AGR-2467.1 - F C ORANGE ASSOCIATES LLC - FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT FOR THE KNOLLS APARTMENTSR-a 7•
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FIRST AMENDMENT TO
AFFORDABLE HOUSING AGREEMENT
by and between
CITY OF ORANGE
Successor in Interest to ORANGE REDEVELOPMENT AGENCY)
and
FC ORANGE ASSOCIATES LP, a Delaware limited partnership
formerly F.C. ORANGE ASSOCIATES LLC,a California limited liability company and
formerly F.C. ORANGE ASSOCIATES L.P., a California limited partnership)
Developer) ,
This FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT ("First
Amendment")is entered into as of this day of 2020,by and among the CITY
OF ORANGE, a municipal corporation ("City"), and FC ORANGE ASSOCIATES LP, a
Delaware limited partnership, formerly F.C. ORANGE ASSOCIATES LLC, a California limited
liability company, and also formerly F.C. ORANGE ASSOCIATES, L.P., a California limited
partnership ("Developer")with reference to the following:
PART 1:
CONSENT TO SALE OF MEMBERSHIP INTERESTS OF PARTY TO AFFORDABLE
HOUSING AGREEMENT
A. Recitals.
1. City's predecessor in interest (the Orange Redevelopment Agency),
Developer and FC Orange, Inc. entered into an Affordable Housing Agreement, Agreement No.
2467, dated September 13, 1995 ("Original Agreement"), attached hereto as Exhibit "A" and
incorporated herein; and
2. FOREST CITY ASSUMED LOANS I HOLDINGS LLC, a Delaware
limited liability company, and FCPM, Inc., a Maryland corporation (together the "Seller"), the
members of Oracle-Wetmore Co., LLC, a Delaware limited liability company ("Oracle"), have
agreed to sell their membership interest in Oracle to FFAH V THE KNOLLS LLC, a Delaware
limited liability company, BLDG KNOLLS MANAGER LLC, a Delaware limited liability
company and BLDG KNOLLS LLC,a Delaware limited liability company(together the"Buyer").
3. Oracle owns 100% of the membership interests in FC Orange Associates
Member, LLC, which owns 100% of the membership interests of Developer. Concurrently with
such sale, FC Orange Associates Member, LLC will be dissolved so that Oracle will own 100%
of the interests of Developer. Also concurrently with such sale or prior thereto, it is anticipated
that Developer will be converted from a limited liability company to a limited partnership, as is
set forth in the introductory paragraph. Finally, Buyer shall be admitted as partners of Developer
and shall cause the transfer of Oracle's interest in Developer to BLDG Knolls LLC and Oracle
shall be dissolved; and
4. City has reviewed the experience, qualifications and identity of Buyer and
finds it acceptable and capable of carrying out the purpose of the Original Agreement; and
5. Buyer now requests City to formally consent to the sale of the membership
interests in Oracle to Buyer, the conversion of Developer to a limited partnership, the transfer of
the interests in Developer to Buyer, and the dissolution of Oracle.
B. Consent. City hereby consents to the sale of the membership interests from Seller
to Buyer concurrently herewith, the conversion of Developer from a limited liability company to
a limited partnership, the transfer of the interests in Developer to Buyer and the dissolution of
Oracle.
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PART 2:
AMENDMENT OF AFFORDABLE HOUSING AGREEMENT
A. In the Original Agreement, all references to"Agency"shall hereafter be deemed to
refer to"City," and all references to "Forest City" shall be deemed to refer to"Buyer."
B. The first sentence of Section 1.5(a) of the Original Agreement, "Subject of
Agreement—Developer," is hereby amended to read as follows:
The principal address of Developer for purposes of this Agreement is:
FC Orange Associates LP
c/o BLDG Knolls LLC
139 S. Beverly Drive, Suite 309
Beverly Hills, CA 90212"
Developer shall promptly provide City with the name and address of any other person or entity to
whom any notices shall be sent by City.
C. Section 3.2 of the Original Agreement, "Acquisition—Taxes and Assessments,"is
hereby amended in its entirety to read as follows:
3.2. Taxes and Assessments
a) Developer shall not place, or allow to be placed, on the Property or
any portion thereof, any mortgage, trust deed, encumbrance or lien not authorized by this
Agreement. Developer shall remove, or shall have removed, any levy or attachment made
on the Property (or any portion thereo fl, or shall assure the satisfaction thereof within a
reasonable time but in any event prior to a tax sale or foreclosure of the Property. The
covenants of Developer set forth in this Section 3.2 relating to the placement of any
unauthorized mortgage, trust deed, encumbrance or lien, shall remain in effect until the
issuance of the Certificate of Completion.
b) D;eveloper shall pay wken and as due any real estate taxes and
assessments assessed and levied on or against the Property which are levied, assessed or
imposed for any period after the Closing. Nothing contained herein shall be deemed to
prohibit Developer from contesting the validity or amount of any tax assessment,
encumbrance or lien, nor to limit the remedies available to Developer in respect thereto.
Notwithstanding any provision to the contrary contained in this Agreement,Developer and
any successor may apply for and receive a California Property Tax Welfare Abatement
contingent upon compliance with the rules and regulations set forth under the California
Property Tax Welfare Abatement program.
c) Developer shall pay to City an annual fee of Thirty Thousand
Dollars and 00/100 ($30,000.00), commencing upon the date on which the First
Amendment is executed. Said amount shall increase annually by Two Percent (2%)
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beginning on the first anniversary date of the execution of the First Amendment. Said
annual payment to City shall continue until the earlier to occur of the termination of the
Original Agreement as amended herein, or until the Project no longer maintains its
affordability requirements.
d) Developer shall commit the amount of Seven Hundred Fifteen
Thousand Dollars and 00/100 ($715,000.00), to be spent by December 31, 2022, for the
purpose of deferred maintenance,capital improvements and added common area amenities
that will enhance the quality of living for tenants of the Project. In addition, Developer
will partner with the Foundation for Affordable Housing ("FFAH") to develop and offer
afterschool and social programs to tenants of the Project. These improvements and
programs shall be detailed in a separate letter agreement, approved by Developer and the
City Manager on behalf of City.
e) Developer shall dedicate to City, by no later than December 31,
2021, that portion of its property adjacent to the exit for City's Grijalva Park in an amount
sufficient for City to install a right turn lane. Said property to be dedicated shall be
substantially as set forth in Exhibit "B" to the First Amendment to Affordable Housing
Agreement."
D. The first sentence of Section 5.6 of the Original Agreement, "Use of the Property
Management of Project," is hereby amended to read as follows:
Developer,or an affiliated entity,shall manage and operate the Project in accordance with
its Management Plan and in a manner that is comparable to or better than other affordable
multifamily rental housing developments of similar size."
E. This First Amendment amends, as set forth herein, the Original Agreement and,
except as specifically amended hereby, the Original Agreement shall remain in full force and
effect. To the extent that there is any conflict or inconsistency between the terms and provisions
of this First Amendment and the terms and provisions of the Original Agreement, the tertns and
provisions of this First Amendment shall control and govern the rights and obligations of the
parties.
F. All terms of this First Amendment shall be binding upon,inure to the benefit of and
be enforceable by, the parties hereto and their respective legal representatives, successors and
assigns.
G. The parties hereto agree to reasonably cooperate with each other to execute any
other documents necessary to effectuate the intent of this First Amendment.
Remainder of page intentionally left blank; signatures on next page]
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IN WITNESS of this First Amendment to Affordable Housing Agreement, the parties
enter into this Amendment as of the year and day first above written.
DEVELOPER" CITY"
FC ORANGE ASSOCIATES LP, CITY OF ORANGE, a municipal corporation
a Delaware limited partnership (formerly
F.C. ORANGE ASSOCIATES LLC, a
California limited liability company and
formerly F.C. ORANGE ASSOCIATES L.P.,
a California limited partnership)
By: By: w
Printed Name: Mark A. Murphy, Mayor
Title:
By: TEST:
Printed Name:
Title:
Pamela Coleman, City Clerk
APPROVED AS TO FORM:
Mary E. ' ing, Sr. A t. C ty Attorney
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IN WITNESS of this First Amendment to Affordable Housing Agreement, the parties
enter into this Amendment as of the year and day first above written.
DEVELOPER" CITY"
FC ORANGE ASSOCIATES LP, CITY OF ORANGE,a municipal corporation
a Delaware limited partnership
By. /By:
Printed Name: Mark A.Murphy,Mayor
Title:
By: ATTEST:
Printed Name:
Title:
Pamela Coleman,City Clerk
APPROVED AS TO FORM:
Gary A. Sheatz,City Attorney
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IN WITNESS of this First Amendment to Affordable Housing Agreement, the parties
enter into this Amendment as of the year and day first above written.
DEVELOPER" CITY"
FC ORANGE ASSOCIATES LP, CITY OF ORANGE,a municipal corporation
a Delaware limited partnership
By: By:
Printed Name: Matthew Ellis Mark A.Murphy,Mayor
Title:Manager of BLDG Partners,LLC,sole member of
BLDG Knolls Manager LLC,Its Co-General Partner
By: jily Gr,{/'au . ATTEST:
Printed Name: Deborrah A.Willard
Title:President of Foundation for Affordable Housing V,
Inc.,sole member of FFAH V The Knolls,LLC,
Its Managing General Partner Pamela Coleman,City Clerk
APPROVED AS TO•FORM:
Gary A. Sheatz,City Attorney
4
State of Oregon Notarial Certificate(ORS Oh,194,280,194,286)
i
Acknowledgment in an Individual CapacW
State of OREGON
County of Whites
This record vas acknowledged before me on(date) 20 21 by
name(s))ofmdividual(s) DeborrahA.Willard
Ili
Notary Publk State of Oregon
Official Stamp
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orrsraur,
p;"` NOTAR PU ICCREpQNcr9d0111$SbNidO,Q8 lVs
Mroo ssax oECQElaar
Document Description
1Ns certificate is attached to page —of a title or
type of document),dated 20 ,consisting of pages.
ACKNOWLEDGEMENT
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 b{itt;rtl(4
County of i=tv9y t a,
On
t,
S6t, l Z a V 1'2', 207't, before me, 'OiU1 i16 6 11 .O4ifi L4
insert nam and tie of officer] personally appeared
kitt: %A) (t`7 who roved to me on the basis of satisfactory
evidence to be the person(s)whose name(s) st subscribed to the within instrument
and acknowledged to me that hl hefthey executed the same inCti y-be aeii°authorized
capacity(ies), and that by _ iae4their 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.
a JOANNE C.CASTANEDA
Notary Public.California
WITNESS my hand and official seal. s-.4;_a Los Angeles County
Commission#2333290
My Comm.Expires Oct 7,2024
Signature (;,.)' [-/ LL'L( ,. (1/14(ote "g G NOTARY SEAL]
EXHIBIT "A"
ORIGINAL AGREEMENT
AFFORDABLE HOUSING AGREEMENT
with Attachments 1-10)
C'-
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AFFORDABLE HOUBING AGREEMENT
By and Hetween
ORAPIaE REDEVELOPMENT AGENCY,
Aqency") .
and
F. C. ORANGE, INC.,
Deveioper")
Pertaininq to the
Financinq and Rehabilitation of
the 260-unit villa Santiago Apartntents
in the City of Oranqe, Calffornia
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TABLE OF CONTENTS
Fa e
ARTICLE 1. SUBJECT OF AGREEMENT . . . . . . . . . . . . . 2
1. 1 Def initions . . . . . . . . . . . . . . . . . . . . 2
1.2 Purpose of Aareement . . . . . . . . . . . . . . . 7
1. 3 Farties to the Agreement . . . . . . . . . . . . . 7
1.4 The Agency . . . . . . . . . . . . . . . . . . 7
1.5 Develoner . . . . . . . . . . . . . 8
1. 6 Prohibitian Aqainst Assianments and Change in
Ownership, Manaqement and Control of
Develot er . . . . . . . . . . . . . . . . . . 8
1.7 No Encumbrances Excent the Senior
Encumbrances . . . . . . . . . . . . . . . .10
ARTICLE 2 . FINANCING . . . . . . . . . . . . . . . . .10
2. 1 Project Budget . . . . . . . . . . . . . . . . .10
2.2 The Bonds . . . . . . . . . . . . . . . . . . . .11
2 . 3 Aaencv Funds . . . . . . . . . . . . . . . . . . 11
2.4 Developer's Eauity . . . . . . . . . . . . . . . 12
2 .5 Disbursement of Financina Proceeds . . . . . . . . 13
ARTICLE 3 . ACQUISITION 14
3 . 1 9bliaation to Acauire the Property . . . . . . .14
3 .2 Taxes and Assessments . . . . . . . . . . . . .14
3 , 3 Zonina of the Property . . . . . . . . . . . . 15
3 .4 Condition of the Prouertv: Hazardous Substances . . 15
3 . 5 Conditions Precedent to Closina . . . . . . . . . . 16
3 . 6 Recardation . . . . . . . . . . . . . . . . . .17
3 .7 Use of Propertv After Closinq . . . . . . . . . .17
3 .8 Relocat on . . . . . . . . . . . . . . . . . . .17
ARTICLE 4 . REHABILITATION . . . . . . . . . . . . . .19
4 . 1 Obligation to Rehabilitate the Property . . . . .19
4.2 Rehabil]ation Cantract . . . . . . . . . . . . .19
4.3 Rehabilitation Plans . . . . . . . . . . . . . . . 19
4.4 Rehabilitation of the Propertv . . . . . . . . . . 20
4.5 Cost of Rehabilitation . . . . . . . . . . . . . . 21
4 .6 Schedule of Performance . . . . . . . . . . . . 21
4 .7 Indemnification durinq Construction; Bodilv Injury
and Propertv Damacte Insurance . . . . . . . . . . . 21
4.8 Nondiscrimi}ation . . . . . . . . . . . . . . . .22
4.9 Local. State and Federal Laws . . . . . . . . . .23
4 . 10 City and Other Governmental Agencv Permits . . . . 23
4. 11 ,g,ts. of Access . . . . . . . . . . . . . . . . . 23
4 . 12 Certificate of Completion . . . . . . . . . . . . . 23
4 . 13 Disclaimer of ResAonsibility . . . . . . . . . . . 24
4. 14 Siqns and Publicity . . . . . . . . . . . . . . . . 25
ARTICLE 5. USE OF THE PROPERTY . . . . . . . . . . . . . 25
5.1 Uses. . . . . . . . . . . . . . . . . . . . . . . . 25
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Paae
5.2 Housinq for Low-Income Persons. . . . . . . . . 25
5. 3 Maintenance of the Pro ert . . 25
5. 4 Obl ' ation to Refrain from D'scrimination. . . . • 25
5. 5 Form of Nondiscrimination and Nonseqregation
Clauses. . . . . . . . . . . . . . . . . . .2 6
5.6 Mana ement of Pro 'ect . . . . . . . . . . . . . . 27
5.7 Effect and Duration of Covenants . . . . . . 27
5.8 Effect of Violati n of the Terms and•Provisions of•
this Aareement. . . . . . . . . . 27
5.9 Acrreement Containina Covenants• 5ubordination to
Senior Encumbrances. . . . . . . . . . . . . . . . 28
ARTICLE 6. DEFAULTS, REMEDIES AND TERMINATION . . . . . . 29
6.1 Defaults - Genera . . . . . . . . . . . . . . . . 29
6. 2 e al Actions. . . . . . . . . . . . . . . . . . 29
6.3 Institutian of Legal Actions . . . . . . . . . 29
6.4 A licable L w . . . . . . . . . . . . . . . . 29
6. 5 Acceptance of Service of Process . . . . . . . 29
6.6 Riqhts and temedies are Cumulative . . . . . . . . 30
6.7 Damages . . . . . . . . . . . . . . . . . . . . . . 3 0
6.8 S ecific Performance . . . . . . . . . . . . . . . 30
6.9 Remedies and Ricrhts of Termination . . . . . . . . 30
6. 10 Termin tion b Develo er . . . . . . . . . . . 30
6. 11 Termination b enc . . . . . . . . . . . 31
ARTICLE 7 GENERAL PROVISIONS . . . . . . . . . . . . 32
7. 1 Notices Demands nd Communicatians Between the
Parties . . . . . . . . . . . . . . . . . . . . 32
7.2 Conflict of Interests . . . . . . . 32
7.3 Warranty Against Pavment of Consideratian for
Agreement . . . . . . . . 3 2
7.4 Nonliabi.lity of Agency Officials and Employees . . 32
7.5 Enforced Dela Force Ma 'eure : Extension of Time
of Perfarmance . . . . . . . . . . . . . . 32
7.6 Inspection af Books, and Records . . . . . . . . . . 33
7. 7 Approvals . . . . . . . . . . . . . . . . . . . . . 33
7.8 Attornevs Fees . . . . . . . . . . . . . . . . . 34
7.9 Construction and tar retation of.A reement . . . 39
ARTICLE 8. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS . . . 35
ARTICLE 9. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY . . 35
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ATTACHMENTS
ATTACHMENT NO. 1 Legal Descriptivn of the Property
ATTACHMENT NO. 2 Schedule of Performance
ATTACHMENT NO. 3 Scope of Rehabilitation
ATTACHMENT NO. 4 Agreement Containing Covenants
ATTACHMENT NO. 5 Project Budget
ATTACHMENT NO. 6 Conditions Precedent to Closinq
ATTACHMENT NO. 7 Agency Promissory Nate
ATTACHMENT NO. 8 Agency Deed of Trust
ATTACHMENT NO. 9 Form of Assignment and Assumgtion
Agreement
ATTACHMENT NO. 1Q -Form of Guaranty Agreement
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AFFORDABLE HOUSING AGREEMENT
THE ORANGE REDEVELOPMENT AGENCY, a public body, carporate and
politic, (herein called the "Agency") and F. C. ORP.I3GE, INC. , a
California corporation (herein called "Developer") , hereby agree as
follows:
Recitals
A. The Developer has entered into an agreement for the purchase
of a 260-unit apartment community located on 17 acres in the City
of Orange, known as the Villa Santiago Apartments, 11841 Prospect
Avenue {the "Property"} .
B. The Praperty is currently improved with 77 two-story buildings
15 duplexes 18 triplexes and 44 fourplexes) containing 260
apartment units and related improvements, and is in need of
rehabilitatian and redevelopment.
C. The parties mutually desire to redevelop and improve the
Property by providing for the acquisition, rehabilitation and use
of the Property, as more p articularly set forth in. this Agreement,
below.
D. Pursuant to the Community Redevelapment Law of the State of
California, Sections 33000 et seq• af the California Health and
Safety Code (the "Redevelopment Law") , not less than 20 of the tax
increment derived from redevelopment projects must be set aside
into a Low and Moderate Income Housing Fund and used to increaser
improve or preserve affordable housing for persons and families of
low and moderate income. In accordance with the Redevelopment Law,
the Agency has set aside funds from the Tustin Street Redevelopment
Project, the Southwest Redevelopment Project and the Northwest
Redevelopment Project (the "Redevelopment Projects") , far the
purpose of increasing, improving or preserving affardable housing
in the City af Oranqe (the "Affordable Housing Funds"j .
E. The City of Orange has adopted an affordable housing plan,
with the objective of increasing and improving the stock of
affordable housing within the City. One major priority of such
plan is to preserve existing housing stock through rehabilitation.
The Agency is authorized to administer the use of the Affordable
Housing Funds for this purpose.
