HomeMy WebLinkAboutEssayons LP Owner Participation Agreement (Hye Court-450 M Street) 10-4-22 RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN
TO: 2022-0133214
FRESNO County Recorder
Paul Dictos, CPA
Thursday, Oct 27, 2022 02:55:01 PM
City of Fresno, in its capacity as Housing CONFORMED COPY
Successor to the Redevelopment Agency
Copy of document recorded.
of the City of Fresno Has not been compared with original.
848 M Street Third Floor
Fresno, Ca. 93721
Attention: Executive Director
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Agreement is recorded at the request and for the benefit of the
Redevelopment Agency of the City of Fresno and is exempt from the payment of a
recording fee pursuant to Government Code Section 6103.
CITY OF FRESNO, IN ITS CAPACITY
AS HOUSING SUCCESSOR TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF FRESNO
By:
Marlene Murphey
Executive Dir ctor
Dated: 2-2—
OWNER PARTICIPATION AGREEMENT
by and between
The City of Fresno, in its capacity as Housing Successor
to the Redevelopment Agency of the City of Fresno,
a municipal corporation,
Fresno Revitalization Corporation, a California Nonprofit Public Benefit Corporation,
and
ESSAYONS LP, a California Limited Partnership, or assignee
Hye Court
450 M Street (APN 468-223-20T)
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ATTACHMENTS
1 . Exhibit A: Legal Description of Propertv
2. Exhibit B: Schedule of Performance/Payment Schedule
3. Exhibit C: Budget/Financial Plan
4. Exhibit D: Certificate of Completion
5. Exhibit E: Scope of Development and Project Design
6. Exhibit F: Form of Regulatory Agreement and Declaration of
Covenants and Restrictions
7. Exhibit G: Form of Promissory Note
& Exhibit H: Form of Deed of Trust
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OWNER PARTICIPATION AGREEMENT
THIS OWNER PARTICIPATION AGREEMENT("Agreement") is entered as of the
Effective Date (defined in this Agreement), between the CITY OF FRESNO, a municipal
corporation, and in its capacity as housing successor to the Redevelopment Agency of
the City of Fresno, FRESNO REVITALIZATION ORPORATION, a California nonprofit
public benefit corporation (collectively referred to herein as the "Agency"), and
ESSAYONS LP., a California limited partnership, or assignee ("Owner").
RECITALS
The parties enter this Agreement based on the following facts, understandings,
and intentions:
A. On February 1, 2014, the former Redevelopment Agency was dissolved pursuant
to the provisions of California State Assembly Bill No. 1 X 26 ("AB 26") and upheld by the
California Supreme Court in California Redevelopment Assoc. v. Matosantos, S194861
(Dec. 29, 2011). On June 27, 2012, AB 26 was subsequently amended in part by
California State Assembly Bill No. 1484 ("AB 1484") (AB 26 and AB 1484 are referred to
collectively as the "Redevelopment Dissolution Law").
B. Pursuant to the Redevelopment Dissolution Law, the former Redevelopment
Agency's housing assets were transferred to the City of Fresno as the Housing Successor
to the former Redevelopment Agency.
C. Agency administers the Low and Moderate Income Housing Fund established
pursuant to Cal. H.&S. C. Sections 33334.2 et seq.
D. Fresno Revitalization Corporation ("FRC") is a California nonprofit public benefit
corporation, the Board of which is comprised of the Fresno City Council and the Mayor,
and which performs certain functions on behalf of the Successor Agency to the
Redevelopment Agency of the City of Fresno, and the City in its capacity as Housing
Successor of the Redevelopment Agency of the City of Fresno.
E. Owner holds, or will acquire, all rights, title, and interest in fee to the certain real
property described in Exhibit "A" attached hereto and incorporated herein (the
"Property"), including improvements located thereon which shall be improved by Owner
as contemplated by this Agreement and known as Hye Court (the "Project"). The Project
includes the rehabilitation of the three residential structures, and the renovation of a small
out-building, and installation of landscaping and green space. The Property and Project
are located within the territorial jurisdiction of the City.
F. Owner proposes to develop a residential rental project on the Property consisting
of three residential units. All of the residential units (the "Affordable Units") are to be
rented and preserved as "Affordable Rental Housing" (as defined below).
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G. Owner agrees to undertake improvements in accordance with the combined
Performance and Payment Schedule described in Exhibit "B" attached hereto and
incorporated herein (the "Performance and Payment Schedule").
H. To the extent Housing Set Aside Funds will exceed 50% of the cost of producing
the Affordable Units, the Agency has determined based on substantial evidence, that the
use of the Housing Set Aside Funds is necessary because the Agency or Owner of the
Affordable Units has made a good faith attempt but been unable to obtain commercial or
private means of financing the units at the same level of affordability and quantity. The
Project is not feasible and cannot be completed and restricted to the affordable rental
housing purposes and uses provided under Law and this Agreement absent the financial
support of the Agency.
I. The Property and associated onsite and offsite improvements are collectively
referred to in this Agreement as the "Improvements" or the "Project," all of which will
directly benefit the Property and the Plan area, cannot otherwise be reasonably paid for
or financed solely through private financing, and are necessary to eliminate blight.
J. Agency is willing to assist Owner's construction of the Affordable Units by making
available to Owner as a loan certain funds in the amount of$1,221,100 (the "Loan"), upon
the terms and conditions specified in this Agreement. The Loan shall consist of$662,486
in Housing Set-Aside Funds, and $558,614 in funds contributed from Fresno
Revitalization Corporation.
K. The Loan shall be disbursed in accordance with the schedule set out in Exhibit"B"
to the Agreement and the Loan shall be repaid in accordance with the Promissory Note,
an example of which is attached hereto as Exhibit "G". The Loan and performance of the
affordability and other covenants and restrictions set forth in this Agreement shall be
evidenced by this Agreement, the Regulatory Agreement and Declaration of Covenants
and Restrictions, attached hereto as Exhibit "F", and the Deed of Trust and Assignment
of Rents, attached hereto as Exhibit "H," which shall be recorded against and run with
and encumber the Property.
L. Agency has further determined this Project is in the best interests of, and will
materially contribute to, Plan implementation. Further, Agency has found the Project: (i)
will have a positive influence in the Plan Area, and surrounding environs; (ii) is in the
vital and best interests of Agency and the health, safety, and welfare of City residents;
(iii) complies with applicable federal, state, and local laws and requirements; (iv)will help
eliminate blight; (v) will improve and preserve the community's supply of low income
housing available at affordable rent, as defined by Cal. H.&S.C. Sections 50052.5 and
50053, to persons and families of low income, as defined in Cal. H.&S.C. Section 50093
of Code; (vi)will be available to meet the replacement housing provisions in Cal. H.&S.C.
Section 33413; (vii) will apply funds solely within the respective Plan areas except to the
extent otherwise provided herein and allowed by Law; (viii) all planning and
administrative expenses incurred in pursuit hereof are necessary for the production,
improvement, or preservation of low income housing; (ix) will comply with all owner
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participation rules and criteria of Agency and the Plan; and (x) will comply with any and
all applicable review and other requirements of the City's Historical Preservation
Commission.
M. The Owner and the Agency have determined that this Agreement is not subject
to Article XXXIV of the California Constitution.
NOW THEREFORE, in consideration of the above recitals, which are contractual
in nature, the mutual covenants contained herein, and such other and further
consideration as is hereby acknowledged, the parties agree as follows:
AGREEMENT
1. DEFINITIONS. Besides definitions contained elsewhere in this Agreement, the
definitions in this Section will govern the construction, meaning, application, and
interpretation of the various terms used in this Agreement.
1.1 "ADA" means the Americans with Disabilities Act of 1990.
1.2 "Affordability Period" means a period of fifty-five years commencing from
the date Agency records the Certificate of Completion.
1.3 "Affordable Rental Housing" or"Affordable Units" means the Units available
at affordable rent, as defined by Cal. H.&S.C. Section 50093, , which
requirements shall be enforceable by covenants running with the land. As
used in this Agreement, the term "Affordable Rent" shall mean annual
rentals whose amount does not exceed the maximum percentage of income
that can be devoted to rent as set forth by Health & Safety Code Section
50093, or its successor, and Section 5.603(b) of Title 24 of the Code of
Federal Regulations which is currently described in the Regulatory
Agreement and Declaration of Covenants and Restrictions attached hereto
as Exhibit "F." There will be three affordable units consisting of two units
for households whose annual income does not exceed 80% of AMI and one
unit for households whose annual income does not exceed 120% AMI.
1.4 "Agency" means the City of Fresno in its capacity as the Housing Successor
to the Redevelopment Agency of the City of Fresno, a municipal
corporation, organized and existing under the Law, and any assignee of or
successor to its rights, powers, and responsibilities, and Fresno
Revitalization Corporation.
1.5 "Agreement" means this Owner Participation Agreement.
1.6 "Budget" means the Budget/Financial Plan for the Project attached hereto
and incorporated herein as Exhibit "C" (the "Budget").
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1 .7 "Certificate of Completion" means that Certificate issued in the form
attached as Exhibit "D" to Owner by Agency evidencing completion of the
Project for purposes of this Agreement.
1.8 "City" shall mean the City of Fresno, California, a municipal corporation.
1.9 "Conditions Precedent of Agency" means the conditions precedent to the
effectiveness of this Agreement against the Agency.
1 .10 "Construction Completion Date" means the date specified in Exhibit B,
subject to extension pursuant to Section 4.5.
1.11 "Day" whether or not capitalized, means a calendar day, unless stated
otherwise.
1.12 "Deed of Trust" shall mean the Deed of Trust recorded against the Property
securing the Loan, as shown in Exhibit "H" of this Agreement.
1.13 "Default" means a party's failure to timely perform any action or covenant
required by this Agreement following notice and opportunity to cure.
1.14 "Director" means the Executive Director of the City in its capacity as housing
successor.
1.15 "Entitlements" mean all permits and fees that the City, County of Fresno,
and other governmental agencies with jurisdiction over the Project, the
Improvements, or the Property may require.
1.16 "Effective Date" means the date of complete execution of the Agreement
following Agency Board approval thereof.
1.17 "Environmental Laws" means any federal, state, or local law, statute,
ordinance, or regulation pertaining to environmental regulation,
contamination, or cleanup of any Hazardous Materials or waste including,
without limitation, any state or federal lien or "super lien" law, any
environmental cleanup statute or regulation, or any governmentally required
permit, approval, authorization, license, variance or permission.
1.18 "Funding Source" means the Loan and other funding sources secured by
Owner to construct the Improvements.
1.19 "Financing Plan" means the Budget including sources and uses of funds
sufficient for Owner to complete the Improvements according to the
Performance and Payment Schedule.
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1.20 "Hazardous Materials" means any substance, material, or waste which is or
becomes regulated by any local governmental authority, the State of
California, or the United States Government including, without limitation,
any material or substance which is: (a) defined as a "hazardous waste,"
"extremely hazardous waste," or "restricted hazardous waste" under
Sections 25115, 25117, or 25122.7, or listed pursuant to Section 25140 of
the California Health and Safety Code, (b) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code,
(c) defined as a "hazardous material," "hazardous substance," or
"hazardous waste" under Section 25501 of the California Health and Safety
Code, (d) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, (e) petroleum, (f) friable asbestos, (g)
polychlorinated byphenyls, (h) listed under Article 9 or defined as
"hazardous" or"extremely hazardous" under Article 11 of Title 22, California
Administrative Code, (1) designated as "hazardous substances" pursuant to
Section 311 of the Clean Water Act (33 U.S.C. §1317), (j) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation
and Recovery Act (42 U.S.C. §6901 et seq., or (k) defined as "hazardous
substances" pursuant to Section of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. §9601, et seq.);
provided, however, hazardous materials shall not include: (1) construction
materials, gardening materials, household products, office supply products
or janitorial supply products customarily used in the construction,
maintenance, rehabilitation, or management of residential rental housing or
associated buildings and grounds, or typically used in household activities,
in a manner typical of other residential rental housing developments which
are comparable to the Improvements; and (2) certain substances which may
contain chemicals listed by the State of California pursuant to Health and
Safety Code Sections 25249.8 et seq., which substances are commonly
used by a significant portion of the population living within the region of the
Property, including, but not limited to, alcoholic beverages aspirin, tobacco
products, NutraSweet and saccharine.
1.21 "Household" means one or more persons occupying an Affordable Unit.
1.22 "Housing Set-Aside Funds" means those California Health and Safety Code
Section 33334.2 monies held and administered by Agency a portion of
which shall be made available as the Loan to Owner for eligible costs and
expenses incurred by Owner in constructing the Improvements in such
amounts, and upon such terms and conditions specified in this Agreement.
1.23 "Improvements" mean the rehabilitation of the Affordable Units that Owner
will complete on the Property as part of the Project, including associated
fencing, and landscaping improvements.
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1.24 "Law" means the Community Redevelopment Law of the State (California
Health and Safety Code Sections 33000 et seq.) as modified by the
Redevelopment Dissolution Law.
1.25 "Loan" means the principal sum of $1,221,100 provided by Agency to
Owner as a loan, upon the terms and conditions set forth in this Agreement
and the Promissory Note attached hereto as Exhibit "G" to be secured by a
no worse than second position deed of trust lien against the Property,
subject to Owner's permanent financing in first position. If the deed of trust
securing the Promissory Note is recorded prior to the recordation of the
deed or deeds of trust securing the other Funding Sources consistent with
the Financing Plan, the Agency shall subordinate such deed of trust to such
other deed(s) of trust, provided the Agency's Deed of Trust maintains no
worse than second position.
1 .26 "Loan Documents" are collectively this Agreement and all exhibits and
attachments thereto any deed of trust given as security, as they may be
amended, modified or restated from time to time.
1.27 "Material Change" means a change, modification, revision or alteration to
the Loan Documents that significantly deviates from those previously
approved by the Agency, provided that fully funded change(s) which do not
result in a change in the number or type (i.e. residential, affordable) of Units
and/or an increase in the total Loan funding, or the Performance and
Payment Schedule set forth in Exhibit B, as provided in this Agreement shall
not constitute Material Change(s).
1.28 "Owner" means Essayons LP, or an affiliated company in which it is a
member, managing member, general partner, or principal.
1.29 "Project" means the rehabilitation of three residential Units on the Property,
of which all shall be Affordable Units, and the renovation of a small out-
building, and installation of landscaping and green space.
1 .30 "Project Completion Date" means the date that Agency shall have
determined the Project has reached completion in accordance with the
plans and specifications in the Performance and Payment Schedule, as
evidenced by Agency's issuance of a Certificate of Completion.
1.31 "Property" means the real property described in Exhibit "A," attached
hereto.
1 .32 "Release of Restrictions" means a release of those covenants, conditions,
and restrictions contained in this Agreement.
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1 .33 "Restrictions" means the affordability restrictions contained in this
Agreement and Exhibit"F"thereto, containing all conditions, covenants, and
restrictions required by the Law, any other applicable laws and regulations,
the Plan, and this Agreement, running with the Property and the Affordable
Units thereon and burdening such for the Affordability Period.
1 .34 "Performance and Payment Schedule" means the schedule attached as
Exhibit "B," setting forth the dates and times by which the parties must
accomplish certain obligations under this Agreement. The parties may
revise the Performance and Payment Schedule from time to time on mutual
written agreement of Owner and Agency, but any delay or extension of the
Construction Completion Date is subject to the requirements in this
Agreement.
1.35 "Security Financing Interest" means a security interest which Owner grants
in the Property and the Improvements thereon before the Agency issues
and records a Release of Restrictions.
