in writing by Beneficiary ("Permitted
Encumbrances"), this Deed of `frust creates a valid lien on Trustor's entire interest in the
Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and
clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional
sales contracts, (vi) there is no financing statement affecting the Property on file in any public
office other than as disclosed in writing to Beneficiary or with respect to the financing of the
Property as shown on the title policy approved by Beneficiary; and (vii) the correct address of
Trustor's principal office is specified in Section 10.2,
7.2 Condition of Property. Trustor represents and warrants that except as disclosed to
Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any
governmental authority of any threatened or pending zoning, building, fire, or health code
violation or violation of other governmental regulations concerning the Property that has not
previously been corrected, and no condition on the Land violates any health, safety, fire,
environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii)
no contracts, licenses, leases or commitments regarding the maintenance or use of the Property
or allowing any third party rights to use the Property are in force; (iii) there are no threatened or
pending actions, suits, or administrative proceedings against or affecting the Property or any
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 5
portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending
condemnation, eminent domain, or similar proceedings affecting the Property or any portion
thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which
have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any
part thereof that could result in a material and adverse change in the condition of the Land; (vii)
all information that Trustor has delivered to Beneficiary, either directly or through Trustor's
agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to
Beneficiary all material facts concerning the Property.
7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other
documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly
authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do
not violate the provisions of any agreement to which Trustor is a party or which affects the
Property. Trustor further represents and warrants that there are no pending, or to Trustor's
knowledge, threatened actions or proceedings before any court or administrative agency which
may adversely affect Trustor's ownership of the Property.
7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay
when due the principal and any interest due on the indebtedness evidenced by the Note, and shall
promptly pay and perform all other obligations of Trustor arising in connection with the Secured
Obligations or the Loan Documents in accordance with the respective terms thereof.
7.5 Use of Loan Proceeds; Preservation and Maintenance of Property; Compliance
with Laws. "Trustor covenants that it shall use the Loan Proceeds solely for purposes authorized
by the Loan Documents. Trustor covenants that it shall keep the Land and improvements in good
repair and condition, and from time to time shall make necessary repairs, renewals and
replacements thereto so that the Property shall be preserved and maintained. Trustor covenants
to comply with all federal, state and local laws, regulations, ordinances and rules applicable to
the Property and the Project, including without limitation all applicable requirements of state and
local building codes and regulations, and all applicable statutes and regulations relating to
accessibility for the disabled. Trustor shall not remove, demolish or materially alter any
Improvement without Beneficiary's consent, shall complete or restore promptly and in good and
workmanlike manner any building, fixture or other improvement which may be constructed,
damaged, or destroyed thereon, and shall pay when due all claims for labor performed and
materials furnished therefor. Trustor shall use the Land and the Improvements solely for
purposes authorized by the Loan Documents, shall not commit or allow waste of the Property,
and shall not commit or allow any act upon or use of the Property which would violate any
applicable law or order of any governmental authority, nor shall Trustor bring on or keep any
article on the Property or cause or allow any condition to exist thereon which could invalidate or
which would be prohibited by any insurance coverage.required to be maintained on the Property
pursuant to the Loan Documents,
7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event
of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned,
conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the Loan
Documents or if any other Transfer (as defined in the Assignment and Amendment of that
Purchase and Development Agreement) occurs in violation of the Loan Documents. If any such
Transfer shall occur in violation of such requirements, without limiting the provisions of
"I ienda City Deed of "frust $494,536 Loan
rev 2.18.16 Final 6
Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates
of such obligations, shall at the option of Beneficiary, and without demand, immediately become
due and payable, subject to any applicable cure period.
7.7 Inspections: Books and Records. Beneficiary and its agents and representatives
shall have the right at any reasonable time upon reasonable notice to Trustor to enter upon the
Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall
maintain complete and accurate books of account and other records (including copies of
supporting bills and invoices) adequate to document the use of the Loan Proceeds and the
operation of the Property, together with copies of all written contracts, Leases and other
Instruments which affect the Property. The books, records, contracts, Leases and other
instruments shall be subject to examination and inspection by Beneficiary at any reasonable time
following two business days prior notice.
7.8 Chartres, Liens, 'Taxes and Assessments. 'Trustor shall pay before delinquency all
taxes, levies, assessments and other charges affecting the Property that are (or if not paid may
become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the
validity or application of any tax, levy, assessment or charge affecting the Property by
appropriate legal proceedings promptly initiated and conducted in good faith and with due
diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any
part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such
contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably
be required from time to time by Beneficiary; and provided further that Trustor shall timely
make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.
7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances,
whether released of record or not, which are discharged in whole or in part by Beneficiary in
accordance with this Deed of Trust.
7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the
term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property
now existing or hereafter located on the Property insured against loss by fire, vandalism and
malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall
be written on a full replacement value basis and shall name Beneficiary as loss payee as its
interest may appear. The full replacement value of the improvements to be insured shall be
determined by the company issuing the policy at the time the policy is initially obtained. Not
more frequently than once every two (2) years, either the "Trustor or the Beneficiary shall have
the right to notify the other party that it elects to have the replacement value redetermined by the
insurance company. Subject to the rights of any senior lienholder, the proceeds collected under
any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in
such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so
collected or any part thereof may be released to Trustor. Such application or release shall not
cure or waive any default or notice of default hereunder or invalidate any act done pursuant to
such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is
not in default under any I.,oan Document, Trustor shall be permitted to use the proceeds of
insurance to rebuild the Improvements.
'I'ienda City Deed of "frust $494,536 Loan
rev 2.18.16 Final 7
7.10.1 Trustor shall at all times during the term hereof, maintain a comprehensive
general liability insurance policy in an amount not less than One Million Dollars ($1,000,000)
each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three
Million Dollars ($3,000,000) excess liability coverage or such other policy limits as Beneficiary
may require in its reasonable discretion, including coverage for bodily injury, property damage,
products, completed operations and contractual liability coverage, Such policy or policies shall
be written on an occurrence basis and shall name the Beneficiary as an additional insured.
Trustor shall maintain workers' compensation insurance as required by law.
7.10.2 Trustor shall file with Beneficiary prior to the commencement of the term
hereof, certificates (or such other proof as Beneficiary may require, including without limitation,
copies of the required insurance policies) evidencing each of the insurance policies and
endorsements thereto as required by this Section, and such certificates (or policies) shall provide
that at least thirty (30) days' prior written notice shall be provided to Beneficiary prior to the
expiration, cancellation or change in coverage under each such policy.
7.10.3 If any insurance policy required hereunder is canceled or the coverage
provided thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of written
notice of such cancellation or reduction in coverage, but in no event later than the effective date
of cancellation or reduction, file with Beneficiary a certificate showing that the required
insurance has been reinstated or provided through another insurance company or companies.
Upon failure to so file such certificate, Beneficiary may, without further notice and at its option,
procure such insurance coverage at Trustor's expense, and `Trustor shall promptly reimburse
Beneficiary for such expense upon receipt of billing from Beneficiary.
7.10.4 The insurance policies required hereunder shall be issued by insurance
companies authorized to do business in the State of California with a financial rating of at least
"A ViI" status as rated in the most recent edition of A.M, Best Ratings Guide. Each policy of
insurance shall contain an endorsement requiring the insurer to provide at least thirty (30) days
written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof. If
any insurance policy required pursuant to the Loan Documents is canceled or the coverage
provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice
of such cancellation or reduction in covet -age, but in no event later than the effective date of
cancellation or reduction, file with Beneficiary a certificate showing that the required insurance
has been reinstated or provided through another insurance company or companies. Upon failure
to so file such certificate, Beneficiary may, without further notice and at its option, procure such
insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for
such expense upon receipt of billing from Beneficiary.
7.11 Hazardous Materials. 'Trustor represents and warrants that except as disclosed to
Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is
free and has always been free of Hazardous Materials (as defined below) and is not and has
never been in violation of any Environmental Law (as defined below); (ii) there are no buried or
partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning,
notice of violation, administrative complaint, judicial complaint, or other formal or informal
notice alleging that conditions on the Land are or have ever been in violation of any
Environmental Law or informing Trustor that the Land is subject to investigation or inquiry
regarding Hazardous Materials on the Land or the potential violation of any Environmental Law;
Tienda_City Deed of Trust $494,536 Loan
rev 2.18.16 Final 8
(iv) there is no monitoring program required by the Environmental Protection Agency or any
other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or
substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land,
whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any
other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has
disclosed to Beneficiary all information, records, and studies in Trustor's possession or
reasonably available to Trustor relating to the Land concerning 1-lazardous Materials.
Trustor shall not cause or permit any Hazardous Material (as defined below) to be
brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents,
employees, contractors or invitees except for incidental supplies ordinarily used in connection
with the construction, rehabilitation, repair, and operation of residential developments and in
compliance with all applicable laws, and shall not cause any release of Hazardous Materials into,
onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or
spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent
property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or
from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to
comply with all Environmental Laws (as defined below).
To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel
reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed
officials, officers, agents and employees (collectively, "Indemnitees") harmless from and against
any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or
other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses,
and other professionals advising or assisting Beneficiary), action, or cause of action (all of the
foregoing, hereafter individually "Clain" and collectively "Claims") arising in connection with
the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise
arising in connection with the presence or release of Hazardous Materials in, on, under, or from
the Property. The foregoing indemnity includes, without limitation, all costs of investigation,
assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials,
all costs of determining whether the Land is in compliance with Environmental Laws, all costs
associated with bringing the Land into compliance with all applicable Environmental Laws, and
all costs associated with claims for damages or injury to persons, property, or natural resources.
Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and
expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any Indemnitee
or Indemnitees in any legal or administrative proceeding incident to any matters against which
lndeninitees are entitled to be indemnified under this Deed of Trust;
b. reimburse Indemnitees for any expenses paid or incurred in connection with any
matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and
c. reimburse Indemnitees for any and all expenses, including without limitation out-
of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection
with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring
and participating in any legal or administrative proceeding.
Tienda City Deed ofTnist $494,536 Loan
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Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any
of the following, or by any failure of Trustor to receive notice of or consideration for any of the
following: (i) any amendment or modification of any Loan Document; (ii) any extensions of
time for performance required by any Loan Document; (iii) any provision in any of the Loan
Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or
limiting the personal liability of "Trustor, or any other party for payment of all or any part of the
Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by
"Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v)
the release of Trustor or any other person, by Beneficiary or by operation of law, from
performance of any obligation under any Loan Document; (vi) the release or substitution in
whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to
properly perfect any lien or security interest given as security for the Secured Obligations.
The provisions of this Section 7.1 I shall be in addition to any and all other obligations
and liabilities that Trustor may have under applicable law, and each lndemnitee shall be entitled
to indemnification under this Section without regard to whether Beneficiary or that Indemnitee
has exercised any rights against the Properly or any other security, pursued any rights against any
guarantor or other party, or pursued any other rights available under the Loan Documents or
applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall
survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any
foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the
lien of this Deed of Trust.
Without limiting any of the remedies provided in this Deed of Trust, Trustor
acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental
provision (as defined in Section 736(0(2) of the California Code of Civil Procedure) made by
Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's
failure to comply with any of the Environmental Provisions will be a breach of contract that will
entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of
Civil Procedure ("Section 736") for the recovery of damages and for the enforcement of the
Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of
damages or enforcement of the Environmental Provisions shall not constitute an.action within
the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money
judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b,
580d, or 726(b) of the California Code of Civil Procedure.
"Hazardous Materials" means any substance, material or waste which is or becomes
regulated by any federal, state or local governmental authority, and includes without limitation
(i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos
and any material containing asbestos; (iii) any substance, material or waste regulated by or listed
(directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste",
"toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant"
in or pursuant to, or similarly identified as hazardous to human health or the environment in or
pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the
Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section
9601, et seq.], the hazardous Materials Transportation Authorization Act [49 U.S.C. Section
5101, el seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.},
the Federal Water Pollution Control Act [33 U.S.C. Section 1251b the Clean Air Act [42 U.S.C.
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 10
Section 7401, el seq.], the California Underground Storage of Hazardous Substances Act
[California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances
Account Act [California Health and Safety Code Section 25300, et seq.], the California
Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California
Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section
25249.5, et seq.], and the Porter -Cologne Water Quality Control Act [California Water Code
Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations
promulgated thereunder; (iv) any substance, material or waste which is defined as such or
regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other
substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated
under any other federal, state or local environmental law, including without limitation, asbestos,
polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products.
"Environmental Law" means all federal, state or local statutes, ordinances, rules,
regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions
of permits, licenses and other operating authorizations regulating, or relating to, or imposing
liability or standards of conduct concerning (i) pollution or protection of the environment,
including natural resources; (ii) exposure of persons, including employees and agents, to any
1-Iazardous Material (as defined above) or other products, raw materials, chemicals or other
substances; (iii) protection of the public health or welfare from the effects of by-products,
wastes, emissions, discharges or releases of chemical substances from industrial or commercial
activities; (iv) the manufacture, use or introduction into commerce of chemical substances,
including without limitation, their manufacture, formulation, labeling, distribution,
transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or
hazardous substances or I-lazardous Materials or the remediation of air, surface waters,
groundwaters or soil, as now or may at any later time be in effect, including but not limited to the
Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental
Response, Compensation and Liability Act [42 U.S,C. Section 9601, et seq.], the Hazardous
Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource
Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control
Act [33 U.S.C. Section 12511, the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California
Underground Storage of Hazardous Substances Act [California Health and Safety Code Section
25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety
Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety
Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act
[California Health and Safety Code Section 25249,5, et seq.], and the Porter -Cologne Water
Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are
hereafter amended, together with any regulations promulgated thereunder.
7.12 Notice of Claims; Defense of Security: Reimbursement of Costs.
a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any
uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or
property damage in excess of an aggregate of Fifty Thousand Dollars (550,000) within five (5)
business days of the occurrence of such Toss. Trustor shall use its best efforts to ensure that
Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any
other financing document or other lien affecting the Property and shall use best efforts to ensure
that provisions mandating such notice and allowing such right to cure shall be included in all
'fienda City Deed of Trust $494,536 Loan
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11
such documents. Within three (3) business days of Trustor's receipt thereof, Trustor shall
provide Beneficiary with a copy of any notice of default Trustor receives in connection with any
financing document secured by the Property or any part thereof.
b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and
defend the Property and title to and right of possession of the Property, the security of this Deed
of Trust and the rights and powers of Beneficiary and Trustee created under it, against all
adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable
fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or
Trustee may render in connection with this Deed of Trust, including without limitation, fees and
expenses related to provision of a statement of obligations or related to a reconveyance. Trustor
further agrees to pay or reimburse .Beneficiary for all costs, expenses and other advances which
may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this
Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or
Trustee or both of them under Sections 7.18 and .8.2, whether or not any lawsuit is filed, or in
defending any action or proceeding arising under or relating to this Decd of Trust, including
reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the
power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title.
d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any
change in the address of Trustor and the location of any property, including books and records
pertaining to the Property.
7.13 Indemnification. Trustor- shall indemnify, defend (with counsel reasonably
acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in
Section 7.1 1) from and against all Claims arising directly or indirectly in any manner in
connection with or as a result of (a) any breach of Trustor's covenants under any Loan
Document, (b) any representation by Trustor in any Loan Document which proves to be false or
misleading in any material respect when made, (c) injury or death to persons or damage to
property or other loss occurring on the Land or in any improvement located thereon, whether
caused by the negligence or any other act or omission of Trustor or any other person or by
negligent, faulty, inadequate or defective design, building, construction or maintenance or any
other condition or otherwise, (d) any claim, demand or cause of action, or any action or other
proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates
to or arises out of the Property, or any Loan Document or any transaction contemplated thereby,
or any failure of Trustor to comply with all applicable state, federal and local laws and
regulations applicable to the Property, provided that no Indemnitee shall be entitled to
indemnification under this Section for matters caused by such Indemnitee's gross negligence or
willful misconduct. The obligations of Trustor under this Section shall survive the repayment of
the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision
contained herein, the obligations of Trustor under this Section shall survive any foreclosure
proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or
reconveyance of this Deed of Trust.
7.14. Limitation of Liabiiit' . Beneficiary shall not be directly or indirectly liable to
Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise
'fienda.__City Deed of "frust $494,536 Loan
rev 2.18.16 Final 12
of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of
Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of
Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste
committed by Trustor, the lessees of the Property or any third parties, or any dangerous or
defective condition of the Property; or (iv) any loss sustained by Trustor or any third party
resulting from any act or omission of Beneficiary in managing the Property after an Event of
Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of
Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in
this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing
against Beneficiary.
7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior
lienholders, any award of damages in connection with any condemnation for public use of, or
injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who
may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may
determine, or at the option of Beneficiary the entire amount so collected or any part thereof may
be released to Trustor. Such application or release shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the
foregoing, so long as the value of Beneficiary's lien is not impaired, insurance and/or
condemnation proceeds shall he used to repair and/or restore the Project.
7.16 Release, Extension. Modification. At any time and from time to time, without
liability therefor and without notice, upon written request of Beneficiary and presentation of this
Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of
the Property, consent to the making of any map or plat of the Land or part thereof, join in
granting any easement or creating any restriction affecting the Property, or join in any extension
agreement or other agreement affecting the lien or charge hereof. At any time and from time to
time, without liability therefor and without notice, Beneficiary may (i) release any person liable
for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the
terms of payment of any Secured Obligation; (iii) accept additional real or personal property of
any kind as security for any Secured Obligation, or (iv) substitute or release any property
securing the Secured Obligations.
7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured
Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note,
Trustee shall reeonvey, without warranty, the Property or so much of it as is then held under this
Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any
matters or facts shall be conclusive proof of the truthfulness thereof, Trustor shall pay all fees of
Trustee and all recordation fees related to such reeonveyance.
7.18 Cure Protection of Security. Either Beneficiary or Trustee may cure any breach
or default of "Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or
Trustee may also enter the Property and/or do any and all other things which it may in its sole
discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such
other things may include: appearing in and/or defending any action or proceeding which purports
to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of
Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim
of lien which in Beneficiary's or Trustee's sole judgment is or may he senior in priority to this
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 13
Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary,
Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance
required to be carried hereunder; otherwise caring for and protecting any and all of the Property;
and/or employing counsel, accountants, contractors and other appropriate persons to assist
Beneficiary or Trustee. Beneficiary and "Trustee may take any of the actions permitted under this
Section 7A 8 either with or without giving notice, except for notices required under applicable
law or under the Loan Documents, Any amounts disbursed by Beneficiary pursuant to this
paragraph shall become additional indebtedness secured by this Deed of Trust,
7.19 Limited Partner's Right to Core. Trustor's limited partner shall have the right to
cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor.
Beneficiary shall provide any notice of default hereunder to the limited partner at the address set
forth in Exhibit B attached hereto concurrently with the provision of such notice to Trustor, and
as to the limited partner, the cure periods specified herein shall commence upon the date of
delivery of such notice in accordance with Section 10.2. See additional Limited partner required
provisions set forth in Exhibit 13 attached hereto and incorporated by this reference herein and
made a part hereof.
8. Default and Remedies,
8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default
shall occur under this Deed of Trust upon the occurrence of any one or more of the following
events:
a. Beneficiary's declaration of an Event of Default under any Loan
Document, subject to the expiration of any applicable cure period set forth in such document;
b. Trustor fails to perform any monetary obligation which arises under this
Deed of Trust, and does not cure that failure within ten (10) days following written notice from
Beneficiary or Trustee;
c. If Trustor's interest in the Property or any part thereof is voluntarily or
involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of
Section 7.6 hereof or if any other Transfer occurs in violation of the Assignment and
Amendment of that Purchase and Development Agreement and Trustor fails to rescind such
conveyance or otherwise cure such breach within the time period specified in paragraph j below;
d. Trustor fails to maintain the insurance coverage required hereunder or
otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure
such default within the applicable time specified in Section 7.10;
e. Subject to Trustor's right to contest such charges as provided herein,
Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any
other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure
such default within ten (10) days.
f. Any representation or warranty of Trustor contained in or made in
connection with the execution and delivery of this Deed of Trust or in any certificate or
i'ienda Cily Deed of Trust $494,536 Loan
rev 2.18.16 Final 14
statement furnished pursuant hereto or in any other Loan Document proves to have been false or
misleading in any material adverse respect when made;
g. lf, pursuant to or within the meaning of the United States Bankruptcy
Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy
Law"), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii)
consents to the entry of an order for relief against Trustor or any general partner thereof in an
involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or
similar official for Trustor or any general partner thereof; (iv) makes an assignment for the
benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
h. If a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an
involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for
Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the
liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ,
warrant of attachment or similar process against the Property or the Project or any part thereof,
and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60
days after its issuance.
1. The holder of any other debt instrument secured by a mortgage or deed of
trust on the Property or part thereof declares an event of default thereunder and exercises a right
to declare all amounts due under that debt instrument immediately due and payable, subject to
the expiration of any applicable cure period set forth in such holder's documents; or
j. Trustor fails to perform any obligation arising under this Deed of Trust
other than one enumerated in this Section 8,1„ and does not cure that failure either within ten (10)
days after written notice from Beneficiary or Trustee in the event of a monetary default, or
within thirty (30) days after such written notice in the event of a nonmonetary default, provided
that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot
reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if
Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such
cure to completion with due diligence and in good faith and in no event later than sixty (60) days
following receipt of notice of default or such longer period as Beneficiary may allow.
8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein
and the limited recourse provisions set forth in the Note, at any time after an Event of Default,
Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies
described below, and may exercise any one or more or all, of the remedies set forth in any Loan
Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's
rights and remedies shall be cumulative, and the exercise of any one or more of them shall not
constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred
in pursuing the remedies provided hereunder, including without limitation reasonable attorneys'
fees and costs.
a. Acceleration. Beneficial.), may declare any or all of the Secured
Obligations, including without limitation all sums payable under the Note and this Deed of Trust,
to be due and payable immediately.
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 15
b. Receiver. Beneficiary may apply to any court of competent jurisdiction
for, and obtain appointment of, a receiver for the Property.
c. I;ntty_ Beneficiary, in person, by agent or by court-appointed receiver,
may enter, take possession of, manage and operate all or any part of the Property, and may also
do any and all other things in connection with those actions that Beneficiary may in its sole
discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such
other things may include: taking and possessing copies of all of Trustor's or the then owner's
books and records concerning the Property; entering into, enforcing, modifying, or canceling
Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting
tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to
Trustor; completing any unfinished construction; and/or contracting for and making repairs and
alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been
removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor
hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform
such acts and execute such documents as Beneficiary in its sole discretion may consider to be
appropriate in connection with taking these measures, including endorsement of Trustor's name
on any instruments,
d. UCC Remedies. Beneficiary may exercise any or all of the remedies
granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of
competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for
foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the
covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall
have the discretionary right to cause some or all of the Property, including any Property which
constitutes personal property, to be sold or otherwise disposed of in any combination and in any
manner permitted by applicable law.