Now, therefore, in consideration of their mutual promises set forth
herein, the Agency and Developer hereby agree as follows:
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ARTICLE 1. SUBJECT OF AGREEMENT
1. 1 Definitions
For purposes of this Agreement, the following capitalized
terms shall have the following meanings:
Acquisition Cost" sha13 mean the total cost to Developer to
clase escrow and obtain title to the Property, including the
purchase price, recordinq, broker, escrow and title fees, as
pravided in the Project Budqet.
Affordable Rent shali have the meaning ascribed tv such term
in Section 50053 of the California Health and Safety Code, as it
may be amended from time to time.
Agencv" shall mean the orange Redevelopment Agency, a public
body, corporate and politic.
Agencv Deed of Trust" shall mean a subordinate Deed of Trust,
security Agreement and Fixture Filing (With Assignment of Rents) ,
securing the perfarmance of Developer's obligatians to the Agency,
substantially in the form of the instrument attached hereto as
Attachment No. S.
Aqency Funds" shall mean the portion of the Sources
consisting of the Aqency Grant and the Agency Laan.
Aaency Grant" shall mean that portion of the Agency Funds
other than the Agency Loan, equal to the sum of $3,750,000, to be
paid to F. C. orange, Inc. , as a grant, to be used to pay a portion
of the Project Costs in accordance with this Agreement.
Aaenay Loan" shal7, mean that portion of the Agency Funds for
the Project equal to $3 ,750, 000, to be used ta pay a ortion af the
Project Costs in accordance with this Agreement.
Actency Promissory Note" shall mean the promissory note
evidencing the Agency Loan, substantialiy in the form of the
instrument attached hereto as Attachment No. 7.
Aareement Containinq Covenants" shall mean an agreement
substantially in the form of the document attached hereto as
Attachment No. 4.
Bonds" shall mean the bonds to be issued by the City of
range for the Project, as described more fully in Section 2.2 of
this Agreement.
Bond Proceeds" shall mean the net funds derived from the
issuance of the Bonds available to repay the Construction Loan.
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Certificate of Completion" shall mean the certificate to be
issued by the Agency upon completion of the Rehabilitation, as
provided in Section 4. 12 of this Agreement.
Citv" shall mean the City of Orange, state of California.
Closina" shall mean the point in time when the Bonds are
issued by the City, the Construction Loan is made and Developer
closes escrow to acquire the Property.
Communitv Redevelopment Law" shall mean Division 24 , Part 1
of the Health and Safety Code of the State of California, beginningatSection33000.
Co struction Lender" shall mean Union Bank or another
financial institution that is reasonably acceptable to the Agency,
that will make the Construction Loan.
Const uction Loan" shall mean a loan to be made at the
Closing by the Construction Lender to Developer to pay a part of
the Project Costs, to be repaid following completian and lease-up,
with the Bond Proceeds.
Credit Enhancament" shall mean the Washington Capital
Permanent Loan Commitment and Fannie Mae Martgage Backed
Security/Delegated Underwriting and Servicinq Bond Credit
Enhancement, or other similar financing mechanism, providinq for
the commitment of the FNMA, ta be issued at the Closing to provide
security for and facilitate the issuance of the Bonds.
Developer" shall mean F. C. Oranqe, Inc. , a wholly-owned
subsidiary of Forest City Residential Development, Inc. , an ohio
corporation, and its successors and assigns as permitted by this
Agreement.
Develo er's E uit ' shall mean that portion of the Sources to
be used to pay Project Costs that is to be provided by Developer
from funds other than the Bond Praceeds or the Agency Funds, as
described in Section 2.4 of this Agreement.
Disbursement and Intercreditor Agreement" shall mean a
subordination agreement or any other aqreement among the Agency,
Developer and Construction Lender relating to the disbursement of
the Agency Funds, the Developer's Equity and the Construction Loan,
the respective rights of the Agency and the Construction Lender,
and such other matters as the Aqency, the Developer and the
Construction Lender may deem necessary or appropriate, consistent
with this Agreement and in form and substance reasonably acceptable
to the Executive Director.
Executive Director" shall mean the Agency Executive Director
at the time, or the Executive Director's designee.
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FNMA" or "Fannie Mae shall mean the Federal National
Mortgaqe Association.
Force Majeure" or "Force Maieure Event" shall have the
meaning set forth in Section 7 . 5 of this Agreement.
Forest Citv Entity" shall mean any corporation that is a
wholly-owned subsidiary of Forest City Enterprises.
Guarantv" sha13 mean the Guaranty Agreement by Forest City
Enterprises, Inc. , an Ohio corporation, for the benefit of the
Agency, substantially in the form attached hereto as Attachment No.
l0; provided that such Guaranty Agreement guarantees the completion
of construction of the improvements on the Property in accordance
with the approved Plans (describad in Section 4 . 3 of this
Agreement) , and the obligations of the Developer to pay Relocation
Costs as provided in Section 3 .8 of this Agreement.
Hazardous Substances" shall have the meaning set forth in
Section 3 .4 (b) af this Agreement.
Law Income" or " ower Income" shall mean for purposes of this
Agreemertt, a total househald income that does not exceed sixty
percent (60 5) of the area median income, as published from time to
time by the U.S. Department of Housing and Urban Development or the
California. Department of Housing and Community Development, or ,
their respective successor agencies.
Permitted Transfer" means any of the fallowing:
a) a conveyance of a security interest in the Property
or Project to a Senior Lender, to secure a 5enior Ldan, or the
conveyance of title to the Property or Project in connection with
a foreclosure or a deed in lieu of foreclosure of such laan;
b) (1) Subject ta subparagraph (b) (2) , below, a
conveyance of the Property or Project to a limited partnership in
which Developer or any other Forest Ci ty Entity is the controlling
and managinq general partner, or a sale back from such partnership
to such general partner, or the substitution of such qeneral
partner as directed by the investor limited partner in accordance
with the terms of the Developer s partnership agreement.
2) Notwithstanding any pr4vision to the contrary
contained herein, any event described in subparagraph (b) (1) shall
not be deemed to be a Permitted Transfer unless the Executive
Director or designee reasonably determines, which determination
shall not be unreasonably withheld, that Developer, Forest City
Properties Corporation or another Forest City entity remains, or
the limited partner providing any portion of the Developer's Equity
or such limited partner's designee) , or any other entity
reasonably acceptable to the Agency's Executive Director (which
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shall not be unreasonably withheld) becomes, the controlling and
managing general partner of the Deveioper.
c) The conveyance of security interests in the Property
and the Project ta FNMA in connection with the issuance of the
Bonds.
d) Any other refinancing that repays a Senior Loan
referred to herein as a "Take-out Loan") , if the Agency Executive
Director reasonably determines (which determination shall not be
unreasonably withheld) that the resulting loan-ta-value ratio will
not exceed 90 (including the Take-out Loan and the Agency Loan) ,
and the repayment terms of the Take-out Loan do not materially
impair the Developer's ability to repay the Agency Laan.
e) The leasing for accupancy af all or any part of the
Property or Project.
f) The inclusian of equity participation by Developer by
transfer of or addition of limited or general partners to the
Developer or similar mechanism.
Proiect shall mean the 260-unit apartment community located
on the Property, to be rehabilitated and operated as provided in
this Aqreement.
Proiect Budaet" shall mean the document attached to this "
Agreement as Attachment No. 5, as it may be amended from time to
time as provided in Section 2 . 1 af this Agreement.
Proiect Costs" shall mean the full cost to acquire the
Property, pay ail required Relocation Costs and camplete the
Rehabilitation, as provided in the Project Budget.
Pro erty" shall mean the real property that is specifically
described in the Legal Description which is attached hereto as
Attachment No. 1.
Redevelopment Plans" shall mean the redevelopment plans for
the following redevelopment projects in the City of Orange: the
Tustin Street Redevelopment Project, adopted by the City Council of
the City of Orange on December 6, 1983 by Ordinance No. 49-83, as
amended on June 21, 1988 by Ordinance No. 20-88; the Southwest
Redevelopment Project, adopted by the City Council of the City of
range on November 20, 1984 by Ordinance No. 37-84, as amended on
July 15, 1986 by Ordinance No. 20-86 and on March 5, 1988 b.y
Ordinance Na. 24-88; and the Northwest Redevelapment Project,
adopted by the City of Orange on June 28, 1988 by Ordinance Na. 22-
88; and any further amendments thereto.
org\vs\agmt.5 5_8-22-95
Rehabilitation" shall mean the work of improvement to be
performed on the Property in accordance with the Scope of
Rehabilitation, attached hereto as Attachment No. 3 .
Rehabilitation Casts" shall mean the cost of completing the
Rehabilitation.
Relocation Costs" shall mean the cost of relocating occupants
from the Propert r as the result of the Rehabilitation, in
accardance with all applicable laws and requirements.
Restricted Period" shall mean the longest feasible time, but
not less than 55 years.
Schedule of Performance" shall mean the document attached
hereto as Attachment No. 2 .
Scope of Rehabilitation" shall mean the document attached
hereto as Attachment No. 3.
Senior Encumbrance" shall mean any mortgage, deed of trust
and other similar security instrument granting a security interest
in the Property and the Project in cennection with any of the
Senior Loans, and any regulatory agreement or other similar
instrument required as a condition of the issuance of the Bands or
the syndication of Low Income Housing Tax Credits, to which the
Agency Deed of Trust and the Agreement Containing Covenants are
subordinate in accordance with Sections 2.3 and 5. 10, respectively.
Senior Lender" shall mean the Construction Lender, the
trustee for the Bond holders, FNMA or other issuer of Credit
Enhancement for the Project, and the holder of any other Senior
Encumbrance.
Senior Loan" shall mean and ir clude the Hond Proceeds, the
Construction Loan, any reimbursement obligation to FNMA or any
ather entity providing Credit Enhancement, and any other
construction or permanent loan secured by a Senior Encumbrance, the
proceeds of which are used to pay Project Costs other than such
costs paid with the Agency Funds and Developer's Equity, or to
refinance any priar financing of such Projec't Costs.
sources" shall mean, collectively, the sources of financing
to pay all Project Costs, including the Agency Funds, the Senior
Loan and the Developer's Equity.
Units" shall mean the 260 apartment units to be operated by
Developer on the Property.
Washington Capital" shall mean Washington Capital DUs, Inc.
org\vs\agmt.5 6,_
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1. 2 Purpose of Aqreement
a) The purpose of this Agreement is to assist the
Developer, by providing part of the funds needed far the
acquisition of the Property, reloc tion of its occupants and
rehabilitation of the Project and the existing buildings and
improvements located thereon, in order to provide housing for
persons and families of Law Income. The Rehabilitation of the
Property pursuant to this Agreement, and the fulfillment generally
of this Agreement are in the vital and best interest of the City of
orange and the health, safety, and welfare of its residents, and in
accord with the public purposes and provisions of applicable
federal, state, and local laws and requirements.
b) This Agreement is in furtherance of the City's goal .
to develop viable urban communities by providing decent housing and
a suitable living environment and expanding economic opportunities
for low income persons, by extending and strengthening partnerships
among all levels of government and the private sector in the
production and operation of affordable housing.
c} This Agreement is also in furtherance of the
inclusionary housinq provisions of the California Community
Redevelapment Law (Subdivision (b) (2) of Section 33413 of the
California Health and Safety Code) , pursuant to which at least 15
percent of all new or substantially rehabilitated dwelling units
developed within a redevelopment project area by enti ies other
than the Agency, is required to be available at affordable housing
cost to persons and families of low or moderate income. Section
33413 (b) (2) (A) (ii) provides that to satisfy the provisions of
Section 33413 (b) (2) , the Agency may cause to be available, at
affordable housing cost, two units outside a redevelopment project
area for each unit that otherwise would have ta be available inside
a project area. Pursuant to Section 5.9 of this Agreement,
Developer shall record long-term a£fordability covenants against
the Property, requiring that the 260 Units be used exclusively as
housing for Low Income households at Affordable Rent, and meeting
the inclusionary housing requirement to the extent of 130 units of
housing.
1.3 Parties ta the Actreement
1.4 The Agencv
The Aqency is a public body, corporate and politic,
exercising governmental functions and powers, and organized and
existing under the Community Redevelopment Law of the State of
California (California Health and Safety Code § 33000 et seg) . The
principal office of the Agency is located at 300 East Chapman
Avenue, Orange, California 92666-1591. "Agency" as used in this
Agreement includes the Orange Redevelapment Agency and any assignee
of or successor to its rights, powers and responsibilities.
org\vs\agmt,5
8-22-95
1.5 Developer
a) The principal address of Developer for purposes
of this Agreement is 949 South Hope Street, Los Angeles, California
90015-0010. A copy of any notice to the Developer (which copy shall
not constitute notice ta the Developer) shall also be giveh to Bret
H. Reed, Esq. , A Law Corporation, 1300 Dove Street, Suite 200,
Newport Beach, California 92660. "Developer" as used in this
Agreement includes the Developer as of the date hereof, and any
assignee of or successor to its rights, powers and responsibilities
permitted by this Agreement.
b)The parties ac}cnowledge and agree that
Developer intends and shall have the right to assign its interests
in this Agreement and the Praject to a yet-to-be-formed limited
partnership in which Developer will be the controlling and managing
general partner. To facilitate such assignment, on or prior td the
Closing, Agency, Developer and the proposed assignee shall execute
an Assignment and Assumption Agr_eement, substantially in the form
attached to this Agreement as Attachment No. 9.
c} In addition, concurrently with the Closing,
Developer shall cause Forest City Enterprises, Inc. , an Ohio
corporation, to execute and deliver to the Agency the Guaranty.
1. 6 Prohibition Ac}ainst Assignments and Chanqe in
Ownership. Manacrement and Control of Developer
a) The Developer represents and agrees that its
undertakings pursuant to this Agreement are for the purpose of
acquiring the Property, performing the Rehabilitation and using the
Property for housing as pravided in this Agreement. The Developer
further recognizes that the qualifications and identity of the
Developer, and its principals, are of particular concern to the
community and the Agency, in view of:
i) the importance of providing affordable housing
on the Property to the general welfare of the community;
ii} the public funds and other assistance that have
been made available by law and by the Agency for the purpose of
making such affordable housing possible;
iii) the fact that Developer has substantial
experience and special expertise in the area of muJ.tifamily housinq
development and aperations; and
iv) the fact that a change in ownership, management
or control of the Developer or of a substantial part thereof, or
any other act or transaction involving or resulting in a
significant change in ownership, management or control of the
Developer or the degree thereof, is for practical purposes a
org\vs\agmt.5 8_
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r
transfer or dispositian of the property then owned by the
Developer.
b) The Developer further recognizes that it is because
of such qualifications and identity that the Agency is entering
into this Agreement with the beveloper and is makinq the Agency
Loan. No voluntary or invoiuntary successor in interest of the
Developer shall acquire any rights or gowers under this Agreement
except as expressly set forth herein.
c) Except for a Permitted Transfer, or as otherwise
specifically permitted by this Agreement, Developer shall not
assign all or any part of its interest in the Project and/or the
Property, or any part thereof or interest therein, or its interest
in this Agreement or any right or obligation herein, or enter into
an agreement to do any of the foregoing, or accomplish any of the
foregoing indirectly by changes in the ownership, management or
contral of Developer, without the prior written approval of the
Agency, which approval shall not be unreasonably withheld or
conditioned. This prohibition shall not be deemed to prevent the
granting of easements or permits ta facilitate Rehabilitation of
the Project pursuant to ARTICLE 4 , to prohibit or restrict the
renting for occupancy of the Units, or to prohibit Permitted
Transf ers.
d) Without the prior written approval of the Executive
Director, there shall be na material and adverse change in the
management of the Developer, or with respect to the identity of the
parties in control of the Developer or the degree thereof, by any
method or means (other than routine and periodic changes in board
membership and staffing, or as otherwise approved by the Executive
Director) . Notwithstanding the foregoing, Developer shall not be
in default af this paragraph (d) so long as Developer remains owned
and contrclled by any Forest City Entity.
e) The Developer shall promptly ndtify the Executive
Director of any and all material and adverse changes in management
or control of Developer, of which it or any of its officers have
heen notified or otherwise have knowledge or information.
f) If, in violation af this Section 1. 6, thera is a
significant material and adverse change in the ownership,
management or control of DeveZoper, or an assignment by Developer,
which is not approved by the Executive Director, the Agency may
take such reasonable action as the Agency may c3eem appropriate to
ensure that the purposes of this Agreement will be carried aut,
includinq without limiting the generality of the foregoing,
termi::ai.ing this Agreement and exercising any rights set forth in
this Agreement.
g) The restrictions of this Section 1.6 shall terminate
upon issuance of the Certificate of Completion. Any restrictians
org\vslagmt.5 9_
8-22-95
on transfers of the Site or chenges in the Developer thereafter
shall be contained in the Agreement containing Covenants and the
Agency Deed of Trust. -
1.7. No Encumbrances Except the Senior Encumbrances
Notwithstanding Sectian 1. 6, Developer is authorized to
provide such security interests in the Property and the Project and
to execute and enter into such security instruments and regulatory
agreements as may be reguired in connection wzth the issuance of
the Bonds, the closing of the Construction Loan, the FNMA Credit
Enhancement, and the Law Income Housinq Tax Credit syndication, all
as contemplated by the parties. No other liens or encumbrances are
permitted to be recorded against the Property and the Project,
except as may be reasonable and customary in the rehabilitation and
operation of multifamily housing similar to the Project. The
restrictions of this Section 1.7 shall terminate upon issuance of
the Certificate af Completion. Any restrictions on encumbrances
thereafter shall be contained zn the Agreement Containing Covenants
and the Agency Deed of Trust.
ARTICLE 2 . FINANCING
2. 1. Proiect Budget
The parties anticipate the sources and uses of funds for the
acquisition of the Property, relocation of the occupants therefrom
and rehabilitation of the Project to be as set forth in the Praject
Budget which is attached hereto as Attachment No. 5, and
incorporated herein by this reference. As provided in the Project
Budget, the parties anticipate that the funds needed to pay all
Project Costs will derive from the fallowing Sources:
a) a Construction Laan to be made by the Construction Lender,
to be repaid upon comple ion and lease-up of the Project by
the Bond Proceeds;
b) the Agency Funds; and
c) Developer Equity, all or a part of which is to be obtained
or reimbursed ta Develaper by the syndication sale of Low
Income Housing Tax Credits.
The parties shall take all reasonable and necessary steps to
facilitate the proposed financing for the Project. Prior to the
Closing, Developer shall update, as necessary, and submit to the
Agency far approval any proposed chanqes to the Project Budget so
that it encompasses all of the Praject Costs and demonstrates to
the satisfaction of the Executive Director that the combined
proceeds of the Sources will be sufficient ta pay all Project
Costs.
org\vs\agmt.5
1_8-22-95
2.2 . The Bonds.
aj The Agency and Developer shall take all reasonabie
and necessary steps to facilitate the issuance of the Bonds by the
City.
b) If, far any reason, the City does not issue the
Bonds, the parties will cooperate in good faith to obtain other
financing for the Project, consistent with the purpases and intents
of this Agreement, and to make such amendments to this Aqreement as
may be necessary to reflect the requirements of such other
financing.
c) In the event, by the date specified for the Closing
in the Schedule of Performance, the Gity has not issued the Bonds
or the Developer has not obtained alternative financing,
sufficient, together with the Agency Funds and Developer's Equity,
to pay all Project Co$ts, either party shall have the right to
terminate this Agreement, as provided in Sections 6. 10 and 6. 11
hereof.
d) The Agency shall not be obligated to pledge any of
its praperties, funds or assets as security for the Bonds, or to
make or guarantee any payments to the holders of the Bonds or any
other party with respect to the Bonds or with respect to any Credit
Enhancement provided by a lender in connection with the issuance of
the Bonds. The Bonds are intended to be special, limited
obligations of the City, secured exclusively by the Property and
such other assets and property as may be described in the bond
indenture and other documents which may be executed by the City in
connection with the Bonds (the "Bond Documents") .