1.36 "Unit" means a residential unit constituting the Project.
2. CONDITIONS PRECEDENT TO AGENCY'S OBLIGATION TO PERFORM
UNDER THIS AGREEMENT. The following are conditions precedent to Agency's
obligation to perform under this Agreement. Until each and all of the conditions
are satisfied, Agency is not obligated to take any action, or provide any funding,
or further funding, under this Agreement. Agency, in writing by its authorized
representative, may waive any condition or agree to extend the time for
satisfaction of any condition set forth in this Section 2. Agency may terminate this
Agreement as provided herein for the failure of a condition.
2.1 Owner shall pay for and provide a title report, recorded deed, or other
evidence acceptable to Agency that Owner owns the Property.
2.2 Owner has entered into and provided Agency copies of agreements with
any and all Funding Sources and the general contractor for the Project. All
such Funding Source agreements shall contain a provision whereby the
party(ies) to each such agreement, other than Owner, agree to make
reasonable efforts to (i) notify Agency immediately of any event of default
by Owner under such agreement; (ii) notify Agency immediately of
termination or cancellation of such agreement; and (iii) provide Agency,
upon Agency's request, an estoppel certificate certifying that such
agreement is in full force and effect and Owner is not in default under such
agreement.
2.3 Owner has submitted evidence that the combined monies from the Funding
Sources, are not less than the greater of a total development cost of
$1,287,100 or the amount which Agency determines is necessary to
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complete the Improvements, including evidence of such Funding Sources
acceptable to the Agency. Agency shall not disburse any portion of the
Loan prior to Agency's confirmation that all of Owner's funding sources are
secured and sufficient to complete the Project.
2.4 Owner will submit its Financing Plan to the Agency for review and
acceptance provided that the purpose of Agency's review is solely to
confirm Owner has sufficient funds available to complete the Improvements
and maintain the Project as this Agreement requires.
After Agency accepts the Financing Plan, Owner will not make any Material
Change in the Financing Plan without first submitting such change to
Agency for review and acceptance, which shall not be unreasonably
withheld, delayed, or conditioned.
2.5 Owner, at Owner's expense, shall have investigated and determined all
environmental, soil, seismic, and other surface and subsurface conditions
of the Property and the suitability of such conditions for the Project. Owner's
responsibility and due diligence includes, but is not limited to, determining
the presence of Hazardous Materials. Both Owner and Agency will promptly
give the other copies of all reports and test results. Owner will indemnify,
defend, and hold Agency harmless from any damages or claims arising out
of Owner's inspections and tests.
2.6 Should Owner's property assessment/inspection reveal any Hazardous
Materials or environmental conditions requiring remediation, Owner will
promptly notify Agency. Not later than ten days from and after such notice,
Owner shall, at its sole cost and expense, commence to make required
submittals, develop required remedial action plans, and thereafter pursue
remediation activities as to such Hazardous Materials or environmental
conditions and to diligently prosecute such to completion as required by
applicable federal, state and local law and in a manner and according a
reasonable time frame agreeable to Agency. Without limiting the foregoing,
any remediation will be performed pursuant to a remedial action plan, if
needed, approved by the governmental agencies having jurisdiction and will
be performed according to applicable environmental laws and
governmental requirements.
2.7 Owner shall not be in default of this Agreement and all representations and
warranties of Owner contained herein shall continue to be true and correct
in all material respects.
2.8 Owner will have signed and delivered all documents required hereunder.
2.9 Owner shall be in full compliance with the Performance and Payment
Schedule.
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2.10 Owner will have provided proof of insurance as required by this Agreement.
2.11 This Agreement, the executed Deed of Trust, and the executed Restrictions
shall have been recorded with the Fresno County Recorder's Office.
3. OWNER OBLIGATIONS AFTER SATISFACTION OF CONDITIONS
PRECEDENT. The following obligations of Owner will run with the land and survive
this Agreement, and will become effective upon the date Owner acquires fee title
to the Property:
3.1 Owner will take all reasonable precautions to prevent the release into the
environment of any Hazardous Materials in, on, or under the Property in
violation of applicable laws or regulations. Owner will comply with all
governmental requirements with respect to Hazardous Materials. In
addition, Owner shall install and use equipment and implement and follow
procedures that are consistent with reasonable standards for the disclosure,
storage, use, removal, and disposal of Hazardous Materials.
3.2 Owner will notify the Agency and give Agency a copy of all environmental
permits, disclosures, applications, entitlements, or inquiries relating to the
Property including, without limitation, notices of violation, notices to comply,
citations, inquiries, cleanup or abatement orders, cease and desist orders,
reports filed pursuant to self-reporting requirements and reports filed or
applications made pursuant to any governmental regulation relating to
Hazardous Materials. Within three days after each incident, Owner will
report to Agency any unusual or potentially important incidents respecting
the environmental condition of the Property.
If a release of any Hazardous Materials into the environment occurs, Owner
will, as soon as possible after the release, furnish Agency with a copy of
any reports relating thereto and copies of all correspondence with
governmental agencies relating to the release. Upon request, Owner will
furnish Agency with a copy of any other environmental entitlements or
inquiries relating to or affecting the Property including, without limitation, all
permit applications, permits, and reports, even reports and other matters.
3.3 Owner shall indemnify, hold harmless and defend Agency, City and each of
their officers, officials, employees, agents and volunteers from any and all
claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine,
penalty, punitive damage, or expense (including, without limitation,
reasonable attorneys' fees), arising out of (i) the presence, release, use,
generation, discharge, storage or disposal of any Hazardous Materials on,
under, in or about the Property, or the transportation of any Hazardous
Materials to or from the Property, or(ii) the violation, or alleged violation, of
any statute, ordinance, order, rule, regulation, permit, judgment or license
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relating to any use, generation, release, discharge, storage, disposal or
transportation of Hazardous Materials on, under, in or about, to or from, the
Property. This indemnity will include, without limitation, any damage,
liability, fine, penalty, parallel indemnity after closing, cost or expense
arising from or out of any claim, action, suit or proceeding for personal injury
(including sickness, disease or death), tangible or intangible property
damage, compensation for lost wages, business income, profits or other
economic loss, damage to the natural resource or the environment,
nuisance, contamination leak, spill, release or other adverse effect on the
environment. Owner's obligations under the preceding sentence shall apply
regardless of whether Agency, City or any of their officers, officials,
employees, agents or volunteers are negligent, but shall not apply to any
claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine,
penalty, punitive damage, or expense caused solely by the gross
negligence, or caused by the willful misconduct, of Agency, City or any of
their officers, officials, employees, agents or volunteers. This section shall
survive expiration or termination of this Agreement.
3.4 The status and qualifications of Owner are of particular concern to Agency
until the Restrictions expire, no voluntary or involuntary successor-in-
interest of Owner will acquire any rights or powers under this Agreement,
provided that the parties acknowledge the Owner shall hold the Affordable
Units for rental as Affordable Rental Housing as provided in this Agreement.
Notwithstanding anything to the contrary herein, Owner shall have the right
to transfer ownership of the Property to another person or entity having
experience in the ownership and operation of Affordable Rental Housing,
as reasonably determined by Agency, which approval shall not be
unreasonably withheld.
4. DEVELOPMENT OF THE PROPERTY.
4.1 Except as set forth in this Agreement, before Owner begins constructing the
Improvements or undertakes any other work of improvement on the
Property, Owner, at its own cost and expense, will secure all land use and
other entitlements, permits, and approvals that Agency or any other
governmental agency with jurisdiction over the Project requires for
construction of the Project. Without waiver or limitation, Owner will secure
and pay all costs, charges and fees associated with, the following:
4.1.1 All permits and fees that the City, County of Fresno, and other
governmental agencies with jurisdiction over the Project, the Improvements,
or the Property may require.
4.1.2 ADA/Barriers to the Disabled. The Project shall comply with all
applicable federal, state, and local accessibility requirements.
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4.2 Scope of Development and Project Design. Owner has submitted a general
or basic concept drawing to Agency, which Agency has approved, and a
copy of which is attached as Exhibit "E" (the "Scope of Development and
Project Design"). Owner will complete the Improvements on the Property
in one phase, according to the Scope of Development and Project Design,
and the plans, drawings, and documents that Owner submits to Agency.
Owner shall carry out construction of the Project including the
Improvements in accordance with all applicable local, state, and federal
laws, codes, ordinances and regulations, including without limitation all
applicable state and federal labor standards.
4.3 Books and Records. Owner shall make available for examination at
reasonable intervals and during normal business hours, all books,
accounts, reports, files and other papers or property with respect to all
matters covered by this Agreement, and shall permit Agency to audit,
examine, and make excerpts or transcripts from such records. Agency may
audit any conditions relating to this Agreement at Agency's expense, unless
such audit shows a materially significant discrepancy in information
reported by Owner to Agency in which case Owner shall bear the cost of
such audit. Owner shall also reasonably cooperate with and assist the
Agency in Agency's compliance with any applicable audit requirements of
the California Redevelopment Law including California Health and Safety
Code Sections 33080 and 33080.1 . This section shall survive for a period
of four years after the expiration or termination of this Agreement.
4.4 Audit. Owner shall be accountable to Agency for all Loan funds disbursed
to Owner pursuant to this Agreement. Owner will cooperate fully with
Agency and the State of California in connection with any interim or final
audit relating to the Project that may be performed. Owner will maintain
accurate and current books and records for the Project using generally
accepted accounting principles. Owner agrees to maintain books and
records that accurately and fully show the date, amount, purpose and payee
of all expenditures financed with Loan funds and to keep all invoices,
receipts and other documents related to expenditures financed with Loan
funds for not less than four years after the fiscal year in which such
expenditures are incurred. For purposes of this section, "books, records,
and documents" include, without limitation, plans, drawings, specifications,
ledgers, journals, statements, contracts/agreements, funding information,
purchase orders, invoices, loan documents, computer printouts,
correspondence, memoranda, and electronically stored versions of the
foregoing. This section shall survive for a period of four years after the
expiration or termination of this Agreement.
4.5 Owner shall cause the issuance of all necessary discretionary
governmental permits, approvals, and entitlements, close any implicated
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funding or other escrow and begin/complete construction of the
Improvements according to the Performance and Payment Schedule.
4.5.1 Construction Completion Date. Agency, acting through and in the
discretion of its Director, may extend the Construction Completion Date of
the Project for that period of time that Agency, in its reasonable discretion,
determines necessary to overcome any delay if and to the extent such delay
is due to a cause which is beyond Owner's reasonable control, and if Owner
could not, with reasonable diligence, have foreseen and avoided such
cause for delay. Such causes include, without limitation, acts of God,
unusually severe weather or flood, war, terrorism, riot or act of the public
enemy, labor disputes, unavoidable inability to secure labor, materials,
supplies, tools or transportation, or acts or omissions of any governmental
authority having jurisdiction. Agency will not extend the Construction
Completion Date for acts or omissions occurring through the fault of Owner,
or for acts of Agency permitted or contemplated by this Agreement. An
extension of time as provided in this subsection will be Owner's sole remedy
for any delays in the Performance and Payment Schedule. Any extension
of time beyond 180 days shall require Agency approval.
As a condition precedent to any extension requested by Owner, Owner will
give the Agency notice within ten days after any cause for delay occurs,
stating the cause and the additional time Owner anticipates needed to
complete the Project. Any extension by Agency must be in writing and
signed by the Director or the Director's designee, which approval shall not
be unreasonably withheld, delayed, or conditioned.
4.6 Subject to the terms of this Agreement, the Loan shall be disbursed to
Owner according to the Performance and Payment Schedule. All Loan
funds shall be used solely for costs of the Project and Improvements. In the
event Owner does not complete construction of the Project by the
Construction Completion Date, as may be extended pursuant to Section
4.5.1, or otherwise does not go forward with the Project, any portion of the
Loan advanced to the Owner shall be immediately due and payable upon
the written demand of Agency.
4.7 Certificate of Completion. Owner will notify Agency when Owner deems the
Project complete. Within ten business days after such notice, Agency will
inspect the Improvements. When Agency reasonably determines Owner
has completed the Improvements as required in this Agreement, the Plan,
and the Law, Agency will furnish Owner with the Certificate of Completion.
Agency will not unreasonably delay, condition or refuse to issue the
Certificate of Completion. The recorded Certificate of Completion will be a
conclusive determination that Owner has satisfactorily completed the
Improvements required under this Agreement. Any parties then owning or
subsequently purchasing, leasing or otherwise acquiring any interest in the
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Property will not(because of that ownership, purchase, lease or acquisition)
after the recording, incur any obligation or liability under this Agreement for
constructing the Improvements, but will take such interest in the Property
subject to the continuing covenants set forth in this Agreement.
4.7.1 If Agency determines not to furnish the Certificate of Completion, in
accordance with Section 4.7 above, Agency will give Owner a written notice
stating why Agency has decided not to issue the Certificate of Completion,
or why it is delaying the issuance, and the reasonable actions that, in
Agency's opinion, Owner must take before Agency can issue the Certificate
of Completion. Agency's failure to give the notice within ten days, however,
will not cause the Owner to be entitled to the Certificate of Completion. The
Certificate of Completion is not a notice of completion as referred to in
Section 3093 of the California Civil Code.
4.7.2 The following are conditions precedent to Agency issuing the
Certificate of Completion, and each submission will be in form and
substance satisfactory to the Director: Evidence that the time to file all
mechanics' liens or material men's liens has expired and any such liens
recorded against the Property or Improvements have been released or, if
not released, sufficiently bonded (i.e. 150%) against as required by law.
4.8 To the extent economically feasible, consistent with the requirements of any
permitted encumbrance, or as otherwise approved by Agency or provided
in the Agreement, if any building or improvement on the Property is
damaged or destroyed by an insurable cause, Owner shall, at its cost and
expense, diligently undertake to repair or restore said buildings and
improvements consistent with the Scope of Development and Project
Design for the Project. Such work or repair shall commence within ninety
days after the insurance proceeds are made available to Owner and shall
be complete within one year thereafter. All insurance proceeds collected
for such damage or destruction shall be applied to the cost of such repairs
or restoration and, if such insurance proceeds shall be insufficient for such
purpose, Owner shall make up the deficiency.
4.9 Inspections. Owner shall permit, facilitate, and require its contractors to
permit and facilitate observation and inspection of the Project by Agency
during reasonable business hours and upon reasonable notice for the
purpose of determining compliance with this Agreement.
4.10 If and to the extent that development of the Project results in the permanent
or temporary displacement of residential tenants, homeowners or
businesses, Owner shall comply with all applicable local, state, and federal
statutes and regulations with respect to relocation planning, advisory
assistance and payment of monetary benefits. Owner shall be solely
responsible for payment of any relocation benefits to any displaced persons
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and any other obligations associated with complying with said relocation
laws. For purposes of this Section 4.10 the parties acknowledge that as of
the Effective Date the Project Property is vacant and unoccupied.
4.11 Reporting Requirements. Owner shall submit to Agency the following
reports:
4.11.1 Annual Reports. Annually, beginning in the year following Agency's
issuance of the Certificate of Completion, and continuing until the expiration
of this Agreement, on such dates as are agreeable between the parties and
consistent with all federal and state reporting requirements applicable to the
Project, Owner shall submit an annual report to Agency, in a form approved
by Agency. Such annual report shall include for each of the Affordable
Units: the rent, the annual income, and the family size of the Household
occupying the Affordable Unit. Such annual report shall also state the date
the tenancy commenced for each Affordable Unit, certification from an
officer of Owner that the Affordable Unit is in compliance with the Affordable
Rental Housing requirements, and such other information the Agency may
be required by Law to obtain. Owner shall provide any additional
information reasonably requested by the Agency provided such information
is directly related to Owner's compliance with this Agreement.