8.3 Power -of Sale. If Beneficiary elects to invoke the power of sale hereby granted,
Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of
its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such
notice to be recorded in the office of the Recorder of each County wherein the Property or some
part thereof is situated as required by law and this Deed of Trust.
Prior to publication of the notice of sale, I3enefiiciary shall deliver to Trustee this Deed of
Trust and the Note or other evidence of indebtedness which is secured hereby, together with a
written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions
of law and this Deed of Trust.
Notice of sale having been given as then required by law, and not less than the time then
required by law having elapsed after recordation of such notice of default, Trustee, without
demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale,
either as a whole or in separate parcels and in such order as it may determine, at public auction to
the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee
may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 3.6
. 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 and place fixed by the preceding
postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby created,
including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of
sale to payment of all suras advanced or expended by Beneficiary or Trustee under the terms
hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or
persons legally entitled thereto.
Without limiting the generality of the foregoing, Trustor acknowledges and agrees that
regardless of whether or not a default has occurred hereunder, if an Event of Default has
occurred under the Loan Documents, and if in connection with such Event of Default
Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled
to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of
any sale of the Property in connection with such foreclosure shall be used to pay all Secured
Obligations, including without limitation, the outstanding principal balance and all other
amounts due under the Note,
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid
for and acquire the Property or any part of it to the extent permitted by then applicable law.
Instead of paying cash for such property, Beneficiary may settle for the purchase price by
crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of
sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse
Beneficiary or Trustee under Section 7.12(c); and
b. Second, the remaining balance of all other Secured Obligations in any
order and proportions as Beneficiary in its sole discretion may choose.
8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the
sums secured by this Deed of Trust, 'Trustor shall have the right to have any proceedings begun
by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five (5) days
before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any
time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all
sums which would be then due under the Loan Documents if the Secured Obligations had no
acceleration provision; (b) Trustor cures all preaches of any other covenants or agreements of
Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by
Beneficiary and Trustee in enforcing the covenants and agreements of "Trustor contained in this
Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein,
including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as
Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's
interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust
shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the
'11enda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 17
obligations secured hereby shall remain in full force and effect as if no acceleration had
occurred.
9. Trustors Waivers. To the fullest extent permitted by law, Trustor waives: (a) all
statutes of limitations as a defense to any action or proceeding brought against Trustor by
Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing
for any appraisemcnt, valuation, stay, extension, redemption or moratorium; (c) all rights of
marshalling in the event of foreclosure; and (d) all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance
of this Deed of Trust and of the existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind.
10. Miscellaneous Provisions.
10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary
and contain further agreements and affirmative and negative covenants by Trustor which apply
to this Deed of Trust and the Property.
10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be
mailed to "Trustor at the address set forth below. That address is also the mailing address of
Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for
Beneficiary as secured party under the UCC. Except for any notice required under applicable
law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be
made in writing, and sent to the parties at their respective addresses specified below or to such
other address as a party may designate by written notice delivered to the other parties in
accordance with this Section. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon
receipt;
b. certified or registered mail, return receipt requested, in which case notice
shall be deemed delivered two (2) business days after deposit, postage prepaid in the United
States mail;
c. nationally recognized overnight courier, in which case notice shall be
deemed delivered one (1) day after deposit with such courier; or
d. facsimile transmission, in which case notice shall be deemed delivered on
transmittal, provided that a transmission report is generated reflecting the accurate transmission
thereof.
Beneficiary: City of Lodi
221 West Pine Street
P.O. Box 3006
Lodi, CA 95241-1910
Attention: City Manager
Facsimile: (209) 333-0422
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 18
Trustor:
Tienda Drive Senior Apartments, L.P.
c/o Eden Investments, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention; President
Facsimile: (510) 582-6523
With a copy to Trustor's investor limited partner as set forth in Exhibit 13 attached
hereto.
10.3 I3indina on Successors. The terms, covenants and conditions of this Deed of
Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors,
successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided
however this Section 10.3 docs not waive the provisions of Section 7.6.
10.4 Substitution of Trustee. Beneficiary may from time to time or at any time
substitute a trustee or trustees to execute the trust hereby created, and when any such substitution
has been filed for record in the office of the Recorder of San Joaquin County, it shall be
conclusive evidence of the appointment of such trustee or trustees, and such new trustee or
trustees shall succeed to all of the powers and duties of the Trustee named herein.
10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of
Trust or to enforce any right of Beneficiary or of 'Trustee, Trustor shall pay to Beneficiary and
Trustee all costs of such action or proceeding, including reasonable attorneys' fees.
10.6 Governing Law; Severability: interpretation. This Deed of Trust shall be
governed by the laws of the State of California without regard to principles of conflicts of laws.
Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be
litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction").
The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall
have exclusive jurisdiction over all controversies which shall arise under or in relation to the
Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts
for any such litigation, and waives any other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held
unenforceable or void, that provision shall be deemed severable from the remaining provisions,
and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of
Trust are for convenience only and are not intended to affect the interpretation or construction of
the provisions herein contained. In this Deed of Trust, whenever the context so requires, the
singular number includes the plural.
10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any
obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or
Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to
any act or omission by Trustor shall not be construed as a consent to any other or subsequent act
or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in
any future or other instance. No amendment to or modification of this Deed of Trust shall be
effective unless and until such amendment or modification is in writing, executed by Trustor and
Tienda_City teed of Trust $494,536 Loan
rev 2.18.16 Final 19
Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of
payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary
of its right either to require prompt payment when due of all other sums so secured or to declare
default for failure so to pay.
10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted
under this Agreement, such action shall be in writing, and such action may be given, made or
taken by Beneficiary's City Manager or by any person who shall have been designated by
Beneficiary's City Manager without further approval by the governing board of Beneficiary.
10.9 Joint and Several Liability. If Trustor consists of more than one person or entity,
each shall be jointly and severally liable for the faithful performance of all of Trustor's
obligations under this Deed of Trust.
10.I0 Time is of the Essence. Time is of the essence for each provision of this Deed of
Trust.
10.11 Partial Subordination to Extended Use Agreement. Beneficiary acknowledges that
Trustor and the California Tax Credit Allocation Committee ("CTCAC") intend to enter into an
extended use agreement, which constitutes the extended low-income housing commitment
described in Section 42(h)(6)(B) of the Internal Revenue Code (IRC), as amended. As of the date
hereof, IRC Section 42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other
than for good cause) of an existing tenant of any low-income unit or any increase in the gross rent
with respect to such unit not otherwise permitted under Section 42 for a period of three (3) years
after the date the building is acquired by foreclosure or instrument in lieu of foreclosure. In the
event the regulatory agreement required by CTCAC is recorded against the Property, Beneficiary
agrees to comply with the provisions set forth in IRC Section 42(h)(6)(E)(ii).
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first
written above.
TRUSTOR:
TIENDA DRIVE SENIOR APARTMENTS, L.P.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC, General Partner
By: Eden Investments, Inc., sole member/manager
By:
Linda Mandolini, President
SIGNATURE MUST BE NOTARIZED.
Tienda City Iced of "Trust $494,536 Loan
rev 2.18.16 Final 20
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF ALAMEDA
On
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(is), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
This area for official notarial seal.
Tienda City Deed of Trust 5494,536 Loan
rev 2.18.16 Final 21
Exhibit A
Legal Description of Land
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described as
follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Tienda_City Deed of Trust $494,536 Loan
rev 2.18.16 Final 22
EXHIBIT "B"
INVESTOR LIMITED PARTNER REQUIRED PROVISIONS
This Exhibit 13 is attached to and made a part of the Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing (the "Deed of Trust") executed by Tienda Drive Senior
Apartments, L.P., a California limited partnership (the ""Trustor") for the benefit of the City of
Lodi, a California municipal corporation (the "Beneficiary"), which secures a loan in the amount of
Four Hundred Ninety -Four Thousand Five Hundred Thirty -Six Dollars ($494,536.00) (the
"Loan") made by Beneficiary to Trustor. The Trustor (sometimes referred to in this Exhibit B as
the "Partnership"), through its limited partner, is providing equity for the development of the
Project. The agreement of limited partnership governing the Trustor, as it may be amended and/or
amended and restated from time to time, is referred to herein as the "Partnership Agreement."
Beneficiary and Trustor agree that the following covenants, terms and conditions shall be
part of and shall modify or supplement the "Loan Documents" (defined in Section 2 of the Deed of
Trust), and that in the event of any inconsistency or conflict between the covenants, terms and
conditions of the Loan Documents and this Exhibit 13, the covenants, terms and conditions set forth
below shall control and prevail.
Wells Fargo Affordable Housing Community Development Corporation (together with its
affiliates, successors and assigns, "Limited Partner"), is being admitted as a limited partner of
Trustor and as a condition to becoming a limited partner in the Trustor which benefits Trustor
and Beneficiary, Limited Partner requires that the Beneficiary and Trustor grant certain
protections to Limited Partner under Loan Documents evidencing or securing the Loan.
Beneficiary and Trustor agree to the following provisions, notwithstanding anything to
the contrary set forth in the Loan Documents:
l . For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner, prior to exercising remedies
under the Loan Documents, Beneficiary will give Limited Partner a copy of any written notice it
gives to Trustor under the Loan Documents at the following address:
Wells Fargo Affordable I -lousing Community
Development Corporation, MAC D] 053- 170
301 South College Street, 17th Floor
Charlotte, NC 28288
Attn: Director of Asset Management
With a copy to:
Joel I -1j elmaas, Counsel
Wells Fargo Bank, N.A.
MAC X2401 -06T
1 1 -come Campus, 6th Floor
Des Moines, IA 50328-0001
Tienda City Decd of Trust $494,536 Loan
rev 2.18.16 Final 23
Or such other address that the Limited Partner shall send to Beneficiary in accordance
with Section 12.9 of the Development Agreement (defined in Recital B of the Deed of Trust).
Changes of addresses for Notices and any changes in the Limited Partner or a change to
an entity other than Wells Fargo Affordable Housing Community Development Corporation shall
be effective without an amendment to this Exhibit B, or if an amendment is required by the
Beneficiary, such amendment may be approved by the City Manager or his or her designee, and
such amendment need not be recorded to be effective.
2. Limited Partner shall have the same right as Trustor to cure or remedy any
default hereunder within the cure period provided to "Trustor extended by an additional
sixty (60) days; provided however, if the default is of such nature that the Limited Partner
reasonably determines that it is necessary to replace the general partner of Trustor in order
to cure such default, then the cure period shall be extended until the date sixty (60) days
following the removal of the general partner of "Trustor, and such cure shall be accepted or
rejected on the same basis as if tendered by Trustor.
3. If Limited Partner presents payment or otherwise cures a monetary or non -
monetary default within the cure periods set forth in the Loan Documents, Beneficiary will
accept such action as curing the respective default under the Loan Documents.
4. For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner, Beneficiary agrees that the
Limited Partner may sell, transfer, assign or otherwise dispose of all or any part of its interest in
Trustor to an entity controlled by an affiliate of Wells Fargo Bank, National Association,
without Beneficiary's prior written consent, and such transfer, assignment or other disposition
will not trigger an Event of Default or any due on sale or acceleration provisions under the Loan
Documents.
5. Beneficiary will permit Limited Partner to remove the general partner of Trustor
in accordance with Trustor's partnership agreement, provided that Beneficiary gives its prior
written approval that the substitute general partner is acceptable to Beneficiary in its reasonable
discretion. An affiliate of Wells Fargo Bank, National Association is an acceptable substitute
general partner, and does not require Beneficiary's prior written approval. Such transfers will
not trigger an Event of Default or any due on sale or acceleration provisions under the Loan
Documents.
6. Beneficiary will permit insurance and condemnation proceeds to be used to
rebuild the Project provided that sufficient funds are available from other sources to effectively
rebuild the Project.
7. Beneficiary has not and will not cross -default or cross-collateralize the Loan
with any loan made with respect to another property.
8. Beneficiary will not materially modify the Loan Documents without Limited
Partner's prior written consent.
Tienda City Deed of Trust $494,536 Loan
rev 2.18.16 Final 24
Approved as to
city Aiime
Escrow No. 54605-1032123-10
North American Title Company
CERTIFICATE OF ACCEPTANCE OF DEED OF TRUST
THIS IS TO CERTIFY that this Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
from TIENDA DRIVE SENIOR APARTMENTS, L.P., a California limited partnership, as Trustor, to CITY OF
LODI, a California municipal corporation, as Beneficiary, is hereby accepted pursuant to Resolution No. 2016-
xxx, adopted by the City Council of the City of Lodi on March 3, 2016, and the CITY OF LODI, consents to the
recordation of this Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing by and through
its duly authorized officer.
DATED:
CITY OF LODI, a California municipal corporation
By
STEPHEN SCHWAUABER, City Manager
STATE OF CALIFORNIA
CITY OF
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
On before me, , personally appeared
, who proved to me on the basis of satisfactory evidence to be the person(s)
whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
(SIGNATURE OF NOTARY)
North American Title Company
Escrow No. 54605-1032123-10
Recording Requested by &
When Recorded, return to:
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE § 27383
APN 027-410-24 & 027-410-25
Space above this line for Recorder's use.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Tienda Drive Senior Apartments, 2245 and 2255 Tienda Drive, Lodi, CA)
This Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement")
is dated as of March 2, 2016, by and between the City of Lodi, a California municipal corporation
("City") and Tienda Drive Senior Apartments, L.P., a California limited partnership ("Owner").
City and Owner are hereinafter collectively referred to as the "Parties." This Agreement shall be
effective as of the date this Agreement is recorded ("Effective Date").
RECITALS
A. Owner acquired that certain property located at 2245 and 2255 Tienda Drive in
the City of Lodi, California, more particularly described as ExhibitA (the "Property") from its
sponsor Eden Housing, Inc., a California nonprofit public benefit corporation ("Eden"). Eden
acquired the Property from the City pursuant to that certain Purchase and Development
Agreement between the City and Eden dated as of July 28, 2010. The Purchase and
Development Agreement, assumed by Owner and amended by the City and Owner by that
assignment and amendment of even date herewith, is referred to the "Development
Agreement."
B. Owner acquired the Property for the purpose of constructing, owning, and
operating seventy-nine (79) units of rental housing affordable to low income senior households
designed for the physical and social needs of senior tenants, as well as one manager's unit, all
landscaping, parking and related improvements (the "Development") in accordance with this
Agreement and the Development Agreement.
C. In order to assist with the development and financing of the Development, the City
approved a reduction in the local development impact fees for the Development and a
$494,536.00 loan (the "City Loan") to the Owner funded by a portion of the impact fees paid or
to be paid by the Owner. The assistance by the City is based upon the City's General Plan
policy to "provide incentives, through the development review, permitting and fee processes, to
Tienda_City Regulatory Agreement
rev 2.16.16 Final 1
redevelop underutilized commercial properties located within the Mixed Use Corridors" that have
been identified as incentive zones, especially projects that provide significant public benefit such
as the subject Development. The City Loan, together with affordable housing funds obtained
from other sources, will be used for the construction and operation of the Development and
made the Development more competitive for the other affordable housing funding sources.
D. The Parties have agreed to enter into and record this Agreement in order to
assure that the Development provides the significant public benefit of affordable senior housing.
The Parties intend the covenants set forth in this Agreement to run with the land and to be
binding upon Owner and Owner's successors and assigns for a period of not less than fifty-five
(55) years.
NOW THEREFORE, in consideration of the foregoing, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows.
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the meanings
set forth in this Section wherever used in this Agreement.
"Actual Household Size" means the actual number of persons in the applicable
household,
"Adjusted for Family Size Appropriate to the Unit" shall be determined consistent with
Section 50052.5(h) of the California Health and Safety Code and applicable federal rules,
including the rules and regulations applicable to the use of federal low-income housing tax
credits.
"Adjusted Income" means the total anticipated annual income of all persons in a
household, as calculated in accordance with 25 California Code of Regulations Section 6914 or
pursuant to a successor State housing program that utilizes a reasonably similar method of
calculation of adjusted income. In the event that no such program exists, the City shall provide
the Owner with a reasonably similar method of calculation of adjusted income as provided in said
Section 6914.
"Affordable Rent" means that the gross monthly rent payable by the tenant does not
exceed one -twelfth of thirty percent (30%) of the applicable AMI limit, Adjusted for Family Size
Appropriate to the Unit, less a reasonable utility allowance.
"Area Median Income" or "AMI" means the area median income adjusted by actual
household size for households in the County of San Joaquin, California, as published from time
to time by HCD, If such income determinations are no longer published, or are not updated for a
period of at least eighteen (18) months, then the City shall provide the Owner with other income
determinations which are reasonably similar with respect to methods of calculation to those
previously published by HCD.
"Eligible Household" means a senior household for which gross household income upon
initial occupancy does not exceed the applicable maximum income level for a Restricted Unit as
specified in Section 2.1 and meets Owner's other eligibility requirements set forth in the
Management Plan.
"HCD" means the California Department of Housing and Community Development.
Tienda_City Regulatory Agreement
rev 2.16.16 Final 2
"Low Income Household" shall mean a household with an Adjusted Income that does
not exceed sixty percent (60%) of Area Median Income.
"Low Income Rent" means the maximum allowed rent for a Low Income Unit pursuant to
Section 2.3.1 below.
"Low Income Units" mean the Units in the Development to be made available and
occupied by Low Income Households pursuant to Section 2.1 of this Agreement.
"Note" means the Promissory Note dated as of March 2, 2016, in the original principal
amount of $494,536, executed by Owner in favor of the City evidencing the City Loan.
"Regulations" means Title 25 of the California Code of Regulations.
"Rent" means the total of monthly payments by the tenants of a Unit (other than the
manager's Unit) for the following: (1) use and occupancy of the Unit and land and related
improvements, including parking; (2) any separately charged fees or service charges assessed
by the Owner which are required of all tenants, other than security deposits; (3) the cost of an
adequate level of service for utilities paid by the tenant, including garbage collection, sewer,
water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service,
cable service or any other utility or service permitted to be excluded from the calculation of Rent
pursuant to the terms of 25 California Code of Regulations Section 6918; and (4) any other
interest, taxes, fees or charges for use of the land or associated facilities and assessed by a
public or private entity other than the Owner, and paid by the tenant. Owner and City will
consider reasonable changes to this definition of Rent if required by other funding sources for the
Development prior to the recordation of this Agreement.
"Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable
Rent by a household of not more than a specified household income in accordance with and as
set forth in Section 2.1.
"Units" means the residential rental units to be constructed by the Owner on the
Property.
2. USE AND AFFORDABILITY RESTRICTIONS. Owner hereby covenants and agrees, for
itself and its successors and assigns, that the Property shall be used solely for the operation of
an affordable residential rental development for senior households in compliance with the
requirements set forth herein.
2.1 Affordability Requirements.
For a term of fifty-five (55) years commencing upon the date of issuance of a final
certificate of occupancy or equivalent for the Development, forty-nine percent (49%) of the
residential units in the Development shall be rented to and occupied by or, if vacant, available for
occupancy by Low Income Households (the "Restricted Units"). The City and the Owner
acknowledge that other financing sources for the Development may impose additional
affordability restrictions on the Development.
In the event that recertification of tenant incomes indicates that the number of Restricted
Units in the Development actually occupied by Eligible Households falls below the percentage
Tienda_City Regulatory Agreement
rev 2.16 16 Final 3
restricted in this Section 2.1, Owner shall rent the next available dwelling unit(s) in the
Development to Eligible Household(s) until the required percentage is achieved.
2.2 Senior Occupancy. The Owner shall operate the Development as a senior
housing development and as such shall require all Units in the Development, except for the
resident manager's unit, if used as such, to be occupied or held available for occupancy to
persons 62 years of age or older in accordance with applicable law To the extent applicable and
consistent with the age restriction of 62 years, the Development shall be operated at all times
with: (a) the Unruh Act, including but not limited to California Civil Code Sections 51.2, 51.3 and
51.4 which relate to the requirements for lawful senior housing; (b) the United States Fair
Housing Act, as amended, 42 U.S.C. Section 3607(b) and 24 CFR 100.304, which relate to
lawful senior housing; (c) the California Fair Employment and Housing Act, Government Code
Section 12900 et seq., which relates to lawful senior housing; and (d) any other applicable law or
regulation. The Owner shall develop and implement appropriate age verification procedures to
ensure compliance with the requirements of this Section. The Owner shall provide the City with
a copy of its written verification procedures. The Owner agrees to indemnify, protect, hold
harmless and defend (by counsel reasonably selected by the City) the City and its council
members, officers and employees, from all suits, actions, claims, causes of action, costs,
demands, judgments and liens arising out of the Owner's failure to comply with applicable legal
requirements related to housing for seniors. The indemnity provisions of this Subsection shall
survive expiration of the Term or other termination of this Agreement, and shall remain in full
force and effect.
2.3 Allowable Rents for Restricted Units.
2.3.1 Low Income Rent. Subject to Section 2.4 below, the Rent charged to
tenants of the Low Income Units shall not exceed one -twelfth (1112th) of thirty percent (30%) of
sixty percent (60%) of Area Median Income, adjusted for Assumed Household Size.
2.3.2 In calculating the allowable Rent for the Units, Assumed Household Size
shall be the federally -mandated household size assumptions as set forth in federal statutes or
regulations for programs also providing financial assistance to the Development ("Assumed
Household Size").
2.3.3 The Rent may only be increased one time per year (unless otherwise
approved in writing by the City) and the Rent level following an increase, or upon a new
occupancy, shall not exceed the Rent level set forth in Subsection 2.3. t, as applicable.
Households occupying Units shall be given at least thirty (30) days written notice prior to any
increase in the Rent.
2.4 Increase Income of Tenant Household.
2.4,1 increase Above Initial Qualifying income. If upon recertification of tenant
incomes, Owner determines that the household income of a tenant has increased and exceeds
the income level for a Low Income Household or other applicable the applicable income category
in which the tenant initially qualified under a regulatory agreement required by other
Development financing, then upon expiration of the tenant's lease: (i) such tenant's unit shall
continue to be considered as a unit in the initial applicable income category, (ii) upon ninety (90)
days' written notice to the tenant, such tenant's rent may be increased to an Affordable Rent for
Tienda_City Regulatory Agreement
rev 2.16.16 Final 4
the income category for which the tenant qualifies, and (iii) Owner shall rent the next available
residential unit at an Affordable Rent to a Low Income Household.