3 . Agency Funds
a) In accordance with and subject to the terms and
conditions of this Agreement, the Agency shall provide funds in the
sum of Seven Million Five Hundred Thousand Dollars ($7,500,000) ,
consisting af $3 ,750,000 which constitutes the Agency Grant, and
another $3, 750, 000 which canstitutes the Agency Loan. Concurrently
with the Closing, the Agency, the Developer and the Construction
Lender shall execute any Disbursement and Intercreditor Agreement
which the parties may deem necessary or appropriate. The Agency
Funds will pay that part of the Project Costs not otherwise paid
with a Senior Loan or Developer's Equity. The Agency Funds shall
be disbursed as provided in Section 2.5, belaw. The Agency's
obligation to disburse the Agency Funds is conditioned upon each of
the events described in Attachment No. 6 having occurred prior to
the time for Closing set forth in the Schedule of Perfarmance.
b) Agencv Grant. The Agency shall make a grant to .C.
Orange, Inc. in the amount of $3 ,750, O a, to pay a portion of the
Project Costs, as follows: (i) the sum of $2,500, 000 shall be
arg\vslagmt.5 11_
8-22-95
used by F. C. Orange, Inc. to purchase the land on which the
Project is located; (ii) F. C. Orange, Inc. shall, concurrently
with the close of escrow, lease the land to the limited partnership
of which it is the qeneral partner which is to own and operate the
Project; (iii) F.C. oranqe, Inc. , shall, concurrently with the
disbursement of the Agency Grant to F. C. Orange, Inc. by the
Agency, lend the remaining $1, 250,000 to the partnership, for use
in paying such other Project Costs as may be approved by the
Agency, F. C. Orange, Inc. and the limited partnership. The
delineation of the Project Costs to be paid with the Agency Grant
pursuant to this subdivisian (b) shall be subject to final appraval
by the Rgency, F. C. Orange, Inc. , the partnership and the
Construction Lender prior to the Closing. The Developer shall have
no obligation to repay the Agency Grant.
c) Aaency Loan: The Aqency Loan shall be in the amount
of $3,750,000, and shall be used to pay Project Costs. The terms
of the Agency Loan shall be those set forth in the Aqency
Promissory Note, which is incorporated herein by this reference.
The obligations of the Developer to repay the Agency Loan shall be
non-recourse obligations, secured by the Agency Deed of Trust,
which is incorporated herein by this reference. Concurrently with
the Closing, Developer shall execute the Agency Deed of Trust in
recordable form, and the Agency shall record the Agency Deed of
Trust against title to the Property. Subject to Section 5.10(b)
below, the Agency Deed of Trust shall be subordinate to any Senior
Encumbrance. 5ubject to the ric}hts of holders of any Senior
Encumbrance, the Agency shall have the right to foreclose on the
Agency Deed of Trust in the event Developer fails to cure any
Default, as provided in Article 6 hereof.
2.4. Developer's Equitv
a) Concurrently with the execution af this Agreement,
Developer has submitted to the Agency evidence reasonably
acceptable to the Agency that Developer will have available, when
needed, sufficient Developer's Equity to pay all Project Costs
other than those to be paid with the Construction Loan and the
Agency Funds, as set forth in the Project Budqet.
b) At the time of the Closing, Developer shall provide,
in cash, from saurces other than the Agency Funds and the
Construction Loan, that portion of the Developer's Equity equal to
2, 500, 000 (the "Initiai Equity"} . When and as needed, Developer
shall provide such additional Developer's Equity as may be needed
to pay Project Costs.
c} In addition to the Initial Equity, Developer hereby
pledges to provide an additional $3 , 500,000 in Developer's Equity
for payment of Project Costs, if needed (the "Pledged Equity"} .
Subsequent to the Closing, Developer shall provide, in cash, as
part of the Pledged Equity, such Developer's Equity as may be
org\vs\agmt.5 12_
8-22-95
required for payment of Relocation Costs, as set forth in Section
3 .8 hereof.
d) Developer shall pay with Developer's Equity any
Project Costs in excess of the combined amounts af• the proceeds of
the Construction Loan and the Agency Funds.
e} Agency shall reasonably cooperate with Developer to
facilitate a syndication sale of Low Income Housing Tax Credits to
provide or reimburse Developer far some or all of the Developer's
Equity.
2.5. Disbursement of Financinq Proceeds.
a) Pursuant to and subject to the terms and conditions
of this Section 2. 5, the Disbursement and Intercreditor Agreement
and the Construction Loan documents, the proceeds of the
Construction Loan, Agency Funds and Initial Equity shall be paid
out or deposited upon the Closing into various funds and accounts
for payment af Project Costs.
b) The manner in which Constructian Loan proceeds, the
Agency Funds and Initial Equity shall be allocated to specific
Project Costs shall be reasonably determined by the Agency
Executive Director, the Develo er and the Construction Lender prior
to the Closing. Subject to the reasonable approval of the
Executive Director, the parties shall be subject to the procedures
regardinq disbursement of financing proceeds set forth in the
Canstruction Loan documents and the Disbursement and Intercreditor
Agreement.
c) 5ubject to the satisfactzon of all conditions
precedent to Closing, the Agency shall disburse the Agency Funds
for the payment of Project Costs. Unless otherwise agreed to by
and among the Agency Executive Director, the Construction Lender
and the Developer, the Aqency sha13 disburse the Agency Funds, at
the Closing, as follows: (i) the Agency, on behalf of F. C.
Orange, Inc. , shall deposit into escrow far the purchase of the
Property that partion of the Agency Grant proceeds to be used to
purchase the land; (ii) the balance af the Agency Grant praceeds
shall be deposited, on behalf of F. C. Orange, Inc. , into such
accounts and funds relating to the issuance of the Bonds or the
Construction Loan as may be appropriate; (iii) that pQrtion of the
Agency Loan proceeds to be used to pay Acquisition Costs shall be
deposited, on behalf of the Developer, into escrow far the purchase
of the Property;. and (iv) any remaining Agency Loan proceeds shall
be deposited, on behalf of Developer, with the Construction Lender
in such accounts and funds for payment of Project Costs as may be
appropriate.
d) Any portion of the Agency Funds to be applied
against the purchase price for acquisition of the Property shall be
org\vs\agmt.5 13-
8-22-95
aid by the Agency inta escrow when the Executive Director receives
notice from the escrow aqent that all other conditions to the close
of escrow (other than payment of the purchase price) have been
satisfied. Any portion of the Agency Funds ta be used for
Acquisition Costs'other than the purchase price may be disbursed by
the Agency through escrow, to the parties entitled thereto, or to
Developer, as the Executive Director and Developer may agree. Any
portion of the Agency Funds to be used for other Project Costs
shall be disbursed in a manner that is acceptable to the
Construction Lender, the Developer and the Agency Executive
Director. To facilitate this provisian, the Agency Executive
Director is authorized to execute such escraw instructions and
disbursement agreements as the Executive birector may deem
necessary or appropriate.
e) The Agency shall not be obligated to disburse the
proceeds of the Agency Loan or the Agency Grant until the Aqency
Executive Director determines, in his reasonable discretian, that
all canditions set forth in Attachment No. 6 have been satisfied,
or waives such conditions.
ARTICLE 3 . ACQUISITION
3 . 1. Obligation to Acquire the Propertv
Within the time provided therefor in the Schedule of
Performance, Developer shall take all actions necessary to close
escraw and acquire fee title to the Property. The Aqency
acknowledges and agrees that the parties intend for F. C. Orange,
Inc. to acquire fee title to the land and lease the land to the
limited partnership of which F. C. Orange, Inc. is the general
partner, and ta which this Agreement is to be assigned pursuant to
the Assignment and Assumptian Agreement attached hereto as
Attachment No. 9.
3 . 2 . Taxes and Assessments
Developer shall pay when and as dne (and shall not apply for
any deferral or exemption of) any real estate taxes and assessments
assessed and levied on or against the Property which are levied,
assessed or imposed for any period after the Closing. The
Developer shall not place, or allow to be placed, on the Property
or any p rtion thereof, any m4rtgage, trust deed, encumbrance or
lien not authorized by this Agreement. The Developer shall remove,
or shall have removed, any levy or attachment made on the Property
or any portion thereof) , or shall assure the satisfaction thereof
within a reasonable time but in any event prior to a tax sale or
foreclosure af the Property. Nothing herein contained shall be
deemed ta prahibit the Develaper from contesting the validity or
amount of any tax assessment, encumbrance or lien, nor to limit the
remedies available t4 the Develaper in respect thereto. The
crg vs\agmt.5
4_8-22-95
covenants of the Developer set forth in this Section 3 .2 relatingtothepZacementofanyunauthorizedmortgage, trust deed,
encumbrance or lien, sha31 remain in effect until the issuance of
the Certificate of Completion.
3 . 3 . Zoning of the Praperty
Developer shall be responsible for ensuring that the use of
the Property for the purposes described in this Aqreement complies
with the zoning and other City land use regulations applicable to
the Property at the time of Closing sa as to assure that Developer
is able to proceed with the Rehabilitation and provision of
affordable housing in accordance with the provisions of this
Agreement.
3.4. Condition of t e Pro ert • Hazardo s Substances
a) The Agency makes no representation or warranty,
express or implied reqarding the Property as to the condition af
the soil ar water, its geology, or the presence of known or unknown
faults. The Agency makes no representation or warranty, express or
implied regarding the condition of the improvements currently
existing on the Property. It shall be the sole responsibility of
the Develaper, at the Developer's expense, to investigate and
determine the soil and water condition of the Property, the
conditions of the improvements, and the suitability of the Property
and the improvements far the Project. If the soil or water
conditians of the Property, or the conditions of the impravements,
or any part thereaf, are not _in all respects entirely suitable for
the use or uses to which the Property and the improvements will be
put, then it is the sole responsibility and obligation of the
Developer to take such action as may be necessary ta place the
Property and the soil and water conditions thereof, and the
zmprovements thereon, in all respects in a condition entirely
suitable for the development of the Property as provided in this
Agreement.
b) Developer agrees to perform and be solely
responsible far the clean-up of any hazardous substances on, in,
under ar within the Property, at the sole cost, risk and expense of
Developer. For purposes of this Agreement, the term "hazardous
substances" shall include, without limitation, any flammable
explosives, radioactive materials, asbestos, polychlorinated
biphenyls, chemicals known to cause cancer ar repraductive
toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or related materials of any kind.
c) After taking title to the Praperty, the Developer
shall defend, indemnify and hold harmless the Aqency and its
officers, agents, employees, contractors and attorneys from any
claims, liability, injury, damages, costs and expenses (includinq,
without limiting the generality of the foregoing, the cast of any
org\vs\agmt.5 15—8-22-95
required clean-up of hazardous substances, and the cost of
attorneys' fees) which may be sustained as the result of the
presence ar clean-up of hazardous substances on, in, ar under the
Property.
d) Developer shall remove and/or otherwise remedy any
hazardous substances and soil and water contamination on, in, under
and/or within the Property if (ij Developer caused such hazardous
substances or contamination to come on to the Property, or (ii)
Developer is required to da so by applicable law and implementing
rules and regulations. Any such removal or remediation shall
comply with all applicable laws and implementing rules.
e) The Developer agrees that the Agency, and its
consultants and agents, shall have the right (but not the
obligatian) to enter upon the Property at any time to monitar
compliance with this Section 3 .4. The Agency hereby indemnifies and
holds the Developer harmless for any injury or damages arising out
of any such entry upon the Property pursuant to this paragraph (e) .
Nothing herein (including without limitation the Agency's right to
inspect) shall be construed to make the Agency or its officers,
employees, contractors and agents liable for the responsibilities
under this section.
f) Developer agrees that far the Restricted Period,
Developer shall use the Property in such a manner so that:
i) To the actual knowledge of Developer, the
Froperty will not be in violation of any federal, state or local
law, ordinance or regulation relating to environmental conditions
on, under or about the Property, including, but not limited to soil
and groundwater conditions;
ii) Neither Developer, nor ta the actual knowledge
of Developer, any third party, will use, generate, manufacture,
refine, produce, process, store or dispose of, on, under or about
the Property, or transport to or from the Property, any Hazardous
Substances, except as such may be consistent with the customary
construction, use and operation of property similar to the
Improvements to be developed on the Property pursuant to this
Agreement.
3. 5. Canditions Precedent to Closina.
The canditions precedent to the Closing are those set forth in
Attachment No. 6, attached hereto and incorporated herein by this
reference. On or before the date established in the Schedule of
Performance, the Develq}er shall satisfy the conditions described
in Attachment No. 6 and complete the Closing.
org\vs\agmt.S 6_
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3 .6. Recordation.
Concurrently with the Closing, Develaper shall cause the
recordation of the Agreement Containing Covenants, substantial y in
the form of the instrument attached hereto as Attachment No. 4, and
the Agency Deed of Trust, substantially in the form of the
instrument attached hereto as Attachment No. 8 .
3 . 7. Use of Propertv after Closinq
Followinq the Closing, Developer shall be responsible for the
maintenance and security of the Property, and shall manage the
Property in a reasonable and prudent manner.
3.8. Relocat'on
a) The parties acknowledge that Agency has contracted
with Pacific Relocatian Consultants to prepare a relacation plan
for the Project, which shall be subject to the approval of the
Agency and Developer (the "Relocation Plan") , which approval shall
not be unreasonably withheld.
b) After taking title to the Property, Devaloper shall
cooperate with Agency to promptly relocate all occupants af the
Property as necessary for the Rehabilitation, in accordance with
all applicable relocation laws and requirements and the Relocation
Plan.
c) The Agency shall provide all appropriate technical
assistance to Developer in cdnnection with the relocation of
occupants from the Property. In addition, the Agency shall pay,
from any of the Canstruction Loan, Developer Equity or the Agency
Funds (and as pravided in subdivision (e} , belowj , all Relocation
Costs required by law. To facilitate this provision, at the
Closing, Developer shall cause to be degasited into an account to
be he2d by the Construction Lender (the "Relocation Account") , from
any of the Sources, the initial sum of $3, 125,000 (or such other
sum as set forth in the final Relocation Plan approved by the
Agency and Developer) , which represents the current estimate of the
portion of Relocation Costs to be paid duririg the first eighteen
months following the Closing. Subsequent to the C3osing, Developer
shall deposit into the Relocation Account, from Developer's Equity,
such additional funds as may be necessary to pay Relocation Costs.
Such deposits shall be made by Developer, without the requirement
of any further notice, within one hundred fifty (150) days prior to
the time provided for such Relocation payments to be made in the
approved Relocation Plan. Failure to make such depasit when and in
the amount required shall be a default under this Agreement. The
obligation to make such additional payments shall be an obligation
that is specifically guaranteed by Forest City Entarprises, Inc. ,
in the Guaranty. Notwithstanding any provision of this Agreement
to the contrary, the obligation described in this subdivision (c)
org\vs\agmt.5 l_
8-22-95
to deposit such additianal funds into the Relocation Account and
make relocation payments following the completion of the
Rehabilitation of the Project shall survive the issuance of the
Certificate of Completion. The terms of withdrawing the funds in
the Relocation Account for payment af Relocation Costs shall be
subject to the approval of the Agency Executive Director. Agency
shall have the right to draw on the Relocation Account as necessary
to pay all Relocatian Costs. Upon the determination by the Agency
Executive Director that all Reiocation Costs have been paid, any
amount remaining on deposit in the Relocatian Account shall be
released to Developer.
d) Except as otherwise provided in subdivision (e) ,
below, Develaper sha11 be resporisible for the cost af paying all
required Relocation Costs, as provid d in this Section 3 .8, and
shall defend, indemnify and hold harmless the Agency and its
officers, employees, aqents, contractors and attorneys from any
claims, liabilities, injury, damages, costs and expenses
including, without limiting the generality of the foregoing,
attorneys' fees) relating to the payment of Relocation Costs, which
may be sustained as the direct result of the relocation of any
person from the Property. Except as provided below, in the event
of any action ar praceeding in connection with a claim or demand
for relocation assistance directly resulting .from the Project,
Developer sttall have the right and responsibility to assume the
defense of any such action, all at Developer's own cost (as a
project expense) and by counsel selected by Developer and approved
by the Agency (which approval shall not be unreasonably withheld,
but which shall be withheld in the event the Agency reasonably
determines that such counsel cannot represent the interests of the
Agency as the result of any conflict of interest) .
e) The parties have budgeted the sum of approximately
4, 500,000 for payment of Relocation Costs, based on their current
estimate of an amount that they believe will exceed the actual
amount that will be needed to pay all Relocation Costs. In the
event actual Relocation Costs exceed $4, 500, 000, Developer and
Agency shall each be responsible for fifty percent (50) of the
amount by which actual Relocation Costs exceed $4, 500, 000. To
facilitate this provision, if, at any time, the Agancy determines
that actual Relocatian Costs will exceed $4, 500,000, Agency shall
provide written notice to Developer, indicating the additional
amount to be provided by Developer. Agency and beveloper shall
each promptly deposit into the Relocation Account an amount equal
ta fifty percent (50) of the amount by which actual Relocation
Costs will exceed $4 ,500, 000.
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ARTICLE 4 . REHABILITATION
4 . 1. Obliaation to Rehabilitate the Property
Developer agrees ta rehabilitate the Praject in accordance
with and within the limitations established in the Scope of
Rehabilitation, which is attached to this Agreement as Attachment
No. 3 , and incorporated herein by this rePerence. At the Closing,
Developer shall deliver to the Agency the Guaranty, executed by
Forest City Enterprises, Inc. , guaranteeing completion of
construction of the Project and payment of Relocation Costs, as
provided in this Agreement.
4.2. Re abilitation Contract
a) Unless the provisions of subdivisian (b) of this
Section 4.2 apply, not later than the Closing, Developer shall
submit evidence to the Agency that it has obtained a constructian
contract (the "Rehabilitation Contract") with a licensed general
contractor, providing for: (i} the timely completion of the
Rehabilitation in accordance with and as required by this Agresment
and the approved final plans, for an amount that is in accordance
with the Project Budget; (ii the withholding of such retention
amounts as is customary; and (iii) if required by the Construction
Lender, performance and payment bonds, guaranteeing the timely
c mpletion of the Rehabilitation in accordance with the Project
Budget.
b) As an alternative to the requirements set forth in
subdivision (a) of this Section 4.2, in the event the Devel4per,
through Forest City California Residential Development, Inc. , is to
perform the responsibilities af the general contractor, Developer
shall submit evidence to the Agency that it has obtained all of the
major subcontracts needed for the Rehabilitation, with licensed
subcontractors who are qualified and experienced in multifamily
housing construction in California, providing far: (i) the timely
completion of the Rehabilitation in accordance with and as required
by this Agreement and the approved final plans, for an amount that
is in accordance with the Project Budget; (ii) the withholding of
such retention amounts as is customary; and (iii) if required by
the Construction Lender, performance and payment bonds,
guaranteeing the timely completion of the Rehabilitation in
accordance with the Project Budget.