4.11.2 Annual Proof of Insurance. Annually, beginning in the year following
Agency's issuance of the Certificate of Completion, and continuing until the
expiration of the Agreement, Owner shall submit proof of insurance as
required by this Agreement.
4.12 All Leases used to rent the Affordable Units are subject to the following:
4.12.1 Annual Income Certification and Reporting. Owner shall include in
leases for all Affordable Units provisions which authorize Owner to
immediately terminate the tenancy of any Household one or more of whose
members misrepresented any fact material to the Household's qualification
as a Household as an extremely low, very low, low, or moderate income
family, as applicable. Each such lease shall also provide that the
Household is subject to annual certification, and that, if the Household's
annual income increases above the applicable limits for low income family
such Household's rent may be subject to increase to the amount payable
by tenant under federal, state or local law, except that, consonant with the
Law, tenants of the Affordable Units that have been allocated to low income
housing tax credits by a housing credit agency pursuant to section 42 of the
Internal Revenue Code of 1986 (26 U.S.C. 42) must pay rent governed by
Section 42.
4.12.2 The leases for the Affordable Units shall provide that if the Project
is subject to state or federal rules governing low income housing tax credits,
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the provision of those rules regarding continued occupancy by, and
increases in rent for, Households whose incomes exceed the eligible
income limitation shall apply in place of the provisions set forth in subsection
4.12.1 above.
4.13 With respect to the Project, Owner shall comply with the following:
4.13.1 Except to any extent otherwise provided in this Agreement, Owner
is specifically responsible for all management functions with respect to the
Affordable Units including, without limitation, the selection of tenants,
certification and re-certification of Household size and income, evictions,
collection of rents and deposits, maintenance, landscaping, routine and
extraordinary repairs, replacement of capital items and security. Agency
shall have no responsibility for management of the Affordable Units of the
Project.
4.13.2 Owner covenants and agrees the Affordable Units shall constitute
Affordable Rental Housing during the entire Affordability Period. If Owner
fails to comply the requirement to lease the Affordable Units only to qualified
Households during the Affordability period, as described in the attached
Form of Regulatory Agreement and Declaration of Covenants and
Restrictions attached hereto as Exhibit "F," Agency shall be entitled to
enjoin Owner from leasing the Affordable Units in the Project, as Owner
acknowledges that damages are not an adequate remedy at law for such
breach.
4.13.3 The structures on the Property shall be improved and maintained in
accordance with applicable standards and in compliance with the mitigation
measures required in Environmental Assessment No. C-02-61, a finding of
mitigated negative declaration, published September 27, 2002.
5. INDEMNITY; INSURANCE
5.1 Owner shall indemnify, hold harmless and defend Agency, City and each of
their officers, officials, employees, agents from any and all loss, liability,
fines, penalties, forfeitures, costs and damages (whether in contract, tort or
strict liability, including but not limited to personal injury, death at any time
and property damage) incurred by Agency, City, Owner, or any other
person, and from any and all claims, demands and actions in law or equity
(including attorney's fees and litigation expenses), arising or alleged to have
arisen directly or indirectly out of Owner's performance of this Agreement.
Owner's obligations under the preceding sentence shall not apply to any
loss, liability, fines, penalties, forfeitures, costs, or damages caused solely
by the gross negligence, or caused by the willful misconduct, of Agency,
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City or any of their officers, officials, employees, agents or volunteers. This
section shall survive expiration or termination of this Agreement.
5.2 Following acquisition of the Property, and thereafter, throughout the life of
this Agreement, the Owner shall pay for and maintain in full force and effect
all policy(ies) of insurance required hereunder with an insurance company
either(1)admitted by the California Insurance Commissionerto do business
in the State of California and rated not less than "A-VII" in Best's Insurance
Rating Guide, or (2) authorized by the Agency's Risk Manager or his/her
designee. The following policies of insurance are required:
5.2.1 Until the Certificate of Completion is recorded, Builders Risk(Course
of Construction) insurance in an amount equal to the completed value of the
project with no coinsurance penalty provisions.
5.2.2 Following the recording of the Certificate of Completion,
COMMERCIAL PROPERTY insurance which shall be at least as broad as
the most current version of Insurance Service Office (ISO) Commercial
Property Form CP 10 30 (Cause of Loss - Special Form), with limits of
insurance in an amount equal to the full (100%) replacement cost (without
deduction for depreciation) of the Improvements with no coinsurance
penalty provisions. Such insurance shall include coverage for business
income, including "rental value", in an amount equal to the 18 months of the
annual rent generated by the Improvements. Coverage for business
income, including "rental value," shall be at least as broad as the most
current version of Insurance Service Office (ISO) Commercial Property
Form CP 00 30.
Owner shall be responsible for payment of any deductibles contained in any
insurance policies required hereunder and Owner shall also be responsible
for payment of any self-insured retentions. Any deductibles or self-insured
retentions must be declared to, and approved by, the Agency's Risk
Manager or his/her designee.
All policies of insurance required hereunder shall be endorsed to provide
that the coverage shall not be cancelled, non-renewed, reduced in coverage
or in limits except after thirty calendar day written notice has been given to
Agency. Upon issuance by the insurer, broker, or agent of a notice of
cancellation, non-renewal, or reduction in coverage or in limits, Owner shall
furnish Agency with a new certificate and applicable endorsements for such
policy(ies). In the event any policy is due to expire during the term of this
Agreement, Owner shall provide a new certificate, and applicable
endorsements, evidencing renewal of such policy not less than fifteen
calendar days prior to the expiration date of the expiring policy.
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The Builders Risk (Course of Construction) and Property insurance policies
shall be endorsed to name Agency as a loss payee.
Owner shall furnish Agency with all certificate(s) and applicable
endorsements effecting coverage required hereunder. All certificates and
applicable endorsements are to be received and approved by the
Agency's Risk Manager or his/her designee prior to Agency's execution of
this Agreement.
If at any time Owner fails to maintain the required insurance in full force and
effect, Owner shall immediately discontinue all work under this Agreement
until Agency receives notice that the required insurance has been restored
to full force and effect and that the premiums therefore have been paid for
a period satisfactory to the Agency. Owner's failure to maintain any required
insurance shall be sufficient cause for Agency to terminate this Agreement.
The fact that insurance is obtained by Owner shall not be deemed to release
or diminish the liability of Owner, including, without limitation, liability under
the indemnity provisions of this Agreement. The duty to indemnify Agency,
City and each of their officials, officer, employees, agents, and volunteers
shall apply to all claims and liability regardless of whether any insurance
policies are applicable. The policy limits do not act as a limitation upon the
amount of indemnification to be provided by Owner. Approval or purchase
of any insurance contracts or policies shall in no way relieve from liability
nor limit the liability of Owner.
Upon request of Agency, Owner shall immediately furnish Agency with a
complete copy of any insurance policy required under this Agreement,
including all endorsements, with said copy certified by the underwriter to be
a true and correct copy of the original policy. This requirement shall survive
expiration or termination of this Agreement.
5.3 Owner will obtain and deliver payment and performance bonds issued by
an insurance company admitted in California in good standing as a surety
and meeting the criteria for Owner's other insurance under this Agreement,
each bond in an amount at least equal to 100% of Owner's estimated
construction costs, provided that the Agency hereby waives any
requirement for said bonds at all time during which Owner is in full
compliance with this Agreement and the Project remains fully funded.
5.4 Until Agency issues the Certificate of Completion Agency will have access
to the Property, after reasonable notice to the Owner (except in
emergencies), without charge or fee, during normal construction hours, for
purposes of assuring compliance with this Agreement. Agency
representatives will comply with all safety rules while on the Project or the
Property.
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5.5 Owner will design and construct the Improvements, and after that, prior to
any allowable transfer or sale thereof, Owner will maintain the Property
according to all applicable laws including, without limitation, all applicable
state labor standards, Agency zoning, and development standards,
building, plumbing, mechanical and electrical codes, all provisions of the
Fresno Municipal Code and all applicable access requirements. Agency
makes no representation about which, if any, of such laws, ordinances,
regulations, or standards apply to development of the Project.
Owner acknowledges that Owner, not Agency, is responsible for
determining applicability of and compliance with all local, state, and federal
laws including, but not limited to, any applicable provisions of the California
Labor Code, Public Contract Code, and Government Code. Agency makes
no express or implied representation as to the applicability or inapplicability
of any such laws to this Agreement or to the parties' respective rights or
obligations hereunder including, but not limited to, payment of prevailing
wages, competitive bidding, subcontractor listing, or similar or different
matters. Owner further acknowledges that Agency shall not be liable or
responsible at law or in equity for any failure by Owner to comply with any
such laws, regardless of whether Agency knew or should have known of the
need for such compliance, or whether Agency failed to notify Owner of the
need for such compliance.
5.6 Following acquisition of the Property, Owner will take reasonable efforts to
not permit any lien or stop notice to be filed against the Property, provided
Owner may reasonably determine to contest any such lien or stop notice. If
Owner discovers that any lien or stop notice has been recorded against the
Property, Owner will notify the Agency within 15 days following such
discovery. If a claim of lien or stop notice is recorded against the Property
or Improvements, Owner, within thirty days after recordation of a claim of
lien or stop notice or within five days after Agency's demand, whichever first
occurs, will do the following:
5.6.1 Pay and discharge the same; or
5.6.2 Effect the release of such lien by recording and serving upon the
claimant a surety bond in sufficient form and amount (i.e. 150%), or
otherwise, and provide evidence of same to Agency; or
5.6.3 Give Agency other assurance which Agency, in its sole discretion,
deems satisfactory to protect the Agency from the effect of the lien or stop
notice.
6. SECURITY FINANCING AND RIGHTS OF HOLDERS.
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6.1 Notwithstanding any other provision of this Agreement, Owner may not
grant a security interest in the Property before the Agency issues and
records a Certificate of Completion, without the written consent of Agency,
provided that Agency hereby approves the recommended security interest
of Owner's financial institutions, including their respective successors or
assigns, as described in the Financing Plan.
7. CONTINUING OWNER OBLIGATIONS
7.1 In its performance of this Agreement, Owner covenants by and for itself and
its successors and assigns, and all persons claiming under or through them,
that there shall be no discrimination against or segregation of any person,
including contractors, subcontractors, bidders and vendors, on account of
race, color, religion, ancestry, national origin, sex, sexual preference, age,
pregnancy, childbirth or related medical condition, medical condition (e.g.,
cancer related) or physical or mental disability, and in compliance with all
applicable federal, state and local laws, regulations and rules including
without limitation Title VI I of the Civil Rights Act of 1964, 42 U.S.C. Sections
2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d),
the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621,
et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section
1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and
Housing Act, Cal. Government Code Section 12900, et seq., the California
Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code
Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section
12101, et seq., and all other applicable anti-discrimination laws and
regulations of the United States and the State of California as they now exist
or may hereafter be amended. Owner will allow Agency representatives
access to its employment records related to this Agreement during regular
business hours and upon reasonable notice to verify compliance with these
provisions when so requested by the Agency.
7.2 Following acquisition of the Property, Owner will pay before delinquency all
ad valorem real estate taxes and assessments on the Property, subject to
the Owner's right to contest in good faith any such taxes. Owner will remove
any levy or attachment on the Property or any part of it or assure the
satisfaction of the levy or attachment within a reasonable time. Owner will
notify Agency prior to applying for or receiving any exemption from the
payment of property taxes or assessments on any interest in or to the
Property or the Improvements. Owner further agrees that the prior consent
of Agency shall be required if the basis for such exemption is other than for
qualified property held by a nonprofit entity that has been determined to be
exempt from federal and state income taxation, which consent shall not be
unreasonably withheld.
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8. COVENANTS AND RESTRICTIONS RUNNING WITH THE LAND. The following
covenants shall run with the land and shall bind Owner, and Owner's successors
in interest to the Property for the periods stated and shall be fully binding for the
benefit of the Plan community and Agency without regard to technical classification
or designation, legal or otherwise.
8.1 Owner covenants for itself, its successors, assigns, and every successor in
interest to the Property or any part of it that, after closing of any applicable
escrow, during construction, and after completing the Improvements, the
Owner shall devote the Affordable Units on the Property to the uses
specified in this Agreement for the Affordability Period. All uses of the
Affordable Units including, without limitation, all activities Owner undertakes
pursuant to this Agreement, shall conform with this Agreement and the Law.
Without waiver or limitation, each of the Affordable Units to be constructed
pursuant to this Agreement shall be maintained as Affordable Rental
Housing pursuant to this Agreement and the Restrictions.
8.2 Owner and those taking under Owner will maintain the Property and all
Improvements on site in reasonably good-condition and repair (and, as to
landscaping, if any, in a healthy condition), all according to the Scope of
Development and Project Design and related plans, as-amended from time
to time. Owner and those taking under Owner shall: (i) maintain all on-site
Improvements according to all other applicable laws, rules, ordinances,
orders, and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction and all
their respective departments, bureaus, and officials; (ii) keep the
Improvements free from graffiti; (iii) keep the Property free from any
accumulation of debris or waste material; (iv) promptly make repairs and
replacements to the on-site Improvements; and (v) promptly replace any
dead, or diseased plants and/or landscaping (if any) with comparable
materials. Owner shall abide by any covenants on the Property related to
compliance with historical standards.
Agency will give Owner written notice of any breach of this Section 8.2.
Within ten days from receipt of such notice, Agency and Owner will meet
and confer, and agree to corrective actions and a schedule of performance
for such corrective actions. Owner must cure the default within the agreed
schedule or within (a) ten days after the Agency's notice for any default
involving landscaping, graffiti, debris, waste material, or general
maintenance on the Property; or(b)thirty days after Agency's notice for any
default involving the Improvements. If Owner does not cure the default
within the agreed schedule, Agency, without obligation to, may enter the
Property, cure the default, and protect, maintain, and preserve the
Improvements and landscaping.
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Agency may lien or assess the Property for the Agency's expenses in
protecting, maintaining, and preserving the on-site Improvements and
aesthetics of the Property, including any lawful administrative charge in the
manner used by the Agency in the abatement of public nuisances. The
notice and opportunity to cure provided for herein will supplement the
noticing, hearing, and nuisance abatement order used by Agency. Owner
will promptly pay all such amounts to Agency upon demand.
8.3 From the Effective Date until the expiration of the Affordability Period,
Owner covenants to use and operate the Affordable Units on the Property
as Affordable Rental Housing pursuant to this Agreement.
8.4 Owner covenants for itself and any successors in interest and all persons
claiming by, through or under them, in perpetuity, that there shall be no
discrimination against or segregation of any person or group of persons
because of race, color, creed, religion, sex, sexual preference, marital
status, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Affordable Units, nor shall Owner
itself or any person claiming under or through Owner establish or permit any
such practice or practices of discrimination or segregation concerning the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the Affordable Units.
8.5 All deeds, leases, or contracts concerning the Affordable Units shall contain
or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and
all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of
persons because of race, color, creed, religion, sex, sexual
preference, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the land herein conveyed, nor shall the grantee or any person
claiming under or through him or her, establish or permit any such
practice or practices of discrimination or segregation concerning the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the land herein, conveyed.
The foregoing covenants shall run with the land."
In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and
all persons claiming under or through him or her, and this lease is
made and accepted upon and subject to the following conditions:
- 23 -
"That there shall be no discrimination against or segregation of
any person or group of persons, because of race, color, creed,
religion, sex, sexual preference, marital status, national origin,
or ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased
nor shall the lessee himself or herself, or any person claiming
under or through him or her, establish or permit any such
practice or practices of discrimination or segregation concerning
the selection, location, number, use, or occupancy of tenants,
lessees, sublessees, subtenants, or vendees in the premises
herein leased."