2.4.2 Non-❑ualifyina Household. If, upon recertification of tenant incomes,
Owner determines that a tenant's household income has increased to exceed 80% of the Area
Median Income, such tenant shall be permitted to continue to occupy the unit and upon
expiration of the tenant's lease: (i) upon 90 days' written notice, such tenant's rent may be
increased to the lesser of one -twelfth of thirty percent (30%) of the household's actual income or
the fair market rent, (ii) the unit shall continue to be classified as satisfying the income category
for which the tenant originally qualified, and (iii) when the tenant vacates the unit, the unit shall
be rented at an Affordable Rent to an Eligible Household in order to achieve the affordability
requirements of this Agreement.
In the event of inconsistency between the provisions of Sections 2.4.1 or 2.4.2 and the
requirements applicable to the Development in connection with low-income housing tax credits or
other financing or rent subsidies provided to the Development by a federal, State or other public
agency, the requirements applicable pursuant to such tax credit and other financing or subsidy
source shall prevail.
2.5 Lease Provisions. The Owner shall include in leases or rental agreements for all
of the Restricted Units provisions which authorize the Owner to immediately terminate the
tenancy of any household if one or more of its members misrepresents any fact material to that
household's qualification to occupy any Restricted Unit. Each lease or rental agreement of an
Restricted Unit shall also provide that the household is subject to annual certification in
accordance with Section 3.1 below, and that, if the household's income increases above the
applicable limits for household income which initially qualified that household for the Restricted
Unit, such household's Rent will be subject to an increase.
2.6 Manager's Unit. One (1) dwelling unit in the Development may be used as
resident manager's unit, and shall be exempt from the occupancy and rent restrictions set forth in
this Agreement.
2.7 No Condominium Conversion. Owner shall not convert the Development to
condominium or cooperative ownership or sell condominium or cooperative rights to the
Development or any part thereof during the term of this Agreement.
2.8 Non -Discrimination. All of the Units shall be available for occupancy on a
continuous basis to members of the general public, subject to income eligibility and senior
housing criteria. The Owner shall not give preference to any particular class or group of persons
in renting the Units. There shall be no discrimination against or segregation of a person or of a
group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government Code,
nor shall the Owner or any person claiming under or through the Owner 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 Property. With respect to familial status, the third sentence of this Section 2.8 shall not be
construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in the third sentence of this Section
2.8 shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil
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Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of
the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to the third sentence of this Section 2.8. The Owner shall include a statement in all
advertisements, notices, and signs for the availability of the Units for rent to the effect that the
Owner is an Equal Housing Opportunity Provider.
Nothing in this Section 2.8 is intended to require the Owner to change the character,
design, use, or operation of the Development from, or to require the Owner to obtain licenses or
permits other than those required for, a rental housing development.
2.9 Section 8 Certificate Holders. The Owner will accept as tenants, on the same
basis as all other prospective tenants, persons who are recipients of federal certificates for rent
subsidies pursuant to the existing housing program under Section 8 of the United States Housing
Act, or its successor. The Owner shall not apply selection criteria to Section 8 certificate or
voucher holders that are more burdensome than criteria applied to all other prospective tenants,
nor shall the Owner apply or permit the application of management policies or lease provisions
with respect to the Development which have the effect of precluding occupancy of units by such
prospective tenants.
3. REPORTING REQUIREMENTS,
3.1 Tenant Certification. Owner or Owner's authorized agent shall obtain from each
household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter,
a written certificate containing all of the following in such format and with such supporting
documentation as City may reasonably require:
(a) The identity of each household member; and
(b) The total gross household income; and
(c) The number and type of calculated preference points, if applicable.
Owner shall retain such certificates for not less than five (5) years, and upon City's
request, shall provide copies of such certificates to City and make the originals available for City
inspection.
3.2 Annual Report; Inspections. By not later than April 30 of each year during the
term of this Agreement, Owner shall submit an annual report ("Annual Report") to the City in
form satisfactory to City, together with a certification that the Development is in compliance with
the requirements of this Agreement. The Annual Report shall, at a minimum, include the
following information for each dwelling unit in the Development as of the date of the Annual
Report: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges, specifying
the amount chargeable to the Tenant; and (iv) dates of any vacancies during the previous year;
(v) number of people residing in the unit ; (vi) total gross household income of tenants; (vii)
documentation of source of household income; and (viii) the information required by Section 3.1.
The Annual Report shall include a site improvement and maintenance plan and shall include a
report on the current waitlist, including number of households, unit size desired, typical wait
period, and the number and percentage of Veteran households on the waitlist. Owner shall
include with the Annual Report, an income recertification for each household, documentation
verifying tenant eligibility, and such additional information as City may reasonably request from
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time to time in order to demonstrate compliance with this Agreement. The Annual Report shall
conform to the format requested by City; provided however, during such time that the
Development is subject to a regulatory agreement restricting occupancy and/or rents pursuant to
requirements imposed in connection with the use of state or federal low-income housing tax
credits, Owner may satisfy the requirements of this Section by providing City with a copy of
compliance reports required in connection with such financing.
Owner shall permit representatives of City to enter and inspect the Property, the
Development, and records, during reasonable business hours in order to monitor compliance
with this Agreement upon forty-eight (48) hours advance notice of such visit to Owner or to
Owner's management agent.
3.3 Annual Budget. The Owner shall provide the City for its review and approval, not
later than December 1 of each year, the annual budget for the upcoming calendar year, which
shall be in a form acceptable to the City. Unless the proposed annual budget is disapproved in
writing by the City within thirty (30) days, which disapproval shall state with reasonable specificity
the basis for disapproval, it shall be deemed approved.
4. TERM OF AGREEMENT.
4.1 Term of Restrictions. This Agreement shall remain in effect through the 55th
anniversary of the issuance of the final certificate of occupancy or equivalent for the
Development, unless the term is extended by mutual agreement of the Parties.
4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This
Agreement shall remain effective and fully binding for the full term hereof, as such may be
extended pursuant to Section 4.1, regardless of (i) any sale, assignment, transfer, or conveyance
of the Property or the Development or any part thereof or interest therein, (ii) any payment,
prepayment or extinguishment of the City Loan or Note, or (iii) any reconveyance of the Deed of
Trust securing the Note.
4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to
execute and record appropriate instruments to release and discharge this Agreement; provided,
however, the execution and recordation of such instruments shall not be necessary or a
prerequisite to the termination of this Agreement upon the expiration of the term as such may be
extended pursuant to Section 4.1.
5. BINDING UPON SUCCESSORS: COVENANTS TO RUN WITH THE LAND. Owner
hereby subjects its interest in the Property and the Development to the covenants and
restrictions set forth in this Agreement. The City and Owner hereby declare their express intent
that the covenants and restrictions set forth herein shall be deemed covenants running with the
land and shall be binding upon and inure to the benefit of the heirs, administrators, executors,
successors in interest, transferees, and assigns of Owner and City, regardless of any sale,
assignment, conveyance or transfer of the Property, the Development or any part thereof or
interest therein. Any successor -in -interest to Owner, including without limitation any purchaser,
transferee or lessee of the Property or the Development (other than the tenants of the individual
dwelling units within the Development) shall be subject to all of the duties and obligations
imposed hereby for the full term of this Agreement. Each and every contract, deed, or other
instrument affecting or conveying the Property or the Development or any part thereof, shall
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conclusively be held to have been executed, delivered and accepted subject to the covenants,
restrictions, duties and obligations set forth herein, regardless of whether such covenants,
restrictions, duties and obligations are set forth in such contract, deed, or other instrument.
6. PROPERTY MANAGEMENT; REPAIR AND MAINTENANCE; MARKETING.
6.1 Management Responsibilities. Owner shall be responsible for all management
functions with respect to the Property and the Development, including without limitation the
selection of tenants, certification and recertification of household income and eligibility, evictions,
collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs,
replacement of capital items, and security. City shall have no responsibility for management or
maintenance of the Property or the Development.
6.2 Management Entity. City shall have the right to review and approve the
qualifications of the management entity proposed by Owner for the Development. The
contracting of management services to a management entity shall not relieve Owner of its
primary responsibility for proper performance of management duties. City hereby approves
Eden Housing Management, Inc. as the initial management entity for the Development.
6.3 Repair, Maintenance and Security. Throughout the term of this Agreement,
Owner shall at its own expense, maintain the Property and the Development in good physical
condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions
in conformity with all applicable state, federal, and local laws, ordinances, codes, and
regulations. Without limiting the foregoing, Owner agrees to maintain the Development and the
Property (including without limitation, the residential units, common areas, meeting rooms,
landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance,
debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal
activity, and shall take all reasonable steps to prevent the same from occurring on the Property
or at the Development. Owner shall prevent and/or rectify any physical deterioration of the
Property and the Development and shall make all repairs, renewals and replacements necessary
to.keep the Property and the improvements located thereon in good condition and repair.
6,3.1 City's Right to Perform Maintenance. In the event that Owner breaches any of the
covenants contained in Section 6.3, and such default continues for a period of fourteen (14) days
after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30)
days after written notice from City (with respect to landscaping, building improvements and
general maintenance), then City, in addition to any other remedy it may have under this
Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the
Property and perform all acts and work necessary to protect, maintain, and preserve the
improvements and the landscaped areas on the Property, All costs expended by City in
connection with the foregoing, shall be paid by Owner to City upon demand.
6.4 Management Plan and Marketing Plan. Prior to the start of construction of the
Development, Owner shall submit for City review and approval, a plan for managing the Property
and a plan for marketing the Project (the "Management and Marketing Plans"). Upon request
by the City, the Management and Marketing Plans shall be updated but not more frequently than
two (2) years from the initial plans and every five (5) years thereafter. Updates and revisions to
the Management and Marketing Plans may be subject to prior approval of Owner's investor
limited partner or other project lenders before being implemented.
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The Management and Marketing Plans shall describe the management team and shall
address how the Owner and the management entity plan to manage and maintain the Property
and the Development. The Management and Marketing Plan shall include the proposed
management agreement and the form of rental agreement that Owner proposes to enter into with
Development tenants. The Management and Marketing Plan shall address how Owner plans to
market the Restricted Units to prospective Eligible Households, Owner's tenant selection criteria,
and how Owner plans to certify the eligibility of Eligible Households. Owner shall abide by the
terms of the Management and Marketing Plan in marketing, managing, and maintaining the
Property and the Development, and throughout the term of this Agreement, shall submit
proposed modifications to City for review and approval.
6.5 Approval of Amendments. If City has riot responded to any submission of the
Management and Marketing Plans, the proposed management entity, or a proposed amendment
or change to any of the foregoing within thirty (30) days following City's receipt of such plan,
proposal or amendment, the plan, proposal or amendment shall be deemed approved by City.
6.6 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all
fees, assessments, taxes, charges, liens and levies applicable to the Property or the
Development, including without limitation possessory interest taxes, if applicable, imposed by
any public entity, and shall pay such charges prior to delinquency. However, Owner shall not be
required to pay any such charge so long as (a) Owner is contesting such charge in good faith
and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested
liabilities, and (c) on final determination of the proceeding or contest, Owner immediately pays or
discharges any decision or judgment rendered against it, together with al! costs, charges and
interest. The Parties acknowledge that the Owner will apply for exemption from property tax
under Revenue and Taxation Code Section 214.
6.7 Insurance Coverage, Throughout the term of this Agreement Owner shall at
Owner's expense, maintain in full force and effect insurance coverage as specified in the Deed of
Trust or Development Agreement and shall comply with all insurance requirements set forth in
the Deed of Trust.
6.8 Property Damage or Destruction. If any part of the Development is damaged or
destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent
restriction requirements set forth in this Agreement. Such work shall be commenced as soon as
reasonably practicable after the damage or loss occurs and shall be completed within one year
thereafter or as soon as reasonably practicable, provided that insurance proceeds are available
to be applied to such repairs or restoration within such period and the repair or restoration is
financially feasible. During such time that Development lenders or Owner's investor limited
partner impose requirements that differ from the requirements of this Section the requirements of
such lenders and investor limited partner shall prevail.
7. RECORDATION; SUBORDINATION. This Agreement shall be recorded in the Official
Records of San Joaquin County. This Agreement shall be subordinated in priority only to the
liens and encumbrances approved by the City pursuant to the Development Agreement or
otherwise approved in writing by the City which shall not be unreasonably withheld.
8. TRANSFER.
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8.1 Restrictions on Transfer. During the term of this Agreement, except as permitted
pursuant to the Development Agreement or this Agreement, Owner shall not directly or indirectly,
voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer,
conveyance, assignment or lease (collectively, "Transfer") of the whole or any part of the
Property, the Development, or the improvements located on the Property, without the prior
written consent of the City, which approval shall not be unreasonably withheld. In addition, prior
to the expiration of the term of this Agreement, except as expressly permitted by this Agreement
or the Development Agreement, Owner shall not undergo any significant change of ownership
without the prior written approval of City. For purposes of this Agreement, a "significant change
of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent
(25%) in aggregate of the present ownership and/or control of Owner, taking all transfers into
account on a cumulative basis; provided however, neither the admission of an investor limited
partner, nor the transfer by the investor limited partner to subsequent limited partners shall be
restricted by this provision.
8.2 Permitted Transfers. Notwithstanding any contrary provision, the prohibitions on
Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or
permits to facilitate development of the Property; (ii) the dedication of any property required
pursuant to the Development Agreement; (iii) the lease of individual dwelling units to tenants for
occupancy as their principal residence in accordance with this Agreement or the lease of
commercial space to commercial tenants, if applicable; (iv) assignments creating security
interests for the purpose of financing the acquisition, construction, or permanent financing of the
Development or the Property in accordance with the Development Agreement, or Transfers
directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a
security interest; or (v) the Permitted Transfers or Pre -approved Transfers set forth in the
Development Agreement or Transfers made in accordance with the provisions attached as
Exhibit B to the Deed of Trust.
In addition, City shall not withhold its consent to the sale, transfer or other disposition of
the Development, in whole or in part, provided that (a) the Development is and shalt continue to
be operated in compliance with this Agreement; (b) the transferee expressly assumes all
obligations of Owner imposed by this Agreement; (c) the transferee executes all documents
reasonably requested by the City with respect to the assumption of the Owner's obligations
under this Agreement, and upon City's request, delivers to the City an opinion of its counsel to
the effect that such document and this Agreement are valid, binding and enforceable obligations
of such transferee; and (d) either (A) the transferee has at least three (3) years' experience in the
ownership, operation and management of low-income multifamily rental housing projects of
similar size to that of the Development, without any record of material violations of
nondiscrimination provisions or other state or federal laws or regulations applicable to such
projects, or (B) the transferee agrees to retain a property management firm with the experience
and record described in subclause (A).
9. DEFAULT AND REMEDIES.
9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an event of default hereunder ("Event of Default"):
(a) The occurrence of a Transfer in violation of Section 8 hereof;
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(b) Owner's failure to maintain insurance on the Property and the
Development as required hereunder, and the failure of Owner to cure such default within ten (10)
days of notice of the default to Owner;
(c) Subject to Owner's right to contest the following charges, Owner's failure
to pay taxes or assessments due on the Property or the Development or failure to pay any other
charge that may result in a lien on the Property or the Development, and Owner's failure to cure
such default within thirty (30) days of delinquency;
(d) A default has been declared under any loan secured by a mortgage, deed
of trust or other security instrument recorded against the Property and remains uncured beyond
any applicable cure period such that the holder of such security instrument has the right to
accelerate repayment of such loan;
(e) A default arises under the Development Agreement, the Note, or the Deed
of Trust and remains uncured beyond the expiration of any applicable cure period;
(f) Owner's default in the performance of any term, provision or covenant
under this Agreement, and unless such provision specifies a shorter cure period for such default,
the continuation of such default for thirty (30) days in the event of a monetary default or sixty (60)
days in the event of a non -monetary default following the date upon which City shall have given
written notice of the default to Owner, or if the nature of any such non -monetary default is such
that it cannot be cured within sixty (60) days, Owner's failure to commence to cure the default
within sixty (60) days and thereafter prosecute the curing of such default with due diligence and
in good faith, but in no event longer than 120 days from receipt of the notice of default or such
longer period of time as City may allow.
The limited partner of Owner shall have the right to cure any default of Owner hereunder
upon the same terms and conditions afforded to Owner. City shall provide any notice of default
hereunder to the limited partner in accordance with the terms of Exhibit B of the Deed of Trust
concurrently with the provision of such notice to Owner, and as to the limited partner, the cure
periods specified herein shall commence upon the date of delivery of such notice in accordance
with Subsection 11.3.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation
beyond any applicable cure period, City may proceed with any of the following remedies:
A. Bring an action for equitable relief seeking the specific performance of the terms
and conditions of this Agreement, and/or enjoining, abating, or preventing any
violation of such terms and conditions, and/or seeking declaratory relief;
B. Accelerate and declare the balance of the Note and interest accrued thereon
immediately due and payable and proceed with foreclosure under the Deed of
Trust;
C. Pursue any other remedy allowed at law or in equity.
Each of the remedies provided herein is cumulative and not exclusive. The City may
exercise from time to time any rights and remedies available to it under applicable law or in
equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this
Agreement.
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rev 2.16.16 Final 11
10. INDEMNITY. Notwithstanding any other provision in the Development Agreement or
other documents executed in connection with the City Loan, Owner shall indemnify, defend (with
counsel approved by City) and hold City and their respective elected and appointed officers,
officials, employees, agents, and representatives (collectively, the "Indemnitees") harmless from
and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs
of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty,
deficiency, fine, order, and damage (ail of the foregoing collectively "Claims") arising directly or
indirectly, in whole or in part, as a result of or in connection with Owner's construction,
management, or operation of the Property and the Development or any failure to perform any
obligation as and when required by this Agreement. Owner's indemnification obligations under
this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful
misconduct of any Indemnitee. The provisions of this Section 10 shall survive the expiration or
earlier termination of this Agreement.
11. MISCELLANEOUS.
11.1 Amendments. This Agreement may be amended or modified only by a written
instrument signed by both Parties.
11.2 No Waives. Any waiver by City of any term or provision of this Agreement must be
in writing. No waiver shall be implied from any delay or failure by City to take action on any
breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable
law. No failure or delay by City at any time to require strict performance by Owner of any
provision of this Agreement or to exercise any election contained herein or any right, power or
remedy hereunder shall be construed as a waiver of any other provision or any succeeding
breach of the same or any other provision hereof or a relinquishment for the future of such
election.
11.3 !Notices. Except as otherwise specified herein, all notices to be sent pursuant to
this Agreement shall be made in writing, and sent to the Parties at their respective addresses
specified below or to such other address as a Party may designate by written notice delivered to
the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery;
(ii) certified or registered mail, return receipt requested, in which case notice shall
be deemed delivered upon receipt if delivery is confirmed by a return receipt;
(iii) nationally recognized overnight courier, with charges prepaid or charged to the
sender's account, in which case notice is effective on delivery if delivery is confirmed by the
delivery service;
(iv) facsimile transmission, in which case notice shall be deemed delivered upon
transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or
certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the
accurate transmission thereof. Any notice given by facsimile shall be considered to have been
received on the next business day if it is received after 5:00 p.m. recipient's time or on a
nonbusiness day.
Tienda,_,City Regulatory Agreement
rev 2.16.16 Final 12
City: City of Lodi
221 West Pine Street
P.O. Box 3006
Lodi, CA 95241-1910
Attention: City Manager
Facsimile: (209) 333-0422
Owner: Tienda Drive Senior Apartments, L.P.
c/o Eden Investments, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Facsimile: (510) 582-6523
With a copy to Owner's investor limited partner as provided in Exhibit B to the Deed of
Trust.
11.4 Further Assurances, The Parties shall execute, acknowledge and deliver to the
other such other documents and instruments, and take such other actions, as either shall
reasonably request as may be necessary to carry out the intent of this Agreement.
11.5 Parties Not Co -Venturers. Nothing in this Agreement is intended to or shall
establish the Parties as partners, co -venturers, or principal and agent with one another.
11.6 Action by the City. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent or request by the City is required or permitted
under this Agreement, such action shall be in writing, and such action may be given, made or
taken by the City's City Manager or by any person who shall have been designated by the City
Manager, without further approval by the City Council.
11.7 Non -Liability of City Officials, Officers, Directors, Employees and Agents. No
member, official, employee or agent of the City shall be personally liable to Owner or any
successor in interest, in the event of any default or breach by the City, or for any amount of
money which may become due to Owner or its successor or for any obligation of City under this
Agreement. No director, officer, employee or agent of the Owner shall be personally liable to the
City or any successor in interest, in the event of any default or breach by the Owner, or for any
amount of money which may become due to the City or its successor or for any obligation of the
Owner under this Agreement.
11.8 Headings: Construction. The headings of the sections and paragraphs of this
Agreement are for convenience only and shall not be used to interpret this Agreement. The
language of this Agreement shall be construed as a whole according to its fair meaning and not
strictly for or against any Party.
11.9 Time is of the Essence. Time is of the essence in the performance of this
Agreement.
11.10 Governing Law. This Agreement shall be construed in accordance with the laws
of the State of California without regard to principles of conflicts of law.
Tienda_City Regulatory Agreement
rev 2 16.16 Final 13
11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to
interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover
all reasonable attorneys' fees and costs incurred in such action.
11.12 Severability. If any provision of this Agreement is held invalid, illegal, or
unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the
remaining provisions shall not be affected or impaired thereby.
11.13 Entire Agreement. This Agreement, together with the Development Agreement,
the Note, the Deed of Trust, the three (3) subordination agreements dated as of March 2, 2016
executed by the City, Owner and Owner's lenders recorded concurrently herewith, and the
unrecorded Estoppel Certificate dated as of the Effective Date executed by the City for the
benefit Owner's investor limited partner identified in Exhibit B to the Deed of Trust contains the
entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior
oral or written agreements between the Parties with respect thereto.
11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one agreement.
IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
DEVELOPER
TIENDA DRIVE SENIOR APARTMENTS, L.P.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC, General Partner
By: Eden Investments, Inc., sole member/manager
By:
Linda Mandolini, President
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rev 2.16.16 Final 14
CITY
City of Lodi, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
Janice D.Ulagdich, City Attorney
SIGNATURES MUST BE NOTARIZED.