4 .3. Rehabilitation Plans
a)Subject to the terms of this Agreement, the
Executive Directflr or designee shall have the right of review
including without limitation architectural review) of all
rehabilitation and construction plans and drawings submitted to the
City in connection with the issuance of permits for the
Rehabilitation, including any proposed changes therein.
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b) Prior to the Closing, Developer shall cause ta be
prepared and shall submit to the Executive Director all
construction drawinqs and related documents needed for permits for
the Rehabilitation {collectively called the "Plans") . The Plans may
be submitted concurrently to the Executive Director and to the City
Building Department, as requzred for the issuance of Permits. The
Plans shall be consistent with the Developer's Scope of
Rehabilitatinn.
c) If any revisions or corrections of Plans shall be
required by any government official, aqency, department or bureau
having jurisdiction over the development of the Property, Developer
and the Executive Director shall cooperate in efforts to obtain
waiver of such requirements or to develop a mutually acceptable
alternative.
d) If Developer desires to make any changes not in
substantial conformance with the approved Plans, such proposed
change shall be submitted to the Executive Oirector for approval,
which approval shall not be unreasonably withheld. Such change in
the plans shall, in any event, be deemed approved unless rejected,
in whole or in part, by written notice thereaf setting forth in
detail the reasons therefor, and such rejection shall be made
within fifteen (15) days following receipt of the reguest for the
proposed change.
4 .4. Rehabilitation o the Pro ert
a) Developer shall cause the Rehabilitation to be
performed in substantial conformance with the City-approved Plans,
as modified by any approved change orders.
b) Developer shall cause all Rehabilitation to be
performed in compliance with (i) all applicable laws ordinances,
rules and regulations of federal state, county or municipal
governments or agencies now in force or that may be enacted
hereafter, and (ii) all directives, rules and regulations of any
fire marshall, health officer, building inspection, or other
officer of every governmental agency now having or hereafter
acquiring jurisdiction.
c) Developer shall perform or cause t4 be performed all
design and construction work required by this Agreemertt diligently,
continuously and without interruption strictly in accordance with
the Schedule of Performance, subject, however, to any Force Majeure
Delay specif ied hereunder. Develaper shall commence or cause the
Rehabilitation to be commenced within the time provided therefor in
the schedule of Performanea. eveloper shall perfarm or cause to
be performed all such design and construction work in a good and
workmanlike manner and in accordance with sound engineering and
construction practices. Subject to normal construction delays and
project phasing, Developer shall not cause or permit cessation of
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work for a period in excess of five (5} consecutive business days,
except cessation caused by Force Majeure Events, without he prior
written consent of the Executive Director.
4 . 5. Cost of Rehabilitation
The cost of Rehabilitation shall be the responsibility of
Developer. The parties anticipate that the Rehabilitation Costs
shall be as set forth in the Project Hudget, but hereby acknowledge
and agree that any increase in costs above the amounts heretofare
projected or assumed by Developer, or decreases in revenues belaw
the amounts heretofore projected or assumed by Developer, which
occur subsequent to the execution of this Agreement, shall be at
the sole financial risk of Developer. Develaper shall be solely
responsible for paying all cost overruns.
4 .6. Schedule vf Performance
The Developer shall perform all acts required of the Developer
within the times provided in the schedule attached to this
Aqreement as Attachment No. 2, or if no time is provided, in a
reasonable time.
b) If necassary to facilitate relocation, Developer may
cause the Rehabilitatian to be performed in phases. To the extent
hat the Rehabilitation of any buildings in the Project, or
exteriar areas of the Property, will commence prior ta completion
of relocation of occupants from ather portions of the Project,
Developer and its general contractor shall ensure that the
Rehabilitatian does not cause any safety hazard to the remaining
occupants, and shall use their best efforts to minimize
construction noise, dust and disruption to the remaining occupants.
c} During periads of construction, the Developer shall
submit tv the Executive Director a written report of the progress
of the construction when and as reasonably requested by the
Executive Director, but not more often than monthly. The report
shall be in such farm and detail as may be reasonably required by
the Executive Director; provided, that submission to the Executive
Director of the same progress report as the report required by the
Construction Lender shall satisfy the requirement of this
subdivision.
4.7 . Indemnification during Construction; Bodily Iniury and
Propertv Damage Insurance
a) Developer agrees to and shall defend, indemnify and
hold the Agency and its officers, employees, agents, contractors
and attorneys harmless from and against all claims, liability,
loss, damage, costs or expenses (including reasanable attorne s
fees and court costsj arising from or as a result of the death of
any person or any accident, injury, loss or damage whatsoever
org\vs\agmt.5 2 1_8-22-95
caused to any person or to the property of any person which shall
accur on or adjacent to the Property and which shall be directly or
indirectly caused by any acts done thereon or any errors ar
omissions of the Developer or its officers, employees, contractars
or agents.
b) Prior to or concurrently with the Closing, the
Developer shall obtain, and deliver to the Executive Director, and
maintain a policy or policies of the following types of insurance
on the Property:
i) Liability insurance, which provides coverage
not less than that provided in the form of a comprehensive general
liability insurance policy against liability far any and all claims
and suits for damages or injuries ta persons or property resulting
from or arising out of operations of Developer, its officers,
agents, or employees. Said policy or policies of insurance shall
provide coverage €or both bodily injury and property damage in not
less than Ten Million Dollars ($0,000,000) combined single limit,
or its equivalent.
ii) Insurance covering the improvements existing or
hereafter erected on the Property aqainst loss by fire and other
hazards, casualties and contingencies, including earthquakes (if
available at commercially reasonable rates) . All such insurance
shall be evidenced by standard fire and extended coverage ins rance
policy or policies, in the amount of the replacement value of the
improvements.
iii)R11 such policies shall name the Orange
Redevelapment Agency, as insured or additiona2 insured, and be
endorsed with a standard mortgage clause with loss payable to the
Agency. Certificates thereof together with copies of original
policies shall be deposited with Executive Director at or
immediately after the Closing. Said policy or policies shall also
contain a provision that na termination, cancellation, or changa of
coverage of insured shall be effective until after thirty (30) days
notice thereof has been given in writing to Executive Director.
Develaper shall give to Executive Director prompt and timely notice
of claim made ar suit instituted arising out of Developer's
oparations hereunder. Developer may procure 'and maintain, at its
own cost and expense, any additional kinds and amounts of insurance
which in its own judgment may be necessary for i s proper
protection and in the prosecution of the work. All insurance
policies shall be written by responsible and solvent insurance
companies.
4.8. Nondiscrimination
The Developer far itself and its successors and assigns agrees
that in the Rehabilitatian of the improvements on the Property
pr4vided for in this Agreement, the Developer will not discriminate
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against any employee or applicant for employment because of race,
color, cre d, religion, sex, sexual orientation, marital status,
national origin or ancestry.
4.9. Local. State and Federal Laws
The Developer shall carry out the Rehabilitation in confarmity
with all applicable laws.
4. 10. Citv and Other Governmental Agencu Permits
a) Before the commencement of the Rehabilitation, the
Developer shall secure or cause to be secured, any and all permits
which may be required by the City or any other governmental agency
affected by such canstruction, development or work. Prior to the
Closing, Develaper shall submit evidence acceptable to the
Executive Director that all conditions to the issuance of such
permits have been satisfied, with the exception of conveyance of
title and payrnent of fees (which fees shall be included in the
Project Budget) . The Executive Director shall have tha authority
to waive the requirement that all such conditions must be satisfied
as a condition precedent to Closing.
b) Developer shall pay all applicable City fees in
connection with the Project, any application fees and charqes
required in connection with buildinq permits, and any costs or fees
required as a condition of receiving such building permits.
c) This Agreement is not a "Development Agreement" as
provided in Sectian 65864 et sea• of the California Government
Code. Developer . shall comply with all appiicable conditions of
approval required by the City of Orange.
4 . 11. Rights of Access
Representatives qf the Agency shall have the reasonable right
of access ta the Praperty withaut charges or fees, at normal
construction hours during the period af construction for the
purposes of this Agreement, including, but not limited to, the
inspection of the work being perfarmed in constructing the
improvements. Such representatives of the Agency shall be those
who are so identified in writing by the Executive Director or
designee.
4. 12. Certificate of Combletion
a) Promptly after completion af the Rehabilitation, as
required by this Agreement, the Agency shall furnish the Developer
with a Certificate of Campletion upan written request therefor by
the Developer. The Agency shall not unreasonably withhold such
Certif icate af Completion and such Certificate of Completion shall
be issued so lonq as Developer has completed the Rehabili ation of
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the Property in accordance with this Agreement. Such Certificate of
Completion shall be, and shall so state, conclusive determination
of satisfactory completion of all of the Rehabilitation required by
this Agreement.
b) The Certificate of Completion shall be in such fortn
as to permit it to be recorded in the Recorder's Office af orange
County.
c) Within thirty (30) days af er request from the
Developer, the Agency shall either issue the requested Certificate
of Completion or provide the Developer with a written statement of
the reasons the Agency refused or failed to furnish a Certificate
of Completion. The statement shall also contain the Agency's
opinion of the action the Developer must take to obtain a
Certificate of Completian. If the reasvn for such refusal is
confined to the immediate availability af specific items or
materials for landscaping, andJor minor items (being those
aggregating not more than ten percent of the estimated cost of
Rehabilitation , the Agency will issue its Certificate of
Completion upon the posting of a bond, letter of credit or cash by
the Developer with the Agency in an amount representing the
Agency"s reasonable estimate of the cost of the work not yet
completed. If the Agency fails to provide such written statement
within said 30-day period, the Developer shall be deemed tq have
received the Certificate of Completion.
d) Such Certificate of Completion shall not constitute
evidence of compliance with or satisfaction of any obligation of
the Developer to any holder of a mortgage securing money loaned to
finance the Project. Such Certificate of Completion is not natice
of completion as referred to in Section 3093 of the California
Civil Code.
4. 13 . Disclaimer of Responsibility
Except as provided in this Agreement, the Agency neither
undertakes nor assumes nor will have any responsibility or duty to
Developer or to any third party to review, inspect, supervise, pass
judqment upon or inform Develaper or any third party af any matter
in connection with the rehabilitation of the Property, whether with
respect ta the quality, adequacy or suitability of any plans,
labor, service, equipment or material furnished to the Property,
any person furnishinq the same or otherwise. Developer and all
third parties shall rely upon its or their own judgment with
respect to such matter, and any review, inspection, supervision,
exercise of judgment or information supplied to Developer or ta any
third party by the Agency in connection with such matter is for the
public purpose of carrying out the Community Redevelopment Law in
accordance with this Agreement, and neither Developer (except as
expressly provided in this Ac}reement or for the purposes set forth
in this Agreement) nor any third party is entitled to rely thereon.
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4. 14. Sians and Publicity.
Developer shall provide, periodically update and maintain
construction site signs identifying the development, giving
recognition to the Redevelopment Agency, the City Council and their
members. The Agency and Developer may refer to the Project in
their own promotional and advertising materials and press releases.
ARTICLE 5. USE OF THE PROPERTY
5. 1. Uses
The Developer covenants and aqrees (far itself, its
successors, its assigns, and every successor in interest to the
Property or any part thereof} that the Develaper, such successors,
and such assigns shall devote the Property to the uses specified
therefor in this Agreement and the Agreement Containing Covenants.
Priar to Closinq, Developer shall prepare and submit to the
Executive Director far approval a management plan (the "Management
Plan") relating to the operation and management of the Project, as
provided in the Agreement Containing Covenants.
5.2. Housing for Low-Income Persons
a) Developer, for itself, its successors and assigns,
agrees that during the Restricted Period, all the Units shall be
rented exclusively to persons and families of Low Income, at
Affordable Rents. The maximum incomes of tenants eligible to rent
the Units, and the maximum rents that rnay be charged for the Units,
shall be as set forth in the Agreement Containing Covenants.
b) To permit the Agency to monitor, on an onqoing
basis, compliance with the affordability requirements of this
Agreement, as required by Section 33418 of the California Health
and Safety Code, Develaper shall be responsible for submitting the
reports and certifications described in subsection l.a. (6) of the
Agreement Containing Covenants.
5.3 . Maintenance of the Propertv .
During Rehabilitation, Developer shall maintain the
improvements on the Property and shall keep the Prop rty free fram
any accumulatian of debris or waste materials, subject to normal
construction jobsite canditions.
5.4. Oblisation to Refrain from Discrimination
The Developer covenants and agrees for itself, its successors,
its assigns and every successor in interest to the Property or any
part thereof, there shall be no discrimination against or
segregation of any person, or group of persons, on account of race,
org\vs\agmt.5 2 5_
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color, religion, sex, sexual orientation, marital status, natianal
origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property nor shall the
Developer, itself or any person claiming under or through it,
establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location`, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees of the Property.
5.5. Farm of Nondiscrimination and Nonseqreqation Clauses
The Developer shall refrain from restricting the sale, lease,
sublease, rental, transfer, use, occupancy, tenure, or enjoyment of
the Property (or any part thereof} on the basis of race, color,
religion, sex, sexual orientation, marital status, ancestry or
national origin of any person. All such deeds, leases, or
contracts pertaining thereto shall contain or be subject to
substantially the following nondiscrimination or nonsegregation
clauses:
2. In deeds: "The grantee herein covenants by and for
itself, its successors and assigns, and all persons claiming under
or through them, that thera shall be no discrimination against or
segregation of, any person or group of persons on account of race,
colar, religion, sex, sexual orientation, 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 itself or any person claiming under or through
it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees in the land herein conveyed. The foregoing
covenants shall run with the land. "
2. In leases: "The lessee herein covenants by and for
itself, its successors and assigns, and all persons claiming under
or through them, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no
discrimination against or segregation of any person or group of
persons, on account of race, color, religion, sex, sexual
orientation, marital status, national origin, or ancestry, in the
Ieasing, subleasing, rentinq, transferring, use, occupancy, tenure
or enjoyment of the land herein leased, nor shall Lessee itself, or
any person claiming under or through it, establish or permit such
practice or practices of discrimination or segregation with
reference ta the selection, location, number, or occupancy of
tenants, lessees, sublessees, tenants, or vendees in the land
herein leased. "
3 . In contracts: "There shall be no discrimination
against or segregation of, any person or group of persons on
account of race, color, religion, sex, sexual orientation, marital
org\vs agmt.5 2 6_
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status, national origin or ancestry in the sale, lease, sublease,
rental, transfer, use, occupancy, tenure or enjoyment of the land,
nar shall the transferee itself or any person claiming under or
through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees of the land. "
5. 6. Manaqement of Proiect
Develaper, or an affiliated Forest City entity, shall manage
and operate the Project in accordance with its Management Plan and
in a manner that is comparable to other affordable multifamily
rental housing developments managed by other Forest City entities.
Developer shall be responsible for the operation of the Project
either by direct management or by contractinq its managerial
functions to a third party entity reasonably acceptable to Aqency
which will be charged with managzng the Project on behalf of
Developer. Agency shall have the right to review and approve any
such entity priar to its selection by Develaper. Such approval
shall nct be unreasonably withheld. Developer shall include in any
such agreement with a management company a provisian permitting
Developer to terminate the agreement in the event that the
management company fails to cure any violation of federal, state or
local health and safety laws within thirty (30) days following the
giving of notice of such violations by Agency ar any other
governmental entity.
5.7. Effect and Duration of Covenants
The covenants established in this Agreement, without regard ta
technical classificati n or designation, shall be binding on the
Developer and the Agency and their respective successors in
interest, for the benefit and in favor of the Develaper, Agency,
their respective successors and assigns, and the City of Oranqe.
The covenants contained in this Agreement shall remain in effect
for the respective time periods set forth in the Agreement
Cantaininq Covenants.
5.8. Effect of Violation of the Terms and Provisions of this
Aqreement
The Developer, Agency and the City are fleemed beneficiaries of
the terms and pravisions of this Agreement and the covenants
herein, both for and in their vwn respective right and for the
purposes of protecting the interests of the community and other
parties, public or private, for whase benefit this Agreement and
the covenants running with the land have been provided. The Agency
and the Developer shall each have the riqht if the covenants
contained in this Agreement are breached, to exercise all rights
and remedies, and to maintain any actians or suits at law or in
equity or other proper proceedings to enforce the curing of such
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breaches to which it or any other beneficiaries of this Agreement
and cavenants are entitled.
5. 9. Agreement Containing Covenants;, Subordination to Senior
Encumbrances.
a) Concurrently with the Closing, Developer and Agency
shall execute and cause the recordation of an Agreement Containing
Covenants.
b) Concurrently with the execution and recordation of
the Agreement Containing Covenants, the Agency shall execute such
instruments of subordinatian as may reasonably be required to
subordinate the Agreement Containing Covenants (as well as he
Agency Deed of Trust} to the senior lien of any Senior Loan, upon
receipt of the Disbursement and Intercreditor Aqreement or other
agreement with a Senior Lender which pravides the Agency with
rights in the event of a default by Developer, which would permit
the Agency to preserve affardability of the Units, as required by
California Health and Safety Code Section 33334.14, such as any of
the following:
1) A right to cure a default on the Seniox
Encumbrance;
2) A right to negotiate with the Senior Lender
after notice of default to Developer from the
Senior Lender;
3) An agreement that if prior to foreclosure of
the Senior Encumbrance, the Aqency takes title
to the Property, and cures the default on the
senior lien, the Senior Lender will not
exercise any right it may have to accelerate
the Senior Encumbrance by reasan of the
transfer of title to the Agency; and
4) A right to purchase the Property from
Developer at any time after a default on the
Senior Encumbrance but prior to foreclosure.
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ARTICLE 6. DEFAULTS, REMEDIES AND TERMINATION
6. 1. Defaults - General
a) Subject to the extensions of time set forth in
Section 7.5, failure or delay by either party to perform any term
oz provision of this Agreement constitutes a defauZt under this
Agreement. The party who so fails or delays must immediately
commence to cure, correct, or remedy such failure or delay and
shall complete such cure, correction or remedy with reasonable
diligence and during any period af curing shall not be in default.
b) The nondefaulting party shall give written notice of
def ault to the party in default, specifying the default complained
of by the nondefaulting party. elay in giving such notice shall
not constitute a waiver of any default nor shall it chanqe the time
of default.
c) Any failures or dela s by either party in asserting
any of its rights and remedies as to any default shall not aperate
as a waiver of any default or of any such rights or remedies.
Delays by either party in asserting any of its rights and remedies
shall not deprive either party of its right to institute and
maintain any actions or praceedings which it may deem necessary to
protect, assert, or enfarce any such riqhts or remedies.
6.2. Leaal Actions
6. 3 . Institut on of Leaal Actions
In addition to any other rights or remedies, either party may
institute legal action to cure, correct, ar remedy any default ta
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions
must be insti uted in the Superiar Court of the County of Orange,
5tate of California, in any other appropriate court in that County,
or in the United States Dis rict Court for the Central District of
California.
6.4. Ap licable Law
The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
6. 5. Acceptance of Service of Process
a) In the event that any legal action is commenced by
the Developer against the Agency, service of process on the Agency
shall be made by personal service upon the Executive Director or
Chairman af the Agency, or in such other manner as may be provided
by law.
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b) In the event that any leqal action is commenced bytheAgencyagainsttheDeveloper, service of process on the
Developer shall be made by personal service upon an officer of
Developer or in such manner as may be provided by law, and shall be
valid whether made within ar without the State of California.