In contracts: "There shall be no discrimination against or segregation
of, any person, or group of persons because of race, color, creed,
religion, sex, sexual preference, marital status, national origin, or
ancestry, in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the premises, nor shall the transferee himself
or herself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or
segregation concerning the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees
of the premises."
8.6 Agency is the beneficiary of the covenants running with the land for itself
and for protecting the interests of the community and other parties, public
or private, in whose favor and for whose benefit the covenants are provided,
without regard to whether Agency has been, remains, or is an owner of any
land or interest in the Affordable Units on the Property. Agency may
exercise all rights and remedies and maintain any actions or suits at law or
in equity or other proceedings to enforce the covenants for itself or any other
beneficiaries.
9. DEFAULTS AND REMEDIES
9.1 Subject to the extensions of time permitted under this Agreement, either
party's failure to perform any material action or material covenant as
required by this Agreement, following notice and failure to cure, is a
"Default" under this Agreement. A party claiming a Default shall give written
notice of Default to the other party specifying the Default complained of, and
the cure demanded. Except as otherwise expressly provided in this
Agreement, the noticing party shall not begin any proceeding against the
other party until the other party is given an opportunity to cure the Default.
The other party will have thirty calendar days after receiving the notice to
cure the Default, or, if the party cannot reasonably cure the Default within
such thirty days, the other party must begin to cure within the thirty days
- 24-
and diligently pursue the cure to completion, whereupon there shall be no
event of Default.
9.2 Subject to first giving the notice and opportunity to cure, a party may begin
an action at law to enforce, or in equity to seek specific performance of, the
terms of this Agreement, or to cure, correct, or remedy any Default, to
recover damages for any Default, or to obtain any other remedy consistent
with the purpose of this Agreement. A party must bring any legal action in
the Superior Court of the County of Fresno, State of California, in an
appropriate municipal court in Fresno County, or in the District of the United
States District Court serving Fresno County.
9.3 If Owner begins any legal action against Agency, it shall serve process on
the Agency by personal service on the Director, or in any other manner the
law permits. If Agency begins any legal action against the Owner, it will
serve process on the Owner by personal service on Owner, Owner's Agent
or in any other manner the law permits.
9.4 Except as otherwise expressly stated in this Agreement, the rights and
remedies of the parties are cumulative, and a party's exercise of one or
more rights or remedies will not preclude the party's exercise, at the same
or different times, of any other rights or remedies for the same or any other
Default of the other party.
9.5 A party's failure or delay in asserting any right or remedy will not be a waiver
of any Default or of any right or remedy and will not deprive the party of its
right to begin and maintain any action or proceeding to protect, assert or
enforce any right or remedy.
9.6 The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
10. GENERAL PROVISIONS
10.1 Any notice, demand, or other communication permitted or required under
this Agreement will be in writing and given by personal delivery, or by first-
class U.S. mail, postage prepaid, to a party at its respective address below:
To Agency:
City of Fresno, in its capacity as
Housing Successor to the
Redevelopment Agency of the
City of Fresno
ATTN: Executive Director
848 M Street Third Floor
- 25-
Fresno, CA 93721
To Owner:
Essayons, LLC
ATTN: Scott Anderson
855 M Street, Suite 1110
Fresno, CA 93721
A party may change its address for notices, demands and communications
by giving notice of the new address as provided in this section. The notice
shall be deemed given three business days after the date of mailing, or, if
personally delivered, when received.
10.2 All of the terms, covenants, and conditions of this Agreement shall be
binding upon the Owner and its permitted successors and assigns.
Whenever the term "Owner" is used in this Agreement, such term shall
include Owner's successors and assigns as permitted under this
Agreement.
10.3 The Agency may assign or transfer any of its interests, rights, or obligations
hereunder at any time to any public agency without the consent of the
Owner.
10.4 No member, official, or employee of the Agency shall be personally liable to
the Owner, or any successor in interest to Owner, for any Default or breach
by the Agency.
10.5 The relationship between the Agency and the Owner is that of a municipal
corporation in its capacity as housing successor and developer
respectively, as permitted by law, and not that of a partnership or joint
venture. Agency and Owner shall not be deemed or construed for any
purpose to be the agent of the other.
10.6 Whenever this Agreement references an action or approval required or
permitted by the Agency, the Director or his or her designee is authorized
to act for the Agency as agent of the Agency unless this Agreement, the
Law, Constitutional and/or local law provide otherwise, or the context
otherwise requires. Whenever this Agreement requires reasonable notice
to be provided, such notice shall be in writing and be at least four business
days.
10.7 This Agreement may be executed in counterparts, each of which shall be
deemed an original and which together shall constitute one and the same
agreement. The parties agree that this Agreement will be considered
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signed when the signature of a party is delivered by facsimile or e-mail
transmission. A facsimile or e-mail signature shall be treated in all respects
as having the same effect as an original signature. The parties will sign
three copies of this Agreement, each of which is deemed to be original.
10.8 This Agreement includes the exhibits and attachments referenced and
incorporated in it. This Agreement contains the entire agreement between
the parties relating to the transaction contemplated by this Agreement and
supersedes all prior or contemporaneous agreements, understanding,
representation and statements, whether oral or written.
10.9 If either party begins a lawsuit or arbitration proceeding, in law or equity, to
enforce or interpret any provision of this Agreement, the prevailing party will
be entitled to recover from the other party reasonable attorneys' fees, court
costs, and legal expenses as determined by the court or tribunal having
jurisdiction.
10.10 Any waiver, alteration, change, or modification of or to this Agreement, to
be effective, must be in writing, and signed by each party.
10.11 If any term, provision, condition or covenant of this Agreement or its
application to any party or circumstances is held invalid or unenforceable,
the remainder of this Agreement and its application to persons or
circumstances, other than those about whom or which it is held invalid or
unenforceable, shall not be affected, and shall remain valid and enforceable
to the fullest extent permitted by law.
10.12 Each party represents and warrants to the other that (a) each has read this
Agreement, and (b) is signing this Agreement with full knowledge of any
rights and obligations each may have, and (c) each has received
independent legal advice from their respective legal counsel as to the
matters set forth in this Agreement, or has knowingly chosen not to consult
legal counsel, and (d) has signed this Agreement without relying on any
agreement, promise, statement or representation by or for the other party,
or their respective agents, employees, or attorneys, except as specifically
set forth in this Agreement, and without duress or coercion, whether
economic or otherwise.
10.13 No member, official or employee of Agency has or shall have any personal
interest, direct or indirect, in this Agreement, nor shall any such member,
official or employee participate in any decision relating to the Agreement
which affects his personal interests or the interests of any corporation,
partnership or association in which he is directly or indirectly interested.
Owner represents and warrants that it has not paid or given, and will not
pay or give, to any third party any money or other consideration for obtaining
this Agreement, other than normal costs of conducting business and costs
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of professional services such as architects, consultants, engineers, and
attorneys.
10.14 The parties will execute such other and further documents, and will take any
other steps, necessary, helpful, or appropriate to carry out the provisions of
this Agreement.
10.15 No contractor, subcontractor, mechanic, material man, laborer, vendor, or
other person hired or retained by with Owner shall be, nor shall any of them
be deemed to be, third-party beneficiaries of this Agreement, rather each
such person shall be deemed to have agreed (a) that they shall look to
Owner as their sole source of recovery if not paid, and (b) except as
otherwise agreed to by Agency and any such person in writing, they may
not enter any claim or bring any such action against Agency under any
circumstances. Except as provided by law, or as otherwise agreed to in
writing between Agency and such person, each such person shall be
deemed to have waived in writing all right to seek redress from Agency
under any circumstances whatsoever.
10.16 Owner hereby covenants and warrants that it is a duly authorized and
existing California limited liability company, in good standing; that it shall
remain in good standing; that it has the full right, power and authority to
enter into this Agreement and to carry out all actions on its part
contemplated by this Agreement; that the execution and delivery of this
Agreement were duly authorized by proper action of the Owner and no
consent, authorization or approval of any person is necessary in connection
with such execution and delivery or to carry out all actions of the Owner's
part contemplated by this Agreement, except as have been obtained and
are in full force and effect; and that this Agreement constitutes the valid,
binding and enforceable obligation of the Owner.
10.17 In the event of any conflict between the body of this Agreement and any
exhibit or attachment to it, the terms, and conditions of the body of this
Agreement will control.
10.18 The Executive Director of the Agency is authorized and directed to execute
and administer this Agreement on behalf of the City in its capacity as
Housing Successor, and Fresno Revitalization Corporation.
- 28-
IN WITNESS WHEREOF, Agency and Owner have signed this Agreement, and
the Agency has approved this Agreement, on the dates and in the year set forth below.
AGENCY: OWNER:
City of Fresno in its capacity as Housing ESSAYONS, LP., a California limited
Successor to the Redevelopment Agency partnership, or assignee
of the City of Fresn
By: Marlene Murphey By: Pentori, lifornia corpor tion
Its: Executive Director Its: Gener P n r
Date: Z
By: Thomas G. Richards
Fresno Revitalization Corporation, A Its: President
California nonprofit public benefit
corporation
Date:
By: Marlene Murphey
Its:
Date: Jo/ 2-Z
ATTEST:
TODD STERMER, CMC
City Clerk Exhibit A: Legal Description Property
By: GI�� Exhibit B: Performance and Payment
Deputy Schedule
APPROVED AS TO FORM Exhibit C: Budget/Financial Plan
RINA GONZALES
Z
tt ney Exhibit D: Certificate of Completion
Exhibit E: Scope of Development
Ey
Exhibit F: Form of Regulatory Agreement
Attach notary acknowledgement and Declaration of Covenants and
Restrictions
Exhibit G: Form of Promissory Note
Exhibit H: Form of Deed of Trust
- 29-
ACKNOWLEDGMENT
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 �f6h� �County of
Oft-�Djf,! i LU � ).0 22 before me, r"
1 (insert name \\d title of the offic )
personally appeared +VD f WS
who proved to me on the basis of satisfactory evidence to be the person(&)whose name(t) is/afe
subscribed to the within instrument and acknowledged to me that he/s4eA49y executed the same in
his/h,erttt Elr authorized capacity(ies), and that by hislhefA494 signature(s)on the instrument the
person(p), or the entity upon behalf of which the person(&) 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.
ExpiresU7AM.CiAVAGUA
WITNESS my hand and official seal. 10m
Notary Public.Caiifornla
Fresno County
Commission#2358656
Y Comm.Expires Jun 24,2025
ti Signatur (Seal)
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 Fresno )
On �}C' before me, Linda Cunha Reitz, Notary Public
�(�
(insert name and title of the officer)
personally appeared tJU/'t&w_ A(Ar' /
who proved to me on the basis of satisfactory e4iden66 to be the person(s)whose name(g4 is/am
subscribed to the within instrument and acknowledged to me that Wshelttwq executed the same in
tj alherltl*r authorized capacity(os), and that by haatherlt�e r signature(s�-on the instrument the
person* or the entity upon behalf of which the person(,9)• cted, 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.
LINDA CUNHA REM
: Notary Public-California R
WITNESS my hand and official seal. r - Fresno County T.
Commission 8 2372408
My Comm.Expires Sep 23.2025
Signatur Lab (Seal)
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
THE LAND DESCRIBED HEREIN IS SITUATED IN THE CITY OF FRESNO, COUNTY
OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Lots 26 through 32, inclusive, in Block 184 in Fresno City, Fresno County, State of
California, according to the map thereof recorded in Book 1 of Plats at Page 25, Fresno
County Records.
APN: 468-223-20T
EXHIBIT "B"
Performance and Payment Schedule
SCHEDULE OF PERFORMANCE
Items to be Completed Before Outside Date Outside
Date
Owner satisfies all conditions precedent to
Agency's obligation to perform as set forth in
Section 2 of this Agreement
Owner receives all necessary entitlements, and November 1, 2022*
construction commences.
First disbursement of Agency Loan Funds November 1, 2022, upon completion of
$407,033.33 foregoing items.
Second disbursement of Agency Loan Funds March 1, 2023
$407,033.33 upon 35% project completion.
Third disbursement of Agency Loan Funds upon June 1, 2023
75% projectcompletion ($200,000)
Completion of Construction of Improvements August 1, 2023
Issuance of Certificate of Completion and October 1, 2023
Certificate of Occupanc .
Fourth and final disbursement of Agency Loan October 1, 2023
Funds $207,033.33
Disbursement of Agency Loan Funds may be paid to Owner sooner should Owner deliver the
items to be completed upon which each payment is conditioned, before the listed Outside Date.
*Outside date of November 1, 2022, shall be revised to coincide with OPA effective date and
proportionately adjust outside dates thereafter.
EXHIBIT "C"
Budget and Financial Plan
SOURCES AND USES
Sources of Funds Amount
Developer Equity $66,000
HSA Funds $662,486
FRC Funds $558,614
Total Sources of Funds $1,287,100
Uses of Funds Amount
Acquisition Costs $66,000
Construction Costs $788,955
Contingencies (Hard &Soft) $80,186
Soft Costs (permits/impact fees/etc.) $169,000
Technical Fees $94,500
RE Taxes, Insurance $22,200
Reserves $20,000
Developer Fees $46,260
Total Uses of Funds $1,287,100
EXHIBIT "D"
Certificate of Completion
CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO:
City of Fresno in its capacity as
Housing Successor to the
Redevelopment Agency of City of Fresno
848 M Street Third Floor.
Fresno, Ca. 93721
Attention: Executive Director
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Certificate of Completion is recorded at the request and for the benefit of the City of
Fresno in its capacity as the Housing Successor to the Redevelopment Agency of the
City of Fresno and is exempt from the payment of a recording fee pursuant to Government
Code Section 6103.
City of Fresno in its capacity as Housing
Successor to the Redevelopment Agency of the
City of Fresno, a municipal corporation
By:
Executive Director
Dated:
Certificate of Completion
450 M Street
RECITALS:
A. By an Owner Participation Agreement (the "Agreement") dated
2022 between Essayons LP., a California limited partnership, or assignee ("Owner') and
the City of Fresno in its capacity as the Housing Successor to the Redevelopment Agency
of the City of Fresno, a municipal corporation ("Agency"), Owner agreed to construct
certain residential units on the premises legally described in Exhibit "A" hereto (the
"Property") and preserve the Affordable Units, as defined in the Agreement as rental
housing for Low and/or Moderate Income Households with the assistance of Agency
housing set aside funds while meeting the Affordable Housing, income targeting and other
requirements of the Community Redevelopment Law set forth at California Health and
Safety Code Sections 33000 et seq. for a fifty-five year Affordability Period according to
the terms and conditions of the Agreement.
B. The Agreement was recorded on [ 1,20 in the Official
Records of Fresno County, California as Instrument No.
C. Under the terms of the Agreement, after Owner completes the construction on the
Property, Owner may ask Agency to record a Certificate of Completion.
D. Owner has asked Agency to furnish Owner with a recordable Certificate of
Completion.
E. Agency's issuance of this Certificate of Completion is conclusive evidence that
Owner has completed the construction on the Property as set forth in the Agreement.
NOW THEREFORE:
1. Agency certifies that Owner commenced the construction work on the Project on
], 20_, and completed the construction work on the Project
on 20_, and has done so in full compliance with the Agreement.