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rev 2.16.16 Final 15
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
before me,
)SS
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal,
Signature
Acknowledgment
This area for official notarial seal,
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document,
STATE OF CALIFORNIA
COUNTY OF
On
)SS
}
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose names) is/ere subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
Exhibit A
PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described
as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Exhibit A
ASSIGNMENT AND AMENDMENT OF THAT
PURCHASE AND DEVELOPMENT AGREEMENT
Tienda Drive Senior Apartments, 2245 and 2255 Tienda Drive, Lodi, CA
This Assignment and Amendment of that Purchase and Development Agreement
("Assignment and Amendment") is dated as of March 2, 2016 (the "Effective Date"), by and
among Tienda Drive Senior Apartments, L.P., a California limited partnership, its successors
and assigns ("Owner" or "Buyer"), Eden Housing, Inc., a California nonprofit public benefit
corporation, as Owner's predecessor in interest as described below ("Eden"), and the City of
Lodi, a California municipal corporation ("City").
RECITALS
A. Owner will acquire that certain property located at 2245 and 2255 Tienda Drive in
the City of Lodi, California, more particularly described as Exhibit A (the "Property") from its
sponsor Eden. Eden purchased the Property on July 30, 2010 from the City pursuant to that
certain Purchase and Development Agreement between the City and Eden dated as of July 28,
2010 (the "Original Purchase and Development Agreement"), a memorandum of which was
recorded July 30, 2010 as Document No 2010-098833 of San Joaquin County Records (the
"Memorandum of Purchase of Development Agreement"). The City and Eden entered into
the Original Purchase and Development Agreement to govern (i) the purchase of the Property
by Eden from the City and (ii) the development on the Property of two projects consisting of a
total of 78 rental housing units affordable to very low and lower income senior households, two
manager's units, and related improvements (the "Senior Project") by Eden or its approved
successors and assigns.
B. The purpose of this Assignment and Amendment is first to assign all Eden's
rights and obligations under the Original Purchase and Development Agreement to Owner and
Owner's assumption of the assigned rights and obligations from Eden, which is required for the
committed construction and permanent financing for the Senior Project, and second to amend
the Original Purchase and Development Agreement to amend and/or amend and restate certain
terms and conditions in the original document related to the development and financing of the
Senior Project which will now be constructed, owned and operated as one project consisting of
seventy-nine (79) units of rental housing affordable to low income senior households designed
for the physical and social needs of senior tenants, as well as one manager's unit and related
improvements (the "Development").
C. The Original Purchase and Development Agreement, as assigned to and
assumed by Owner and as amended herein by the City and Owner shall hereafter be referred to
as the "Development Agreement."
NOW THEREFORE, in consideration of the foregoing, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows.
SECTION ONE: COMPLETED PROVISIONS; ASSIGNMENT, ASSUMPTION AND CITY
CONSENT; DEFINED TERMS
1.1 Satisfaction of Provisions. Eden, the Buyer, and City agree that the following provisions
of the Original Purchase and Development Agreement have either been fully satisfied and
completed or are no longer applicable to the Development, and are of no further force or effect
Tienda_Assignment Amendment to PDA
rev 2 18.16 Final
from and after the Effective Date and that no further action by any party shall be required and no
default thereunder shall be claimed by any party: Sections 2.1, 3.1 - 3.7, 3.9, 5.1, 5,2, 5.6, 8.3.1
— 8.3.9, 8.11, 11.1.1, 12.23, and 12.24, Article 4, all provisions referring to HUD or Tax-exempt
bond financing, HUD 202 financing, including Exhibit 1, and any other financing sources not
identified in Exhibit C and Exhibit D, attached hereto and incorporated herein and all provisions
referring to CDBG and HOME Program requirements.
1.2 Assionment and Assumption, Eden hereby assigns to Buyer ail of Eden's development
rights and all of its right, title and interest in and obligations under the Development Agreement,
and Buyer hereby accepts the above assignment and assumes, agrees and undertakes to
perform all of the obligations set forth in the Development Agreement.
1.3 City Consent. The City hereby consents to the assignment by Eden and the assumption
by the Buyer of the Development Agreement,
1.4 Final Plans. The City will have received and approved the Final Plans for the
Development prior to the issuance of the building permits or the "permit ready letter."
SECTION TWO: DEFINED TERMS AND UPDATED EXHIBITS
2.1 Defined Terms. All terms not otherwise defined above or elsewhere herein, shall have
the meanings set forth in the Original Purchase and Development Agreement.
2.1.1 "Buyer" or "Owner" now means Tienda Drive Senior Apartments, L.P., a
California limited partnership, its successors and assigns.
2.1.2 "Certificate of occupancy" shall mean the second or later of the two certificates of
occupancy issued to Borrower by the City approving the two buildings in the
Development for occupancy.
2 1.3 "Development" now has the meaning set forth in Recital B.
2.1.4 "Effective Date" now means the date first set forth above in this Assumption and
Amendment.
2.1.5 "Parties" or "parties" now means Owner, Eden and the City.
2.1.6 "Property" now means the real property described in Exhibit A, which is the same
property previously described in Exhibits A-1 and A-2. The Parties acknowledge
that the reference to "Pages 79 and 80" in Exhibits A-1 and A-2 was a scrivener's
error and should have been "Page 79." The Parties hereby agree that all
references to "Pages 79 and 80" in any Loan Document is to be read as "Page
79."
2.1.7 "Note" now means the Promissory Note for the City Loan, a draft of which is
attached hereto and incorporated herein as Exhibit L.
2.2 Exlq,iblts: Exhibits A, C, D, E, F, G and H attached hereto and incorporated herein, shall
replace in their entirety Exhibits A, C, D, E, F, G and H attached to the Original Purchase and
Development Agreement, respectively. Exhibit L and M attached hereto and incorporated
herein is hereby added to the Development Agreement. Exhibits B, I and J of the Original
Purchase and Development Agreement are hereby omitted from the Development Agreement:
Exhibit A: Legal Description
Exhibit C: Approved Development Budget.
Exhibit D: Financing Plan
Exhibit E: Schedule of Performance
Exhibit F: Scope of Development
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 2
Exhibit G: Site Plan
Exhibit H: Insurance Requirements
Exhibit K: Memorandum of Development Agreement
Exhibit L: Form of Promissory Note for City Loan
Exhibit M: Investor Limited Partner Required Provisions
3. SECTION THREE: CITY LOAN
In order to assist with the financing of the Development, the City has approved a construction
and permanent loan in the principal amount of Four Hundred Ninety -Four Thousand Five
Hundred Thirty -Six Dollars ($494,536.00) (the "City Loan") to Buyer funded from a portion of
the local development impact fees paid by Buyer on or prior to the closing of the City Loan.
3.1 City Loan Terms. Subject to satisfaction of the conditions set forth in Section 3.3 below
and for the purposes set forth in Section 3.2 below, the City shall make the City Loan which
shall be a nonrecourse loan, bearing zero percent (0%) interest, payable only from residual
receipts, and maturing on the 55th anniversary of the date the final certificate of occupancy is
issued for the Development, on such additional terms as may be more fully set forth in this
Assignment and Amendment and/or the Promissory Note in substantially the form attached
hereto as Exhibit L.
3.2 Use of Funds. Buyer shall use the City Loan proceeds for predevelopment and con-
struction costs, which may include but not be limited to: surveyor, consultant and legal fees; and
costs related to the closing of the Loan (such as title, escrow and other closing costs and fees).
3.3 Conditions for Disbursement. The City shall disburse the Loan proceeds to Buyer when
all the following conditions to disbursement have been satisfied:
3.3.1 Executed City Loan Documents. The Buyer has delivered to the City an
executed original of this Assignment and Amendment and the Promissory Note, and certified
copies of the recorded documents listed in subsection 3.3,2 below.
3.3.2 Recorded Documents. The recording of the Deed of Trust securing the City
Loan, a Memorandum of Development Agreement in the form attached as Exhibit K. and the
Regulatory Agreement and Declaration of Restrictive Covenants restricting the use of the
Property in accordance with Section 7.2 of the Development Agreement.
3.3.3 Title Policy. The issuance by a title company satisfactory to the City of an ALTA
loan policy of title insurance ("City Title Policy") in the amount of the City Loan, insuring the City
that the lien of the City Deed of Trust is subject only to such liens, conditions, encumbrances,
restrictions, easements and exceptions as the City may approve in writing and containing such
endorsements as the City may reasonably require, with the cost of the City Title Policy to be
paid by the Buyer.
3.3.4 Formation Documents. The Buyer has delivered to the City a copy of each of the
following: (i) the amended and restated limited partnership agreement with the investor limited
partner of the Buyer; (ii) certificate of limited partnership; and (iii) formation documents of the
general partner and the member of the general partner; and (iv) authorizing resolutions
reasonably requested by the City.
3.3.5 Insurance Coverage. The Buyer has delivered to the City evidence of insurance
coverage in accordance with the City's current insurance requirements set forth in Exhibit H.
3.3.6 Construction Contract and Bonds. The Buyer has delivered to the City copies of
the following Development documents: Final plans and specifications for the Development; the
general contractor's construction contract that the Buyer has entered into for construction of the
Tienda_Assignment Amendment to PDA
rev 2.18.96 Final 3
Development; and one hundred percent (100%) labor and material (payment) bonds and
performance bonds.
3.3.7 Updated Approved Development Budget. The Buyer has delivered to City an
updated Approved Development Budget (Exhibit C) showing that the undisbursed proceeds of
the Loan, together with other funds or firm commitments for funds that the Buyer has obtained in
connection with the Development, are not less than the amount necessary to pay for the
construction of the Development.
3.3.8 Land Use Approvals and Building Permit. The Buyer has secured all land use
approvals for the Development and the building permits for the Development have been issued
or are ready to issue.
3.3.9 Construction Loans/Limited Partner investment. The Buyer's other construction
loans and limited partnership investment shall be substantially ready to close, meaning
substantially all documents are submitted to escrow or executed by Buyer.
3.3.10 Draw Request. The City has received a written draw request from the Buyer
setting forth the proposed uses of funds consistent with the Approved Development Budget, the
amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost
incurred or to be incurred. When a disbursement is requested to pay the general contractor in
connection with improvements on the Property, the written request shall be accompanied by (1)
certification by the Buyer's architect reasonably acceptable to the City that the work for which
disbursement is requested has been completed; (ii) a copy of the inspection report prepared by
the construction lender's inspector, and (iii) lien releases and/or mechanics lien title insurance
endorsements reasonably acceptable to the City. The Buyer shall deliver to Buyer's other
construction lenders copies of all disbursement requests following approval and execution by
the City.
The City acknowledges that Buyer's senior construction lender shall require the Loan fully
disbursed prior to the senior construction lender's disbursement of the senior construction loan.
Buyer and the City anticipate the City Loan to be disbursed in one disbursement through escrow
for the construction loan closing.
3.4 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision
herein, the City shall have no obligation to disburse or authorize the disbursement of any portion
of the City Loan proceeds following the failure of any of the Buyer's representations and
warranties made in connection with the City Loan to be true and correct in all material respects
when made or the occurrence of an Event of Default under the Development Agreement or any
of the City Loan Documents, which remains uncured beyond any applicable cure period.
SECTION FOUR: OTHER PROVISIONS
4.1 Further Amendments. The parties agree that the following sections in the Original Purchase
and Development Agreement (the "Development Agreement") are hereby modified, deleted,
restated and/or replaced as provided below:
2,1 Representations and Warranties. As of the Effective Date, Buyer hereby
represents and warrants to Seller as follows:
2.2.1 Organization, Buyer is a duly organized, validly existing limited
partnership, is in good standing under the laws of the State of California, and has the
power and authority to own its property and carry on its business as now being
conducted.
Tienda_Assignment Amendment to PDA
rev 2,18.16 Final 4
2.1,2 Authority of the Buyer. Buyer has full power and authority to execute and
deliver this Development Agreement and the necessary documents or instruments,
pursuant to this Development Agreement and to perform and observe the terms and
provisions of all of the above.
2.1.3 Authority of Persons Executing Documents. This Development
Agreement and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Development Agreement have been or will be
executed and delivered by persons who are duly authorized to execute and deliver the
same for and on behalf of Buyer, and all actions required under the Buyer's
organizational documents and applicable governing law for the authorization, execution,
delivery and performance of this Development Agreement and all other documents or
instruments executed and delivered, or to be executed and delivered, pursuant to this
Development Agreement, have been duly taken.
2.1.4 Valid Binding Agreements. This Development Agreement and all other
documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when
so executed and delivered constitute, legal, valid and binding obligations of the Buyer
enforceable against it in accordance with their respective terms,
2.1.5 No Breach of Law or Agreement. Neither the execution nor delivery of
this Development Agreement nor any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Development Agreement, nor
the performance of any provision, condition, covenant or other terms hereof or thereof,
will conflict with or result in a breach of any statute, rule or regulation, or any judgment,
decree or order of any court, board, commission or agency binding on Buyer, or any
provision of the organization documents of Buyer, or will conflict with or constitute a
breach of or a default under any agreement to which Buyer is a party, or will result in the
creation or imposition of any lien upon any assets or property of Buyer, other than liens
established pursuant hereto.
2.1.6 Compliance With Laws; Consent and Approvals. The construction of the
Development will comply with all applicable laws, ordinances, rules and regulations of
federal, state and local governments and agencies and with all applicable directions as
of time of building permit issuance, rules and regulations of the fire marshal, health
officer, building inspector and other officers of any such government or agency.
2.1.7 Pending Proceedings. Buyer is unaware of a known default under any
law or regulation or under any order of any court, board, commission or agency, and
there are no known claims, actions, suits or proceedings pending or, to the knowledge of
Buyer, threatened against or affecting Buyer, at law or in equity, before or by any court,
board, commission or agency which might, if determined adversely to Buyer, materially
affect Buyer's ability to perform its obligations contemplated by this Development
Agreement.
2.1.9 Taxes. Buyer and its subsidiaries have filed all federal and other material
tax returns and reports required to be filed, and have paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them
or their income or their properties otherwise due and payable, except those which are
being contested in good faith by appropriate proceeds and for which adequate reserves
have been provided in accordance with generally accepted accounting principles. Buyer
has no knowledge of a proposed tax assessment against Buyer or any of its subsidiaries
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 5
that could, if made, be reasonably expected to have a material adverse effect upon the
assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or
prospects of Buyer and its subsidiaries, taken as a whole, which would be expected to
result in a material impairment of the ability of Buyer to perform under this Agreement.
6.3.9 Certificate of Completion. The following is added at the end of Section 6.3.9:
"Upon the execution, delivery and recordation of the Certificate of Completion, Buyer shall have
no further obligations under Article 6 of this Agreement."
7.3 Regulatory Agreement, The Regulatory Agreement referenced in Section 7.3
shall hereafter refer to the Regulatory Agreement entered into with the City, and not the County.
8.3 Records. All references to HUD's right to inspect and copy all books, records
and accounts are no longer applicable and shall hereafter be disregarded for any and all
purposes under the Development Agreement.
8.6.1. Maintenance and Damage. Any lien arising under the terms and conditions of
Section 8.6.1 relating to maintenance and damage of the Development shall be subject to and
subordinate to mortgages, deeds of trust or other security interests executed for the sole
purpose of obtaining funds to develop the Property as authorized herein.
9.1.4.6 Rioht of Seiler to Cure Security Interest Default. All costs and expenses incurred
by Seller in curing a default shall be reasonable and any lien arising under the terms and
conditions of Section 9.1.4.6 relating to funds expended by the City to cure a default shall be
subject and subordinate to mortgages, deeds of trust or other security interest executed for the
sole purpose of obtaining funds to develop the Property as authorized herein.
12.9 Notices. Address of Buyer is hereby changed to:
Tienda Drive Senior Apartments, L.P.
c/o Eden Investments, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Facsimile: (510) 582-6523
With a copy to Owner's investor limited partner at the address set forth in Exhibit M.
12 22 Investor Limited Partner Provisions. The provisions required by Borrower's
investor limited partner set forth in Exhibit M attached hereto are hereby incorporated by this
reference herein and made a part hereof.
12.24 Memorandum of Development Agreement. Concurrently with the closing of the
City Loan, the parties shall record the Memorandum of Development Agreement in the form
attached hereto as Exhibit K.
12.25 Approval of the City. Any approval rights of the City under the Development
Agreement shall not be unreasonably withheld, conditioned or delayed.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 6
IN WITNESS WHEREOF, the Parties have executed this Assignment and Amendment of that
Purchase and Development Agreement as of the date first written above.
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
App;oved as to form:
Janice.D` Magdich, City Attorney
[Signatures continue on the next page; the balance of this page is intentionally left blank.]
Tienda Assignment Amendment to PDA
rev 2.18.16 Final 7
TIENDA DRIVE SENIOR APARTMENTS, L.P., a California limited partnership
By: Tienda Drive Senior Apartments LLC, General Partner
By: Eden Investments, Inc., sole member/manager
By:
Linda Mandoline, President
EDEN MOUSING, INC., a California nonprofit public benefit corporation
By:
Linda Mandolini, President
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 8
Exhibit A: LEGAL DESCRIPTION OF PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described as
follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Tienda_Assignment Amendment to PDA
rev 2,18.16 Final 9
Combined Exhibit C: Approved Development Budget
and Exhibit D: Financing Plan
on following page
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 10
Exhibit E: Schedule of Performance
Completion of the Predeveiopment No later than March 21, 2016
Activities set forth in Article 5
Close of Construction Financing
Commencement of Construction
No later than March 21, 2016
Within 21 days after the Close of Construction
Financing or the earlier of the construction
commencement date required by the
California Tax Credit Allocation Committee or other
Project financing source.
Construction Completion
Within 24 months of commencement of construction.
100% Occupancy Within 6 months of construction completion.
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 11
Exhibit F: Scope of Development
(Project Name and Description)
Tienda Drive Senior Apartments: The new construction of two wood -framed apartment
buildings, each building is to two -stories, and elevator -served. The buildings will consist
of 80 units targeting low-income seniors aged 62 and over. The unit mix includes 79
one -bedrooms and 1 two-bedroom manager's unit. Eight (8) units will be set aside for
formerly homeless individuals diagnosed with a mental illness. The property will also
feature a central 1,200 square foot community room with kitchen. Additional common
amenities include two laundry rooms, courtyard space, and on-site management and
social services.
Tienda Assignment Amendment to PDA
rev 2.18.16 Final 12
Exhibit G: Site Plan
on following page
Tienda_Assignment Amendment to PDA
rev 2.18 16 Final 13
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Exhibit H: City Insurance Requirements
on following pages
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 14
Insurance Requirements to be provided by the City of Lodi prior to the close of escrow.
Exhibit K: Memorandum of Development Agreement
North American Title Company
Escrow No. 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE § 27383
APN 027-410-24 & 027-410-25
MEMORANDUM OF DEVELOPMENT AGREEMENT
(2245 and 2255 Tienda Drive, Lodi, CA)
This Memorandum of Development Agreement dated as of March 2, 2016,
modifies that Memorandum of Purchase and Development Agreement recorded July 30,
2010 as Document No. 2010-098833 of San Joaquin County Records (the "Original
Purchase and Development Agreement") to disclose that unrecorded Assignment
and Amendment of that Purchase and Development Agreement of even date herewith,
by and among Tienda Drive Senior Apartments, L.P., a California limited partnership
("Owner"), Eden Housing, Inc., as Owner's predecessor in interest, and the City of Lodi,
a California municipal corporation ("City").
The real property in the City of Lodi, County of San Joaquin, State of California,
described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD
ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN
COUNTY RECORDS
(the "Property") shall be developed, owned, maintained, and operated pursuant to the
terms of the above -referenced Original Purchase and Development Agreement, as
amended by the Assignment and Amendment of that Purchase and Development
Agreement, hereinafter referred to as the "Development Agreement."
Tienda_Assignment Amendment to PDA
rev 2 18.16 Final 15
This Memorandum of Development Agreement, which may be executed in counterparts,
is executed as of the date written above.
TIENDA DRIVE SENIOR APARTMENTS, L.P.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC, General
Partner
By: Eden Investments, Inc., sole
member/manager
By:
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
Janice D. Magdich, City Attorney
EDEN HOUSING, INC., a California nonprofit
public benefit corporation
By:
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 16
Exhibit L: Form of Promissory Note for City Loan
on following pages
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 17
PROMISSORY NOTE
SECURED 13Y DEED OF TRUST
$494,536.00
Lodi, California
March 2, 2016
FOR VAIJJE RECEIVED, TIENDA DRIVE SENIOR APARTMENTS, L.P,, a
California limited partnership (the "Borrower"), having its offices at 22645 Grand Street,
Hayward, CA 94541, hereby promises to pay the CITY OF LODI, a California municipal
corporation (the "City"), the principal amount of Four Hundred Ninety -Four Thousand Five
Hundred 'Thirty -Six Dollars ($494,536.00) or so much thereof as may be advanced by the City
from time to time pursuant to the Development Agreement referred to below, in the manner
provided below. No interest shall accrue on the outstanding principal balance of this Note,
except as provided in Section 4 below.
This Promissory Note (this "Note") has been executed and delivered pursuant to and in
accordance with that certain Assignment and Amendment dated as of the date hereof, and
executed by and between Borrower and City, which Assignment and Amendment amends that
certain Purchase and Development Agreement dated as of June 28, 2010 between the City and
Eden Housing, Inc., which was assumed by Borrower. The Purchase and Development
Agreement, as amended, is referred to herein as the "Development Agreement." This Note is
subject to the terms and conditions of the Development Agreement which is by this reference
incorporated herein. Capitalized terms used but not defined herein shall have the meaning
ascribed to such terms in the Development Agreement.
1. Payments.
a, Annual Payments. Commencing on the May lti` following the issuance of
the final Certificate of Occupancy, and continuing every May 1" thereafter until the full
repayment of the Loan or the maturity date (defined below), Borrower shall pay to the City, the
City's Proportionate Share of Residual Receipts (defined below).
i. "City's Proportionate Share of Residual Receipts" shall mean the City's
proportion of the "Lenders' Share of Residual Receipts" (defined below) payable to the City,
which shall be the principal amount of the Loan actually disbursed divided by the sum of the
original principal amounts actually disbursed of all loans approved by the City as part of the
Financing and payable on a "residual receipts" basis which may also be called "net cash flow,"
"surplus cash," or other similar term. The "Lenders' Share of Residual .Receipts" shall mean
fifty percent (50%) of the Residual Receipts and the "Borrower's Share of Residual Receipts"
shall be retain fifty percent (50%) of the Residual Receipts.