6. 6. Riqhts and Remedies are Cumulative
Except with respect to rights and remedies expressly declaredtobeexclusiveinthisAgreement, the rights and remedies of the
parties are cumulative and the exercise by either party of one or
more of such rights or remedies shall not preclude the exercise byit, at the same or different times, of any other rights or remedies
for the same default or any other default by the other party.
6.7. Damaqes
If either party defaults with regard to any of the.provisions
of this Agreement, the nondefaulting party shall serve written
notice of such default upon the defaulting party. If the default
is not cured by the defaulting party within hirty (3p} days after
service of the notice of default, or if the default is not
cammenced to be cured within thirty (30} days after service of the
notice of default and is not cured promptly within a reasonable
time after the commencement, the defaulting party shall be liable
to the other party for damages caused by such default.
6.8. 5pecific Performance
If either party defaults under any of the provisivns of this
Aqreement, the nondefaulting party shall serve written notice of
such default upon such defaulting party. If the de£ault is not
commenced to be cured within thirty (30) days after service of the
notice of default and is not cured promptly within a reasonable
time after the commencement, the nondefaulting party, at its
option, may institute an action for specific performance of the
terms of this Agreement,
6.9. Remedies and Riqhts of Termination
6. 10. Termination b Develo er
The Developer at its option may terminate this Agreement if:
a) the City does not issue the Bonds within the time provided in
the 5chedu e of Performance; or (b) the Agency improper2y does not
disburse the Agency Funds in the manner and by the date provided in
this Agreement, or the Ageney is otherwise in material default vf
its obligations hereunder, and any such failure is not cured within
thirty (30) days after written demand by the Developer. Upon such
termination, neither party shall have any further rights or
liabilities against the other.
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6. 11. Termination by Agencv
a) The Agency at its option may terminate this
Agreement if the Developer improperly assigns or attempts to assign
this Agreement, or any rights therein; or makes any tatal or
partial sale, transfer or conveyance of the whole or any part of
the Property or the Praject in violation of the terms of this
Agreement.
b) The Agency at its optian may terminate this
Agreement if the Developer has not submitted ta the Agency
satisfactary evidence that the Devploper has satisfied all
conditions precedent to the Closinq within the time provided in the
Schedule of Performance.
c) The Agency at its option may terminate this
Agreement if upon satisfaction of all conditions precedent and
concurrent under this Agreement, the Developer does not, in breach
hereof, beqin and complete the Rehabilitation. of the Property as
required by this Agreement and within the times of performance set
forth in the Schedule of Performance, or the Developer otherwise
fails to perform any abligation of the Developer hereunder, and
such breach is not cured within thirty (30) days after the date of
written demand.
org\vs\agmt.5
31—8-22-95
ARTICLE 7 . GENERAL PROVISIONS
7. 1 Not' ces Demands and Communications Between the Parties
Formal notices, demands, and communications between the Agency
and Developer shall be sufficientZy given if personally delivered,
or dispatched by registered or certified mail, postage prepaid,
return receipt requested, to the principal offices of the AgencyandDeveloperasdesignatedinSection1. 4 and 1. 5 hereof. Such
written notices, demands, and communications may be sent in the
same manner to such other addresses as either party may from time
to time designate by mail as pravided in this Section 7. 1.
7.2 Conflict o• Interests
No member, official or employee of the Agency 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 or her personalinterestsortheinterestsofanycorporation, partnership or
association in which he, or she is, directly or indirectly,interested.
7 . 3 Warrantv Against Pavment of Consideratior for Aareement
Develoger warrants that it has not paid or given, and will nat
pay or give, any third party any maney ar other cansideration for
obtaininq this Agreement.
7 .4 Nonliabilitv of Aaency Officials and EmD o,yees
No member, afficial, employee, agent, attorney or contractor
of the Agency shall be personally liable ta Developer or any
successor in interest, in the event of any default or breach by the
Agency or for any amount which may become due to Developer or to
its successor, or on any obligations under the terms of this
Agreement.
5 Enforced Delav fForce Majeurel : Extension of Time of
Performance
Notwithstanding specific provisions of this Agreement,
perfarmance by either party hereunder shall not be d emed to be in
default where delays or defaults are due to war; insurrection;
strikes; lock-outs; riots; floods; earthquakes;, fires; casualties;
acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transpartation;
governmental restrictions or priority; litigation, including
litigation challenging the validity of this transaction r any
element thereof; unusually severe weather; inability to secure
necessary labor, materials or tools; delays of any contractor,
subcantractor, or suppliers; acts of the other party; acts or
org vs\agmt.5
3 2_8-22-95
failure to. act of the Agency or any other public or governmental
agency ar entity (except that acts or failure to act of the Agency
shall not excuse performance by the Agency) ; or any other causes
beyond the control or without the fault of the party claiming an
extension of time to perform. Notwithstanding the foregoing, none
of the foregoing events shall constitute a Force Majeure Event
unless and until the party claiming such delay and interference
delivers to the other parties written notice describing the event,its cause, when and how such party obtained knowledge, the date the
event commenced, and the estimated delay resulting therefrom. Any
party claiming a Force Majeure Delay shall deliver such written
notice within fifteen (15} days after it abtains actual knowledge
of the event. An extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from the
time of the cammencemen of the cause. Times of performarice under
this Agreement may also be extended in writing by the mutual
agreement af the Executive Director, and Developer.
7. 6 Inspection of Books and Records
The Agency has the right at all reasonable times to inspect
the books and records of Developer pertaining to the Property
and/or the Praject. Developer shall maintain copies of such books
and records in Orange County or Los Angeles County.
7.7 Approvals
Approvals required of the Agency or Developer shall not be
unreasonably withheld, conditioned or delayed, and approval or
disapproval shall be given within a reasonable time.
Notwithstanding ariy pravision to the contrary contained herein, any
matter that is to be "deemed approved" pursuant ta this Agreement
unless approved or disapproved by the Agency within a given time
otherwise provided in this Agreement, shall not be deemed approved,
unless each of the follawing conditions is met:
1) DeveloFer requests such approval in writing;
2) Developer accampanies the written request with the
following statement, all in capital letters (filling in
the blanks with the appropriate section and number of
days) : NOTICE: PURSUANT TO SECTION OF THE
AFFORDABLE HOUSING AGREEMENT BETWEEN DEVELOPER AND
AGENCY, FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE OF
THE REQUESTED MATTER WITHIN DAYS SHALL BE DEEMED
TO BE AGENCY APPROVAL" ;
3) Agency fails to approve, disapprove, or approve the
matter subject to specified conditions within the
applicable time period; and
org vs\agmt.5
3 3-8-22-95
4) the matter is not subject to a Force Majeure Delay (other
than a delay caused solely by the fact that the Agency
has failed to act within the given time, absent any other
Force Majeure event} , in accordance with Sectian 7.5.
7.8 Attorneys Fees
If either party hereto should retain legal counsel for the
purpose of enforcing any term or candition of this Agreement, the
prevailing party shail be entitled to recover costs and expenses,
including but not limited to reasonable attorneys' fees.
7.9. Construction and Interpretation of Agreement.
a) The language in all parts of this Agreement shall in
all cases be construed simply, as a whole and in accardance with
its fair meaning and not strictly for or against any party. The
parties hereto acknowledge and agree that this Agreement has been
prepared jointly by the parties and has been the subject of arm's
length and careful negotiation over a considerable period of time,
that each party has been given the opportunity to independently
review this Agreement with legal counsel, and that each party has
the requisite experience and sophistication to understand,
interpret and agree to the particular language of the provisions
hereof. Accordingly, in the event of an ambiguity in or dispute
regarding the interpretation of this Agreement, this Agreement
shall not be interpreted or constru d against the party preparing
it, and instead other rules of interpretation and construction
shall be utilized.
b) If any term or provision of this Agreement, the
deletion of which would not adversely affect the receipt of any
material benefit by any party hereunder, shall be held by a court
of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby and each
other term and provision of this Aqreement shall be valid and
enforceable to the fullest extent permitted by law. It is the
intentian of the parties hereto that in lieu of each clause or
provision of this Agreement that is illegal, invalid ar
unenforceable, there be added as a part of this Agreement an
enforceable clause or provision as similar in terms to such
il eqal, invalid ar unenforceable clause or provision as may be
possible.
c)The captions of the articles, sectians and
subsectians herein are inserted solely for convenience and under no
circumstances are they or any of them to be treated or construed as
part of this instrument.
d) References in this instrument to this "Aqreement"
mean, refer to and include this instrument as well as any riders,
exhibits, addenda and attachments hereto (which are hereby
org\vs\a9mt.5 3 4-
8-Z2-95
incorporated herein by this reference) or other @ocuments expressly
incorporated by reference in this instrument. Any references to
any covenant, condition, obligatian and/or undertaking "herein, '
hereunder, " or "pursuant hereto" (or language af 3ike import)
shall mean, refer to and include the covenants, obligations and
undertakings existing pursuant to this instrument and any riders,
exhibits, addenda and attachments ar other documents affixed to or
expressly incorporated by reference in this instrument.
ej As used in this Agreement, and as the context may
require, the singular includes the plural and vice versa, and the
masculine gender inciudes the feminine and vice versa.
ARTICLE 8. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
This Agreement shall be executed in five duplicate oriqinals
each af which is deemed to be an original. This Agreement includes
thirty-six (36) pages and ten (10} attachments which constitute the
entire unders anding and agreement of the parties.
This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all
negotiations or previaus agreements between the parties with
respect to all or any part of the Property.
All waivers of the provisions of this Aqreement must be in
writing and signed by the appropriate authorities of the Agency and
the Developer, and all amendments hereto must be in writing and
signed by the appropriate authorities of the Agency and the
Developer.
ARTICLE 9. TIME FOR ACCEPTANCE dF AGREEMENT $Y AGENCY
This Agreement, when executed by the Developer and delivered
to the Agency, must be authorized, xecuted and delivered by the
Agency within thirty (30) days after the date of signature by the
Developer or this Aqreement may be terminated by the Developer on
written notice to the Agency. The date of this Agreement shall be
the date when the Agreement shall have been signed by the Agency.
org vs\agmt.5
a 5_8-22-95
ORANGE REDEVELOPMENT AGENCY
0
Dated: .
C" ,- -
B Y•
Executive Director
TTEST:
By:
A ency Cl k
APPROVED AS TO FORM AND LEGALITY:
KANE, BALLMER & BERKMAN
Agency S ecial eounsel
By: L-
nn F. Wasserman
F. C. ORANGE, INC. ,
a calit nia ora io
Dated:By:
Gregory lkin
Presiden
orgtvs\a9mt.5 3 6—
B-22-95
CALIFORNIA AL4PURPOSE ACKNOWLEDGMENT Na.5so7
Stat2 Of California
County of orange
On 9-13-95 before me,
OATE NAME,TITLE OF OFFICER-E.G.,"JANE OOE,NO RY PUBLIC"
personally appeared David L. Rudat---------------------__,___________
NAME(S)OP SIGFIER{S)
personally known to me - OR - proved to me on the basis of satisfactory evidence
to be the person whose name} is a e
subscribed to the within instrument and ac-
o n,R.c knowledged to me that ie sl e ey executed
con+.#o»vn x9n the same in s.n r authorizedz ' r v Pu-cauro o
or rocfcainmr capacity); and that by is'etr
c°'"'".°``«Aa z.°°°
signature on the instrument the person,
or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
e-- =-Ll-
SIGNATUflE OF NOTAflY
OPTIOIdAL
Though the data below is not required by law,it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
0 CORPORATEOFFICER
Piffordable Hausing Agreement
nnfts
TITLE OR TYPE OF DOCUAAENT
PARTNER(S) LIMITED
GEiVERAL 35 with 10 attachments
ATTORNEY-IN-FACT NUMBER OF PACaES
TRUSTEE{S)
GUARDIAWCONSERVAi"OR
OTHER: 9-12-95
Executive Director DATE OF DOCUMENT
SIGNER IS REPRESENTING:
n,a,MeoFP sorv s oRen r rrpEs Gregory M, Vilkin
Oranc R develogmen__Ac enc SIGNER(S}OTHER THAN NAMED ABOVE
1993 NAtIpNAL NOTARY ASSOCIATION•8236 Remmet Ave.,P.O.Box 7184•Canoga Park,CA 9t309-7184
STATE OF CALIFORNIA )
ss.
COUNTY OF LOS ANGELESj
on bef ore me,
A ES E. MACKEY
personally
appeared L r personally known to
me (or proved o me o the basis of 'satisfactory evidence) to be
the person,whose name s}fis/ subscribed to the within
instrument and acknowledged to me that he/.s tt-/ executed the
same in his/f.h i— authorized capacity(i,es}, and that by
his/x.e r h.n-i signature(s...on the instrument the person r the
entity upon behalf af which the person(,s' acted, executed the
instrum2nt.
WITN my han and off' ' 1.
Siqn ture
JAMES E.MAC K
COiWM.#1020473
a;rp,'- i1pTAFiY PUBU•CAUFORNIA
OS ANCiELES CO 29;8f
My Comm.Expires AA•
ATTACHMENT N0. 1
LEGAL DESCRIPTION
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY
OF ORANGE, CZTY OF ORANGE, DESCRIBED AS FOLLOWS:
L TS 13, 14, 15, 16, 26 AND THE SOUTHERLY 7 FEET OF LOT 17
EXCEPTING THAT PORTION LYING WEST O THE EAST LINE OF MCPHERSON
ROAD BY FINAL ORDER OF CONDEMNATION RECORDED FEBRUARY 21, 1991 AS
INSTRUMENT N. 91-078842, OFFICIAL RECORDS) , OF THE G. HOWARD
THOMPSON TRACT, AS SHOWN ON A MAP RECORDED IN BOOK 1 PAGE Z2 OF
RECORD OF SURVEYS, IN THE OFFICE THE COUNTY RECORDER OF ORANGE
COUNTY, CALIFORNIA, AND THAT PORTION OF THE NORTH HALF OF CENTER
STREET ADJOINING SAID LOTS 13, 14, 15 AND 26, LYING BETWEEN THE
CENTERLINE aF MAIN STREET AND THE EAST LINE OF FIRST STREET,
ABANDONED BY ORDER OF THE $OARD OF SUPERVISORS OF ORANGE CDUNTY,
CALIFORNIA, A CERTIFIED COPY OF WHICH WAS RECORDED MAY 25, 1927 IN
BOOK 55, PAGE 60 OF OFFICIAL REC RDS.
org\vs\tegal
7-13-95
ATTACHMENT NO. 2
SCHEDULE OF PERFORMANCE
1. Execution of Agreement _by the Within 30 days after the
Aaencv. The Agency and City Agreement is executed by the
Council shall hold a joint Developer and submitted to
public meeting on this Agree-the Agency.
ment; the Agency shall authorize
execution of the Agreement; and
the Executive Director shall
execute and deliver this
Agreement to the Developer.
2. Evidence of Availability of Not later than the date of
Eauitv. The Developer shall execution of this Agreement
submit to the Agency evidence by Developer.
that Initial Equity will be
available at the Closing.
3 . Approval of Evic3ence of Equitv.Goncurrently with executian
The Agency shall approve or of this Agreement by Agency.
disapprove the evidence of
availability of the Initial
Equity.
4. Financina. The Developer shall Within 120 days after
deposit the full amount of the execution of this Agreement
Initial Equity,and all by the Agency.
conditions shall be satisfied
relating ta approval of the
Cc nstructian Loan, the Credi.t
Enhancement and issuance of the
Bonds.
5. Approval of Financincx.he At the time of the Closing.
Agency Executive Director shall
approve or disapprove the
financing for the Project.
6. Conditions to Closina.All Within 120 days after Agency
conditions precedent t4 the execution of this Agreement.
Closing as set forth in
Attachment No. 6 shall be
satisfied (or waived by the
Agency Executive Director) ,
Developer shall cause escrow to
close and the Agency shall
disburse the Agency Loan and
Agency Grant.
Attachment No. 2
org\vs\sop.3 Page 1 Of 2
8-23-95
7 . Relocation Account. Developer At the time of the Closing.shall deposit the initial amount
of 3 , 125, 000 into the
Relocation Account.
8 . Relocati n. Agency shall cause Promptly following the
its consultant to commence Closing.
relocation of all occugants from
the Project.
9, start of Rehabilitation.As soon after Closing as
Developer shall commence possible, but subject to
Rehabilitation. relocation of occupants from
phases of the Project in
which rehabilitation is to
begin.
10. Completion of Rehabilitation.Within 12 months after the
The Developer shall complete all Clasing.
construction and rehabilitation
af the improvements on the Site
as described in the Scope af
Development and the approved
Plans.
Attachment No. 2
org vs\sop.3
P a e 2 o f 28-23-95 g
ATTACHMENT NO. 3
SCOPE OF REHABILTTATION
Villa Santiago)
The Property is located at 11841 Prospect Avenue, in the City of
orange.
Proiect Description
Development of the Property shall cansist of the rehabilitation of
an existing 260-unit apartment community on 17 acres, consisting of
77 two-story buildings (15 duplexes, 18 triplexes and 44
fourplexes) containing 2-bedroom, 2 Z bath townhouse units, and
related amenities and improvements (the "Improvements") .
Landscapinc and Pavinq
All areas of the Property not required for the Improvements shall
be paved or landscaped in accordance with plans approved by the
City. Landscaping may consist of grass lawns, ground covers, trees,
decorative block walls, screening, plants, terraces, fountains,
pools and other water arrangements. Developer shaZl install a
permanent irrigati n system an the Property, designed to minimize
water use while provi@ing such water as necessary to maintain the
landscaping in a healthy candition. Paving shall be in accordance
with City approved plans.
Refuse
An enclosed refuse area ar areas shall ba provided at convenient
locatians in accordance with the requirements of the Gity of
range. Refuse areas shall be constructed of building materials
compatible with the Improvements.
Utilities
Developer shall be responsible for aIl utility relocation or
installation on the Property, and for hookups to sewers, storm
drains, water and gas distribution lines, electric, telephone,
cable televisian, and ather public utility lines. Al1 utility
services on site shall be installed as required by the City of
Orange municipal code. Such installations shall be instailed
undergraund or concealed within the Improvements and no mechanical
equipment or meters shall be exposed at gr und level.
Attachment No. 3
o s\vs\scope
pag 1 of 2
6-8-95
Public Improvements
The Developer, at its sole cost and expense, shall prepare or cause
to be prepared plans and specification for offsite improvements as
required by the City of Orange Municipal Code far City approval,
and shall construct such improvements in accordance with City-
approved plans and the technical specifications, standards and
practices of the City of Orange.
Desian Ob ectives
The rehabilitation of the Property shall show a high quality of
site planning and architectural design, and a pleasing, safe and
well-maintained environment. The design objectives shall be as set
forth in Developer's Rehabilitation Proposal, dated June 1, 1995,
which is incorporated herein by this referQnce.
Rehabilitation
The Developer, at its sale cvst and expense, shall be responsible
for preparing, and submi ting to the City for approval plans for
tha rehabilitation of the Property. The work of improvement shall
be in accordance with the approved plans, this Scope of
Rehabilitation, the "Proposed Development Program" attached hereto
as Exhibit A, and all applicable cade requirements.