2. This Certificate of Completion is not evidence of Owner's compliance with, or
satisfaction of, any obligation to any mortgage or security interest holder, or any mortgage
or security interest insurer, securing money lent to finance work on the Property or Project,
or any part of the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred to in
California Civil Code section 3093.
4. Nothing contained herein modifies any provision of the Agreement.
IN WITNESS WHEREOF, the Agency has executed this Certificate of Completion
as of this _day of , 20
The City of Fresno in its capacity as Housing Successor to the
Redevelopment Agency of the City of Fresno,
a municipal corporation
By:
Executive Director
Dated:
Owner hereby consents to recording this Certificate of Completion against the Property
described herein.
Dated: , 20_
Essayons LP., a California limited partnership, or assignee
By: Pentori, a California corporation
Its: General Partner
By:
Thomas G. Richards
Its: President
Dated 20
THE ABOVE PARTIES ARE TO SIGN THIS INSTRUMENT BEFORE A NOTARY
PUBLIC.
ATTEST:
TODD STERMER, CMC
City Clerk
By:
Deputy
APPROVED AS TO FORM
RINA M. GONZALES
Interim City Attorney
By:
Deputy
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND DESCRIBED HEREIN IS SITUATED IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
Lots 26 through 32, inclusive, in Block 184 in Fresno City, Fresno County, State of
California, according to the map thereof recorded in Book 1 of Plats at Page 25,
Fresno County Records.
APN: 468-223-20T
EXHIBIT "E"
SCOPE OF DEVELOPMENT AND PROJECT DESIGN
Rehabilitate and place back into service three (3) residential structures ranging in size
from 721-1313 SF and small out-building. Currently, uninhabitable residential shells
with no structural integrity, weather proofing interior partitioning or utilities (water,
sewer, gas or electricity. Scope includes architectural and structural engineering plans
and general contractor to perform necessary construction related work as per the
architect's plans. Work to include retrofit structural bracing, construct interior partition
walls, bathrooms, and kitchens, ensure weather-proofing and connect the required
utilities. Additionally, landscape and lighting work as part of the planned rehabilitation.
Vehicular parking will be accommodated both on and off-site. Project will yield three
attractive affordable rehabilitated residential units.
EXHIBIT "F"
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
FREE RECORDING REQUESTED
BY AND WHEN RECORDED MAIL
TO:
CITY OF FRESNO IN ITS
CAPACITY AS HOUSING
SUCCESSOR TO THE
REDEVELOPMENT
AGENCY OF THE CITY OF
FRESNO
848 M Street
Fresno, CA 93721
Attn: Executive Director
(Space Above This Line for Recorder's Office Use
Only)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ("Agreement") is made and entered into this I by and
betweenthe CITY OF FRESNO IN ITS CAPACITY AS THE HOUSING
S U C C E S S O R T O T H E REDEVELOPMENT AGENCY OF THE CITY OF
FRESNO, a municipal corporation ("Agency"), and Essayons, LP., a California l i m it e d
p a r t n e r s h i p , or assignee ("Owner").
RECITALS:
A. Pursuant to an Owner Participation Agreement by and between
Agency and Owner dated . 2022 (the "OPA"), Agency has
provided to Owner financial assistance in the amount of One Million Two Hundred Twenty
One Thousand One Hundred Dollars ($1,221,100.00) in Agency Loan funds (the "Agency
Assistance"), for the purpose of assisting Owner in the acquisition of real property and the
construction of a residential affordable housing development on that certain real property
located in the City of Fresno, County of Fresno, State of California, more particularly
described in Exhibit "A" attached hereto and incorporated herein by reference (the
"Property"). The development consisting of three residential units will include two units for
households whose annual income does not exceed 80% of AMI and one unit for
households whose annual income does not exceed 120% AMI.
B. Pursuant to the OPA, Owner has agreed to construct and maintain a rental
housing project consisting of three total residential units (hereinafter referred to collectively
as the "Project")on the Property. The Project is also referred to in the OPA as the"Project,"
and is further described in the Scope of Development and Project Design attached to the
OPA.
C. Agency, City, and Owner now desire to place restrictions upon the use and
operation of the Project, in order to ensure that the Project shall be operated continuously
as a rental housing project with three units available for rental by Low and Moderate
Income persons for the term of this Agreement.
AGREEMENT:
NOW, THEREFORE, the Owner and Agency declare, covenant and agree, by and
for themselves, their heirs, executors, administrators and assigns, and all persons claiming
under or through them, that the Property shall be held, transferred, encumbered, used,
sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter
set forth, all of which are declared to be in furtherance of a common plan for the
improvement and sale of the Property, and are established expressly and exclusively for
the use and benefit of the Agency, the residents of the City of Fresno, and every person
renting a dwelling unit on the Property.
AFFORDABILITY RESTRICTIONS RUNNING WITH LAND
In addition to the covenants and conditions contained in the OPA, the following
California Community Redevelopment Law (California Health & Safety Code Section
33000 et seq.) affordability requirements shall be imposed upon the Affordable Units on
the Property funded under the Agreement and shall bind the Owner and all purchasers of
the Property and their successors until the date that is fifty-five years following recordation
of the Agency's Certificate of Completion as defined in the OPA.
The Affordable Units on the Property are held and will be held, transferred,
encumbered, used, sold, conveyed and occupied subject to the covenants, restrictions,
and limitations set forth in this Agreement, all of which are in furtherance of the Project,
the Agency's Community Redevelopment Law and Plan Area obligations including
Agency's obligations set forth at California Health & Safety Code sections 33334.2 et seq
and 33413 (a)with respect to Housing Set Aside Funds and replacement dwelling units at
affordable rent within the jurisdiction of the Agency. All of the restrictions, covenants and
limitations will run with the land and will be binding on all parties having or acquiring any
right, title or interest in the Affordable Units upon the Property or any part thereof, will inure
to the benefit of the Agency, and will be enforceable by it. Any purchaser under a contract
of sale or other transferee of an interest covering any right, title or interest in any part of
the Affordable Units upon the Property, by accepting a deed or a contract of sale or
agreement of purchase, accepts the document subject to, and agrees to be bound by, any
and all restrictions, covenants, and limitations set forth in this Agreement until the date that
is fifty-five years following recordation of the Agency's Certificate of Completion.
1. Restrictions. The following covenants and restrictions ("Restrictions") on the use
and enjoyment of the Affordable Units upon the Property shall be in addition to any other
covenants and restrictions affecting the Property, and all such covenants and restrictions
are for the benefit and protection of the Agency and shall run with the Affordable Units
upon the Property and be binding on any future owners of the Property and inure to the
benefit of and be enforceable by Agency. These covenants and restrictions are as follows:
a. From the date of recordation of this Agreement until the expiration of the
Affordability Period, three Affordable Units funded under the OPA are to be used as Low
or Moderate Income Affordable Rental Housing and affordable dwellings as provided for
in the OPA and this Agreement. Owner agrees to file a recordable document setting forth
the Project Completion Date and the Affordability Period as and when determined by the
Agency. Unless otherwise provided in the Agreement, the term "Affordable Rental
Housing" shall include without limitation compliance with the following requirements:
Nondiscrimination. There shall be no discrimination against nor segregation
of any person or group of persons on account of race, color, creed, religion,
sex, marital status, national origin, ancestry, or handicap in the sale, transfer,
use, occupancy, tenure, or enjoyment of any of the Property, nor shall Owner
or any person claiming under the Owner, establish or permit any practice of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of owners or vendees of the Property.
Principal Residence. Each of the Affordable Units upon the Property shall
be leased only to natural persons, who shall occupy such as a principal
residence.
Income Requirements. Each of the Units constituting Affordable Rental
Housing upon the Property may be leased only to (a) natural person(s)
whose annual household income at the time of initial occupancy is not
greater than 30%, 50%, 80% and/or 120% of the most recent annual median
income calculated and published by HUD for the Fresno Metropolitan
Statistical Area applicable to such household's size, and at an affordable
rent for Extremely Low, Very Low, and/or Low and/or Moderate Income
households as applicable as per the terms provided in the OPA, consistent
with the applicable California Redevelopment Law, including California
Health & Safety Code Section 50053(b) (collectively, the "Low-Income
Requirements").
Injunctive Relief and Recapture. Should any of the Affordable Units
constituting Extremely Low, Very Low, Low and/or Moderate Income
Affordable Rental Housing upon the Property not continue, subsequent to
the initial occupancy, to satisfy the Extremely Low, Very Low, Low and/or
Moderate Income Requirements, then, during the Affordability Period, such
Unit(s) shall be made available for subsequent lease only to Households that
qualify as a required Extremely Low, Very Low, Low and/or Moderate Income
Household, as defined in California Health & Safety Code Sections 50106,
50105, and 50079.5 for use as the Household's principal residence.
2. Enforcement of Restrictions. Without waiver or limitation, the Agency shall be
entitled to injunctive or other equitable relief against any violation or attempted violation of
this Agreement, including the Restrictions, and shall, in addition, be entitled to damages
for any injuries or losses resulting from any violations thereof.
3. Income Computation and Certification Reporting Requirements. Prior to each
Household's occupancy of an Affordable Unit, Owner shall comply with all of the following
requirements:
a. Income Computation. Within 120 days prior to a Household's occupancy of
an Affordable Unit, Owner shall obtain and maintain on file an Income Computation and
Certification form, attached hereto as Exhibit T," from each such Household dated
immediately prior to the date of initial occupancy in the Project by such Household. In
addition, the Owner will provide such further information as may be required in the future
by the Agency. Owner shall use its best efforts to verify that the income provided by an
applicant is accurate by taking the following steps as a part of the verification process: (i)
obtain three pay stubs for the most recent pay periods; (ii) obtain a written verification of
income and employment from applicant's current employer; (iii) obtain an income
verification form from the Social Security Administration and/or California Department of
Social Services if the applicant receives assistance from either agency; (iv) if an applicant
is unemployed or did not file a tax return for the previous calendar year, obtain other
verification of such applicant's income as is satisfactory to the Agency; and (v) obtain such
other information as may be requested by the Agency. A copy of each such completed
Income Computation and Certification form shall be filed with the Agency prior to the
occupancy of an Affordable Unit by a Household whenever possible, but in no event more
than thirty days after initial occupancy by said Household.
b. Income Recertification. Immediately prior to the first anniversary date of the
occupancy of an Affordable Unit by a Household and on each anniversary date thereafter,
Owner shall recertify the income of such Household by obtaining a completed Income
Computation and Certification form based upon the current income of each occupant of
the Affordable Unit. In the event the recertification demonstrates that such Household's
income exceeds the income at which such Household would qualify to rent the Affordable
Unit, such Household will no longer qualify for Affordable Rent. Owner shall provide the
Agency with a copy of each such completed recertification with the next submission of
Certificate of Continuing Program Compliance, as specified herein.
C. Certificate of Continuing Program Compliance. Upon the issuance of the
Certificate of Completion and annually by October 31 of each year, or at any time upon
the written request of Agency, Owner shall advise the Agency of the occupancy of the
Project by delivering a Certificate of Continuing Program Compliance, attached hereto as
Exhibit"C," certifying: (i)the number of Affordable Units of the Project which were occupied
or deemed occupied pursuant to this Agreement by a Household during such period; and
(ii) to the knowledge of Owner either: (a) no unremedied default has occurred under this
manner the validity, enforceability, or effect of the rest of this Agreement, and each shall
be enforceable to the greatest extent permitted by law.
9. Pronouns. Any reference in this Agreement and the Restrictions herein to the
masculine, feminine, or neuter gender herein shall, unless the context clearly requires the
contrary, be deemed to refer to and include all genders. Words in the singular shall include
and refer to the plural, and vice versa, as appropriate.
10. Interpretation. The captions and titles of the various articles sections, subsections,
paragraphs, and subparagraphs of this Agreement are inserted herein for ease and
convenience of reference only and shall not be used as an aid in interpreting or construing
this Agreement or any provision hereof.
11 . Capitalized Terms. All capitalized terms used in this Agreement, unless otherwise
defined herein, shall have the meanings assigned to such terms in the OPA.
12. Amendments. This Agreement shall be amended only by a written instrument
executed by the parties hereto or their successors in title, and duly recorded in the real
property records of the County of Fresno.
13. Notice. Any notice required to be given hereunder shall be made in writing and shall
be given by personal delivery, or by certified or registered mail, postage prepaid, return
receipt requested, at the addresses specified below, or at such other addresses as may
be specified in writing by the parties hereto:
Agency: Housing Successor to the
Redevelopment Agency
of the City of Fresno
848 M Street, Third Floor
Fresno, CA 93721
Executive Director
Copies to: City Attorney
Fresno City Hall
2600 Fresno St.
Fresno, CA 93721
Owner: Essayons LP., or assignee
855 M Street Suite 1110
Fresno, CA 93721
ATTN: Scott Anderson
The notice shall be deemed given three business days after the date
of mailing, or, if personally delivered, when received.
Agreement; or (b) a default has occurred, in which event the Certificate of Continuing
Program Compliance shall describe the nature of the default and set forth the measures
being taken by the Owner to remedy such default.
d. Maintenance of Records. Owner shall maintain complete and accurate
records pertaining to the Affordable Units and shall permit any duly authorized
representative of the Agency to inspect the books and records of Owner pertaining to the
Project including, but not limited to, those records pertaining to the occupancy of the
Affordable Units.
e. Reliance on Tenant Representations. Each lease between Owner and a
Household shall contain a provision to the effect that Owner has relied on the income
certification and supporting information supplied by the Household in determining
qualification for occupancy of the Affordable Unit, and that any material misstatement in
such certification (whether or not intentional) will be cause for immediate termination of
such lease.
4. Acceptance and Ratification. All present and future owners of the Property and
other persons claiming by, though, or under them shall be subject to and shall comply with
the above Restrictions. The acceptance of a deed of conveyance to the Property shall
constitute an agreement that the Restrictions, as such may be amended or supplemented
from time to time, is accepted and ratified by such future owners, tenant or occupant, and
such Restrictions shall be a covenant running with the land and shall bind any person
having at any time any interest or estate in the Property, all as though such Restrictions
were recited and stipulated at length in each and every deed, conveyance, mortgage or
lease thereof.
5. Benefit. This Agreement and the Restrictions herein shall run with and bind the
Property for a term commencing on the date this Agreement is recorded in the Office of
the Recorder of the County of Fresno, State of California, and expiring upon the expiration
of the Affordability Period. The failure or delay at any time of Agency and/or any other
person entitled to enforce these Restrictions shall in no event be deemed a waiver of the
same, or of the right to enforce the same at any time or from time to time thereafter, or an
estoppel against the enforcement thereof.
6. Costs and Attorne 's Fees. In any proceeding arising because of failure of Owner
or any future owner of the Property to comply with the Restrictions required by this
Agreement, as may be amended from time to time, Agency shall be entitled to recover its
respective costs and reasonable attorney's fees incurred in connection with such default
or failure.
7. Waiver. Neither Owner nor any future owner of the Property may exempt itself from
liability for failure to comply with the Restrictions required in this Agreement.
8. Severability. The invalidity of the Restrictions or any other covenant, restriction,
condition, limitation, or other provision of this Agreement shall not impair or affect in any
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California.
15. COUNTERPARTS; ELECTRONIC SIGNATURES. This Agreement may be
executed in counterparts, each of which shall be deemed an original and which
together shall constitute one and the same agreement. The parties agree that this
Agreement will be considered signed when the signature of a party is delivered by
facsimile or e- mail transmission. A facsimile or e-mail signature shall be treated
in all respects as having the same effect as an original signature.
16. FURTHER ASSURANCES. The parties will execute such other and further
documents, and will take any other steps, necessary, helpful, or appropriate to carry
out the provisions of this Agreement.