As of the date of this Note, the prorata percentage sharing of the Lender's Share of
Residual Receipts, assuming full disbursement of the following loans, is expected to be:
CaIHFA: 31.37% based on a $740,000.00 MHSA loan; County: 47.67% based on the
$1,124,669.15 County loan; and City of Lodi: ("City") 20,96% based on a $494,536.00 City
Tienda_City $494,536 Promissory Note
rev 2,16.16 Final 1
loan.
ii. "Residual Receipts" in a particular calendar year shall mean the amount by
which Gross Revenue exceeds Annual Operating Expenses.
iii. "Annual Operating Expenses" with respect to a particular calendar year
shall mean the following costs reasonably and actually incurred for operation and maintenance of
the Project to the extent that they are consistent with an annual independent audit performed by a
certified public accountant using generally accepted accounting principles: property taxes and
assessments imposed on the Project; debt service currently due on a non -optional basis
(excluding debt service due from residual receipts or surplus cash of the Project) on loans
associated with the development of the Project; Call -IFA 0.42% MI -ISA servicing fee; property
management fees and reimbursements, not to exceed tees and reimbursements which are
standard in the industry; partnership management fees and asset management fees including all
fees paid to Borrower's investor limited partner, if any, in the amount of Thirty -Three Thousand
Five Hundred Dollars ($33,500) increasing by three percent (3%) annually during the fifteen
year Tax Credit compliance period and after the expiration of the fifteen year compliance period,
in the amount of Twenty -Five Thousand Dollars ($25,000) which amount will increase by three
percent (3%) annually commencing on the first anniversary of the expiration of the tax credit
compliance period, and such other reasonable fees as may be approved by the City at the time the
tax credit syndication occurs; organizational costs (e.g., annual franchise tax payments) and costs
associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary
course of business; premiums for property damage and liability insurance; utility services not
paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair
of the Project; any annual license or certificate of occupancy fees required for operation of the
Project; security services; advertising and marketing; cash deposited into reserves for capital
replacements of the Project in an amount required by the Project financing and the tax credit
syndication (or any greater amount approved by the City); cash deposited into a reasonable
operating reserve required by the Project financing and the tax credit syndication (or any greater
amount approved by the City); payment of any previously unpaid portion of the Developer Fee
not exceeding a cumulative developer fee in the maximum amount of One Million Four Hundred
"Thousand Dollars ($1,400,000); on-site service provider fees and reimbursements for tenant
social services at the Project; extraordinary operating costs specifically approved by the City;
payments of deductibles in connection with casualty insurance claims not normally paid from
reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally
paid from reserves, and other ordinary and reasonable operating expenses not listed above.
Annual Operating Expenses shall not include the following: depreciation, amortization,
depletion or other non-cash expenses; any amount expended from a reserve account; and any
capital cost with respect to the Project, as determined by the accountant for the Project.
iv. "Gross Revenue" with respect to a particular calendar year shall mean all
revenue, income, receipts, and other consideration actually received from operation and leasing
of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid
by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units,
deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental
adjustments to leases or rental agreements; proceeds from vending and laundry room machines;
the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 2
used to rebuild the Project; and condemnation awards for a taking of part or all of the Project for
a temporary period not used to restore the Project following such condemnation. Gross Revenue
shall not include tenants' security deposits, loan proceeds, capital contributions or similar
advances.
e. Statement. No later than May I" of each year following the issuance of the
certificate of occupancy for the Project, Borrower shall provide to the City Borrower's calculation of
Residual Receipts for the previous calendar year, accompanied by such supporting documentation as the
City may reasonably request, including without limitation, an independent audit prepared for the Project
by a certified public accountant in accordance with generally accepted accounting principles. No later
than December 1" dead) year following issuance of the final certificate of occupancy for the Project,
Borrower shall provide to the City a projected budget for the following calendar year which shall include
an estimate of Residual Receipts.
d. Application of Payments. Payments shall be applied fust to accrued
interest, if any, and then to the outstanding principal balance.
e. Term. Notwithstanding any other provision of this Note, principal and
interest, if any, payable pursuant to this Note shall be fully repaid within fifty-five (55) years
from the date the final certificate of occupancy is issued for the Project, but in no event shall the
maturity date be later than July 15, 2073 (the "Maturity Date").
3. Deed ofTrust. This Note is secured by that Deed ofTrust, Assignment of Rents,
Security Agreement and Fixture Filing (the "Deed of Trust") of even date herewith which shall
be recorded on the Property in the Official Records of the County of San Joaquin.
4. Default Rate. Upon the occurrence of an Event of Default (defined below),
interest shall automatically accrue without notice at a rate equal to the lesser of the maximum
rate permitted by law or ten percent (10%) per annum (the "Default Rate"). When Borrower is
no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again
be the zero percent (0%) rate specified in the first paragraph of this Note. The imposition or
acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note
or prevent City from exercising any of its other rights or remedies.
5. Manner and Place of Payment. Payments shall be mailed to the City of Lodi, P.O.
13ox 3006, Lodi, CA 95241-1910, or delivered to City Hall, located at 221 West Pine Street,
Lodi, CA 95240, or at such other place as the holder hereof may inform Borrower in writing, in
lawful money of the United States.
6. Waiver: Attorney$' Fees. Borrower waives presentment for payment, demand,
protest, and notices of dishonor and of protest; the benefits of all waiveable exemptions; and all
defenses and pleas on the grounds of any extension(s) of the time of payment or of any due date
under the Note, in whole or in part, whether before or after maturity and with or without notice.
Borrower hereby agrees to pay all costs and expenses, including reasonable attorney's fees,
which may be incurred by the holder hereof in the enforcement of the Note, the Development
Agreement, Regulatory Agreement, and the Deed of Trust or any term or provision of any of
such documents.
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 3
7. Acceleration. The entire balance of the obligation shall be immediately due and
payable in the event Borrower fails to make payments due under this Note following not Tess
than fifteen (15) day notice and cure period or in the Event of Default as defined in and subject
to applicable notice and cure provisions in the Development Agreement, the Deed of Trust,
Regulatory Agreement, or in the event the Project is refinanced, sold, transferred or conveyed in
any manner, or if Borrower reorganizes, modifies its structure or transfers the Project as a
portion of its assets without the written consent of or otherwise approved by the City. This loan
is not assumable without the prior written approval of the City, except by an affiliate of Eden
1 -lousing, Inc. Neither acceptance by the City of the payments provided for herein nor any failure
by the City to pursue its legal and equitable remedies upon default shall constitute a waiver of
the City's right to require prompt payments when due of all principal and interest, if any, owing
or to declare a default and exercise all of its rights under this Note, the Deed of Trust, Regulatory
Agreement, and Development Agreement.
8. Prepayment. Borrower shall have the right to prepay without penalty all or any
part of the obligation evidenced by this Note.
9. Nonrecourse Obligation. Except as expressly provided in the second paragraph of
this section 9, the Borrower, the Borrower's officers, directors, partners, employees and agents,
shall not have any direct or indirect personal liability for payment of the principal of, or interest,
if any, on this Note or the performance of the covenants of the Trustor under the Deed of `frust
securing this Note, The sole recourse of the City with respect to the principal of, or interest, if
any, on this Note and defaults by the Borrower in the performance of its covenants under the
Deed of Trust shall be to the property securing the indebtedness evidenced by this Note. No
judgment, or execution thereon, entered in any action, legal or equitable, on this Note or the
Deed of Trust shall be enforced personally against the Borrower, its officers, directors, partners,
employees or agents, but may be enforced only against the property described in the Deed of
Trust and such other or further security as, from time to time, may be hypothecated for this Note;
provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or
impair the enforcement against all such security for this Note by the City, or (b) be deemed in
any way to impair the right of the City to assert the unpaid principal amount of this Note as
demand for money within the meaning and intendment of Section 431.70 of the California Code
of Civil Procedure or any successor provision thereto.
The foregoing limitation of liability is intended to apply only to the obligation for the
repayment of the principal of, and payment of interest, if any, on this Note and the performance
of Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing
contained herein is intended to relieve the Borrower of personal liability for (1) fraud or willful
misrepresentation; (2) the failure to pay taxes, assessments or other charges which may create
liens on the Property that are payable or applicable prior to any foreclosure under the Deed of
Trust (to the full extent of such taxes, assessments or other charges); (3) the fair market value of
any personal property or fixtures removed or disposed of by Borrower other than in accordance
with the Deed of Trust; (4) the misapplication of any proceeds under any insurance policies or
awards resulting from condemnation or the exercise of the power of eminent domain or by
reason of damage, loss or destruction to any portion of the Property; (5) the 13orrower's
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 4
indemnification obligations, if any, under the Development Agreement; and (6) payment to the
City or any senior lender any rental income or other income arising with respect to the Property
received by the Borrower and not applied in accordance with the Deed of Trust or Development
Agreement or other Project loan documents evidencing other- Project loans approved by the City,
after the City has given notice to the Borrower of the occurrence of an Event of Default.
10. Assignment. The City's rights under this Note may be assigned by the City in its
sole discretion.
1 1. No Offset. The Borrower hereby waives any rights of offset it now has or may
hereafter have against the City, its successors and assigns, and agrees to make the payments
called for herein in accordance with the terms of this Note.
TIENDA DRIVE SENIOR APARTMENTS, L.P., a California
limited partnership
By: Tienda Drive Senior Apartments LLC, its General Partner
By: Eden Investments, Inc., its sole Member/Manager
By:
Linda Mandolini, President
Approved as to form:
City of Lodi, a California municipal corporation
By
Janice D. Magdich, City Attorney
Tienda_City $494,536 Promissory Note
rev 2.16.16 Final 5
EXHIBIT M
INVESTOR LIMITED PARTNER REQUIRED PROVISIONS
This Exhibit M is attached to and made a part of the Assignment and Amendment
of that Purchase and Development Agreement by and among Tienda Drive Senior
Apartments, L.P., a California limited partnership ("Borrower"), Eden Housing, Inc., a
California nonprofit public benefit corporation, and the City of Lodi, a California municipal
corporation (referred to as the "Lender" in this Exhibit M). The Borrower (sometimes
referred to in this exhibit as the "Partnership"), through its limited partner, is providing
equity for the development of the Project. The agreement of limited partnership governing
the Borrower, as it may be amended and/or amended and restated from time to time, is
referred to herein as the "Partnership Agreement." All capitalized terms used, but not
defined, in this Exhibit M shall have the meaning ascribed to such term in the
Development Agreement.
The Low Income Housing Tax Credit financing for the development of the
Project requires the admission of an investor limited partner in Borrower ("Limited
Partner"), and as a condition to becoming a limited partner in the Borrower which
benefits Borrower and Lender, Limited Partner requires that the Lender and Borrower
grant certain protections to Limited Partner under the Development Agreement and the
documents evidencing or securing the City Loan, including without limitation, the
Promissory Note, Deed of Trust, and the Regulatory Agreement and Declaration of
Restrictive Covenants between Borrower and the Lender (collectively, the "City
Documents"),
Lender and Borrower hereby agree that (1) each the following covenants, terms
and conditions shall be part of and shall modify or supplement each of the City
Documents notwithstanding any term or provision set forth in any of the City Documents
to the contrary, and (ii) that in the event of any inconsistency or conflict between the
covenants, terms and conditions of the City Documents and this Exhibit M, including
without limitation the terms and provisions set forth in Article 10 and Article 12 of the
Original Purchase and Development Agreement, that each of the following covenants,
terms and conditions set forth herein in this Exhibit M shall supersede, control and prevail:
1.For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner prior to exercising
remedies under the City Documents, Lender will give Limited Partner a copy of any
written notice it gives to Borrower under the City Documents at the following address:
Wells Fargo Affordable Housing Community
Development Corporation, MAC D1053-170
301 South College Street, 17th Floor
Charlotte, NC 28288
Attention: Director of Asset Management
With copy to:
Tienda_Assignment Amendment to PDA
rev 2.18.16 Final 18
Joel Hjelmaas, Counsel
Wells Fargo Bank, N.A.
MAC X2401 -06T
1 Home Campus, 6th Floor
Des Moines, IA 50328-0001
Or such other address that the Limited Partner shall send to Lender in
accordance with Section 12.9 of the Development Agreement.
Changes of addresses for Notices and any changes in the Limited Partner or a
change to an entity other than Wells Fargo Affordable Housing Community Development
Corporation shall be effective without an amendment to this Exhibit M, or if an
amendment is required by the Lender, such amendment may be approved by the City
Manager or his or her designee, and such amendment need not be recorded to be
effective.
2. Limited Partner shall have the same right as Borrower to cure or
remedy any default hereunder within the cure period provided to Borrower
extended by an additional sixty (60) days; provided however, if the default is of
such nature that the Limited Partner reasonably determines that it is necessary to
replace the general partner of Borrower in order to cure such default, then the cure
period shall be extended until the date sixty (60) days following the removal of the
general partner of Borrower, and such cure shall be accepted or rejected on the
same basis as if tendered by Borrower.
3. If Limited Partner presents payment or otherwise cures a monetary or
non -monetary default within the cure periods set forth in the City Documents, Lender
will accept such action as curing the respective default under the City Documents.
4. For so long as Wells Fargo Affordable Housing Community Development
Corporation (together with its affiliates) is the Limited Partner, Lender agrees that the
Limited Partner may sell, transfer, assign or otherwise dispose of all or any part of its
interest in Borrower to an entity controlled by an affiliate of Wells Fargo Bank, N.A.,
without Lender's prior written consent, and such transfer, assignment or other
disposition will not trigger an Event of Default or any due on sale or acceleration
provisions under the City Documents,
5. Lender will permit Limited Partner to remove the general partner of
Borrower in accordance with Borrower's partnership agreement, provided that Lender
gives its prior written approval that the substitute general partner is acceptable to
Lender in its reasonable discretion. An affiliate of Wells Fargo Bank, National
Association is an acceptable substitute general partner, and does not require Lender's
prior written approval. Such transfers will not trigger an Event of Default or any due on
sale or acceleration provisions under the City Documents.
6. Lender will permit insurance and condemnation proceeds to be used to
rebuild the Project provided that sufficient funds are available from other sources to
effectively rebuild the Project.
Tienda_Assignment Amendment to PDA
rev 2 18.16 Final 19
7. Lender has not and will not cross -default or cross-collateralize the City
with any loan made with respect to another property.
8. Lender will not materially modify the City Documents without Limited
Partner's prior written consent.
9. No Third Party Beneficiaries. Wells Fargo Affordable Housing Community
Development Corporation, its affiliates, successors and assigns, as the Limited Partner of the
Borrower, is a third party beneficiary to the Development Agreement, pursuant to the terms and
conditions thereof.
Tienda_Assignment Amendment to PDA
rev 2 18.16 Final 20
North American Title Company
Escrow No. 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §27383
APN 027-410-24 & 027-410-25
MEMORANDUM OF DEVELOPMENT AGREEMENT
(2245 and 2255 Tienda Drive, Lodi, CA)
This Memorandum of Development Agreement dated as of March 2, 2016,
modifies that Memorandum of Purchase and Development Agreement recorded July 30,
2010 as Document No. 2010-098833 of San Joaquin County Records (the "Original
Purchase and Development Agreement") to disclose that unrecorded Assignment
and Amendment of that Purchase and Development Agreement of even date herewith,
by and among Tienda Drive Senior Apartments, L.P., a California limited partnership
("Owner"), Eden Housing, Inc., as Owner's predecessor in interest, and the City of Lodi,
a California municipal corporation ("City").
The real property in the City of Lodi, County of San Joaquin, State of California,
described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD
ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN
COUNTY RECORDS
(the "Property") shall be developed, owned, maintained, and operated pursuant to the
terms of the above -referenced Original Purchase and Development Agreement, as
amended by the Assignment and Amendment of that Purchase and Development
Agreement, hereinafter referred to as the "Development Agreement."
Tienda_Memo of Development Agreement
rev 2 18.16 Final
This Memorandum of Development Agreement, which may be executed in counterparts,
is executed as of the date written above.
TIENDA DRIVE SENIOR APARTMENTS, L.P.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC, General
Partner
By: Eden Investments, Inc., sole
member/manager
By:
Linda Mandolini, President
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
Janicet. Magdich, City Attorney
EDEN HOUSING, INC., a California nonprofit public
benefit corporation
By:
Linda Mandolini, President
A notary public or other officer completing this certificate
verifies only the Identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
)
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within Instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
This area for official notarial seal.
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
This area for official notarial seal.
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document,
STATE OF CALIFORNIA
COUNTY OF
On
before me,
)SS
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(les), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
This area for official notarial seal.
North American Title Company
Escrow No. 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
Eden Housing, Inc
22645 Grant Street
Hayward, CA 94541-5031
Attention: Neil Saxby
RELEASE AND TERMINATION
This Release and Termination ("Release") by Eden Housing, Inc., a California nonprofit
public benefit corporation ("Eden") and the City of Lodi, a California municipal
corporation (the "City") is dated as of March 2, 2016 for reference purposes only.
Eden, as the current owner of the property described in Exhibit A attached hereto (the
"Property"), and the City declare that that certain instrument entitled "AGREEMENT"
recorded in the Official Records of San Joaquin County on July 31, 1996 as Document
No. 96079082 is hereby terminated, and upon the recordation of this Release in the
Official Records of the County of San Joaquin, the Property shall be released from the
encumbrance of the AGREEMENT.
The parties have executed this Release and Termination as of the day first above
written. This Release may be signed in multiple counterparts.
EDEN HOUSING, INC.,
By:
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPR ,VED AS TO FORM:
anice D. Magdich, City Attorney
Tienda_ Release and Termination of 1996 Agreement
rev 2 16.16 Final
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )SS
COUNTY OF ).
On before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within Instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
Exhibit A
PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described
as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Exhibit A
North American Title Company
Escrow No. 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
Eden Development, Inc.
22645 Grant Street
Hayward, CA 94541-5031
Attention: Neil Saxby
RELEASE AND TERMINATION
(Option Agreement to Purchase Real Property)
(2245 and 2255 Tienda Drive, Lodi, CA)
(APN: 027-410-24 and 027-410-25)
This Release and Termination ("Release") by Eden Development, Inc. ("Eden
Development") and the City of Lodi, a California municipal corporation (the "City") is
dated as of March 2, 2016 for reference purposes only and shall be effective upon its
recordation in the Official Records of the County of San Joaquin ("Official Records").
The City granted an option to Eden Development to purchase the property
identified above and described in Exhibit A attached hereto, as set forth in an
unrecorded Option Agreement to Purchase Real Property dated as of October 20, 2010
between the City as the then owner of the property and Eden Development as the
optionee ("Option"), a memorandum of which was recorded in the Official Records on
December 11, 2009 as Document # 2009-176922 (the "Memo of Option").
Eden Development and the City wish to terminate the Option and the Memo of
Option and release and remove the Memo of Option from the Official Records.
NOW, THEREFORE, it is hereby declared and understood as follows:
The Option and the Memorandum of Option are hereby terminated, and the Property is
hereby released from the encumbrance of the Memo of Option.
Tienda_Release and Termination of EDI Option
rev 2.16.16 Final
The parties to the Option and Memorandum of Option have executed this Release and
Termination as of the day first above written. This Release may be signed in multiple
counterparts.
Eden Development, Inc.,
a California nonprofit public benefit corporation
By:
Linda Mandolini, President
City of Lodi, a California municipal corporation
By:
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferraiolo, City Clerk
Approved as to form:
Janice D:'Magdich, City Attorney
[SIGNATURES MUST BE NOTARIZED]
Tienda_Release and Termination of EDI Option
rev 2.16.16 Final 2
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal,
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
}
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct,
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
Exhibit A
PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described
as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN 1300K 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Exhibit A
ESTOPPEL CERTIFICATE
March , 2016
Wells Fargo Affordable Housing Community Development Corporation
MAC D1053-170
301 South College Street, 17°i Floor
Charlotte, NC 29288
Re: Tienda Drive Senior Apartments, L.P. (the "Partnership")
Ladies and Gentlemen:
We refer to that certain loan in the amount of Four Hundred Ninety -Four Thousand Five
Hundred Thirty -Six and No/100 Dollars ($494,536.00) made by us, the City of Lodi, a California
municipal corporation (the "City"), and assigned by Eden Housing, Inc. ("Eden") to the Tienda
Drive Senior Apartments, L.P. ("Partnership") as the borrower (the "Loan") evidenced and
secured by various documents, including, without limitation, that certain that Promissory Note
dated as of March 2, 2016, in the original principal amount of $494,536.00 by the Partnership
evidencing the Loan, that certain Deed of Trust with Assignment of Rents, Security Agreement,
and Fixture dated as of March 2, 2016, by the Partnership for the benefit of the City, securing the
Loan, that certain Regulatory Agreement and Declaration of Restrictive Covenants dated as of
March2, 2016 by the Partnership and the City, and that certain Purchase and Development
Agreement dated as of July 28, 2010 by Eden and the City, which has been or will be assigned to
the Partnership and amended by that certain Assignment and Amendment of that Purchase and
Development Agreement dated as of March 2, 2016 among Eden, the Partnership and the City
(the "Development Agreement") (collectively, the "Loan Documents") on property located at
2245 and 2255 Tienda Drive, Lodi, CA 95242 (the "Property").
The City understands that Wells Fargo Affordable Housing Community Development
Corporation ("Investor") is being admitted as the investor limited partner of the Partnership
and are about to make an installment of your equity investment in the Partnership, and have
requested that the City execute this Estoppel Certificate (this "Certificate") in connection
therewith.
The City approves the admission of the Investor to the Partnership as the investor limited
partner of the Partnership and the admission of an affiliate of the Investor as a special limited
partner in the Partnership (also referred to herein as "Borrower").
In connection with the Partnership's proposed development of the Property, the
Partnership has or will obtain the following additional loans: (i) construction loan from Wells
Fargo Bank, National Association, in an approximate amount of $16,771,698.00, (ii)
construction and permanent loan from the County of San Joaquin in the amount of
Tienda_City Estoppel in favor of Investor
rev 2.16.16 Final
$1,124,669.15; and (iii) construction and permanent loan from Wells Fargo Financial National
Bank through the Affordable Housing Program in the amount of $790,000.00. The City
approves of the additional financing set forth in this paragraph and the mortgage liens
encumbering the Property that secure such additional financing.