Attachment No. 3
org vs\scope Page 2 af 2
6-8•95
EXHIBIT A
TO SCOPE OF DEVELOPMENT (Attachment No. 3)
PROPOSED DEVELOPMENT PROGRAM
The proposed development program strives to replace the Villa
Santiago af today with the rehabilitated gate-guarded Siena
apartment community, designed for families who enjoy living in the
City of Orange. The development plan incorporates extensive
changes which will dramatically improve the appearance of the
project as well as the quality of each individual unit. Major
rehabilitation will be undertaken once the project is vacated and
escrow has closed. Forast City Properties Corporation is currently
working with its architect (and other consultants) to finalize the
rehabilitation plans and related budget. The scope af work for the
redevelopment includes:
Complete remodel of building exteriors which will give
tha project a newer architectural design
New blockwall perimeter feneing with gate-guarded entries
New kitchen cabinets and cauntertops
New appliances including microwave ovens
Replacement of carpeting and vinyl flooring
New bathroom sinks, faucets, tubs and fixtures
Installation of central air conditioning and .heating
New window coverings
Replacement of all interior entry doors
Painting of exterior and interior
Repair of replacement of all roofs
Repair af replacement of and recoating of asphalt paving
Upgrading of hot water heaters
Upgrading of landscaping and entries
Repair of all structural, mechanical and electrical
systems
Additionally, a sport court, two (2) tot lots and barbecue areas
will be incorporated into the amenities. When completed, the
proposed rehabilitation will result in a quality family-oriented
project which will enhance the neighborhood environment.
org\vs\devpro
ATTACHMENT NO. 4
OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code Section 6103
Recording Requested by:
ORANGE REDEVELOPMENT AGENCY
When Recorded Return to:
Orange Redevelopment Agency
30o East Chapman Avenue
Orange, California 92666-1591
c/o Agency Clerk
SPACE ABOVE THIS LINE FOR RECORDING USE
AGREEMENT CONTAINING COVENANTS
INCLUDING RENTAL RESTRICTIONS,,,},
THIS AGREEMENT is entered into on 1995, by and
between the ORANGE REDEVELOPMENT AGENCY, a public body corporate
and palitic (herein referred ta as "Agency") and ORANGE ASSOCIATES,
a Ca].ifornia limited partnership (hereinafter referred to as
Developer") , and F. C. ORANGE, INC. , a California corporation,
Developer's general partner (hereinafter referred to as "owner) .
A. Owner owns the real property, exclusive of improvements,
located in the City of Orange, County of Orange, State of
California, legally described in the "Legal Description" attached
hereta and incarporated herein as Exhibit A (the "Land") .
Developer owns a leasehold interest in the Land and owns the
improvements naw or hereafter located on the Land (the
Improvements") . For purposes of this Agreement, the Land and the
Improvements shall be referred to collectively as the Property. "
B. Developer intends to rehabilitate the Property and the
residential improvements thereon, consisting of 260 apartment units
and related improvements and amenities, in accordance with that
certain Affordable Housing Agreement entered into between the
Agency and Owner, Developer's general partnez and predecessor in
interest, on 1995, to which this Agreement is
attached as Attachment Na. 4 , (the "Affordable Housing Agreement") ,
which Affardable Housinc} Agreement is incorporated herein by
reference. Any capitalized term not atherwise defined in this
Agreement shall have the meaning ascribed to such term in the
Affordab2e Housing Agreement.
C. This Agreement is entered into and recorded in accordance
Attachment No. 4
org\vs\cov.s Paqe 1 of 138-23-95
with the Affordable Housing Agreement.
D. The parties acknowledge and agree that the covenants and
agreements contained herein that are applicable to the Developer
shall also apply to the Owner to the extent of Owner s interest in
the Property.
NOW, THEREFORE, THE AGENCY, THE DEVELOPER AND THE OWNER AGREE
AS FOLLOWS:
l. Use af the Property. . Developer and Owner, each on behalf
of itself and its respective successors, assigns, and each suc-
cessor in interest to the Property or any part thereof, hereby
covenants and agrees to use the Property as follows:
a. Affordable Rental Housinq Requirements. Developer
and Owner and their respective successars and assigns shall use the
Property exclusively to provide rental housing, as described in the
Affordable Housing Agreement and this Agreement, as follows:
1) The Property shall consist of 260 apartment
units (the "Units") and related amenities, as described in the
5cape of Rehabilitation attached to the Affordable Housing
Agreement as Attachment No. 3 .
2) During the term of this Agreement, all of the
Units (except a manaqer's Unit when occupied by a resident manager)
shall be rented exclusively to persons or families of Low Income
as defined below) , at an Affordable Rent (as defined below) .
Without the express written consent of the Agency, neither
Developer nor Owner shall subdivide its respective interest in the
Property for purposes of selling or otherwise conveying separate
ownErship interests in portions of the Property,
3) The maximum incomes of residential tenants
eligible to rent the Units shall be determined on the basis af the
Area Median Income for Orange County, published from time to time
by the United States Department of Housing and Urban Development
HUD") , the State Department of Housing and Community Development
HCD") or successor agencies. For purposes of this Agreement, the
term "Low Income" shall mean a household income that does nat
exceed 60 of the area median income, adjusted for the actual size
of the hausehold proposed to rent a Unit.
4) The maximum rent that may be charged to such
persons for a Unit, including a reasonable utility allowance, shall
not exceed ari "Affordable Rent, which, for purposes of this
Agreement shall not axceed the product of 30 percent times 60 of
the area median income adjusted for family size appropriate for the
unit (which, for a two-bedroom Unit, shall mean three persons, as
provided in Califarnia Health and Safety Code Sections 50052.5 and
50053) . The parties acknowledge that the current maximum incomes
Attachment No. 4
org\vs\cov.5 page 2 of 138•23-95
are set forth in a memorandum from HCD to Interested Parties, dated
February 1995, entitled "New Income Limits" (referred to herein as
the "HCD Income Schedule") . Prior to initial lease-up of the
Units, the Agency Executive Director and the Developer shall
determine the maximum rents to be charged for each of the Units
not to exceed "Affordable Rent") and the actual maximum income of
tenants who will be eligible for such units (not to exceed 60$ of
the area median income) , on the basis of the then current HCD
Income Schedule. From time to time thereafter, as changes occur in
the area median income (as published by HUD or HCD) , Developer and
Agency shall revise the maximum rents to be charged for each of the
Units (not to exceed "Affordable Rent"} and the actual maximum
incomc of tenants who will be eligible for such units (not to
exceed 60 af the area median income) .
5) Developer shall only lease the Units to persons
or families who qualify as Low Income tenants at the time of income
certification, as described in paragraph (6) , beiow ("Qualified
Tenant") .A person or family who at the time of income
certif ication qualif ied as a Law Income tenant shall continue to be
deemed so qualified, until such time as the person or family's
income is redetermined (as prov ded in paragraph (6) below) , even
if such person or family's income has subsequently increased to an
amount that exceeds 60 of the area median income, adjusted for
family size. Each iease agreement with a tenant shall include
notice to the tenant of the requirements of Section 1 of this
Agreement Containing Cavenants relating ta income restrictions.
6) (A) Agency and appropriate departments of the
City of Orange (the "Gity") , and their respective successors and
assigns, shall have the right to monitor and enforce the covenants
contai.ned in this subsection I..a. Develvper covenants that it
shall comply with any monitoring program set up by Agency and/or
City ta enforce said covenants.
8)Developer shall utilize the forms
provided as Certifications of Eiigibility {attached to this
Agreement as Exhi.bit "B") and Certification of Continuing Program
Compliance (attached to this Aqreement as Exhibit 'C") , which are
incorporated herein by this reference. When a Unit is rented to a
Law Income tenant, Developer shall report utilizing a form
substantially in the form of Exhibit "B. " 1Prior to renting any
Unit to a tenant, and annually thereafter within thirty (30} days
after the anniversary date of such tenant's occupancy, the
Developer shall submit to the Agency a completed income computation
and certification form in the form o€ the Certification of
Eligibility (Exhibit "B") and Certificate of Continuing Program
Compliance (Exhibit "C") . Developer shall certify that each tenant
leasing a Unit meets the eligibility requirements established for
the Unit and further that each tenant is a Low Income household.
C) Reports with respect to each Unit shall
Attachment No. 4
org\vs\cov.5 Page 3 of 13
8-23-95
be submitted to the Agency annually, not later than August 1, for
the most recent year (ending June 30} . Developer shall obtain an
income certification fram each tenant and shall certify that, to
the best of Develaper's knowledge, the income af the tenant is
tru hfully set forth in the income certification form. Reportinq
by the Developer shall conform to the requirements of California
Health and Safety Code Section 33418, and shall further provide
informatioh to the Agency with respect ta the operation of the Site
that will enable the Agency to make appropriate reports pursuant to
California Health and Safety Coda Section 33080.4. The Developer
shall verify the income certification of the tenant in one or mare
of the following methods as specifically requested by the Agency:
i) obtain two (2} paycheck stubs from
the tenant's two (2) most recent pay periods;
ii) obtain a true copy of an income tax
return from the tanant f or the most recent tax year in whictt a
return was filed;
iii)obtain an income verification
certificatian from the employer of the tenant;
iv) obtain an income verification
certification from the Social Security Administration and/or the
Califarnia Department of Social Services if the tenant receives
assistance from such agencies; or
v) obtain an alternate form of income
verification reasonably requested by the Agency, if none of the
above forms of verificatian is available to the Develaper.
On an annual basis Developer or its management agent shall
additianally submit to Agency evidence of each Qualified Tenant's
continuing eligibility for the Units.. Agency (or the City) shall
review such reports within 14 days of receipt, for certification of
continuing affordability of Units and eligibility of tenants.
Moreover, Developer covenants and agrees that it shall pay the
reasonable costs of the Agency (or City) incurred in monitoring and
enforcing these reguirements.
b. Management. Developer, or an affiliated Forest City
entity, shall manage and operate the Project in manner that is
comparable to other affordable multifamily rental housing
developments ma aged by other Forest City entities. Developer
shall be responsib2e for the manaqement of the Project either by
direct management, by a management company that is a wholly owned
suhsidiary of Farest City Enterprises, or by contracting its
managerial functians to a third party entity acceptable to Agency
which will be charged with managing the Project on behalf of
Developer. Prior to the Closing, Developer shall prepare and submit
to the Agency Executive Directvr for approval a management plan
Attachment No. 4
org\vs\cov.5 page 4 of 13
8-23-95
the "Management Plan"j , for the operation and management of the
Project. The Management Plan shali include, but not be limited to,
the components listed be2ow. Approval of the Management Plan must
be obtained prior to the initial Zease-up af any of the Units.
During the term of this Agreement, Developer shall manage the
Units in accordance with the approved Management Plan, including
such amendments as may be approved in writinc} fram time to time by
the Agency Executive Director or desiqnee. The camponents of the
Management Plan shall include:
jl) Manaaement Ac1ent Developer shall submit the
name and qualifications of the proposed Management Agent. Agency
shall have the right to review and approve any such entity prior toitsselectionbyDeveloper. 8uch approval shall not be unreasonablywithheld, and any disapproval shall be based on the experience and
qualifications of the Management Agent.
2) Manaqement Acxreement Developer shall submit a
copy of the proposed management agreement specifying the amount of
the management fee, and the relationship and division of
responsibilities between Developer and Management Agent. Developer
shall include in any agreement with the Management Agent a
provision permitting Developer to termina e the agreement in the
event that the Management Agent fails to cure any breach of this
Agreement or violation of federal, state or local health and safety
laws within thirty (30) days following the giving of notice of such
violations by the Agency or any other governmental entity.
3) Annual BudQet and Proiected Cash Flows Prior
to the Closing, and annually thereafter not later than February 1
of each calendar year, Developer shall submit a projected operating
budget and cash flow to the Agency Executive Director or desiqnee,
demonstrating that there is sufficient cash Plow to operate the
Project in a reasonable and prudent manner in accordance with this
Agreement. The budget and cash flow shall be in a form that is
ac eptable to the Agency Executive Director or designee.
4)enant Selection Criteria. Developer shall
adopt written tenant selection policies and criteria that meet the
following requirements:
A) Are consistent with the purpose of
providing housing for Low Income tenants.
B} Are reasonably related to program
eligibility anci the applicants' ability to perform the obligations
of the lease.
C) Provide for the selection of tenants from
a written waiting list in the chronological order of their
application, insofar as is practicable, and the prompt written
notification to any rejected applicant of the grounds for any
Attachment No. 4
org vs\cov.5 Page 5 Of 13B-23-95
rejection.
D) Provide first priority in the selection of
eligible tenants to households referred to Developer by the Aqency.
E} To the extent that Developer's tenant
selection criteria include a restriction on maximum household size,
such restriction shall not be mare restrictive than the definition
of "family size appropriate to the unit" set forth in California
Health and Safety Code Section 50052 . 5 (i.e. , three persons in the
case of a two-bedroom Unit) , nor shall they permit more than five
5) persons to occupy a two-bedroom Unit.
5) Rules and Requlations. The Managernent Plan
shall include such reasonable ruies and regulations relating to the
conduct of tenants and use of the Units and common areas as are
customary for new apartment communities in the region, and as
Developer may deem necessary or appropriate. The Agency hereby
approves the "Apartment Cammunity Policies Addendum" attached
hereto as Exhibit "D" which is incorporated herein by this
reference. To the extent the Management Plan contains rules
different than those set forth in Exhibit "D", such rules shall be
subject to the appraval of the Agency Executive director.
c. Exterior Maintenance.Prior to the Closing,
Developer shall prepare and submit to the Agency Executive Director
for approval a program for the maintenance of the exterior of the
improvements that comFlies with this subsectian l.c. (the "Exterior
Maintenance Proqram") . Developer shall maintain the exterior of
the improvements in good condition in accordance with the Exterior
Maintenance Program, as the same may be amended from time ta time
with the approval of the Agency Executive Director. The Exterior
Maintenance Pragram shall describe in reasonable detail the
standards to be followed in maintaining the exterior of the
improvements, including a schedule indicating the proposed
frequency of each element of maintenance, and shal. include, at a
minimum, the following: periodic cleaning of the exterior of the
improvements, including windows; removing graffiti; removing debris
and waste materials and otherwise maintaining outdoor areas of the
Project; performing inspections of all exterior features to
determine whether repairs are required; conducting periodic
pratective treatments such as rust removal and caulking; conducting
repairs to facades, roof, doors, windows, and other exterior
features; maintaining security devices and systems; and periodic
repainting. The Exterior Maintenance Program, including any
amendments proposed by Daveloper, shall be subject to the. approval
of the Agency Executive Director or his designee. In the event
Developer fails to maintain the exterior of the improvements in
accordance with the approved Exterior Maintenance Program, the
Agency shall have the right, but not the obligation, tQ enter the
Property, correct any violation, and hold the Developer responsible
for the cost thereof, and such cost, un il paid, shall constitute
Attachment No. 4
org\vs\cov.s Page 6 of 138-23-95
a lien an the Property.
d.Alterations and Modifications. Developer shall
protect, maintain and preserve the improvements on the Property and
obtain approval in writing from Agency priar to any material
alteration or modification of such Improvements, such approval not
to be unreasonably withheld or delayed.
e. Non-Discrimination. Developer herein covenants by
and for itself, its heirs, executors, administrators and assigns,
and all persans claiming under or through them, and this Agreement
is made and accepted upon and subject to the following condi-
tions:That there shall be na discrimination against or
segregation of any person or group of persons on account of race,
coldr, creed, religion, sex, sexual orientation, marital status,
national origin or ancestry in the leasing, subleasing, renting,
transferring, use, occupancy, tenure or enjoyment of the Property,
nor shall Developer itself, or any person claiming under or through
it, establish or permit such practice or practices of
discrimination or segregation with reference ta the selection,
location, number, use or occupancy of tenants, lessees, sublessee,
subtenants, or vendees in the Property.
f. Reauired Non-Discrimination Cl ses. Developer
shali refrain from restricting the rental, sale, or lease of the
Property ar any portion thereof, on the basis of race, color,
creed, religian, sex, sexual orientation, marital status, national
origin, or ancestry of any person. Every deed, lease, and contract
entered into with respect to the Property, or any portion thereof,
after the date of this Agreement shall contain or be subject to
substantially the following nondiscrimination or nonsegregation
clauses:
1) In deeds: "The grantee herein covenants by and
for itself, its successors and assigns, and all persens claiming
under or through them, that there sha l be no discrimination
against or segregation of, any persan or group of persons on
account af race, color, creed, religian, sex, sexual orientation,
marital status, national origin, or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land
herein canveyed, nor shall the grantee itself or any person
claiming under or through it, establish or permit any such practice
or practices of discrimination or segregation with reference to the
selection, Iecation, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the land herein conveyed. The
foxegoing cavenants shall run with the land. "
2} In leases: "The lessee herein covenants by and
for itself, its successors and assigns, and all persons claiminq
under ar through them, and this lease is made and accepted upon and
subject ta the following conditions: That there shall be no dis-
crimination against or segregation of any person or group of
Attachment No. 4
org\vs\cov.s page 7 of 13
5-23-95
persons on account of race, color, creed, religion, sex, sexual
orientation, marital status, national origin, or ancestry in the
leasing, subleasing, transferrinq, use or enjoyment of the land
herein leased nor shall the lease itself, or any person claiming
under ar through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants or vendees in the land herein leased. "
3) In contracts: "There shall be no discrimina-
tion against ar segreqation of, any person, or group of persons on
account of race, color, creed, religian, sex, sexual orientation,
marital status, national origin, or ai cestry in the sale, lease
sublease, transfer, use, accupancy, tenure or enjoyment of the
land, nor shall the transferee itself or any person claiming under
or through it, estab ish or permit any such practice or practices
of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the land. "
g. Indemnity and Insurance.
2) Developer agrees to and shall defend, indemnify
and hold the Agency and its officers, employees, agents,
contractors and attorneys harmless from and against all claims,
liability, loss, damage, costs or expenses (including reasonable
attorneys' fees and court costs) arising from or as a result of the
death of any person or any accident, injury, loss or damaqe
whatsoever caused ta any person or to the property of any person .
which shall occur on or adjacent to the Property and which shall be
directly or indirectly caused by any acts done thereon b, ar any
errors or omissions of, the Developer or its partners, employees,
contractors or agents.
2 Developer shall mazntain a policy or policies
of the following types of insurance on the Property:
A)Liability insurance, which provides
coverage not less than that provided in the form of a comprehensive
general liability insurance policy against liability for any and
all claims and suits far damages or injuries to persons or property
resulting from or arising out of operations of Developer, its
off icers, agents, or employees. Said policy or policies of
insurance shall provide coverage for both bodily injury and
praperty damage in no less than Ten Million Dollars ($10,000,000)
combined single limit, or its equivalent, increased annuaZly by the
increase, if any, in the consumer price index (CFI) .
B) Insurance covering the improvements
existing or hereafter erected on the Praperty aqainst loss by fire
and other hazards, casualties and contingencies, including
earthquakes (if available at commercially reasanable rates) . All
Attachment No. 4
org\vs\cov.s page 8 of 13
8-23-95
such insurance shall be evidenced by standard fire and extended
coverage insurance policy or policies, in the amount of the
replacement value af the improvements.