[END—SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the Agency and Owner have executed this
Regulatory Agreement and Declaration of Covenants and Restrictions by duly
authorized representatives on the date first written hereinabove.
The City of Fresno in its capacity as Housing Successor to the
Redevelopment Agency of the City of Fresno, a municipal corporation
By:
Marlene Murphey
Executive Director
Dated:
Owner hereby consents to recording this Certificate of Completion against the Property
described herein.
Dated: 20
Essayons, LP., a California limited partnership, or assignee
By: Pentori, a California corporation
Its: General Partner
By:
Thomas G. Richards
Its: President
Exhibit A: Legal Description of Property
Exhibit B: Income Computation and Certification Form
Exhibit C: Certificate of Continuing Program
STATE OF CALIFORNIA
COUNTY OF
On , before me, personally
appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s)
or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA
COUNTY OF )
On before me, personally
appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s)
or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
Ill
EXHIBIT "A" TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
LEGAL DESCRIPTION
THE LAND DESCRIBED HEREIN IS SITUATED IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
Lots 26 through 32, inclusive, in Block 184 in Fresno City, Fresno County, State of
California, according to the map thereof recorded in Book 1 of Plats at Page 25, Fresno
County Records.
APN: 468-223-20T
EXHIBIT"B"TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
848 M Street
r Third Floor
! rµ City of Fresno as Housing Fresno, CA93721
www.fresnorda.com
T Successor to the 559.621.7600
Redevelopment Agency of
the City of Fresno
Multi-Family Housing Program
INCOME COMPUTATION AND CERTIFICATION
Property Information
Name of Property: Number of Bedrooms Maximum Income Level
(see table on page 3 Income of Household(percent
Property Address: for allowable rents) Category of Area Median Income)
Rental Agent(Name): ❑ 0 (studio) Extremely Low ❑ 30% of AMI
❑ 1 bedroom Very Low ❑ 50% of AMI
Owner Certification (Signature): ❑ 2 bedrooms Low ❑ 80% of AMI
3 bedrooms Moderate ❑ 120% of AMI
Owner has relied on the income certification and supporting information supplied by the ❑
Applicant in determining qualification for occupancy of the Affordable Unit,and any material
misstatement in such certification by Applicant(whether or not intentional)may be cause
for immediate termination of such lease.
Applicant Contact Information Information on primary lease applicant s).
Name Current Address
(LAST, FIRST, M.I.) City, State,Zip Contact Phone No. Other Phone No.
1. 1.
1 (if different) (if different) (if different)
2. 2. 2.
2.
Household Information List all members of the household"proposed to live at the address listed above.
Name Social Security Employer/ Birth Date
(LAST, FIRST, MIDDLE INITIAL) CA Driver's License Contact Phone Number (mm/dd/yyyy) Relationship
1 Self
2.
3.
'Household is a group of related or unrelated persons occupying the same house with at least one member being the head of the
household. If roommates,please complete above form as"Self'for each roommate. Use a separate page for additional household
members.
Show income received from the following sources by all persons listed above.Do not show income from persons less than 14 years of
age.
Gross Income Person Receiving Income(As
Yes No Source of Income Current Year Shown Above
Wages or salary from employment.
Earnings from self-employment
Unemployment Compensation
Social Security or Supplemental Security Income(SSI)
Veteran's Benefits
Worker's Compensation
Child support or alimony payments
Pensions or Annuities/Railroad Retirement
Property rental income
Aid to Families w/Dependent Children(AFDC)
Dividends/Interest
Other types of income: _
Total Gross lnccme
--- Total Household Members
Statement and Signature(s)
I/we being duly sworn, depose and say that I/we are
year-round occupants of (ADDRESS, CITY &ZIP CODE).
I/We the applicant(s)certify that all information in this certification and all information furnished in support of
this certification is correct and complete to the best of my/our knowledge. I/We understand that the willful
falsification of this information (whether or not intentional) will be cause for immediate termination of such
lease. I/We agree to provide additional information that may be requested to process this income
certification.
I certify that my income does not exceed the stated income level noted on page 1 of this document, and that
I am eligible for a unit made available at affordable rent for lower income households, as defined by California
Health & Safety Code ("H.&S.C.") Section 50053(b), to persons and families of low income, as defined in
H.&S.C. Section 50093, as shown in the table below.
I/We have read the aforementioned statement and release, and understand all of the items. I/We execute it
voluntarily, on the date listed below, with full knowledge of its significance. Me certify under penalty of
perjury that the facts and statements presented in this Income Computation and Certification, as well as the
attached documents are true and accurate. Perjury is punishable by imprisonment in the state of California.
(CA Penal Code Section 118 & 126).
APPLICANT DATE
APPLICANT DATE
Income Verification
Owner shall use its best efforts to verify that the income provided by an applicant is accurate by taking the
following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay
periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii)
obtain an income verification form from the Social Security Administration and/or California Department of
Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or
did not file a tax return for the previous calendar year, obtain other verification of such applicant's income;
and (v) obtain such other information as may be requested by the Agency. A copy of each such completed
Income Computation and Certification form shall be completed and made available for Agency review prior
to the occupancy of an Affordable Unit by a Household whenever possible, but in no event more than thirty
days after initial occupancy by said Household.
2022 Maximum Income Levels
One Two Three Four Five
Person Person Person Person Person
Extremely Low—(<_30%of AMI) $16,350 $18,700 $23,030 $27,750 $32,470
Very Low Income—(5 50%of AMI) $27,300 $31,200 $35,100 $38,950 $42,100
li
Low Income—(<_80%of AMI) $43,650 $49,850 $56,100 $62,300 $67,300
Moderate Income—(:5120%AMI) $67,450 $77,100 $86,700 $96,350 $104,050
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2022 Maximum Rent Limits
rAffordable Rent for Extremely Low Income Households is the product of 30% times 30% of the area median
income adjusted for family size appropriate to the unit less a reasonable allowance for utilities (Health and
Safety Code Section 50053(b)(1).
• Affordable Rent for Very Low Income Households is the product of 30%times 50%of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(bx2).
• Affordable Rent for Low Income Households is the product of 30% times 80% of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(b)(3).
• Affordable Rent for Moderate Income Households is the product of 30%times 120%of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(b)(4).
• Maximum Rents are calculated based on household sizes"appropriate to the unit"of 1 person for a studio unit;
2 persons for a one-bedroom apartment;3 persons for a two bedroom apartment;4 persons for a three bedroom
apartment;5 persons for a four bedroom apartment(.Health &Safety Code Section 50052.5(h).
Maximum Est. Utility Net
Maximum Rent for Extremely Low Income Households(30%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $421.50 $(86.00) $335.50
Maximum Monthly Rent for a One-Bedroom Apartment $481.88 $(98.00) $383.88
Maximum Monthly Rent for a Two-Bedroom Apartment $541.88 $(127.00) $414.88
Maximum Monthly Rent for a Three-Bedroom Apartment $602.25 $(155.00) $447.25
Maximum Monthly Rent for a Four-Bedroom Apartment $650.25 $(186.00) $464.25
Maximum Est. Utility Net
Maximum Rent for Very Low Income Households(50%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $702.50 $(86.00) $616.50
Maximum Monthly Rent for a One-Bedroom Apartment $803.13 $(98.00) $705.13
Maximum Monthly Rent for a Two-Bedroom Apartment $903.13 $(127.00) $776.13
1 Maximum Monthly Rent for a Three-Bedroom Apartment $1,003.75 $(155.00) $848.75
Maximum Monthly Rent for a Four-Bedroom Apartment $1,083.75 $(186.00) $897.75
Maximum Est. Utility Net
Maximum Rent for Low Income Households(80%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $1,124.00 $(86.00) $1,038.00
Maximum Monthly Rent for a One-Bedroom Apartment $1,285.00 $(98.00) $1,187.00
Maximum Monthly Rent for a Two-Bedroom Apartment $1,445.00 $(127.00) $1,318.00
Maximum Monthly Rent for a Three-Bedroom Apartment $1,6016.00 $(155.00) $1,451.00
Maximum Monthly Rent for a Four-Bedroom Apartment $1,734.00 $(186.00) $1,548.00
Maximum Est. Utility Net
Maximum Rent for Moderate Income Households(120%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $1,686.00 $(86.00) $1,600.00
Maximum Monthly Rent for a One-Bedroom Apartment $1,927.50 $(98.00) $1,829.50
Maximum Monthly Rent for a Two-Bedroom Apartment $2,167.50 $(127.00) $2,040.50
Maximum Monthly Rent for a Three-Bedroom Apartment $2,409.00 $(155.00) $2,254.00
Maximum Monthly Rent for a Four-Bedroom Apartment $2,601.00 $(186.00) $2,415.00
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EXHIBIT "C" TO REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
848 M Street
Third Floor
City of Fresno as Housing Fresno,CA93721
T r www.Fremorda.com
I I Successor to the 559.621.7628
Redevelopment Agency of the
City of Fresno
Multi-Family Housing Program
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Period Covered from to
The undersigned, Essayons LLC, a California corporation (the"Owner"), has read and is thoroughly familiar
with the provisions of the Owner Participation Agreement ("OPA") and documents referred to therein
executed by Owner and the Housing Successor to the Redevelopment Agency of the City of Fresno
("Agency") including but not limited to the Regulatory Agreement and Declaration of Covenants and
Restrictions ("Regulatory Agreement"). As of the date of this Certificate, for the period shown above, the
following number of Units in the Project are: (i)occupied by tenants satisfying the Low-Income Requirements
(as defined in the Regulatory Agreement)as a principal residence("Eligible Tenants"), or(ii)currently vacant
and being held available for such occupancy and have been so held continuously since the date an Eligible
Tenant vacated such Unit:
Occupied Affordable Units Vacant Affordable Units
roper roperty Information
Name of Property:
Number of Units by Number of Units by
Property Address: Bedrooms(see table for Income Level of Tenants
allowable rents) Income Category (percent of AMI)
0(studio) Fxftmet _Law 30%of AMI
1 bedroom Very Low 50%of AMI
2 bedrooms Low 80%of AMI
3 bedrooms Moderate 120%of AMI
Owner completing this Certificate has relied on the income certification and
supporting information supplied by each Applicant in determining qualification for
occupancy of the Affordable Unit.
The Owner certifies that the information contained in the Occupancy Summary attached is true and accurate
and hereby certifies that (1) a review of the activities of the Owner during such period and of the Owner's
performance under the OPA and the documents referred to therein has been made under the supervision of
the undersigned, and (2)to the best knowledge of the undersigned, based on the review described in clause
(1) hereof, the Owner is not in default under any of the terms and provisions of the above documents (or
describe the nature of any default and set forth the measures being taken to remedy such default).
[Signature on following page.]
By:
Its:
Date:
By:
Its:
Date:
Occupancy Summary _
I j Number Number
Unit Income Number of Number Monthly of of
Unit Category Occupants Unit of Rental Months Months
Number Size Bedrooms Paid Occupied Vacant
2022 Maximum Income Levels
One Two Three Four Five
Person Person Person Person Person
Extremely Low—(5 30%of AMI) $16,350 $18,700 $23,030 $27,750 $32,470
Very Low Income—(5 50%of AMI) $27,300 $31,200 $35,100 $38,950 $42,100
I
Low Income—(:5 80%.of AMI) $43,650 $49,850 $56,100 $62,300 $67,300
Moderate Income—(5120%AMI) $67,450 $77,100 $86,700 $96,350 $104,050
Lam . -
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2022 Maximum Rent Limits
• Affordable Rent for Extremely Low Income Households is the product of 30% times 30% of the area median
income adjusted for family size appropriate to the unit less a reasonable allowance for utilities (Health and
Safety Code Section 50053(b)(1).
• Affordable Rent for Very Low Income Households is the product of 30%times 50% of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(h)(2).
• Affordable Rent for Low Income Households is the product of 30% times 80% of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(b)(3).
• Affordable Rent for Moderate Income Households is the product of 30%times 120%of the area median income
adjusted for family size appropriate to the unit less a reasonable allowance for utilities(Health and Safety Code
Section 50053(b)(4).
• Maximum Rents are calculated based on household sizes"appropriate to the unit'of 1 person for a studio unit;
2 persons for a one-bedroom apartment;3 persons for a two bedroom apartment;4 persons for a three bedroom
apartment;5 persons for a four bedroom apartment(Health&Safety Code Section 50052.5(h).
Maximum Est. Utility Net
Maximum Rent for Extremely Low Income Households(30%) Rent Allowance_* Rent
Maximum Monthly Rent for a Studio Apartment $421.50 $(86.00) $335.50
Maximum Monthly Rent for a One-Bedroom Apartment $481.88 $(98.00) $383.88
Maximum Monthly Rent for a Two-Bedroom Apartment $541.88 $(127.00) $414.88
Maximum Monthly Rent for a Three-Bedroom Apartment $602.25 $(155.00) $447.25
Maximum Monthly Rent for a Four-Bedroom Apartment $650.25 $(186.00) $464.25
Maximum Est. Utility Net
Maximum Rent for Very Low Income Households(50%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $702.50 $(86.00) $616.50
Maximum Monthly Rent for a One-Bedroom Apartment $803.13 $(98.00) $705.13
Maximum Monthly Rent for a Two-Bedroom Apartment $903.13 $(127.00) $776.13
Maximum Monthly Rent for a Three-Bedroom Apartment $1,003.75 $(155.00) $848.75
Maximum Monthly Rent for a Four-Bedroom Apartment $1,083.75 $(186.00) $897.75
Maximum Est. Utility Net
Maximum Rent for Low Income Households(80%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $1,124.00 $(86.00) $1,038.00
Maximum Monthly Rent for a One-Bedroom Apartment $1,285.00 $(98.00) $1,187.00
Maximum Monthly Rent for a Two-Bedroom Apartment $1,445.00 $(127.00) $1,318.00
Maximum Monthly Rent for a Three-Bedroom Apartment $1,606.00 $(155.00) $1,451.00
Maximum Monthly Rent for a Four-Bedroom Apartment $1,734.00 $(186.00) $1,548.00
Maximum Est. Utility Net
Maximum Rent for Moderate Income Households(12O%) Rent Allowance* Rent
Maximum Monthly Rent for a Studio Apartment $1,686.00 $(86.00) $1,600.00
Maximum Monthly Rent for a One-Bedroom Apartment $1,927.50 $(98.00) $1,829.50
Maximum Monthly Rent for a Two-Bedroom Apartment $2,167.50 $(127.00) $2,040.50
Maximum Monthly Rent for a Three-Bedroom Apartment $2,409.00 $(155.00) $2,254.00
Maximum Monthly Rent for a Four-Bedroom Apartment $2,601.00 $(186.00) $2,415.00
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EXHIBIT "G"
AGENCY PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to
Borrower for Cancellation.
$1,221,100.00 Fresno, California
. 20
For value received, the undersigned, Essayons, LP., a California limited partnership, or
assignee ("Borrower"), promises to pay to the order of the City of Fresno in its capacity
as Housing Successor to the Redevelopment Agency of the City of Fresno ("Lender" or
"Beneficiary"), the sum of One Million Nine Hundred Thousand Dollars ($1,221,100.00)
together with interest on unpaid principal at the rate of zero per annum, with such interest
accruing as of the Payment Commencement Date, to the extent that such funds are
loaned to Borrower, all due and payable as described herein and pursuant to the Owner
Participation Agreement. This Promissory Note ("Note") is made and entered into in
accordance with the terms of the Owner Participation Agreement dated ]
2022, entered into between Borrower and Lender ("Agreement").