The City hereby represents and warrants to you that to its actual knowledge:
1. the Loan Documents have not been further modified or amended and are in full
force and effect, there is no default under the Loan Documents on the part of Borrower under the
Loan Documents, nor does any condition exist which, with notice or the passage of time or both,
would constitute a default, breach, event of default, or failure of condition under the Loan
Documents;
1 each and every covenant, condition and obligation to funding required to be
performed or satisfied has been or will be satisfied, completed and/or unconditionally waived
upon the City's funding of the Loan through an escrow for the closing ol'the above -referenced
loans ("Closing");
3. any matter required to be approved by the City as of the date hereof has been
approved, including, without limitation, the existing liens of record shown of title at Closing and
Eden Housing Management, Inc. as the initial property management agent;
4. the City acknowledges that the Investor is relying on the certifications herein in
investing in the Partnership and making capital contributions pursuant to the Partnership
Agreement;
5. the City approves the purchase option and right of first refusal granted to the general
partner of Borrower under the Partnership Agreement;
6. Notwithstanding anything to the contrary that may be set forth in the Loan
Documents, no approval of the City shall be required for (i) removal of the general partner of the
Partnership by the Investor with an affiliate of Wells Fargo Bank, National Association pursuant
to the Partnership Agreement or (ii) the transfer of limited partnership interests by the Investor
pursuant to the Partnership Agreement. The Investor shall have the right, but not the obligation,
to cure any default of the Partnership under any of the Loan Documents within the cure periods
set forth therein. Notwithstanding the foregoing, if the 1 nvestor elects to remove the general
partner of the Partnership in connection with any such cure, then so long as the Investor
commences proceedings and diligently proceeds to remove such general partner, the cure period
shall be extended for so long as reasonably necessary for the Investor to remove such general
partner and effectuate the cure;
7. the undersigned has executed this Certificate with the knowledge and agreement that
the City will be bound by the statements contained herein and that they may be relied upon by
the Partnership, Investor, and their respective successors and assigns;
"I icnda_City Estoppel in favor of Investor
rev 2.16.16 Final 2
8. this Certificate may not be relied on by any party other than the addressee, in its
capacity as Investor , the Partnership, and their respective successors and assigns without the
prior written consent of the City;9. hi the event of any conflict between the terms of the Loan
Documents and the terms of this Certificate, the terms of this Certificate shall control; and
10. the person executing this Certificate on behalf of the City represents and warrants
that: (i) the City is duly existing, (ii) the person executing this Certificate is duly authorized to
execute and deliver the salve on behalf of the City, (iii) the City has taken such formal action as
may be required by law to bind the City, and the City is formally bound, to the provisions of this
Certificate, and (iv) entering into this Certificate does not violate any provision of any other
agreement to which the City is bound.
This Certificate shall be governed by the laws of the State of California,
Sincerely,
Stephen Schwabauer, City Manager
Attest:
Jennifer M. Ferriolo, City Clerk
Approved as to form:
Janice D. Magdich, City Attorney
'I'icnda_City Estoppel in favor of Investor
rcv 2.16.16 Final 3
WI-IEN RECORDED MAIL TO:
Wells Fargo Bank, National Association
MAC #A0119-183
333 Market Street, 18`x' Floor
San Francisco, California 94105
Attention: Loan Administration Manager
Loan No. 1015555
(SPACE ABOVE FOR RECORDER'S USE)
SUBORDINATION AGREEMENT
(City of Lodi)
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into this
day of March , 2016 by and among (i) WELLS FARGO BANK, N.A. (together with its
successors and/or assigns, the "Senior Lender"), (ii) the CITY OF LODI, a California municipal
corporation (the "Subordinate Lender"), and (iii) TIENDA DRIVE SENIOR APARTMENTS,
L.P., a California limited partnership (the "Borrower").
RECITALS
A. The Senior Lender has made or is making a loan (the "First Mortgage Loan") to
the Borrower in the original principal amount of $_:16,771,698] . The First Mortgage Loan
is or will be secured by a first mortgage lien (the "First Mortgage") on a multifamily housing
project located in San Joaquin County, California (the "Property"). The Property is more fully
described in Exhibit A attached hereto. The Borrower's obligation to repay the First Mortgage
Loan is evidenced by a Note dated __March , 2016 (the "First Mortgage Note").
B. The Borrower has requested the Senior Lender to permit the Subordinate Lender to
make a subordinate loan to Borrower in the amount of $494,536.00 (the "Subordinate Loan") and
to secure the Subordinate Loan by, among other things, placing a mortgage lien against the
Property.
C. The Senior Lender has agreed to permit the Subordinate Lender to make the
Subordinate Loan and to place a subordinate mortgage lien against the Property subject to all of the
conditions contained in this Agreement.
NOW, TI-IEREFORE, in order to induce the Senior Lender to permit the Subordinate
Lender to make the Subordinate Loan to the Borrower and to place a subordinate mortgage lien
against the Property, and in consideration thereof, the Senior Lender, the Subordinate Lender and
the Borrower agree as follows:
DWT 28754805v4 0088288-000026
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of this
Agreement the following terms have the respective meanings set forth below:
"Affiliate" means, when used with respect to a Person, any corporation, partnership,
joint venture, limited liability company, limited liability partnership, trust or individual
controlled by, under common control with, or which controls such Person (the term
"control" for these purposes shall mean the ability, whether by the ownership of shares or
other equity interests, by contract or otherwise, to elect a majority of the directors of a
corporation, to make management decisions on behalf of, or independently to select the
managing partner of, a partnership, or otherwise to have the power independently to remove
and then select a majority of those individuals exercising managerial authority over an
entity, and control shall be conclusively presumed in the case of the ownership of 50% or
more of the equity interests).
"Borrower" means the Person named as such in the first paragraph of this
Agreement and any other Person (other than the Senior Lender) who acquires title to the
Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on which the
Senior Lender is not open for business.
"Default Notice" means: (a) a copy of the written notice from the Senior Lender to
the Borrower stating that a First Mortgage Loan Default has occurred under the First
Mortgage Loan; or (b) a copy of the written notice from the Subordinate Lender to the
Borrower stating that a Subordinate Loan Default has occurred under the Subordinate Loan.
Each Default Notice shall specify the default upon which such Default Notice is based.
"First Mortgage Loan Default" means the occurrence of an "Event of Default" as
that term is defined in the First Mortgage Loan Documents.
"First Mortgage Loan Documents" means the First Mortgage Note and all other
documents evidencing, securing or otherwise executed and delivered in connection with the
First Mortgage Loan.
"Official Records" means the Official Records of San Joaquin County, California.
"Person" means an individual, estate, trust, partnership, corporation, limited liability
company, limited liability partnership, governmental department or agency or any other
entity which has the legal capacity to own property.
"Senior Lender" means the Person named as such in the first paragraph on page I
of this Agreement. Wlien any other Person becomes the legal holder of the First Mortgage
Note, such other Person shall automatically become the Senior Lender.
2
DWT 28754805v4 0088288-000026
"Subordinate Lender" means the Person named as such in the first paragraph on
page 1 of this Agreement and any other Person who becomes the legal holder of the
Subordinate Note after the date of this Agreement.
"Subordinate Development Agreement" means that certain Purchase and
Development Agreement, dated as of July 28, 2010, by and between Eden Housing, Inc, ("Original
Borrower") and Subordinate Lender, as assigned and amended by that certain Assignment and
Amendment of that Purchase and Development Agreement, dated as of March 2, 2016, by and
among Original Borrower, as assignor, Borrower, as assignee, and Subordinate Lender.
"Subordinate Loan Default" means a default by the Borrower in performing or
observing any of the terms, covenants or conditions in the Subordinate Loan Documents to
be performed or observed by it, which continues beyond any applicable period provided in
the Subordinate Loan Documents for curing the default.
"Subordinate Loan Documents" means the Subordinate Development Agreement,
the Subordinate Note, the Subordinate Mortgage, the Subordinate Regulatory Agreement
and all other documents evidencing, securing or otherwise executed and delivered in
connection with the Subordinate Loan.
"Subordinate Mortgage" means that certain Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing, dated as of March 2, 2016, made by Borrower for
the benefit of Subordinate Lender and recorded in the Official Records substantially
concurrently herewith.
"Subordinate Note" means that certain Promissory Note Secured by Deed of Trust,
dated as of March 2, 2016, made by Borrower in favor of Subordinate Lender in the original
face principal amount of the Subordinate Loan.
"Subordinate Regulatory Agreement" means that certain Regulatory Agreement
and Declaration of Restrictive Covenants, dated as of March 2, 2016, by and between
Borrower and Subordinated Lender and recorded in the Official Records substantially
concurrently herewith.
2. Permission to Place Mortgage Lien Against Property.
The Senior Lender agrees, notwithstanding the prohibition against inferior liens on the
Property contained in the First Mortgage Loan Documents and subject to the provisions of this
Agreement, to permit the Subordinate Lender to record the Subordinate Mortgage and other
recordable Subordinate Loan Documents against the Property (which are subordinate in all respects
to the lien of the First Mortgage) to secure the Borrower's obligation to repay the Subordinate Note
and all other obligations, indebtedness and liabilities of the Borrower to the Subordinate Lender
under and in connection with the Subordinate Loan. Such permission is subject to the condition that
each of the representations and warranties made by the Borrower and the Subordinate Lender in
Section 3 of this Agreement is true and correct on the date of this Agreement and on the date on
which the proceeds of the Subordinate Loan are disbursed to the Borrower. If any of the
3
ova 28754805v4 0088288-000026
representations and warranties made by the Borrower and the Subordinate Lender in Section 3 is not
true and correct on both of those dates, the provisions of the First Mortgage Loan Documents
applicable to unpermitted liens on the Property shall apply.
3. Borrower's and Subordinate Lender's Representations and Warranties.
The Borrower and the Subordinate Lender each makes the following representations and
warranties to the Senior Lender:
(a) jlntentionally Omitted]
(b) Relationship of Borrower to Subordinate Lender and Senior Lender.
The Subordinate Lender is not an Affiliate of the Borrower and is not in possession of any
facts which would lead it to believe that the Senior Lender is an Affiliate of the Borrower.
(c) Term. The term of the Subordinate Note does not end before the term of the
First Mortgage Note.
(d) Subordinate Loan Documents. The executed Subordinate Loan
Documents are substantially in the same forms as those submitted to, and approved by,
Senior Lender prior to the date of this Agreement. Upon execution and delivery of the
Subordinate Loan Documents, Borrower shall deliver to Senior Lender an executed copy of
each of the Subordinate Loan Documents, certified to be true, correct and complete.
(e) Senior Loan Documents. The executed Senior Loan Documents are
substantially in the same forms as, when applicable, those submitted to, and approved by,
Senior Lender prior to the date of this Agreement. Upon execution and delivery of the
Senior Loan Documents, Borrower shall deliver to Subordinate Lender an executed copy of
each of the Senior Loan Documents, certified to be true, correct and complete.
4. Terms of Subordination.
(a) Agreement to Subordinate. The Senior Lender and the Subordinate
Lender agree that: (i) the indebtedness evidenced by the Subordinate Loan Documents is
and shall be subordinated in right of payment, to the extent and in the manner provided in
this Agreement to the prior payment in full of the indebtedness evidenced by the First
Mortgage Loan Documents, and (ii) the Subordinate Mortgage and the other Subordinate
Loan Documents are and shall be subject and subordinate in all respects to the liens, terms,
covenants and conditions of the First Mortgage and the other First Mortgage Loan
Documents and to all advances heretofore made or which may hereafter be made pursuant to
the First Mortgage and the other First Mortgage Loan Documents (including but not limited
to, all sums advanced for the purposes of (1) protecting or further securing the lien of the
First Mortgage, curing defaults by the Borrower under the First Mortgage Loan Documents
or for any other purpose expressly permitted by the First Mortgage, or (2) constructing,
renovating, repairing, furnishing, fixturing or equipping the Property).
4
DWT 2875480.5 v4 0088288-000026
(b) Subordination of Subrogation Rights. The Subordinate Lender agrees that
if, by reason of its payment of real estate taxes or other monetary obligations of the
Borrower, or by reason of its exercise of any other right or remedy under the Subordinate
Loan Documents, it acquires by right of subrogation or otherwise a lien on the Property
which (but for this subsection) would be senior to the lien of the First Mortgage, then, in that
event, such lien shall be subject and subordinate to the lien of the First Mortgage.
(e) Payments Before First Mortgage Loan Default. Until the Subordinate
Lender receives a Default Notice of a First Mortgage Loan Default from the Senior ]..,ender,
the Subordinate Lender shall be entitled to retain for its own account all payments made
under or pursuant to the Subordinate Loan Documents.
(d) Payments After First Mortgage Loan Default. The Borrower agrees that,
after it receives notice (or otherwise acquires knowledge) of a First Mortgage Loan Default,
it will not make any payments under or pursuant to the Subordinate Loan Documents
(including but not limited to principal, interest, additional interest, late payment charges,
default interest, attorney's fees, or any other sums secured by the Subordinate Mortgage)
without the Senior Lender's prior written consent. The Subordinate Lender agrees that, after
it receives a Default Notice from the Senior Lender with written instructions directing the
Subordinate Lender not to accept payments from the Borrower on account of the
Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate
Loan Documents (including but not limited to principal, interest, additional interest, late
payment charges, default interest, attorney's fees, or any other sums secured by the
Subordinate Mortgage) without the Senior Lender's prior written consent. If the
Subordinate Lender receives written notice from the Senior Lender that the First Mortgage
Loan Default which gave rise to the Subordinate Lender's obligation not to accept payments
has been cured, waived, or otherwise suspended by the Senior Lender, the restrictions on
payment to the Subordinate Lender in this Section 4 shall terminate, and the Senior Lender
shall have no right to any subsequent payments made to the Subordinate Lender by the
Borrower prior to the Subordinate Lender's receipt of a new Default Notice from the Senior
Lender in accordance with the provisions of this Section 4(d).
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after the
Subordinate Lender receives a Default Notice from the Senior Lender in accordance with
subsection (d) above, the Subordinate Lender receives any payments under the Subordinate
Loan Documents, the Subordinate Lender agrees that such payment or other distribution
will be received and held in trust for the Senior Lender and unless the Senior Lender
otherwise notifies the Subordinate Lender in writing, will be promptly remitted, in kind to
the Senior Lender, properly endorsed to the Senior Lender, to be applied to the principal of,
interest on and other amounts due under the First Mortgage I.,oan Documents in accordance
with the provisions of the First Mortgage Loan Documents. By executing this Agreement,
the Borrower specifically authorizes the Subordinate Lender to endorse and remit any such
payments to the Senior Lender, and specifically waives any and all rights to have such
payments returned to the Borrower or credited against the Subordinate Loan. Borrower and
Senior Lender acknowledge and agree that payments received by the Subordinate Lender,
and remitted to the Senior Lender under this Section 4, shall not be applied or otherwise
5
DWT 28754805v4 0088288-000026
credited against the Subordinate Loan, nor shall the tender of such payment to the Senior
Lender waive any Subordinate Loan Default which may arise from the inability of the
Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan.
(#) Agreement Not to Commence Bankruptcy Proceeding. The Subordinate
Lender agrees that during the tern of this Agreement it will not commence, or join with any
other creditor in commencing any bankruptcy reorganization, arrangement, insolvency or
liquidation proceedings with respect to the Borrower, without the Senior Lender's prior
written consent.
5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver
to the Senior Lender a Default Notice within five Business Days in each case where the
Subordinate Lender has given a Default Notice to the Borrower. Failure of the Subordinate
Lender to send a Default Notice to the Senior Lender shall not prevent the exercise of the
Subordinate Lender's rights and remedies under the Subordinate Loan Documents, subject
to the provisions of this Agreement. The Senior Lender shall have the right, but not the
obligation, to cure any Subordinate Loan Default within 60 days following the date of such
notice; provided, however that the Subordinate Lender shall be entitled, during such 60 -day
period, to continue to pursue its rights and remedies under the Subordinate Loan Documents
to the extent permitted under Section 5(b). All amounts paid by the Senior Lender in
accordance with the First Mortgage Loan Documents to cure a Subordinate Loan Default
shall be deemed to have been advanced by the Senior Lender pursuant to, and shall be
secured by the lien of, the First Mortgage.
(b) Subordinate Lender's Agreement to Standstill. If a Subordinate Loan
Default occurs and is continuing, the Subordinate Lender agrees that, without the Senior
Lender's prior written consent, it will not accelerate the Subordinate Loan, commence
foreclosure proceedings with respect to the Property, collect rents, appoint (or seek the
appointment of) a receiver or institute any other collection or enforcement action.
(c) Cross Default. The Borrower and the Subordinate Lender agree that a
Subordinate Loan Default shall constitute a First Mortgage Loan Default under the First
Mortgage Loan Documents and the Senior Lender shall have the right to exercise all rights
or remedies under the First Mortgage Loan Documents in the same manner as in the case of
any other First Mortgage Loan Default. If the Subordinate Lender notifies the Senior
Lender in writing that any Subordinate Loan Default of which the Senior Lender has
received a Default Notice has been cured or waived, as determined by the Subordinate
Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of
the Property pursuant to its rights under the First Mortgage Loan Documents, any First
Mortgage Loan Default under the First Mortgage Loan Documents arising solely from such
Subordinate Loan Default shall be deemed cured, and the First Mortgage Loan shall be
reinstated, provided, however, that the Senior I.,ender shall not be required to return or
otherwise credit for the benefit of the Borrower any default rate interest or other default
6
DWT 28754805v4 0088288-000(126
related charges or payments received by the Senior Lender during such First Mortgage Loan
Default.
6. Default Under First Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The Senior Lender shall deliver to the
Subordinate Lender a Default Notice within five Business Days in each case where the
Senior Lender has given a Default Notice to the Borrower. Failure of the Senior Lender to
send a Default Notice to the Subordinate Lender shall not prevent the exercise of the Senior
Lender's rights and remedies under the First Mortgage Loan Documents, subject to the
provisions of this Agreement. The Subordinate Lender shall have the right, but not the
obligation, to cure any such First Mortgage Loan Default as provided below. Subordinate
Lender may have up to 30 days from the date of the Default Notice to cure any monetary
default under the First Mortgage Loan Documents; provided, however, that the Senior
Lender shall be entitled during such 30 -day period to continue to pursue its remedies with
respect to the Property. Subordinate Lender may have up to 60 days from the date of the
Default Notice to cure a non -monetary default if during such 60 -day period Subordinate
Lender keeps current all payments required by the First Mortgage Loan Documents. In the
event that such a non -monetary default creates an unacceptable level of risk relative to the
Property, or Senior Lender's secured position relative to the Property, as determined by
Senior Lender in its sole discretion, then Senior Lender may exercise during such 60 -day
period all available rights and remedies to protect and preserve the Property and the rents,
revenues and other proceeds from the Property. All amounts paid by the Subordinate
Lender to the Senior Lender to cure a First Mortgage Loan Default shall be deemed to have
been advanced by the Subordinate Lender pursuant t0, and shall be secured by the lien of,
the Subordinate Mortgage.
(b) Cross Default. The Subordinate Lender agrees that, notwithstanding any
contrary provision contained in the Subordinate Loan Documents, a First Mortgage Loan
Default shall not constitute a default under the Subordinate Loan Documents if no other
default occurred under the Subordinate Loan Documents until either (i) the Senior Lender
has accelerated the maturity of the First Mortgage Loan, or (ii) the Senior Lender has taken
affirmative action to exercise its rights under the First Mortgage to collect rent, to appoint
(or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale
contained in) the First Mortgage. At any time after a First Mortgage Loan Default is
determined to constitute a default under the Subordinate Loan Documents, the Subordinate
Lender shall be permitted to pursue its remedies for default under the Subordinate Loan
Documents, subject to the restrictions and limitations of this Agreement. If at any time the
Borrower cures any First Mortgage Loan Default to the satisfaction of the Senior Lender, as
evidenced by written notice from the Senior Lender to the Subordinate Lender, any default
wider the Subordinate Loan Documents arising from such First Mortgage Loan Default
shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such
First Moilgage Loan Default had never occurred.
7
DWI 28754805v4 0088288-000026
7. Conflict.
The Borrower, the Senior Lender and the Subordinate Lender each agrees that, in the event
of any conflict or inconsistency between the terms of the First Mortgage Loan Documents, the
Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement shall
govern and control solely as to the following: (a) the relative priority of the security interests of the
Senior Lender and the Subordinate Lender in the Property; (b) the timing of the exercise of
remedies by the Senior Lender and the Subordinate Lender under the First Mortgage and the
Subordinate Mortgage, respectively; and (c) solely as between the Senior Lender and the
Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which
the Senior Lender and the Subordinate Lender have agreed to as expressly provided in this
Agreement. Borrower acknowledges that the terms and provisions of this Agreement shall not, and
shall not be deemed t0: extend Borrower's time to cure any First Mortgage Loan Default or
Subordinate Loan Default, as the case may be; give the Borrower the right to notice of any First
Mortgage Loan Default or Subordinate Loan Default, as the case may be other than that, if any,
provided, respectively under the First Mortgage Loan Documents or the Subordinate Loan
Documents; or create any other right or benefit for Borrower as against Senior Lender or
Subordinate Lender.
8. Rights and Obligations of the Subordinate Lender Under the Subordinate
Loan Documents and of the Senior Lender under the First Mortgage Loan Documents.