C) All such policies shail name the Orange
Redevelopment Agency, as insured or additional insured, and be
endorsed with a standard mortgage clause with loss payable to the
Agency. Certificates thereof together with copies of original
policies shall be delivered to Executive Director. All of said
policies shall contain a provision that no termination,
cancellation, or change af coverage of insured shall be effective
until after thirty (30) days notice thereof has been given in
writing to Executive Director. Developer shall give to Executive
Director prompt and timely notice of elaim made or suit instituted
arising out of Developer's operations hereunder. All insurance
policies shall be written by responsible and solvent insurance
companies.
h. Property Taxes and Assessments. Developer shall pay
when and as due (and shail not apply for any deferral ar exemption
of) any real estate taxes and assessments assessed and levied on or
against the Property. The Developer shall not place, or allow to
be placed, on the Property or any portian thereof, any mortgage,
trust deed, encumbrance or lien not authorized by this Agreement,
except as may be reasonable and customary in the rehabilitation and
operation of multifamily housing similar to the Praject. The
Developer shall remove, or shall have removad, any levy or
attachment made on the Property (or any portion thereof) , or shall
assure the satisfaction thereof within a reasonable time but in any
event prior to a tax sale or foreclosure of the Property. Nothing
herein contained shall be deemed to prohibit the Developer from
contesting the validity or amount of any tax assessment,
encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto.
2. Covenant,_,,,tun With the Land. All conditions, covenants
and restrictions contained in this Agreement shall be covenants
running with the land, and shall, in any event, and without regard
to technical classification or designation, legal or otherwise, be,
to the fullest extent parmitted by law and equity, binding for the
benefit and in favor of, and enforceable by Agency, its successors
and assigns, and the City of Orange and its successors and assigns,
against Developer, its successors and assiqnsr to or of the
Property or any portion thereof or any interest therein, and any
party in passessian or occupancy of said Pzoperty or portion
thereof. Agency. and the City shall be deemed the beneficiaries of
the covenants, canditions and restrictions of this Agreement both
for and in their own rights and for the purposes of pratecting the
interests of the community. The covenants, conditions, and
restrictions shall run in favor of the Agency and the City, without
regard to whether the Agency or City has been, remains, or is an
owner of any part of the Property or interest therein. Except as
Attachment No. 4
org\vs\cov.s Page 9 of 13
8-23-95
pravided in the preceding sentence, the covenants, canditions and
restrictians contained in this Agreement shall not benefit nor be
enforceable by any other person.
3 . Prvhibition aaainst Transfers
a. Except £or a Permitted Transfer (defined below) , or
as otherwise specifically permitted by this Agreement, Developer
shall not assign all or any part of its interest in the Project
and/or the Property, or any part thereof or interest therein, or
its interest in this Agreement or any right or obligation herein,
or enter into an agreement to da any of the foregaing, or
accomplish any of the foregaing indirectly by changes in the
ownership, manaqement or control of Developer, withaut the prior
written approval of the Agency, which approval shall not he
unreasonably withheld or conditianed. This prohibition shall not be
deemed to prevent the granting of easements or permits to
facilitate Rehabilitation of the Project pursuant to the Affordable
Hvusing Agreement, to prohibit or restrict the renting for
occupancy of the Units, or to prohibit Permitted Transfers.
b. Without the prior written appraval of he Agency
Executive Director, there shall be no material and adverse chanqe
in the management of the Developer, or with respect to the identity
of the parties in control of the Developer or the deqree thereof,
by any method or means (other than routine and periodic changes in
board membership and staffing, or as otherwise approved by the
Executive Director) . Natwithstanding the foregoing, Developer
shall not be in default of this subparagraph b, so lonq as
Developer remains owned and contralled by Forest City Properties
Corporation or another Forest City entity.
c. The Developer shail promptly notify the Executive
Director of any and all material and adverse changes in management
or control of Develaper, of which it or any of its afficers have
been notified or otherwise have knowledge or information.
d. If, in violation of this Section 3, there is a
significant material and adverse change in the ownership,
management ar control of Developer, ar an assignment by Developer,
which is not approved by the Agency Executive Director, the Agency
may take such reasonable action as the Agency may deem appropriate
to ensure that the purposes of this Agreement will be carried out,
including withaut limiting the generality af the foregoing,
terminating this Agreement and exercising any of Agency's riqhts.
e. For purposes of this Agreement, the term "Permitted
Transfer" means any of the followinq:
i) a conveyance of a security interest in the
Property or Project to. a Senior Lender, ta secure a Senior Loan, or
the conveyance of tit2e to the Property or Project in connection
Attachment No. 4
org vs\cov.5 page 10 Of 13
8-23-95
with a fareclosure or a deed in lieu of foreclosure of such loan;
ii) (A) Subject to subparagraph {ii} (B) , below, a
conveyance of the Property or Project to a limited partnership in
which Developer's general partner or any other Forest City Entity
is the controlling and managing general partner, or a sale back
from such partnership to such general partner, or the substitution
of such general partner as directed by the investor limited partner
in accordance with the terms of the Developer's partnership
agreement.
B) Notwithstanding any provision to the contrary
contained herein, any event described in subparagraph (ii) (A) shall
not be deemed to be a Permitted Transfer unless the Executive
Director or designee reasanably determines, which determination
shall not be unreasonably withhe d, that Developer's general
partner, Forest City Properties Corparation or another Forest City
enti y remains, or the limited partner providing any portion of the
Develaper's Equity (or such limited partner's designee) , or any
other entity reasonably acceptable to the Agency's Executive
Directar (which shall not be unreasonably withheld) becomes, the
controlling and managing general partner of the Developer.
iii) The conveyance of security interests in the
Property and the Praject to FNMA in connection with the issuance of
the Bonds.
iv) Any other refinancing that repays a Senior
Loan (referred to herein as a "Take-out Loan") , if the Agency
Executive Directar reasonably determines (which determination shall
not be unreasonably withheld) that the resulting loan-to-value
ratio will not exceed 90 (including the Take-out Loan and the
Agency Loan) , and the repayment terms of the Take-out Loan do not
materially impair the Developer's ability to repay the Agency Loan.
v) The leasinq for occupancy of all or any part of
the Property or Project.
vi) The inclusion of equity participation by
Developer by transfer or addition of limited or general partners to
the Developer or similar mechanism.
4. Aqency's Rights in Event of Breach. Agency shall have
the right, in the event of any breach of any agreement or covenant
contained herein, to exercise all applicable rights and remedies,
and to maintain any actions at law or in equity or other proper
proceedings to enforce the curing of such breach of agreement ar
covenant. Performance of Developer's obligations pursuant to this
Agreement is secured by that certain Deed of Trust and Assignment
of Rents in favor of Agency, recorded concurrently with this
Agreement.
Attachment No. 4
org\vs\cov.s page l i of 3
8-Z3-95
5. Effect of Breach. No violation or breach of the
covenants, conditions, restrictions, provisions or limitations
contained in this Agreement shall defeat or render invalid or in
any way impair the lien or charge of any permitted deed of trust or
other security instrument recorded on the Property, provided,
however, that, except in the case of a Senidr Encumbrance (as
defined in the Affordable Housing Agreement) , any subsequent owner
of the Property shall be baund by the covenants, conditions, re-
strictions, limitations and provisions of this Agreement, whether
such owner's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale ar otherwise.
6. Te m of Agreement. The covenants against discrimination
set forth in subsections l.e and i.f of this Agreement shall remain
in effect in perpetuity. Every other covenant and condition and
restrictian contained in this Agreement shall remain in effect for
the longest feasible time, but not less than 55 years from the date
hereof. At any time after 55 years from the date hereof, Developer
may request that Agency modify or remove all or any part of the use
restrictions set forth herein. In cannection with any modification
or removal of all or any part of the use restrictions, Developer
will be required to demonstrate that it is no longer feasible to
operate and maintain the Project in a decent, safe and sanitary
manner, considering the limited rents allowed pursuant to
subsection l.a of this Agreement. If Agency finds that it is
necessary to modify or remove all or part of the incame and rent
restrictions applicable to the dwelling units to ensure the
continued operation and maintenance of the project in a decent,
safe and sanitary manner, Agency shall either (a) agree to remove
or modify all or part of the restrictions on tenant income and
rents, as Agency may deem necessary to ensure the continued
economic feasibility of the project; or (b) offer additianal
financial subsidy or other assistance to the praject in an amount
which will ensure the continued econamic feasibility of the project
and the continuation of the income and rent restrictions.
Attachment No. 4
org\vs\cov.5 page 12 af 13
8-23-95
IN WTTNESS WHEREOF, the Agency, the Developer and the Owner have
signed this Agreement as of the dates set opposite their
signatures.
ORANGE REDEVEL PMENT AGENCY
Dated:By:
Executive Director
ATTEST:
By:
Agency Clerk
APPROVED AS T FORM AND LEGALITY:
KANE, BALLMER & BERKMAN
Agency Special Counsel
By:
Glenn F. Wasserman
Developer"
ORANGE ASSOCIATEB, a California
lin ited partn r$hip
By: F. C. Oranqe, inc., a California
corporation, its qeneral parta r
Dated:By:
Gregory M. Vilkin
President
Owner"
F. C. ORANGE, ZNC. , a Califoznia
corporatian
Dated•By:
Gregory M. Vilkin
President
Attachment No. 4
ory\vs\cov.5 page 13 of 13
8-23-95
EXHIBIT "A"
TO AGREEMENT CONTAINING COVENANTS (ATTACHMENT N0. 4)
LEGAL DESCRZPTION OF THE PR PERTY
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY
OF ORANGE, CITY OF ORANGE, DESCRIBED AS FOLLOWS:
LOTS 13, 14, 15, 16, 26 AND THE SOUTHERLY 7 FEET OF LOT 17
EXCEPTING THAT PORTION LYING WEST OF THE EAST LINE OF MCPHERSON
ROAD SY FINAL ORDER OF CONDEMNATION RECORDED FEBRUARY 21, 1991 AS
INSTRUMENT NO. 91-078842, OFFICIAL RECORDS) , OF THE G. HOWARD
THOMPSON TRACT, AS SHOWN ON A MAP RECORDED IN BOaK 1 FAGE 22 OF
RECORD OF SURVEYS, IN THE OFFICE THE COUNTY RECORDER OF ORANGE
COUNTY, CALIFORNIA, AND THAT PORTION OF THE NORTH HALF OF CENTER
STREET ADJOINING SAID LOTS 13 , 14, 15 AND 26, LYING HETWEEN THE
CENTERLINE OF MAIN STREET AND THE EAST LINE OF FIRST STREET,
ABANDONED BY ORDER OF THE BOARD OF SUPERVISORS OF ORANGE COUNTY,
CALIFORNIA, A CERTIFIED COPY OF WHICH WAS RECORDED MAY 25, 1927 IN
B OK 55, PAGE 60 OF OFFICIAL RECORDS.
EXHIBIT "B"
TO AGREEMENT CONTAINTNG COVENANTS (ATTACHMENT NO. 4}
CERTIFICATION OF ELIGIBILITY
Low Income Households)
Part I - Generai Information
1. Project 2. Project 3 . Name of 4. Landlord's
Name Lacation Len@er Name
Part II - Unit Informatio
7.Unit 8. Number of 9. Monthly 10. Number of
Address Bedrooms Payment Occupants
Part III - Affidavit of Renter
I. and I,
as applicants for rental of a Low Income Unit in the above-
described Project, do hereby represent and warrant as follows:
A. (My/Our) adjusted income {anticipated total annual
income) does not exceed sixty percent (60) of the
median gross income for orange County as such income
levels are estab].ished and amended from time ta time
pursuant to Secticn 8 of the United States Housing Act
cf 1937 and published by the State Department af
Housing and Community Development in the California
Administrative Code. (Z/We) understand that the
applicable median grass income is $ The
following computation includes all income (Ijwe)
ariticipate receiving for the 12-month period beqinning
on the date (I/we) execute a renta2 agreement for a Low
Income Unit ar the date on which (I/we) will initially
occupy such unit, whichever is earlier.
Exhibit B
org\vs\cert.bl pd 2 1 O f 67-26-45 g
1. For the renter and all family members include:
a) amount of wages, salaries, overtime pay,
commission, fees, tips and bonuses, and
payments in lieu of earnings, such as
unemployment and disability compensation,
worker's compensation and severance pay
before payroll deductions}
b) net income from business or profession or
rental oP property (without deduction for
repayment of debts or expansian af business
c) interest and dividends
d) periodic receipts such as social security,
annuities, pensions, retirement funds,
insuranae policies, disability or death
benefits, alimony, child support, regular
contributions ar gifts from persons not
occupying the unit
e) public assistance allowance or qrant plus
excess of maximum allowable for shelter or
utilities over the actual ailowance for such
purposes
f) regular and special pay and allowances of
a member of armed services (whether or not
living in the dwelling) who is head of the
family or spause
Subtotal (a) through (f)
Less: portion of above items which are
income of a family member who is less than
18 years old or a full-time student
Total Eligible Income
Note: The following items are not considered income:
casual or sporadic gifts; amounts. specifically for or in
reimbursement of inedical expenses; lump sum payment such as
inheritances, insurance payments, capital gains and settlement
for personal or property losses; educational scholarships paid
directly to the student or educational institution; government
benefits to a veteran for education; special pay to a serviceman
continued. . . )
Exhibit B
org\vs\cert.bl page 2 of 6T-26•95
2. s of the first day of occupancy of the unit which (I/we)
propose to rent either (a) (I/we) am/are not an individual
enrolled as a full-time student during each af five (5)
calendar months during the calendar year in which occupancyoftheunitbeqinsataneducationalinstitutionwhich
normally maintains a regu3ar facility and curriculum and
normally has a regularly enrolled body of students in
attendance and is not an individual pursuing a full-time
course of institutional Qr farm training under the
supervision of an accredited agent of such an educational
organization ar of a state or political subdivision thereof
or (b) if all of the occupants of the unit wiZl be
individuals described in (a) , either (I/we) a/are a husband
or wife entitled ta make a single return jointly of Federalincometaxes.
3 . This affidavit is made with the knowledge that it will be
relied upon by the Landlord to determine maximum income for
eligibility and (I/we) warran tha all information set
forth in this document is true, correct and complete and
based upon information (I/we) deem reliable and that the
estimate cantained in paragraph 1 of this Part III is
reasonable and based upon such investigation as the
undersigned deemed necessary.
4. (I/We) will assist the LandlQrd in obtaining any information
or documents required to verify the statements made in this
Part III and have attached hereto copies of federal incame
tax returns for the past two years.
5. (I/We) acknowledge that (I/we) have been advised that the
makinq of any misrepresentation or misstatement in this
affidavit will constitute a material breach of (my/our)
agreement with the Landlord to rent the unit and will
i continued)
head of family away fzvm home and under hostile fire; foster
child care payments; value of caupon allotments far purpose of
food under Food Stamp Act of 1964 which is in excess of amount
actually charged the eligible household; relocatian payments
under Title II of Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970; payments received pursuant to
participation in the following programs: VISTA, Service Learning
Programs, and Special Volunteer Programs, SCORE, ACE, Retired
Senior Volunteer Program, Foster Grandparent Program, Older
American Community Services Proqram, and National Volunteer
Program to Assist Small Business Experience.
Exhibit B
org vs\cert.bt
Pa e 3 O f 6zs-qs 9
additionally enable the Landlord and/ar Orange Redevelapment
Agency to initiate and pursue all applicable legal and
equitable remedies with respect to the unit and ta me/us.
I/We) do hereby swear under penalty of perjury that the
foregding statements are true and correct.
Date Applicant
STATE OF CALIF RNIA )
5S.
COUNTY OF RANGE
On before me, personally
appeared personally knawn
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is/are subscribed ta the within
instrument and acknowledged to me that he/she/they executed the
same in hisJher/their authorized capacity(ies) , and that by
his/her/their signature(s) on the instrument the person(s) , or
the entity upan behalf of which the person{s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature
Exhibit B
ora\vs\cert.bt page 4 of 6
z6-
INCOME VERIFICATION
for retired persons)
The undersigned has applied for rental of a dwelling unit
located in a redevelopment hausing project in the City of Orange.
Every income statement of a prospective renter must be
stringently verified. Please indicate below the current annual
income from pension, social security, disability, or any other
form of compensation received on a regular basis.
PENSION INCOME
SOCIAL SECURZTY
DISABILITY
OTHER INCOME
TOTAL CURRENT
INCOME
I hereby certify that the statements above are true and complete
to the best of my knowledge.
Signature Date Title:
Name (Print) :
Employer or Other 5ource of Income:
Phone Numb r:
I hereby grant permission to disclose my income to the Agency and
the Project Operator, in connection with
my proposed rental of a dwelling unit located in their project.
Signature Date
Name {Print) :
Please send to•
Orange Development Agency
Housing Division
300 East Chapman Avenue
Orange, California 92666
Exhibit .B
org vs eert.bl
pa e 5 C f 67-26-95 g
INCOME VERIFICATION
for employed persons)
The undersignad employee has applied for rental of a
dwelling unit located in a redevelopment housing project in the
City of Orange. Every incame statement of a prospective renter
must be stringently verified. Please indicate below the
employee's current annual income from wages, overtime, bonuses,
commissions ar any other fvrm of campensation received on a
reguiar basis.
ANNUAL WAGES
OVERTIME
BONUSES
COMMTSSIONS
TOTAL CURRENT
INCOME
I hereby certify that the statements above are true and complete
to the best of my knowledge.
Signature Date Title:
Name (Print) :
Employer or Other Source of Income:
Phone Number:
I hereby grant permission to disclose my income to the Agency and
the Praject Operator, in connection with
my proposed rental af a dwelling unit located in their project.
Signature Date
Name (Print) :
Please send to•
Orange Development Aqency
Housing Division
300 East Chapman Avenue
Orange, California 92666
Exhibit B
org vs\cert.bl paqe 6 Of G7-26-95
ExxrszT c
TO AGREEMENT CONTAINING COVENANTS (ATTACHMENT NO. 4)
ANNUAL CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
The undersigned, being duly authorized
ta execute this certificate on behalf of ORANGE ASSOCIATES (the
Owner") , hereby repreaents and warrants that:
1. He/She has read and is thoraughly familiar with the
provisions of the Aqreement Containinq Covenants ('Agreement") by
and between the ORANGE REDEVELOPMENT AGENCY (the "AgenCy") and
F. C. oRANGE, INC. , which has been assigned to the Owner, to which
this certification is an attachment.
2. As of the date of this certificate, the following
percentages of completed residential units of the Praject (i) are
currently occupied by Low Incame Tenants (as defined in the
Agreement) ; or (ii) are currently vacant and being held available
for such occupancy and have been so held continuously since the
date a Low Income Tenant vacated such unit, as indicated:
Occupied by Low Income
Tenants: Unit Nos. :
Held vacant for occupancy
continuously since last
occupied by Low
Income Tenants: Unit Nos. :
occupied by Senior Citizens
and Qualified Permanent
Residents Unzt Nos. :
Held vacant for occupancy
continuously since last
occupied by Senior Citizens
and Qualified Permanent
Residents Unit Nos. :
Exhibit C
org\vs\eert.el page 1 Of 2s-z-9s
ORANGE ASSOCIATES,
a California limited partnership
By: F. C. ORANGE, INC. , a
California corporation, its
general partner
Dated:By:
Gregory M. Vilkin
President
Exhibit C
org\vs\cert.cl PgC @ 2 Of 2
s-iz-95
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ATTACHMENT NO. 5
PROJECT BUDGET
VILLA SANTIAGO
Source and Ose Statemeat
All fiqure are in QOG's)
SOURCES AT CLOSING
Construction Loan 14,41
Initial Develaper Equity 2 5pp-
Sub-total 16,919
Agency Funds 7,500
Agency Grant 3,750
Agency Loan 3,750
TOTAL $QURCES AT CLOSING 24,419
SOuRCES AT TAKE-OUT
Permanent Financing Mortgage 13,500
Developer's Equity 6,000
Sub-total 19,500
Agency Funds 7,500
Agency Grant 3,750
Agency Loan 3,750
TOTAL SOURCES A TARE-OUT 27,000
Deve2oper will provide Initial Equity in the amount of
2,5oo, 00Q in cash, at the Closing, and will pledge the
availability of an addit onal $3,500, 000, which will be fully
funded not later than the time the Construction Loan is repaid
with permanent financing proceeds.