Commencing on May 15th of the year immediately following issuance of the
Certificate of Occupancy for the Project (the Commencement Date"), and continuing on
the same date each year thereafter until the date which is fifty five (55) years after the
Commencement Date ("Maturity Date"), Borrower shall submit to the Lender a project
financial statement(covering the previous calendar year) prepared using generally accepted
accounting principles. Commencing in the 5th year (Payment Commencement Date) the
Borrower shall submit to the Lender an audited project financial statement (covering the
previous calendar year along with Lender's pro rata share of the annual Project Residual
Receipts (as defined below) as calculated by Borrower. The actual and final amount of
Lender's share of Residual Receipts shall be determined by the Lender upon review of the
audited financial statement. "Residual Receipts" are determined on a cash basis and defined
as revenue minus the total of approved operating expenses, deferred portion of the
developer fees in the development budget, approved debt service, deposits to operating
and replacement reserve accounts per contract, and approved related party expenses. Such
annual payments shall continue until the Maturity Date at which time the entire remaining
unpaid balance of principal together with interest and unpaid penalties or late charges
where applicable thereon shall be all due and payable, along with attorney's fees and
costs of collection, and without relief from valuation and appraisement laws. Lender's
share of Residual Receipts shall be 25%. If there are no residual receipts in any given near
no payment is due and the loan is not in default. On the Maturity Date if the Borrower has
fully complied with the OPA between the Lender and Borrower then any and all principal
then due shall be forgiven, this note cancelled and the Deed of Trust securing the same be
reconveyed. The borrower may request loan forgiveness prior to the maturity date.
Any failure to make a payment required hereunder shall constitute a default under this
Note.
All capitalized terms used in this Note, unless otherwise defined, will have the respective
meanings specified in the Agreement. In addition, as used in this Note, the following
terms will have the following meanings:
"Business Day" means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under the laws of California. Whenever any payment to
be made under this Note is stated to be due on a day other than a Business Day, that
payment may be made on the next succeeding Business Day. However, if the extension
would cause the payment to be made in a new calendar month, that payment will be made
on the preceding Business Day.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust with
Assignment of Rents on real estate in Fresno County, California, that provides for
acceleration upon stated events, dated as of the same date as this Note, and executed
in favor of and delivered to the Lender ("Deed of Trust"), insured by First American Title
Company as no worse than an ALTA or CLTA second position lien.
Time is of the essence with respect to all terms of this Note. It will be a default under this
Note if Borrower defaults under the Agreement, any other Loan Documents (as defined
in the Agreement), or if Borrower fails to pay when due any sum payable under this Note
or under any other obligation secured by a Deed of Trust or other lien senior to the Deed
of Trust which secures this Note after the expiration of the applicable cure period. Borrower
shall promptly inform Lender of any new or additional financing or funding, and Borrower
shall provide Lender copies of all agreements with any and all Funding Sources for this
Project, in accordance with the terms set forth in Section 2.2 of the Agreement. In the
event of a default by Borrower, the Borrower shall pay a late charge equal to 2% of
any outstanding payment. All payments collected shall be applied first to payment of any
costs, fees or other charges due under this Note or any other Loan Documents then to
the interest and then to principal balance. On the occurrence of a default or on the
occurrence of any other event that under the terms of the Agreement or Loan Documents
gives rise to the right to accelerate the balance of the indebtedness, then, at the option
of Lender, this Note or any notes or other instruments that may be taken in renewal or
extension of all or any part of the indebtedness will immediately become due and payable
without any further presentment, demand, protest, or notice of any kind.
The indebtedness evidenced by this Note may, at the option of the Borrower, be prepaid
in whole or in part, at any time, without penalty. Lender will apply all the prepayments
first to the payment of any costs, fees, late charges, or other charges due under this Note,
the Agreement, or other Loan Documents, and then to the interest and then to the principal
balance.
Upon full payment and satisfaction of all amounts due under this Note, Lender shall notify
the Trustee under the Deed of Trust that all obligations due the Note have been satisfied,
and shall deliver to the Trustee all documents required for the full reconveyance of the
Deed of Trust, the termination of the Regulatory Agreement, and cancellation of the Note.
All payments are payable in lawful money of the United States of America at any place
that Lender or the legal holders of this Note may, from time to time, in writing designate,
and in the absence of that designation, then to Lender at its address of record provided
in the Agreement.
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by
the holder of this Note in enforcing payment, whether or not suit is filed, and including,
without limitation, all costs, attorney fees, and expenses incurred by the holder of this
Note in connection with any bankruptcy, reorganization, arrangement, or other similar
proceedings involving the undersigned that in any way affects the exercise by the holder
of this Note of its rights and remedies under this Note. All costs incurred by the holder
of this Note in any action undertaken to obtain relief from the stay of bankruptcy statutes
are specifically included in those costs and expenses to be paid by Borrower. Borrower
will pay to Lender all attorney fees and other costs referred to in this paragraph on
demand.
Any notice, demand, or request relating to any matter set forth herein shall be in writing
and shall be given as provided in the Agreement.
No delay or omission of Lender in exercising any right or power arising in connection
with any default will be construed as a waiver or as an acquiescence, nor will any single
or partial exercise preclude any further exercise. Lender may waive any of the conditions
in this Note and no waiver will be deemed to be a waiver of Lender's rights under this
Note, but rather will be deemed to have been made in pursuance of this Note and not
in modification. No waiver of any default will be construed to be a waiver of or
acquiescence in or consent to any preceding or subsequent default.
The Deed of Trust provides as follows:
DUE ON SALE-CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the sale or
transfer, without the Beneficiary's prior written consent, of all or any part of the Property,
or any interest in the Property. A "sale or transfer" means the conveyance of the
Property or any right, title or interest therein; whether legal, beneficial or equitable;
whether voluntary or involuntary; whether by outright sale, deed, installment sale contract,
land contract, contract for deed, leasehold interest with a term greater than three years,
lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Property, or by any other method of conveyance of
Property interest. If any Trustor is a corporation, partnership or limited liability company,
transfer also includes any cumulative change in ownership of more than 50% of the voting
stock, partnership interests or limited liability company interests, as the case may be, of
Trustor, other than a transfer to the managing member of Trustor or an affiliate of the
managing member. However, this option shall not be exercised by Beneficiary if such
exercise is prohibited by applicable law.
Lender may transfer this Note and deliver to the transferee all or any part of the Property
then held by it as security under this Note, and the transferee will then become vested
with all the powers and rights given to Lender; and Lender will then be forever relieved
from any liability or responsibility in the matter, but Lender will retain all rights and
powers given by this Note with respect to Property not transferred.
If any one or more of the provisions in this Note is held to be invalid, illegal, or
unenforceable in any respect by a court of competent jurisdiction, the validity, legality,
and enforceability of the remaining provisions will not in any way be affected or impaired.
This Note will be binding on and inure to the benefit of Borrower, Lender, and their
respective successors and assigns.
Borrower agrees that this Note will be deemed to have been made under and will be
governed by the laws of California in all respects, including matters of construction,
validity, and performance, and that none of its terms or provisions may be waived,
altered, modified, or amended except as Lender may consent to in a writing duly signed
by Lender or its authorized agents.
The Loan shall be nonrecourse to the Borrower and all constituent members of the
Borrower.
The parties will execute such other and further documents, and will take any other steps,
necessary, helpful, or appropriate to carry out the provisions of this Note.
[Signatures on following page.]
WITNESS WHEREOF, Borrower has executed this Note on the date first
written above.
Borrower
Essayons LP., a California limited partnership, or assignee
By: Pentori, a California corporation
Its: General Partner
By:
Thomas G. Richards
Its: President
Date:
EXHIBIT "H"
DEED OF TRUST
Recording requested by,
and when recorded mail to:
City of Fresno in its capacity as
Housing Successor to the
Redevelopment Agency of the City of Fresno
848 M Street Third Floort
Fresno, CA 93721
Attention: Executive Director
INSTRUCTIONS TO COUNTY RECORDER
Index this instrument as
(i) a Deed of Trust, and
(ii) a Fixture Filing
Space above for Recorder's Use
DEED OF TRUST AND ASSIGNMENT OF RENTS
This DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is
entered into between Essayons LP, a California limited partnership, or assignee
whose principal executive office is at 855 M Street, Suite 1110, Fresno, CA 93721
(the "Trustor"), in favor of Old Republic Title Company , 7451 N .
Remington Avenue , Fresno , CA 9371 1 (the "Trustee"), for the benefit
of the CITY OF FRESNO IN ITS CAPACITY AS THE HOUSING SUCCESSOR TO THE
REDEVELOPMENT AGENCY OF THE CITY OF FRESNO (the "Beneficiary"), with
offices at 2600 Fresno St., Fresno, California 93721.
THE TRUSTOR IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO
THE TRUSTEE, in trust, with the power of sale, the real property in the City of
Fresno, Fresno County, California, more particularly described in Exhibit A attached
hereto and made part hereof by reference (the "Property"), together with:
(i) All tenements, hereditaments and appurtenances of or to the Property,
including without limitation all easements and rights used in connection therewith or
as a means of access thereto, all right, title and interest of the Trustor, now owned
or hereafter acquired, in any land lying within the right-of-way of any street, open or
proposed, adjoining the Property, and any and all sidewalks, alleys, strips and other
areas of land adjacent to or used in connection with the Property;
(ii) All oil and gas or other mineral rights in or pertaining to the Property
and all royalty, leasehold and other rights of the Trustor pertaining thereto;
(iii) All water rights pertaining to the Property and shares of stock evidencing
the same, and all deposits made with or other security given to utility companies by the
Trustor with respect to the Property;
(iv) The rents, issues and profits thereof, subject, however, to the right,
power and authority of Trustor to collect and apply such rents, issues and profits and set
forth in this Deed of Trust;
(v) All buildings and improvements of every kind and description now or
hereafter erected or placed on the Property, and all fixtures thereon, including, but not
limited to, all gas and electric fixtures, engines and machinery, radiators, heaters,
furnaces, heating equipment, laundry equipment, steam and hot water boilers, stoves,
ranges, elevators and motors, bath tubs, sinks, water closets, basins, pipes, faucets and
other plumbing and heating fixtures, mantels, cabinets, refrigeration plant and
refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances,
and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed
that all such fixtures and furnishings shall to the extent permitted by law be deemed
permanently affixed to and a part of the realty;
(vi) All building materials and equipment now or hereafter delivered to the
Property and intended to be installed thereon; and
(vii) All articles of personal property owned by the Trustor and now or
hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and
comfortable use and occupancy of such building or buildings for the purposes for which
they were or are to be erected, and all other goods, chattels and personal property as
are ever used or furnished in operating a building, or the activities conducted therein,
similar to the ones herein described and referred to, and all renewals or replacements
thereof or articles in substitution therefor, whether or not the same are or shall be
attached to the building or buildings in any manner; subject, however, to (and only to)
any purchase money security interests in such personal property.
Said real property and personal property described above, together with appurtenances,
are referred to collectively in this Deed of Trust as the "Collateral'
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS:
(a) Payment to the Beneficiary of an indebtedness in the principal
amount of One Million Two Hundred Twenty One One Hundred
Dollars ($1 ,221 ,100.00), evidenced by a promissory note executed by the Trustor
and payable to the order of the Beneficiary, bearing the same date as this Deed
of Trust, and any and all modifications, extensions or renewals thereof or
substitutions therefor (the "Note"), and performance and satisfaction of each and
all other obligations of the Trustor under the Note;
(b) Performance of every obligation or Trustor in this Deed of Trust, the
Note, the Owner Participation Agreement between Beneficiary and Trustor related to
the Property (the "Owner Participation Agreement") contemplating the improvement
of the "Project" (as that term is defined in the Owner Participation Agreement); and
(c) Payment of all sums, if any, and interest thereon that may hereafter
be loaned or advanced by the Beneficiary to or for the benefit of the Trustor or to its
successors, transferees and assigns, made to the Trustor while the Trustor is the
owner of record of fee title to the Property, or any portion thereof, or to the successors,
transferees or assigns of the Trustor while they are the owners of record of such
fee title, and evidenced by one or more notes or written instruments which recite
that they are secured by this Deed of Trust.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, THE TRUSTOR
COVENANTS AND AGREES AS FOLLOWS:
1. The Trustor shall not use or permit the use of any of the Collateral for
any purpose other than the use for which it was intended at the time this Deed of
Trust was executed, as provided in the Owner Participation Agreement.
2. Upon default under this Deed of Trust or the Note (following delivery
of notice and expiration of the cure period, if any, provided therein), the Beneficiary,
at its option, may declare the whole of the obligations and sums secured hereby to
be immediately due and payable.
3. The person(s) or entity(ies) who have executed this Deed of Trust are
fully authorized, and have obtained any and all written authorizations, approvals or
consents necessary, to bind the Trustor to this Deed of Trust.
4. All rents, profits and income from the Collateral covered by this Deed
of Trust are hereby assigned to the Beneficiary for the purpose of discharging the
obligations hereby secured. However, the Trustor shall be permitted, so long as no
default exists hereunder or under the Note, to collect such rents, profits and income
for use consistent with the provisions of the Owner Participation Agreement.
5. Upon default hereunder or under the Note (following delivery of notice
and expiration of the cure period, if any, provided herein or therein), for the purpose
of protecting its interests hereunder, the Beneficiary will be entitled to the
appointment by a court having jurisdiction, without further notice and without regard
to adequacy of any security for the indebtedness secured hereby, of a receiver to
take possession of and protect the Collateral described herein and operate same
and collect the rents, profits and income therefrom. The entering upon and taking
possession of the Property or other Collateral by such receiver, the collection of such
rents, profits and income and the application thereof shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such
notice.
6. The Trustor, at its sole cost and expense, shall provide and maintain
on the entire Property, including all buildings and improvements thereon: (i) a policy
of broad-form builder's risk insurance sufficient to cover 100% of the replacement
value of all buildings and improvements on the Property including; without imitation,
labor and materials in place or to be used as part of the permanent construction
(including, without limitation, surplus miscellaneous materials and supplies
incidental to the work, and scaffolding, staging, towers, forms and equipment not
owned or rented by the Beneficiary, the cost of which is not included in the cost of
work), insuring against loss or damage by fire, extended coverage perils and such
other hazards, casualties or other contingencies as from time to time may be
reasonably required by the Beneficiary; (2) a policy of commercial general liability
insurance that includes contractual, products and completed operations coverages,
bodily injury and property damage liability insurance with combined single limits of
not less than $1,000,000 per occurrence; and (3) such other insurance as may be
reasonably required by the Beneficiary, in each case in such amounts, in such
manner and with such companies as the Beneficiary and Trustor may reasonably
approve. The foregoing minimum insurance coverage limits shall be subject to
reasonable adjustment from time to time by the Beneficiary. Each such policy shall
be endorsed with a standard mortgage clause with loss payable to the Beneficiary
and the Trustor, and shall provide that the policy shall not be canceled or materially
changed without at least thirty days' prior notice to the Beneficiary. Upon request by
the Beneficiary, the Trustor immediately shall deposit with the Beneficiary
certificates evidencing such policies.
7. The Trustor shall pay: (i) at least ten days before delinquency, all
taxes and assessments affecting the Collateral, including assessments on
appurtenant water stock, (ii) when due, all encumbrances, charges and liens, with
interest, on the Collateral or any part thereof which appear to be prior or superior
hereto; and (iii) all costs, fees and expenses of the Trustee or the Beneficiary
reasonably incurred in connection with the trusts created under this Deed of Trust.