Subject to each of the other terms of this Agreement, all of the following provisions shall
supersede any provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest. 'T'he Subordinate Lender shall not, without
the prior written consent of the Senior Lender in each instance, take any action which has
the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate
Loan Documents, except that the Subordinate Lender shall have the right to advance funds
to cure First Mortgage Loan Defaults pursuant to Section 6(a) above and advance funds
pursuant to the Subordinate Mortgage for the purpose of paying real estate taxes and
insurance premiums, making necessary repairs to the Property and curing other defaults by
the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened taking
by condemnation or other exercise of eminent domain of all or a portion of the Property
(collectively, a "Taking"); or the occurrence of a fire or other casualty resulting in damage
to all or a portion of the Property (collectively, a "Casualty"), at any time or times when the
First Mortgage remains a lien on the Property the following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the
Subordinate Loan Documents or otherwise) to participate in any proceeding or
action relating to a Taking and/or a Casualty, or to participate or join in any
settlement of, or to adjust, any claims resulting from a Taking or a Casualty shall be
and remain subordinate in all respects to the Senior Lender's rights under the First
Mortgage Loan Documents with respect thereto, and the Subordinate Lender shall
8
1)W'1 28751805v4 0088288-000026
be bound by any settlement or adjustment of a claim resulting from a Taking or a
Casualty made by the Senior Lender; provided, however, this subsection and/or
anything contained in this Agreement shall not limit the rights of the Subordinate
Lender to file any pleadings, documents, claims or notices with the appropriate court
with jurisdiction over the proposed Taking and/or Casualty; and
(2) all proceeds received or to be received on account of a Taking or a
Casualty, or both, shall be applied (either to payment of the costs and expenses of
repair and restoration or to payment of the First Mortgage Loan) in the manner
determined by the Senior Lender in its sole discretion; provided, however, that if the
Senior Lender elects to apply such proceeds to payment of the principal of, interest
on and other amounts payable under the First Mortgage Loan, any proceeds
remaining after the satisfaction in full of the principal of, interest on and other
amounts payable under the First Mortgage Loan shall be paid to, and may be applied
by, the Subordinate Lender in accordance with the applicable provisions of the
Subordinate Loan Documents, provided however, the Senior Lender agrees to
consult with the Subordinate Lender in determining the application of Casualty
proceeds, provided further however that in the event of any disagreement between
the Senior Lender and the Subordinate Lender over the application of Casualty
proceeds, the decision of the Senior Lender, in its sole discretion, shall prevail.
(c) No Modification of Subordinate Loan Documents. The Borrower and the
Subordinate Lender each agrees that, until the principal of, interest on and all other amounts
payable under the First Mortgage Loan .Documents have been paid in full, it will not,
without the prior written consent of the Senior Lender in each instance, increase the amount
of the Subordinate Loan, increase the required payments due under the Subordinate Loan,
decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate
Loan, or otherwise amend the Subordinate Loan terms in a manner that creates an adverse
effect upon the Senior Lender under the First Mortgage Loan Documents. Any unauthorized
amendment of the Subordinate Loan Documents or assignment of the Subordinate Lender's
interest in the Subordinate Loan without the Senior Lender's consent shall be void ab initio
and of no effect whatsoever and Subordinate Lender agrees that it shall not transfer or assign
the Subordinate Loan or the Subordinate Loan Documents without the prior written consent
of the Senior Lender.
9. Modification or Refinancing of First Mortgage Loan.
The Subordinate Lender consents to any agreement or arrangement in which the Senior
Lender waives, postpones, extends, reduces or modifies any provisions of the First Mortgage Loan
Documents, including any provision requiring the payment of money. Subordinate Lender further
agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is
for the purpose of refinancing all or any part of the First Mortgage Loan (including reasonable and
necessary costs associated with the closing and/or the refinancing) and, in the event of new
mortgage debt, Subordinate Lender shall execute and deliver to Senior Lender a new subordination
agreement on the same terms and conditions as this Subordination Agreement.
9
DWI' 28751805 v4 0088288-000026
10. Default by the Subordinate Lender or Senior Lender.
If the Subordinate Lender or Senior Lender defaults in performing or observing any of the
terms, covenants or conditions to be performed or observed by it under this Agreement, the other,
non -defaulting lender shall have the right to all available legal and equitable relief.
11. Notices.
Each notice, request, demand, consent, approval or other communication (hereinafter in this
Section referred to collectively as "notices" and referred to singly as a "notice") which the Senior
Lender or the Subordinate Lender is required or permitted to give to the other party pursuant to this
Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a)
personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have
been received at the time so delivered); or (b) sent by Federal Express (or other similar national
overnight courier) designating early morning delivery (any notice so delivered shall be deemed to
have been received on the next Business Day following receipt by the courier); or (c) sent by United
States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice so sent shall be deemed to have been
received two days after mailing in the United States), addressed to the respective parties as follows:
SENIOR LENDER:
Wells Fargo I3ank, N.A.
MAC #A0119-183
333 Market Street, 18`x' Floor
San Francisco, California 94105
Attention: Loan Administration Office
SUBORDINATE LENDER: City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
Either party may, by notice given pursuant to this Section, change the person or persons and/or
address or addresses, or designate an additional person or persons or an additional address or
addresses for its notices, but notice of a change of address shall only be effective upon receipt.
13. General.
(a) Assignment/Successors. This Agreement shall be binding upon the
Borrower, the Senior Lender and the Subordinate Lender and shall inure to the benefit of the
respective legal successors and assigns of the Senior Lender and the Subordinate Lender.
(b) No Partnership or Joint Venture. The Senior Lender's permission for the
placement of the Subordinate Loan Documents does not constitute the Senior Lender as a
joint venturer or partner of the Subordinate Lender. Neither party hereto shall hold itself out
as a partner, agent or Affiliate of the other party hereto.
10
DWI" 28754805%4 0088288-000026
(c) Senior Lender's and Subordinate Lender's Consent. Wherever the
Senior Lender's consent or approval is required by any provision of this Agreement, such
consent or approval may be granted or denied .by the Senior Lender in its sole and absolute
discretion, unless otherwise expressly provided in this Agreement. Wherever the
Subordinate Lender's consent or approval is required by any provision of this Agreement,
such consent or approval may be granted or denied by the Subordinate Lender in its sole and
absolute discretion, unless otherwise expressly provided in this Agreement.
(d) Further Assurances. The Subordinate Lender, the Senior Lender and the
Borrower each agree, at the Borrower's expense, to execute and deliver all additional
instruments and/or documents reasonably required by any other party to this Agreement in
order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and
conditions of the First Mortgage, or to further evidence the intent of this Agreement.
(e) Amendment. This Agreement shall not be amended except by written
instrument signed by all parties hereto.
(17 Governing Law. This Agreement shall he governed by the laws of the State
in which the Property is located.
(g) Severable Provisions, If any provision of this Agreement shall be invalid or
unenforceable to any extent, then the other provisions of this Agreement, shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
(h) Term. The term of this Agreement shall commence on the date hereof and
shall continue until the earliest to occur of the following events: (i) the payment of all of the
principal of, interest on and other amounts payable under the First Mortgage Loan
Documents; (ii) the payment of all of the principal of, interest on and other amounts payable
under the Subordinate Loan Documents, other than by reason of payments which the
Subordinate Lender is obligated to remit to the Senior Lender pursuant to Section 4 hereof;
(iii) the acquisition by the Senior Lender of title to the Property pursuant to a foreclosure or
a deed in Iieu of foreclosure of, or the exercise of a power of sale contained in, the First
Mortgage; or (iv) the acquisition by the Subordinate Lender of title to the Property pursuant
to a foreclosure or a deed in Iieu of foreclosure of, or the exercise of a power of sale
contained in, the Subordinate Mortgage, but only if such acquisition of title does not violate
any of the terms of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original for all purposes; provided,
however, that all such counterparts shall together constitute one and the same instrument.
[Remainder of Page Inieniionally Left Blank]
DWI- 28754805"4 0088288-000026
IN WITNESS WI-IIREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
\SENIOR LENDER:
WELLS FARGO BANK, N.A.,
a national banking association
By:
Jeff Bennett
Senior Vice President
[Signature Page to Subordination Agreement (City of Lodi)]
DWT 28754805v4 0088288-000026
SUBORDINATE LENDER:
CITY OF LODI,
a California municipal corporation
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPROVED AS TO FORM:
By:
Janice D. Magdich, City Attorney
[Signature Page to Subordination Agreement (City of Lodi)]
DWT 28754805v4 0088288-000026
BORROWER:
TIENDA DRIVE SENIOR APARTMENTS, ILP.,
a California limited partnership
By: Tienda Drive Senior Apartments LLC,
a California limited liability company,
its General Partner
By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole Member and Manager
By:
Name:
Title:
[Signature Page to Subordination Agreement (City of Lodi)]
Dw' 28754805v4 0088288-000026
ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of
the individual who signed the document to
which this certificate is attached, and not
the truthfulness, accuracy, or validity of
that document.
State of California )
) ss
County of )
On , 2016 before me,
a Notary Public in and for said State, personally appeared
who proved to me on the basis of
satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her their
authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
DWT 28754805v4 0088288-000026
ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of
the individual who signed the document to
which this certificate is attached, and not
the truthfulness, accuracy, or validity of
that document,
State of California
) ss
County of )
On
, 2016 before me,
a Notary Public in and for said State, personally appeared
who proved to me on the basis of
satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her their
authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
DWI- 28754805 v4 0088268-000026
ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of
the individual who signed the document to
which this certificate is attached, and not
the truthfulness, accuracy, or validity of
that document.
State of California
County of
) ss
On , 2016 before me,
a Notary Public in and for said State, personally appeared
who proved to me on the basis of
satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her their
authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s),
or the entity upon behalf of which the person (s) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
nw r 28754805v4 0088288-000026
EXHIBIT A
Legal Dosed i3tion of Property
A-1
DWI 28754805 v4 0088288-000026
Exhibit A
PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described
as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS,
APN: 027-410-24 and 027-410-25
Exhibit A
1>0
FREE RECORDING REQUESTED
PURSUANT TO GOVERNMENT CODE
SECTION 27383
Recording requested by and
when recorded return to:
CALIFORNIA HOUSING FINANCE AGENCY
Office of General Counsel
P.O. Box 4034
Sacramento, CA 95812-4034
(space above this line for Recorder's use)
SUBORDINATION AGREEMENT
MRSA
Cali -IFA Development No. 14-017-M
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR
SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT
TO AND OF LOWER PRIORITY THAN THE LIENS) OF SOME
OTHER OR LATER SECURITY INSTRUMENT.
THIS AGREEMENT dated as of March 2, 2016 for informational purposes, is entered into by
and between the City of Lodi, a California municipal corporation ("Lender"), Tienda Drive Senior
Apartments, L.P., a California limited partnership ("Borrower"), and the California Housing Finance
Agency ("Agency"), a public instrumentality and political subdivision of the State of California, in
connection with a loan by Lender to Borrower to finance a senior residential rental housing project on
real property located in the City of' Lodi, County of San Joaquin, California and more particularly
described on Exhibit A attached hereto and incorporated herein by this reference ("Project"). Unless
otherwise noted, references to instruments recorded in "Official Records" refer to instruments
recorded in the Office of the County Recorder of the County of San Joaquin.
RECITALS
A. WHEREAS, Lender has agreed to make a loan to the Borrower in the amount of Four
Hundred Ninety -Four Thousand Five Hundred Thirty -Six Dollars and No/100s Dollars ($494,536.00)
(the "Lender Loan") pursuant to and in accordance with that certain Assignment and Amendment of
that Purchase and Development Agreement dated as of March 2, 2016 by and among Borrower, as
assignee, Eden 1 -lousing, Inc., a California nonprofit public benefit corporation ("Eden"), as assignor,
and Lender (the "Assignment and Amendment"). The Lender Loan is evidenced by that certain
Promissory Note Secured by Deed of Trust, dated as of March 2, 2016 made by Borrower in favor of
Lender (the "Lender Note"), which is secured by that certain Deed of Trust, Assignment of Rents,
MI ISA.Subordinalion Agreement (City of 1,odi)
Tienda Drive Senior Apts., 14-017-M
02/17/2016.NIS/jadf-ll1 [Fi1M1,-989-384
-1-
DR/! j' 7 --- f.)() A'0. >>v.1: E.1../J
Security Agreement and Fixture Filing, dated as of March 2, 2016 by Borrower for the benefit of
Lender and recorded in the Official Records substantially concurrently herewith (the "Lender Deed of
Trust").
B. WHEREAS, Lender and Eden have entered into that certain Purchase and
Development Agreement (the "Original PDA"), dated as of July 28, 2010, a memorandum of which
was recorded July 30, 2010 as Instrument No. 2010-098833 of the Official Records (the
"Memorandum of Original PDA"), as assigned and amended by the Assignment and Amendment
(collectively, the Assignment and Amendment and the Original PDA are collectively referred to as the
"Development Agreement'), a memorandum of which will be recorded substantially concurrently
herewith (the "Memorandum of Development Agreement').
C. WHEREAS, Lender and Borrower have entered into that certain Regulatory
Agreement and Declaration of Restrictive Covenants, dated as of March 2, 2016 by and between
Borrower and Lender and recorded in the Official Records substantially concurrently herewith (the
"Lender Regulatory Agreement").
The Lender Note, Lender Deed of Trust, Development Agreement, Memorandum of
Original PDA, Memorandum of Development Agreement, Regulatory Agreement, and any other
documents, recorded or unrecorded pertaining to the Project and the Lender Loan are collectively
referred to herein as the "Lender Documents."
D. WHEREAS, the Agency is making, contemporaneously with the making of this
Agreement, a permanent loan to Borrower (the "MRSA Permanent Loan"). The MHSA Permanent
Loan is evidenced by a promissory note from the Borrower to the Agency in the face amount of Seven
Hundred Forty Thousand and No/100s Dollars ($740,000.00) entitled "California Housing Finance
Agency, MHSA Promissory Note, CaIHFA Development No. 14-017-M (Permanent
Financing/Residual Receipts)" (the "MHSA Promissory Note") and secured by a deed of trust. The
deed of trust was executed by Borrower, as trustor, to North American Title Company, as trustee, in
favor of the Agency, as beneficiary, and is titled "California Housing Finance Agency, MHSA Deed
of Trust With Assignment of Rents, Security Agreement and Fixture Filing, Call -IFA Development
No. 14-017-M" dated 1, 2016 (the "MHSA Deed of Trust") to be recorded in the
Official Records substantially contemporaneously with this Agreement. The Project shall also be
regulated and encumbered by a regulatory agreement executed by Borrower and the Agency titled
"California Housing Finance Agency, M1 -ISA Regulatory Agreement (Mental Health Services Act
Housing Program), Call -IFA Development No. I4 -017-M dated as of 1, 2016 (the
"MHSA Regulatory Agreement") to be recorded in the Official Records contemporaneously with this
Agreement. The MHSA Regulatory Agreement, MHSA Promissory Note, MHSA Decd of Trust and
related unrecorded documents, including but not limited to that certain M1 -ISA Permanent Loan
Disbursement Agreement (if applicable), and the Capitalized Operating Subsidy Reserve Agreement
(if applicable), shall hereafter be collectively referred to herein as the "MHSA Permanent Loan
Docu►n.ents";
E. WHEREAS, it is a condition precedent to the Agency making the MHSA Permanent
Loan that the MHSA Permanent Loan Documents have priority over the Lender Documents; and
M1ISA.Suboidination Agreement (City of Lodi)
'rienda Drive Senior Apts., 14 -0I7 -M
02/17/20 I6,\7)S/jadf-If111FM1 x)89-384
-2-
F. WHEREAS, it is beneficial to all parties that the Agency make the M1 -ISA Permanent
l..,oan, and the parties are willing to subordinate the Lender Documents in order that the MI -ISA
Permanent Loan be made.
NOW THEREFORE, In consideration of the foregoing and other consideration the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Agency to slake the MHSA
Permanent Loan, the parties hereto agree as follows:
1. Subordination of Lender Documents.
(a) The Lender and Borrower hereby unconditionally subordinate the Lender
Documents to the MHSA Permanent Loan Documents, including all extensions, modifications,
incremental disbursements of the original amount of the MI -ISA Permanent Loan if made during
construction, or additional advances made thereunder. Hereafter, the MHSA Permanent Loan
Documents shall unconditionally be, and remain at all times, liens and encumbrances on the Project
prior and superior to the encumbrances of the Lender Documents and to all rights and privileges of the
parties thereunder, and the liens and encumbrances of the Lender Documents together with all rights
and privileges of the parties thereunder shall hereby be subject to and made subordinate to the liens
and encumbrances of the MHSA Permanent Loan Documents. In the event of a judicial or non -
judicial foreclosure of the MHSA Permanent Loan Documents, the lien of the Lender Documents
shall be extinguished.
(b) The Agency agrees that it shall use its best efforts to provide Lender with a
copy of all initial notices of default provided to Borrower under the MI -ISA Permanent Loan
Documents, provided, the Agency shall have no liability to Lender and/or Borrower for its failure to
do so, nor shall failure to do so constitute grounds for any restraining order, injunction, or other
prohibition against or delay in the Agency's exercise of its remedies under the MHSA Permanent
Loan Documents. The Agency shall not record a Notice of Default related to such initial notice
during the period ninety (90) days alter the date of such initial notice if such notice relates to a
nonmonetary default or defaults under the MHSA Permanent Loan Documents. During the term of
such period Lender shall have the right, but not the obligation, to cure any nonmonetary default under
such initial notice. Notwithstanding the foregoing, if at any time following the date of the initial
notice, there shall occur or be continuing a default in the payment of any amount due to the Agency
under the Ml -ISA Permanent Loan Documents, the Agency shall have the right to, and in its sole
discretion may, record a Notice of Default and proceed to foreclosure based upon any such
nonpayment regardless of any extended cure period with respect to nonmonetary defaults.
(c) Lender has read, understands and approves the MIISA •Permanent Loan
Documents and agrees to be bound thereby in the event of its foreclosure or acquisition of the Project.
2. Representations. Lender hereby represents and warrants to the Agency that at the
time of execution of this agreement, the Borrower is in substantial compliance with its obligations to
the Lender under the terms of the Lender Documents, and Lender has read and understands the
MI -ISA Permanent Loan Documents and agrees that in the event the Agency determines there is a
Mf ISA.Suboidination Agreement (City of Lodi)
Tienda Drive Senior Apts., I4 -017-M
02/1712016.NDS/jadf-MI Mp 989-384
-3 -
f <5A1' .• DO !VOT i.; XE7'.... 1:
conflict of terms between the MHSA Permanent Loan Documents and Lender Documents, the terms
of the MI -ISA Permanent Loan Documents shall prevail.
3. Attorney Fees & Costs. If any party shall take any action to enforce or otherwise
relating to this Agreement, the prevailing party or parties shall be entitled to recover reasonable
attorney's fees and costs from the other party or parties.
4. Amendments. Amendments to this Agreement shall be in writing and signed by all the
parties hereto.
5. Governing Law. This Agreement shall be construed in accordance with and be
governed by the laws of California.
6. Counterparts. This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute one and the same instrument.
7. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, it shall not invalidate or render unenforceable
any other part of this Agreement.
NO'T'ICE: 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.
IN WITNESS Wl-IEItEOF, the parties hereto have executed this Agreement as of the date first
above written.
LENDER:
City of Lodi, a municipal corporation of the State of
California
I3y: Dt 4..VT ;car;' ,No/ E xc:c(J/e
Stephen Schwabauer, City Manager
A"T"TEST:
By:
Jennifer M. Ferraiolo, City Clerk
MI ISA.Subordination Agreement (City orI.odi)
Tienda Drive Senior Apls., 14-017-M
02117/2016. N 1 S/ j a d f -N n t, M F-9 8 9- 3 84
-4-
BORROWER:
TIENDA DRIVE SENIOR APARTMENTS,
L.P., a California limited partnership
By: Tienda Drive Senior Apartments LLC,
a California limited liability company
Its: General Partner
By:
Its:
Eden Investments, Inc.,
a California nonprofit public benefit
corporation
Sole Member/Manager
-- Do Ao! Execute
Name:
Its:
DR./1 - RX) NOT EXC['(I'J'
APPROVED AS TO FORM:
By:
Janice D. Magdich, City Attorney
AGENCY:
CALIFORNIA HOUSING FINANCE AGENCY,
a public instrumentality and political subdivision of
the State of California
By;
Name
Title:
MI ISASubordination Agrecmenl (City of Lodi)
Tienda Drive Senior Apis., I4 -017-M
02/1712016. N D S/j a d f -II Ii FM F-98 9- 3 84
ACKNOWLEDGEMENTS
-5-
1)R ;#. d '('... $l() \'O7 ;: .#`:h.. ( T1
EXHIBIT A
Legal Description
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described as
follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, PAGE 79 SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
iv119SA.Subordination Agreement (City of Lodi)
'I'ieoda Drive Senior Apia, 14-017-M
0211 7/2016.N1)S/jadf-ifl I I MIS -989-384
-6-
ACKNOWLEDGEMENTS
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
County of
) ss.
Onabefore me, , Notary
Public, personally appeared
, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
eapacity(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.
1 certify under penalty of perjury under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
MI ISA. Subordination Agreement (City of Lo(li)
'ricnda »rive Senior Apts., 14 -0I7 -M
02/17/2016. N I) S/ j a tl f -II I I FM F-989-384
-7-
DMA TT • D() NOT f 'z t f
ACKNOWLEDGEMENTS
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California )
) ss.
County of )
On before me, a Notary
Public, personally appeared
, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
MI ISA.Subordination Agiecmenl (City of'1 odi)
rienda Drive Senior• Apts., 14 -O17 -MI
02/17/2016.NDS/jadf-ffIIEM F -959-3l14
-8-
North American Title Company
liscrow No. 54605-1032123-10
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
San Joaquin County
Community Development Dept,
Neighborhood Preservation Division
1810 E. Hazelton Avenue
Stockton, CA 95205
EXEMPT MP'T FROM RECORDING FEES PL•R
GOVERNMENT CODE §§6103, 27383
APN 027-410-24 & 027-410-25
SUBORDINATION AGREEMENT
(City to County)
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR
SECURITY INTEREST IN AFFECTING THE PROPERTY BECOMING
SUBJECT TO ANI) OF LOWER PRIORITY THAN THE LIEN OF SOME
OTHER OR LATER SECURITY INSTRUMENT.
TI -IIS SUBORDINATION AGREEMENT ("Agreement") is dated as of March 15, 2016,
by Tienda Drive Senior Apartments, L.P., a California limited partnership (the "Owner" of the real
property described below), the City of Lodi, a California municipal corporation ("City"), and the
County of San Joaquin, a subdivision of the State of California ("County").
RECITALS
A. Concurrently herewith the Owner has executed or will execute to the following
documents (collectively, the "Subordinate Loan Documents") which will encumber the property
described in Exhibit A attached hereto (which property, together with all improvements now or
hereafter located on the property, is hereinafter referred to as the "Property"): That certain Deed
of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of March 2, 2016
(the "City Deed of Trust") for the benefit of the City and recorded concurrently herewith to
encumber the Property to secure a loan to Owner in the principal amount of Four Hundred
Ninety -Four Thousand Five Hundred Thirty -Six Dollars ($494,536.00) (the "City Loan")
evidenced by a Promissory Note Secured by Deed of Trust dated as of March 2, 2016 (the "City
Note") made pursuant to that Development Agreement defined in that Memorandum of
Development Agreement dated as of March 2, 2016 and recorded concurrently herewith. Owner
and City have executed or will execute that Regulatory Agreement and Declaration of Restricted
Covenant dated as of March 2, 2016 ("City Regulatory Agreement") and recorded concurrently
herewith.