8. The Trustor shall: (i) keep the Collateral in good condition and repair
and not remove or demolish any buildings on the Property; to the extent insurance
or condemnation proceeds are available; (ii) complete or restore promptly and in
good and workmanlike manner the buildings and improvements and any other
building or improvement which may be constructed, damaged or destroyed thereon;
(iii) pay when due all claims for labor performed and materials furnished therefore;
(iv) comply in all material respects with all laws affecting the Collateral or requiring
any alterations or improvements to be made thereon; (v) not commit or permit waste
of or on the Collateral; and (vi) not commit, suffer or permit any act upon the Property
in violation of law and/or any covenants, conditions or restrictions affecting the
Collateral.
9. The Trustor shall appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of the Beneficiary or
the Trustee, and shall pay all costs and expenses, including cost of evidence of title
and reasonable attorneys' fees, in any such action or proceeding in which the
Beneficiary or the Trustee may appear, or in any suit brought by the Beneficiary to
foreclose this Deed of Trust.
10. Should the Trustor fail to make any payment or do any act as herein
provided, then the Beneficiary or the Trustee, without obligation to do so, and
following notice to or demand on the Trustor, and without releasing the Trustor from
any obligation hereof: (i) may make or do the same in such manner and to such
extent as either may deem necessary to protect the security hereof, the Beneficiary
or the Trustee being authorized to enter on the Property for such purposes; (ii) may
commence, appear in and/or defend any action or proceeding purporting to affect
the security hereof or the rights or powers of the Beneficiary or the Trustee; (iii) may
pay, purchase, contest or compromise any encumbrance, charge or lien which in
the judgment of either appears to be prior or superior hereto (except for the deeds
of trust, encumbrances and liens securing the Construction/Permanent Financing
Loan(s) and the Agency Loan, as such terms are defined below); and (iv) in
exercising any such powers, may pay necessary expenses, employ legal counsel
and pay such counsel's reasonable fees. All such amounts paid by the Beneficiary,
or the Trustee hereunder shall be added to the obligations secured by this Deed of
Trust.
The term "Construction/Permanent Financing Loan" means, collectively, the
construction financing and take-out financing, and any refinancing or replacement
of that financing from time to time, to be provided by a commercial or other lender(s);
provided, however, that (i) before entering into any Construction/Permanent
Financing Loan, the Trustor shall give the Beneficiary notice of the
Construction/Permanent Financing Loan and copies of the loan agreement and all
other loan documents evidencing the Construction/Permanent Financing Loan; (ii)
the funds disbursed from each Construction/Permanent Financing Loan shall be
used only for costs and charges associated with the loan and for the operation,
maintenance and/or improvement of the Project or the Property as provided in the
Owner Participation Agreement or to refinance existing indebtedness; (iii) the
interest on each Construction/Permanent Financing Loan shall be at a reasonable
rate based on all the facts and circumstances; and (iv) the combined amounts of all
Construction/Permanent Financing Loans or any re-financing thereof and the Note
secured by this Deed of Trust shall not exceed 100% of the fair market value of the
Property as improved by the Project under the Owner Participation Agreement
(such value to be determined by a qualified appraiser reasonably acceptable to
Trustor and Beneficiary. Notwithstanding any limitations set forth above, in the event
of any subsequent refinancing of a Construction/Permanent Financing Loan, Trustor
may use funds from any refinancing that are in excess of the original principal of the
initial Construction/Permanent Financing Loan to compensate Trustor for any
negative cash flow of the Project or to fund other projects by Trustor or a related
entity in the Urban Core of the City of Fresno. (By way of illustration only, and without
limiting the foregoing, if the initial Construction/Permanent Financing Loan for the
Project is $4,000,000 and, while satisfying the rate and loan-to-value limits set forth
in subparagraphs (iii) and (iv), Trustor subsequently obtains refinancing in the
amount of $5,000,000, Trustor may use the additional $1,000,000 in excess of the
original Construction/Permanent Financing Loan to compensate Trustor for
negative cash flow or for another project in the Urban Core without making any
prepayment on the Note secured by this Deed of Trust.)
11. The Beneficiary shall have the right, but not the obligation, to pay
when due fire or other insurance premiums required hereunder if the Trustor fails to
make such payments. All such amounts paid by the Beneficiary hereunder shall be
added to the obligations secured by this Deed of Trust.
12. The Trustor shall pay immediately upon demand all sums so
expended by the Beneficiary or the Trustee under this Deed of Trust, with interest
from date of expenditure at the legal rate
13. If the Trustor fails to pay any amount required by the Note or this
Deed of Trust when due and payable, or fails to perform all other covenants,
conditions and agreements of the Note, this Deed of Trust or the Owner Participation
Agreement (following delivery of notice and expiration of the cure period, if any,
provided therein), the amount of the Note, including unpaid principal and late
charges, and all other charges and amounts required by the Note and this Deed of
Trust shall, at the option of the Beneficiary, become immediately due and payable.
This shall be in addition to and without limitation on any other remedy or right
available to the Beneficiary for such failure.
14. The Trustor shall not voluntarily create or permit to be created against
the Collateral any lien or liens except as specifically permitted by this Deed of Trust
or otherwise authorized by the Beneficiary. The Trustor shall keep and maintain the
Collateral free from the claims of all persons supplying labor or materials who will
enter into the construction, rehabilitation, renovation or repair of any and all buildings
or improvements now existing or to be erected on the Property.
15. By accepting payment of any sum secured by this Deed of Trust after
its due date or by accepting partial payment of any such sum, the Beneficiary does
not waive its right either to require prompt payment when due of all other sums so
secured or to declare default for the Trustor's failure to pay.
16. If the Trustor, without the prior written consent of the Beneficiary: (i)
agrees to or actually sells, conveys, transfers or disposes of the Collateral or any
interest therein or portion thereof, or (ii) assigns or delegates any right or obligation
under the Owner Participation Agreement, the Note or this Deed of Trust, then all
amounts secured by this Deed of Trust may be declared immediately due and
payable, at the option of the Beneficiary. The Beneficiary shall not unreasonably
withhold its consent to any such transaction. The Beneficiary's consent to one
transaction of this type shall not be a waiver of the right to require consent to future
or successive transactions.
DUE ON SALE-CONSENT BY BENEFICIARY. Beneficiary may, at its
option, declare immediately due and payable all sums secured by this
Deed of Trust upon the sale or transfer, without the Beneficiary's prior
written consent, of all or any part of the Property, or any interest in
the Property. A "sale or transfer" means the conveyance of the
Property or any right, title or interest therein; whether legal, beneficial
or equitable; whether voluntary or involuntary; whether by outright sale,
deed, installment sale contract, land contract, contract for deed,
leasehold interest with a term greater than three years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest
in or to any land trust holding title to the Property, or by any other
method of conveyance of Property interest. If any Trustor is a
corporation, partnership or limited liability company, transfer also
includes any change in ownership of more than 50% of the voting
stock, partnership interests or limited liability company interests, as the
case may be, of Trustor, other than a transfer to the managing member
of Trustor or an affiliate of the managing member. However, this option
shall not be exercised by Beneficiary if such exercise is prohibited by
applicable law.
17. As further security for the full and complete performance of each and
every obligation, covenant, agreement and duty of the Trustor contained herein or in
the Note, the Trustor hereby grants and conveys to the Beneficiary a security interest
in and lien on all of the Collateral. This Deed of Trust shall serve as a security
agreement and financing statement created pursuant to the California Commercial
Code, and the Beneficiary will have and may exercise all rights, remedies and
powers of a secured party under the California Commercial Code. Further, this Deed
of Trust is filed as a fixture filing pursuant to the California Commercial Code and
other applicable law, and covers goods which are or are to become fixtures.
18. Should the Property, the buildings or improvements thereon, or any part
of any of them be taken or damaged by reason of any public improvement or
condemnation proceeding, or damaged by fire or earthquake or in any other manner,
the Beneficiary will be entitled, subject to the rights of the holder of any senior deed of
trust securing a Construction/Permanent Financing Loan, to all of the Trustor's interest
in compensation, awards and other payments or relief therefor; and, following the
occurrence of a default as defined in the Note, the Beneficiary shall be entitled, jointly
with the Trustor, at the Beneficiary's option, to commence, appear in and prosecute in
its own name, any action or proceeding, or to make any compromise or settlement, in
connection with such taking or damage. All such compensation, awards, damages,
rights of action and proceeds, including the proceeds of any fire and other insurance
affecting the Property or the buildings or improvements thereon, are hereby assigned to
the Beneficiary, subject to the rights of the holder of any senior deed of trust securing a
Construction/Permanent Financing Loan. After deducting therefrom all its expenses,
including reasonable attorneys' fees, and if there has not occurred a default under the
Note, the Beneficiary shall apply all such proceeds to restoring the Property or the
buildings or improvements thereon, or if there has been such default, or if the Trustor
determines not to rebuild, the Beneficiary shall retain the proceeds to the extent of the
amount due under the Note and any amounts due under this Deed of Trust. Any
balance of such proceeds still remaining shall be disbursed by the Beneficiary to the
Trustor.
19. if the Trustor fails to perform any covenant or agreement in this Deed of
Trust or the Owner Participation Agreement, or if a default occurs under the Note, the
Beneficiary may declare all obligations and sums secured hereby immediately due and
payable by delivery to the Trustee of written declaration of default and demand for sale
and written notice of default and of election to cause the Collateral to be sold, which
notice the Trustee shall cause to be duly filed for record, and the Beneficiary may
foreclose this Deed of Trust; provided, however that the Trustor shall not be deemed to
be in default hereunder for failure to make any payment when due or for failure to
perform any other covenant or agreement contained herein until thirty days after written
notice of such failure is given to the Trustor and Trustor is afforded a reasonable
opportunity to cure the default. The Beneficiary shall also deposit with the Trustee this
Deed of Trust, the Note and all other documents evidencing the obligations or sums
secured hereby.
20. After the lapse of such time as may then be required by law following the
recordation of the notice of default, and notice of sale having been given as then
required by law, the Trustee, without demand on the Trustor, shall sell the Property at
the time and place fixed by the Trustee 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. The
Trustee may postpone sale of all or any portion of the Property by public announcement
at the time and place of sale, and from time to time thereafter may further postpone the
sale by public announcement at the time fixed by the preceding postponement. The
Trustee shall deliver to the purchaser its deed conveying fee title to the Property or
portion thereof so sold, but without any covenant or warranty, express or implied. The
recitals in the Trustee's deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including the Trustor, the Trustee and the Beneficiary,
may purchase at the sale. The Trustee shall apply the proceeds of the sale to payment
of: (i) the expenses of the sale, together with the reasonable expenses of the trust
created by this Deed of Trust, including reasonable Trustee's fees and attorneys' fees
for conducting the sale, and the actual cost of publishing, recording, mailing and posting
notice of the sale; (ii) the cost of any search and/or other evidence of title procedure in
connection with the sale and of revenue stamps on the Trustee's deed; (iii) all sums
expended under the terms hereof not then repaid, with accrued interest at the legal rate;
all other sums then secured hereby; and (v) the remainder, if any, to the person or
persons legally entitled thereto.
21. The Beneficiary may from time to time substitute a successor or
successors to the Trustee named herein or acting hereunder to execute the trusts under
this Deed of Trust. Upon such appointment, and without conveyance to the successor
trustee, the latter shall be vested with all title, powers and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution
shall be made by written instrument executed by the Beneficiary, containing reference
to this Deed of Trust and its place of record, which instrument, when duly recorded in
Fresno County, California, shall be conclusive proof of proper appointment of the
successor trustee.
22. Upon written request of the Beneficiary stating that all obligations
secured hereby have been satisfied and all sums secured hereby have been paid, and
upon surrender of this Deed of Trust, the Regulatory Agreement, and the Note to the
Trustee for cancellation, termination, and retention, and upon payment of its fees, the
Trustee shall reconvey, without warranty, the Collateral then held hereunder. The
recitals in such reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
23. The trusts created by this Deed of Trust are irrevocable by the Trustor.
24. This Deed of Trust applies to, inures to the benefit of, and binds of the
Trustor, the Beneficiary and the Trustee and their respective administrators, executors,
officers, directors, transferees, successors and assigns. The term "Beneficiary" shall
include not only the original Beneficiary hereunder but also any future owner and holder,
including pledges, of the Note secured hereby. In this Deed of Trust, whenever the
context so requires, the masculine gender includes the feminine and/or neuter, and the
singular includes the plural.
25. In addition to and without limitation on any other rights or remedies of the
Trustee or the Beneficiary, if the Trustee or the Beneficiary commences any legal action
or proceeding to enforce or interpret any provision of this Deed of Trust or the Note, the
Trustor shall pay all costs and expenses incurred by the Trustee or the Beneficiary in
connection with such action or proceeding, including legal expenses and reasonable
attorneys' fees and court costs.
26. The Trustee accepts the trusts hereunder when this Deed of Trust, duly
executed and acknowledged, is made public record as provided by law. Except as
otherwise provided by law, the Trustee is not obligated to notify any party hereto of
pending sale under this Deed of Trust or of any action or proceeding in which the Trustor,
the Beneficiary or the Trustee is a party, unless brought by the Trustee.
27. The Trustor requests that a copy of any notice of default and of any notice
of sale hereunder be mailed to it at 770 South Irolo Street, Suite 1000, Los Angeles, CA
90005.
28. The Trustor shall cause a copy of each deed of trust securing a
Construction/ Permanent Financing Loan to be provided to the Beneficiary immediately
upon its recordation, so that the Beneficiary may prepare and record a request for notice
of default and notice of sale thereunder pursuant to California Civil Code Section 2924b.
29. PROVIDED THAT NO NOTICE OF DEFAULT HEREUNDER THEN
APPEARS OF RECORD AND SUBJECT TO THE CONDITIONS IN SECTION 10
ABOVE AND/OR IN THE OWNER PARTICIPATION AGREEMENT, THIS DEED OF
TRUST SHALL BE SUBORDINATE AND SUBJECT TO ANY DEED OR DEEDS
OF TRUST SECURING A CONSTRUCTION/PERMANENT FINANCING LOAN.
BENEFICIARY SHALL, UPON REQUEST OF TRUSTOR, EXECUTE SUCH
SUBORDINATION AGREEMENT OR OTHER DOCUMENTATION REASONABLY
NECESSARY TO SUBORIDINATE THE LIEN AND CHARGE OF THIS DEED OF
TRUST TO LIEN OF ANY DEED OR DEEDS OF TRUST SECURING A
CONSTRUCTION/PERMANENT FINANCING LOAN, AS PROVIDED IN THE
OWNER PARTICIPATION AGREEMENT.
30. This Deed of Trust shall be interpreted and enforced, and the rights
and duties (both procedural and substantive) of the parties hereunder shall be
determined, according to California law.
31 . Capitalized terms not otherwise defined herein shall have the
meanings given them in the Owner Participation Agreement or the Note.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the
date set forth above.
TRUSTOR:
Essayons LP.,
a California limited partnership , or
assignee
By: Pentori, a California corporation
Its: General Partner
By:
Thomas G. Richards
Its: President
Attachment:
Exhibit A: Legal Description of Property
ACKNOWLEDGMENTS
STATE OF CALIFORNIA )
) ss.
COUNTY OF FRESNO )
On before me, Notary
Public, personally appeared
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.
(SEAL)
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND DESCRIBED HEREIN IS SITUATED IN THE CITY OF FRESNO,
COUNTY OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
Lots 26 through 32, inclusive, in Block 184 in Fresno City, Fresno County, State of
California, according to the map thereof recorded in Book 1 of Plats at Page 25, Fresno
County Records.
APN: 468-223-20T