'rienda Subordination Agreement City to County
rev 2.17.16 Final
13. Concurrently herewith the Owner has executed or will execute that certain
Consolidated and Amended and Restated Promissory Note Secured by Consolidated Deeds of
Trust (CDBG/J TOME Program) dated as of March 15, 2016 (the "Consolidated Note"), in favor
of the County in the principal amount o'fOne Million One Hundred Twenty -Four Thousand six
Hundred Sixty -Nine and 15/100th Dollars ($1,124,669.15) (the "County Loan") secured by that
certain Deed of Trust and Security Agreement dated as of.luly 21, 2010 and recorded in the
Official Records of San Joaquin County on July 30, 2010 as Instrument No. 2010-098836 and
that certain Deed of Trust and Security Agreement dated as of July 21, 2010 and recorded in the
Official Records of San Joaquin County on July 30, 2010 as Instrument No. 2010-098837, which
two Deeds of Trust were consolidated into a single obligation by that certain Consolidation of
and Amendment to Deeds of Trust dated as of March 15, 2016, executed by the Owner and
County and recorded concurrently herewith (the "Consolidated Deeds of Trust"). The County
Loan is also evidenced by that certain CDBG/(-TOME Regulatory & Loan Agreement dated as of
July 21, 2010 and recorded in the Official Records of San Joaquin County on July 30, 2010 as
instrument No. 2010-098832, which was assumed by Owner under that Assignment dated as of
Marchl5, 2016 recorded concurrently herewith and amended by Owner and the County by that
certain Amendment to CDI3G/HOME Program Regulatory & Loan Agreement dated as of
March 15, 2016 recorded concurrently herewith (the "Regulatory and Loan Agreement"). The
above -referenced Consolidated Note, Consolidated Deeds of Trust, and the Regulatory and Loan
Agreement are sometimes collectively referred to herein as the "County Loan Documents."
C. As a condition to fully funding the County Loan and consenting to the City Loan,
the County requires that the County Loan Documents be unconditionally and at all times remain
a lien or charge upon the Property, prior and superior to all the rights of the City under the
Subordinate Loan Documents and that the City specifically and unconditionally subordinates the
Subordinate Loan Documents to the lien or charge of the County Loan Documents.
THEREFORE, for valuable consideration and to induce the County to make the County Loan,
the Owner and the City hereby agree for the benefit of the County as follows:
1. The County Loan Documents and any renewals or extensions thereof, shall
unconditionally be and at all times remain a lien or charge on the Property prior and superior to
the rights of the City under the Subordinate Loan Documents.
2. This Agreement shall be the whole agreement with regard to the subordination of
Subordinate Loan Documents to the lien or charge of the County Loan Documents, and shall
supersede and cancel, but only insofar as would affect the priority of the County Loan
Documents, any prior agreements as to such subordination, including, without limitation, those
provisions, if any, contained in the Subordinate Loan Documents which provides for the
subordination of the Subordinate Loan Documents to a deed or deeds of trust or to a mortgage or
mortgages, or to a regulatory agreement.
3. The parties hereto agree to cooperate with each other and perform any acts and
execute, acknowledge and deliver any additional agreements, documents, or instruments that
may be reasonably necessary or desirable to carry out the provisions or to effectuate the purpose
of this Agreement, including, without limitation, execution, acknowledgment, delivery and
Tieiida_Suboidination Agreement City to County
rev 2.17.16 Final 2
recordation any document necessary to clear title to the Property after a foreclosure under the
Consolidated Deed of Trust, or a transfer of the Property by an assignment or a deed in lieu of
foreclosure under the Consolidated Deed of Trust.
that:
4. The City further declares, agrees and acknowledges for the benefit of the County,
(a) The County, in making disbursements of proceeds of the County Loan, is
under no obligation or duty to, nor has the County represented that it will, see to the
application of such proceeds by the person or persons to whom the County 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.
(b) The City intentionally and unconditionally subordinates all of the City's
rights, titles and interests in and to the Subordinate Loan Documents to the lien or charge
of the County Loan Documents and understands that in reliance upon, and in
consideration of, this subordination, specific loans and advances are being and will be
wade by the County 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 subordination.
(c) The City consents to the County Loan and the execution and delivery by the
Owner to the County of the County Loan Documents.
5. Upon the occurrence of an event of default under the County Loan, County agrees
that it shall,
(a) concurrently with notifying Owner of the occurrence of an event of
default, notify the City at its address set forth above of the occurrence of such event of default,
(b) permit the City to cure or correct (provided that such event of default is
curable) any such event of default within thirty (30) calendar days after receipt of such notice
provided, however, if such default is curable but cannot be cured within such thirty (30) day
period, the City shall have such additional time (not to exceed 30 days) as is necessary to cure
such default provided the City is diligently seeking to cure such default,
(c) accept all payments and all acts done by the City on behalf of Owner
within the cure period specified in Paragraph 5(b) above as though the same had been timely
done and performed by Owner, so that such acts and payments shall fully and totally cure and
correct all such defaults, breaches, failures or refusals for all purposes, and
(d) have the continuing right to record a notice of default, obtain a court
appointed receiver and otherwise exercise County's rights and remedies under the County Loan
Documents during the above mentioned cure period, but, if the City notifies County in writing of
the City's election to cure the default, and the City thereafter cures such default during the cure
period provided herein, County will not he entitled to demand or collect any fees or costs
Ticnda Subordination Agreement City to County
rev 2.17.16 Final 3
incurred by County in pursuing its foreclosure, judicial or other remedies to the extent such fees
and/or costs are incurred after receipt by County of the City's notice of the City's intent to cure
such default.
Additionally, notwithstanding anything stated to the contrary in the County Loan Documents,
County acknowledges and agrees that a transfer of the Property to the City shall not, in and of
itself, constitute a default under the County Loan provided that, concurrently with the transfer of
the Property to the City, and as a condition precedent thereto, (i) the City expressly assumes all
of Owner's obligations under the County Loan Documents, (ii) the City provides County with
evidence reasonably satisfactory to County that the City has authority to assume all of Owner's
obligations under the County Loan Documents, and (iii) County has received all third party
consents and reaffirmations required by County (in the County's reasonable opinion) for the
transfer of the Property to the City.
6. This Agreement represents the entire agreement between the parties hereto on the
subject matter hereof and, except as expressly provided herein, shall not be affected by reference
to any other documents. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, or terminated orally, but such may be accomplished only by an instrument in
writing signed by the party against whom enforcement of the change, waiver, discharge, or
termination is sought.
7. if any of the provisions or terms of this Agreement shall for any reason be held
invalid or unenforceable, such invalidity or unenforceability shall not affect any other of the
terms hereof, and this Agreement shall be construed as if such unenforceable term had never
been contained herein.
8. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute and be construed as one
and the same instrument.
Exhibit A is attached hereto and incorporated herein by this reference.
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.
Tienda_Subordination Agreement City to County
rev 2.17.16 Final 4
IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH
RESPECT HERETO.
TIENDA DRIVE SENIOR APARTMENTS, L.P., a
California limited partnership
By: Tienda Drive Senior Apartments LLC, General
Partner '
By: Eden Investments, Inc., sole
member/manager
13y:
Linda Mandolini, President
CITY OF LODI,
a municipal corporation
By:
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPR VED AS TO FORM:
Janice D. Magdich,City Attorney
Stephen Schwabauer, City Manager
SIGNATURES MUST RE NOTARIZED.
Ticnda_Subordination Agreement City to County
rev 2 17.16 Final 5
APPROVED AS TO CONTENT AND
RECOMMENDED FOR APPROVAL:
COUNTY OF SAN JOAQUIN,
A political subdivision of the
State of California
KERRY SULLIVAN, Director
San Joaquin County Community Development
Department
MOISES l'APIEN, Chair
Board of Supervisors,
County of San Joaquin
APPROVED AS TO FORM:
J. MARK MYLES
County Counsel,
County of San Joaquin
ATTEST:
MIM1 DUZENSKI
Clerk of the Board of Supervisors,
County of San Joaquin
Zayante (Zoey) P. Merrill
Deputy County Counsel
Deputy Clerk
ienda Subordination Agreement City to County
rev 2.17.16 Final 6
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On
)SS
)
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature
Acknowledgment
This area for official notarial seal.
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
on
)SS
before me,
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true
and correct.
WITNESS my hand and official seal,
Signature
Acknowledgment
This area for official notarial seal.
Exhibit A
PROPERTY
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA, described
as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD ON MAY 21,
2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN COUNTY RECORDS.
APN: 027-410-24 and 027-410-25
Exhibit A
North American Title Company
Order/Escrow No. 54605-1032123-10
APN: 027-410-24 & 027-410-25
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §6103 & §27383
REQUEST FOR NOTICE
In accordance with California Civil Code Section 2924b, request is hereby made that a
copy of any notice of default and a copy of any notice of sale under the deed of trust
recorded March , 2016 as Instrument No of the Official
Records of San Joaquin County, California, relating to the following property:
Real property in the City of LODI, County of SAN JOAQUIN, State of CALIFORNIA,
described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR RECORD
ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79, SAN JOAQUIN
COUNTY RECORDS.
executed by Tienda Drive Senior Apartments, L.P. as Trustor in which Wells Fargo Bank,
National Association, is named as Beneficiary and American Securities Company as
Trustee, to be mailed to:
City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
NOTICE: Acopyofany Notice of Default and ofany Notice of Sale will be sent only to
the address contained in this recorded request. If your address changes, a new request
must be recorded.
Request for Notice continued.
Dated as of March 2, 2016.
CITY OF LODI
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPROVED AS TO FORM:
By(
Janice D. Magdich, City Attorney
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF
CALIFORNIA
COUNTY OF SAN JOAQUIN
On
)SS
)
before me,
NAT Order No. 54605-1032123-10;
APN 027-410-24 & 027-410-25
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf
of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
North American Title Company
Order/Escrow No. 54605-1032123-10
APN: 027-410-24 & 027-410-25
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
San Joaquin County
City of Lodi
P.O. Box 3006
Lodi, California 95241-1 91 0
Attention: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §6103 & §27383
REQUEST FOR NOTICE
In accordance with California Civil Code Section 2924b, request is hereby made
that a copy of any notice of default and a copy of any notice of sale under the
deed of trust recorded March , 2016 as Instrument No.
of th e 0 fficia I Records of San Joaquin County, California, relating to the
following property:
Real property in the City of LODI, County of SAN JOAQUIN, State of
CALIFORNIA, described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR
RECORD ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79,
SAN JOAQUIN COUNTY RECORDS.
executed by Tienda Drive Senior Apartments, L.P. as Trustor in which California
Housing Finance Agency is named as Beneficiary and North American Title
Company as Trustee, to be mailed to:
City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
NOTICE: Acopy of any Notice of Defaultand of any Notice of Salewill be
sentonlytotheaddress contained in this recorded request. If your address
changes, a new request must be recorded.
Request for Notice continued.
Dated as of March 2, 2016.
CITY OF LODI
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPROVED AS TO FORM:
Janie D. Magdich, City Attorney
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIR CALIFORNIA
COUNTY OF SAN JOAQUIN
On
)SS
}
before me,
NAT Order No. 54605-1032123-10;
APN 027-410-24 & 027-410-25
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal,
North American Title Company
Order/Escrow No. 54605-1032123-10
APN: 027-410-24 & 027-410-25
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
San Joaquin County
City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §6103 & §27383
REQUEST FOR NOTICE
In accordance with California Civil Code Section 2924b, request is hereby made
that a copy of any notice of default and a copy of any notice of sale under the
deed of trust recorded March , 2016 as Instrument No.
of th e 0 ffic is I Records of San Joaquin County, California, relating to the
following property:
Real property in the City of LODI, County of SAN JOAQUIN, State of
CALIFORNIA, described as follows:
PARCEL 1 AND PARCEL 2 AS SHOWN ON THE PARCEL MAP FILED FOR
RECORD ON MAY 21, 2010 IN BOOK 25 OF PARCEL MAPS, AT PAGE 79,
SAN JOAQUIN COUNTY RECORDS.
executed by Tie'nda Drive Senior Apartments, L.P. as Trustor in which the
County of San Joaquin is named as Beneficiary and North American Title
Company as Trustee, to be mailed to:
City of Lodi
P.O. Box 3006
Lodi, California 95241-1910
Attention: City Manager
NOTICE: Acopy ofany Notice of Defaultand ofany Notice of Salewill be
sentonlytotheaddress contained in this recorded request. If your address
changes, a new request must be recorded.
Request for Notice continued.
Dated as of March 2, 2016.
CITY OF LODI
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPROVED AS TO FORM:
Janice D. Magdich, City Attorney
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIR CALIFORNIA
COUNTY OF SAN 3OAQUIN
On
?cc
before me,
NAT Order No. 54605-1032123-10;
APN 027-410-24 & 027-410-25
, Notary Public,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capaclty(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph Is true and correct.
WITNESS my hand and official seal.
March , 2016
North American Title Company
21060 Redwood Road, Suite 110
Castro Valley, CA 94546
Attn: Suzanne 11. Smith
RE: City of Lodi Escrow Instructions
2245 and 2255 Tienda Drive, Lodi, CA
Escrow/Order No. 54605-1032123-10
Dear Ms Smith:
This letter constitutes the escrow instructions of the City of Lodi, a California municipal
corporation (the "City") in connection with the transfer and Ioans described below. These
instructions are to be read in conjunction with escrow instructions from Tienda Drive Senior
Apartments, L.P., a California limited partnership (the "Partnership"), Wells Fargo Bank,
National Association (the "Bank"), California 1 -lousing Finance Agency ("CalHFA"), the County
of San Joaquin ("County"), Wells Fargo Financial National Bank (the "AHP Lender") and Eden
Housing, Inc. ("Eden").
Transfer and Loans.
A. Eden will convey to the Partnership that certain real property (the "Property")
commonly known as 2245 and 2255 Tienda ❑rive in Lodi and more particularly described in
your Preliminary Report 111h Amendment dated as of December 11, 2015 for Escrow/Order No.
54605-1032123-10 (the "Preliminary Report"). Eden as the current owner/developer will
terminate the 1996 Agreement and the Memorandum of Option currently on record, and will
assign its interest in the recorded documents with the City to the Partnership.
B. The Bank will make a construction loan to the Partnership in the amount of
$16,771,698.00 or such higher or lower amount that the Bank may approve, which shall be
secured by the Bank's deed of trust in first lien position against the Property (the "Bank Loan").
C. CaII-IFA will make a MI -ISA permanent loan to the Partnership in the amount of
$740,000.00 which shall be disbursed at closing and be secured by CaIHFA's deed of trust in
second lien position against the Property (the "CaIHFA Loan" or the "MHSA Loan").
D. The two existing secured County loans will be consolidated and amended, which
amended terms will reduce the principal amount of the loan to $1,124,669.15 (the "County
Loan") which will be secured by the existing two deeds of trust in favor of the County as
consolidated by that Consolidation of and Amendment to the Deeds of Trust to be recorded
against the Property in a third lien position.
North American Title Company
March , 2016
Page 2
E, The City will snake with a construction/permanent loan to the Partnership in the
amount of $494,536.00 which shall be disbursed at closing and be secured by the City's Deed of
Trust in fourth lien position against the Property (the "City Loan"). The City Loan will be
evidenced by the documents listed in Section II. below.
F. The AHP Lender will make an Al -IP Loan in the amount of $790,000,00 to the
Partnership secured by a deed of trust in a fifth lien position against the Property (the "AHP
Loan").
I[li. Documents Deposited or to be Deposited into Escrow by the City and Partnership.
I . Release and Termination [of Agreement] executed by the City and Eden to terminate the
1996 Agreement recorded as series #96079082 (the "Agreement Release");
2. Release and Termination [of Option] executed by the City and Eden Development, Inc.
to terminate the Memorandum of Option recorded as series #2009-176922 (the "EDI
Option Release");
3. Regulatory Agreement and Declaration of Restrictive Covenants executed by the City
and Partnership (the "City Regulatory Agreement")'
4. $494,536.00 Deed of Trust with Assignment of Rents, Security Agreement, and Fixture
Filing executed by the Partnership with the City as Beneficiary (the "City Deed of
Trust");
5. $494,536.00 Promissory Note Secured by Deed of Trust executed by the Partnership (the
"City Note");
6. Assignment and Amendment of That Purchase and Development Agreement executed by
the City and Partnership:
7. Memorandum of Development Agreement by executed by the City and Partnership (the
"Memo of Development Agreement") modifying the Memorandum of Purchase and
Development Agreement recorded .luly 30, 2010 as series #2010-098833;
8. Subordination Agreement executed by the City, Partnership and the Bank whereby the
City Loan documents are subordinated to the Bank loan documents listed therein (the
"Bank -City Subordination Agreement");
9. Subordination Agreement executed by the City, Partnership and Call -IFA whereby the
City Loan documents are subordinated to the MI -ISA Loan documents listed therein (the
"MRSA -City Subordination Agreement");
North American Title Company
March , 2016
Page 3
10. Subordination Agreement executed by the City, Partnership and County whereby the City
loan documents are subordinated to the County Loan documents listed therein (the
"County -City Subordination Agreement");
11. Three Requests for Notice executed by the City for the Bank Loan, the MRSA Loan, and
the County Loan (the "City Requests for Notice"); and
12. Estoppel Certificate addressed to Wells Fargo Affordable Housing Community
Development Corporation executed by the City and left undated.
III. Deposit of City Funds.
The City will deposit $494,536.00 into escrow to fully advance the entire $494,536.00
principal amount of the City Loan.
IV. Conditions of Closing.
You may close this escrow only upon fulfillment of all of the following conditions:
A. You hold the documents referred to in Section 11, duly executed and
acknowledged where required, with all appropriate exhibits attached.
B. You have met all of the requirements of these escrow instructions and are
prepared to issue to the City a 2006 ALTA LP -10 Lender's Policy of Title Insurance (the "City
Title Policy") in the amount of Four Hundred Ninety -Four Thousand Five Hundred Thirty -Six
Dollars ($494,536.00) dated as of the recording date of the City Deed of Trust, naming the City
as the Insured and insuring the City that the City Deed of Trust, the City Regulatory Agreement,
the City Memorandum of Development Agreement, and the Memorandum recorded as series
#2010-098833 constitute valid liens against the Property, subject only to the following
exceptions listed in the Preliminary Report as exception #1 and #2 (general and special taxes and
assessments for both parcels; provided, however that all taxes and assessments that are due or
payable shall be paid as of or through closing); #3 (lien of supplemental taxes); #4 (ROW for
Pipe Line 34158); #6 (easement for public utilities); #8 (Water Rights Agreement 2010-068568);
and the following documents to be recorded as part the closing: the Bank construction deed of
trust and any other document required by the Bank to close the I3ank Loan, and CaIHFA's
MFISA Regulatory Agreement, MHSA Deed of Trust, and any other document required by
Call`IFA to close the MI -ISA Loan; #9 (CDBG/HOME Program Regulatory & Loan Agreement
2010-098832); the Amendment to the CDBG/HOME Program Regulatory & Loan Agreement;
the County; #1 1 and #12 (County Deeds of Trust 2010-098836 and 42010-098837) as
consolidated and amended by that Consolidation of and Amendment to Deeds of Trust. The City
Title Policy shall also include as a subordinate item the AHP Loan Deed of Trust. The City Title
Policy shall also include such endorsements as may be listed in an attachment to these
instructions.
North American Title Company
March , 2016
Page 4
C. You have received written or oral confirmation to record from any one of the
following the City's representatives: Joseph Wood (jwoode i),Iodi.gov) or Janice Magdich
(jmagdich c7lodi.gov).
V. Recording Requirements.
A. The correct legal descriptions have been attached and all dates have been inserted,
[3. Upon meeting the conditions of closing in Section IV above, you are instructed to
record the following documents in the Official Records of San Joaquin, collectively known as
the "City Recorded Documents," in the following order or in such other order as may be required
by the Bank's or the Partnership's escrow instructions.
1. 1996 Agreement Release;
2. EDI Option Release;
3. City Regulatory Agreement;
4. City Decd of Trust;
5. Memorandum of Development Agreement;
6. Bank -City Subordination Agreement;
7. MI -ISA -City Subordination Agreement;
8. County -City Subordination Agreement; and
9. City Requests for Notice: Prior to recording, you are to insert the recording
date and series number in the spaces provided. The County Requests for
Notice may be recorded separately within two (2) business days after the
closing of the loans.
Immediately upon recordation of the Recorded Documents, you are instructed to notify
the City by email to the following addresses: Joseph Wood (jwood' lodi.gov) and Janice
Magdich (jmagdich@lodi.gov).
VI. Disbursement of Funds; Delivery of Estoppel Certificate.
You are to disburse the City Funds to the Partnership or its order. You are to date the
Estoppel Certificate as of the closing/recording date and deliver the original Estoppel Certificate
to the addressee.
VH. Delivery of the Recorded Documents and Policies.
North American Title Company
March , 2016
Page 5
You are instructed to deliver to the City of Lodi, N.O. Box 3006, Lodi, CA 95241-1910
Attention: City Manager, all of the following documents which, where applicable, are to include
recording information certified as correct by North American Title Company, within five (5)
business days of the close of escrow: A final settlement statement, the original copy of these
instructions executed by the City and acknowledged by North American Title Company, the
original City Promissory Note, the original Assignment and Amendment of'That Purchase and
Development Agreement; the City Recorded Documents, and the original City Title Policy.
VIII. Costs, Fees, and Premiums.
All escrow, title, recording and other costs, fees and premiums shall be the responsibility
of the Partnership. The City shall not bear any costs, fees or premiums in connection with this
escrow.
IX. Amendment, Modification or Revocation.
These instructions may be revoked, amended or modified in writing executed by all
parties hereto at any time prior to the close of escrow.
Please acknowledge your agreement to and acceptance of these instructions by signing
the enclosed copies of this letter and returning one copy to the undersigned.
Sincerely,
CITY OF LODI, a California municipal corporation
By:
Stephen Schwabauer, City Manager
ATTEST:
By:
Jennifer M. Ferraiolo, City Clerk
APPROVED AS TO FORM:
By:
Janice D. Magdich, City Attorney
North American Title Company
March , 2016
Page 6
The undersigned acknowledges receipt 01' the above instructions and agrees to proceed in strict
accordance therewith.
NORTH AMERICAN TITLE COMPANY
By:
Its:
Dated: March , 2016