ATTACHMENT NO. 5
org\vs\budset.5 page 1 of 2
8-20-95
USES
Land and Building 14,000
Building Construction 4,02
Relocation Payments 4, 500
Contingeney 400
Contractor's Fees 300
Developer's Fees/Overhead ** 513
G & A Fee ** 513
Legal, Accounting, Incurance I10
Taxes 76
Permits & Fees 50
Architectural & Engineering 77
Marketing & FFE 375
Loan Fees 765
Interest 1,297
TOTAL USES 27,000
Fee will be increased to the extent of any cost
savings to a maximum of $1, 000, 000 (5) .
r $3 , 125,000 to be deposited into a Relocatian Account at
the time of Closing; the balance to be paid out in Rental
Assis ance Payments in accordance with the final Relocation Plan,
estimated to be approximately $687,500 in each of 9/97 and 9/98.
ATTACHMENT NO. 5
or9\vs\budset.5 paqe 2 Of 28-20-95
ATTACHMENT NO. 6
CONDITIONS PRECEDENT TO CLOSING
Prior to the time provided in the Schedule of Performance for
Closing, the followinq conditions shall be satisfied:
1. Developer shall have obtained City approval of finai
Rehabilitation Plans.
2. DevelQper shali deliver to the Agency the Rehabilitation
Contract, or, in the alternative, the major subcontracts, as
provided in Section 4 .2 of the Affordable Housing Agreement.
3 . Developer shall deliver to the Agency, and Agency shall
approve, any revisians to the final Project Budget attached to
the Affordable Housing Agreement as Attachment No. 5,
demonstrating to the satisfaction of the Agency the
availability of sufficient funds to pay all Project Costs.
4. Developer shall deliver to the Agency evidence acceptable to
the Executive Director that Developer's Equity will be
available to pay Project Costs, in the amount required by the
final Project Budget, and that the Initial Equity is available
to be funded at the Closing.
5. Developer shall deliver to the Agency a list of ail permits
required for the Project, demonstratinq that a12 approvals
have been obtained, and that all conditions for the issuance
of all necessary permits have been satisfied (with the
xception of conveyance af title, which shall accur upon the
Closing, and payment of fees, which payment is provided for in
the approved Project Budget) .
6. Developer shall deliver to the Agency, and the Agency shall
approve, evidence of the Insurance Policies required by
Section 4.7 of the Affordable Housing Agreement.
7. Developer shall deliver to the Agency the executed Agreement
Containing Covenants, in recordable form, to be recorded upon
tha Closing.
8. Developer shall deliver to the Agency, and the Agency shall
approve, the Management Plan as provided in the Agreement
Containing_Covenants.
9. Developer shall deliver to the Agency, and the Agency shall
approve, the Exterior Maintenance Program as provided in the
Agreement Containinq Covenants.
Attachment No. 6
org\vs\cond.s Pa e 1 o f 38-23-95 g
10. Developer shall deliver to the Agency the executed Agency
Promissory Note, and executed Agency Deed of Trust, in
recordable form, to be recorded upon the Closing.
11. Developer shall cause to be delivered to the Agency the
Assignment and Assumption Agreement, as set forth in Section
1.5(b) of the Affordable Housing Agreement.
12. Developer shall cause to be delivered ta the Agency the
Guaranty, executed by Forest City Enterprises, Inc. , as set
forth in Section 1.5(c) of the Affordable Housing Agreement.
13. Developer shall cause to be delivered ta the Agency the
agreement reqarding subordination, as set forth in Sectian 5.9
of the Affordable Housing Aqreemeht.
14. De eloper shall cause to be delivered to the Agency any other
Disbursement and Intercreditor Agreement between the Agency,
the Developer and the Construction Lender.
15. A title insuranc company acceptable to the Agency shall ba
prepared to issue to the Agency a lender's policy of title
insurance, substantially in the same form required by the
holder of the Senior Encumbrances.
i6. The Agency and City Council, as the case may be, shall have
taken all actions which are legally required to be taken to
authorize and approve the Affordable Housing Agreement, all
attachments thereto and the transactions contemplated thereby.
17. The City shall have taken all actions which ar legally
required to be taken to authorize and approve the issuance of
the Bonds, if applicable.
18. The Agency Executive Director shall determine that Developer
is not in breach of any provisions under the Affardable
Housing Agreement, or shall waive any such breach.
19. All documents required to carry out the transactions
contemplated by the Affordable Hvusing Agreement shall have
been duly executed, acknowledged and delivered.
20. All conditions for close of escrow for conveyance of the
Property to Developer shall have been satisfied, with the
exception of those canditions which shall be satisfied upon
the payment of the purchase price and close of escrow.
21. All appropriate parties (including Developer, City, Agency and
all Senior Lenders) , shall have approved all the terms,
Attachment No. 6
org\vs\cond.5 page 2 of 3
8-23-95
conditions and pravisions of the Bond Documents, Construction
Loan documents and Credit Enhancement documents, so that the
combined amount of the Agency Funds, Developer's Equity and
the Seniar Loans wili be sufficient to pay all Project Costs,
and the City s bond counsel and underwriter shall have advised
tha City that the transactian may close and the Bonds may beissued.
22 . AZ1 Bond Documents and documents relating to all the other
Senior Loans shall have been duly executed, acknowledged and
delivered.
Attachment No. 6
org\vs\cond.s Page 3 of 3s-za-os
ATTACHMENT NO. 7
PROMI8SORY NOTE
TO T8E ORANGE REDEVELOPKENT AGENCY
VILLA SANTIAGO)
2% Orange, California
3,750, 000 1995
FOR VALUE RECEIVED, OR,ANGE ASSOCIATES, a California limited
partnership ("Developer"} , hereby promises to pay to the RANGE
REDEVEL PMENT AGENCY ("Agency") , a public body, corporate and
politic, or order, a principal amount af THREE MILLION SEVEN
HUNDRED FIFTY THOUSAND DOLLARS and Nn/100 Cents {$3,750,OOQ) ar so
much thereof as may be advanced by the Agency ta the Developer
pursuant to the Affordable Housing Agreement dated on or about the
date hereof, between the Developer and the Agency (the "Loan
Agreement") . The obligation of Developer to Agency hereunder is
subject to the terms of the Laan Agreement, this Nate, an Agreement
Containing Covenants dated on or about the date hereof, and a Deed
of Trust dated on or about the date hereof and given by Developer
to Agency for the purpose of securing this Note and certain other
obligations. Said documents are public records on file in the
affices of Agency, and the provisions of said documents are
incorporated herein by this reference. The Developer shall pay
interest at the rate, in the amount and at the time hereinafter
provided.
1. Definitions. Any capitalized term not otherwise defined
herein shall have the meaning ascribed to such term in the Loan
Agreement. In addition, the following terms shall have the
follawing meanings:
Aaency Funds" shall mean the portion of the Saurces
consisting of the Agency Grant and the Agency Laan.
Agencv Grant" shall mean that portion of the Agency
Funds othEr than the Agency Loan, equal to the sum of $3,750,00,
to be paid to F. C. Orange, Inc. , as a grant, to be used to pay a
portion of the Project Costs in accordance with this Agreement.
Agency Loan" shall mean that portion of the Agency Funds
fox the Project equal to $3,750, 000, to be used tc pay a portion af
the Project Costs, evidenced by this Note.
Annual Financial Statement" shall mean the financial
statement of Revenue and Operating Expenses for the Project,
prepared at the Developer's expense, by an independent certified
orglvs\note.4 page 1 Of 13
8-23-95
public accountant reasonably acceptable to the Agency, which shall
form the basis for determining the Residual Receipts.
Bonds" shall mean the bonds to be issued by the City of
Orange for the Project, as describad more fully in Section 2 .2 of
the Loan Agreement.
Closina" shall mean the paint in time when the Bonds are
issued by the City, the Construction Loan is made and Developer
closes escro to acquire the Property.
Constructian Loan" shall mean construction period
financing in an amount that is anticipated not ta exceed
approximately $14,400,000, to be obtained by Developer at the
Closing (the maker of such loan to be referred to as the
Construction Lender") , and to be secured by a deed af trust that
is senior and superior to the Deed of Trust securing the Agency
Loan.
Credit Enhancement" shall mean the Washington Capital
Permanent Loan Commitment and Fannie Mae Mortgage Backed
Security/Delegated Underwriting and Servicing Bond Credit
Enhancement, or other similar financing mechanism, providing for
the commitment of the F'NMA, to be issued at the Closing to pravide
security for and facilitate the issuance of the Bonds.
Developer's EQuity" shall mean any funds expended by
Developer to pay Project Costs (as defined in the Loan Agreement) ,
other than the Agency Funds and the proceeds of a Senior Loan.
Developer's Preferred Return" shall. mean a ten percent
10} internal rate af return, calculated as a return af
Developer's Equity plus a cumulative annuai amount equal to ten
percent (10) of the Developer's Equity.
FNMA" ar "Fannie Mae" shall mean the Federal National
Mortgage Association.
Forest City Entity" shall mean any corparation that is
a wholly-owned subsidiary o€ Forest City Enterprises.
Limited Pa ner Capital Contributions" shall mean the
equity to be provided by the limited partners of the Developer.
Net Proceeds" shall mean the proceeds of a sale,
transfer or refinancing (other than the one time refinancing of the
Construction Loan, but only to the extent the refinancing does not
exceed the Iesser of the principal amount af the Construction Loan
or the unamartized balance of the Construction Loan on the date af
org vs note.4 page 2 Of 135-23-95
such ref inancing, unless a refinancing in excess of the principal
amount of the Construction Laan or the amortized balance of the
Construction Loan on the date of such refinancing is expressly
approved by the Agency) , less the reasonable costs af the
transaction, repayment in full of the Primary Loan and payment of
the Developer's Preferred Return.
O eratin Ex enses" shall mean actual, reasonable and
customary costs, fees and expenses directly attributable to the
operation, maintenance, taxes and management of the Property,
expressly including, without limitation: payment of principal and
interest, all periodic fees and costs attributable to any
Construction Loan and the Primary Loan; onsite administrative costs
including salaries and benefits) ; maintenance costs (includinq
materials and labor) ; reasanable payments to a reserve account;
painting, cleaning, repairs and alterations; landscaping;
utilities; rubbish removal; certificates, permits and licenses;
sewer charges; real and persanal property taxes and assessments;
insurance; security; advertising, pramotion and publicity; office,
janitorial, cleaning and building supplies; cabZe television,
satellite and similar facilities; recreatianal amenities, supplies
and services; reasanable management fee; purchase, repair,
servicing and instaliatian af appliances, equipment, fixtures and
furnishings (other than from reserves) ; fees and expenses of
accountants, attorneys, consultants and other professionals,
includinq annual audits and tax return preparation costs payable to
a third party; and the amortized value of tenant improvements. The
calculation af Operating Expenses shall be subject to the
reasonable approval of the Agency.
Primary Loan" shall mean the portion of the permanent
financing to be provided tv Developer out of the Bond Proceeds, or
other sources of permanent financing by one or more lenders (each
sueh lender to be referred to as a "Primary Lender") in an amount
that is anticipated not to exceed $13, 500,000 including any loan
that refinances the Construction Loan, that is secured by a deed of
trust that is senior and superior t the Deed of Trust securing the
Agency Loan.
Residual Receipts' shall mean the Revenue, less
Operating Expenses, calculated on a calendar year basis. All
calculations of Residual Receipts shall be subject to verification
and reasonable approval by the Agency.
Revenue" shall mean the gross rental incame from the
Property, and any other income to the Developer derived from the
ownership, operation and manac ement of the Property.
org vs\note.4 Page 3 of 138-23-95
Transfer" shall have the meaning set forth in Section 9
of this Note.
Washinaton Capital" shail mean Washington Capital DUS,
Inc.
2 . This Note evidences the obligation of the Develaper to
the Agency for the repayment of $3,750, 000 of funds loaned ta the
Develaper by Aqency p.ursuant to the Loan Agreement.
3 . This Note is payable at the principal office of Agency,
300 East Chapman Avenue, Orange, California 92666-1591, or at such
other place as the holder hereaf may inform the Developer in
writing, in lawful money of the United States.
4. This Note shall be secured by the Deed of Trust.
5. This Note shall accrue simple intere t at the rate of two
percent (2) per annum on the principal amount outstanding, from
the date of disbursement, payable as provided in Section 8, below.
6. The unpaid principal balance of this Note and all accrued
but unpaid interest shall be due and payable on the earliest to
occur of the following (the earliest of which shall be referred to
herein as the "Principal Payment Date") :
a) thirty (30) years from the date of recordation of the
Deed of Trust;
b) the date the Property or any partion thereof or
interest therein is sold, transferred, assigned or
refinanced, without the prior wr5.tten approval of the
Agency, except as otherwise permitted in this Note; or
c) the date on which there is a Defau2t by the Developer
under the terms of this Note, the Deed of Trust, the Loan
Agresment, the Agreement Containing Covenants, or any
deed of trust or other instrument securing the
Constructian Loan, the Bond Proceeds or other Primary
Loan, which is not cured within the respective time
period provided herein and therein.
7. No payments of principal shall be due and payable until
the Principal Payment Date, as provided in Section 6, above.
8. Interest shall be due and payable as follows:
a) When the full original principal amount of the
Agency Loan is outstanding, annual interest shall equal $75,000 per
org vs\note.4 page 4 Of 13
8-23-95
year. Otherwise, interest shail be calculated on the actual amount
outstanding. Developer shall pay interest annually as provided in
subdivision (b) or (d) , below.
b} Annually, commencing 120 days after the end of the
calendar year in which the Closing occurs, Developer shall pay to
the Agency a portion of the interest currently due for the previous
fiscal year, equal to one-half percent per annum (0. 5) on the
outstandinq principal balance. For example, when the full original
principal amount of the Agency Laan is outstanding, the interest
payable pursuant to this subdivisian (b} shall equal $18,750.
c) Except as provided in subdivision (b) , until
Develaper has received the Developer's Preferred Return, calculated
as set forth in subdivision (e) (ii) , below, interest shall accrue
and be deferred (not compaunded) until the Principal Payment Date
described in Section 6, above} . All such acarued but unpaid
interest shall be due and payable in full on the Principal Payment
Date, concurrently with payment of the principal amount of the
Agency Loan.
d) Beginning with the fiscal year in which Developer
has received the Developer's Preferred Return, Developer shall pay
the ful3 amount of interest currently due for the previous fiscal
year, but only to the extent of fifty percent of the Residual
Recaipts for the year in question. Any unpaid interest shall
accrue and be deferred (not compounded) until the Principal Payment
Date (described in Section 6, above) . All such accrued but unpaid
i.nterest shall be due and payable in full an the Principal Payment
Date, concurrently with payment of the principal amaunt of the
Aqency Loan.
e) The following procedures shall apply for purposes of
this Section 8:
i) Annually, not later than 120 days after the end
of the fiscal year, beginning the first fiscal year in which
Developer receives any Revenue, Developer shall submit to Agency
an Annual Financial Statement for the preceding fiscal year,
prepared by a certified public accountant reasonably aceeptable to
the Agency, determining the amount of Residual Receipts, if any,
generated in that year, and computi,ng the cumulative amaunt of
Residual Receipts paid ta Developer throuqh the fiscal year in
question. The Agency shall review and approve such Annual
Fin ncial Statement, or request revisions, within 30 days after
receipt. In the event as the result of the Agency's review of the
statement, there is an increase in the amount of any payment due
and payable to Agency (as the result, for example, of a
determinatian that the actual amount of Residual Receipts exceeds
org vs\note.4 p ge 5 Of 138-23-95
the amount of Residual Receipts shown in the Annual Financial
Statement submitted by Developer) , as provided in subdivision (d} ,
above, Developer shall promptly pay to the Agency the difference,
with interest, from the date an which such payment was due, at the
rate af one percent {ls) over the Prime Rate announced by Hank of
America, but in any event within ten (10) days of notice of such
increase.
ii) Within ane hundred twenty (120) days following
completion of the Rehabilitation required by the Loan Agreement,
Developer shall provide to the Agency a cost certification (the
Cost Certification"j , prepared by a certified public accountant
reasonably acceptable tv the Agency, setting forth ha final
Project Costs and the sources of payment thereof, including the
final amount of Developer's Equity actually expended. The Agency
shall review and approve such Cost Certification, or request
revisions, within 30 days after receipt. The calcuiation of the
Developer's Preferred Return shall be based on the amount of
Developer's Equity set forth in the Cost Certification approved by
Agency.
f) All payments to the Agency shall be applied first to
accrued interest, and then to current interest, then to reduce the
principal amount owed.
9. (a) Prior to the repayment in full of the Agency Loan,
the Developer shall not assign or attempt to assign the Loan
Agreement or any right therein, nor make any total or partial sale,
transfer, conveyance or assignment af the whole or any part of the
Property, the Project thereon, ar any partion thereof or interest
therein (referred to hereinafter as a "Transfer") , without prior
written approval of the Agency, except as atherwise permitted in
this Note. Consent to one such transactian shall not be deemed to
be a waiver of the right to require consent to future or successive
transactions. Agency shall not unreasonably withhald or delay its
consent. If consent should be given, any such transfer shall be
subject to this Section 9, and any such transferee shall assume all
obligations hereunder and agree to be bound by all provisions
cantained herein, subject to the provisions of subsection
9 (e) (iii) , below.
b)Any such proposed transferee shall have the
qualifications and financial responsibility necessary and adequate
as may be reasonably determined by the Ag ncy, to fulfill the
obligatians undertaken by Developer in the Loan Agreement, the
Agreement Containing Cavenants and this Note. Any such proposed
transferee, by instrument in writing satisfactory to the Agency and
in farm recordab2e among the land records of oranga County, for
itself and its successors and assigns, and for the benefit of the
org\vs\note.4 page 5 Of 13
8-23•95
Aqency shall expressly assume all of the vbligations of the
Developer under the Loan Agreement and the Agreement Containing
Covenants, and agree to be subject to all conditions and
restrictions applicable ta the Developer in this Note, subject to
the provisions of subsection 9 (e) {fii) . There shall be submitted
to the Agency for review all instruments and other legal documents
propased to effect any such transfer; and if approved by the Agency
its approval shall be indicated to the Developer in writing.
c) In the absence of specific written aqreement by
the Agency, no unauthorized Transfer, or approval thereof by the
Agency, shall be deemed to relieve the Developer or any other
party from any obligations under the Laan Agreement.
d) In the event of a Transfer prior to the time
the Agency Loan is paid in full without the priar written consent
of the Agency, the net proceeds (after repayment in full of the
Primary Laan, but before calcuiation of Developer's Preferred
Return) , shall be paid to the Agency to the extent necessary to pay
in full the accrued interest, if any, current interest and
remaining principal balance of the Agency Loan.
e) (i) As used herein, "Transfer" includes the
sale, agreement ta sell, transfer or conveyance of the Property,
the Project, or any portion thereof or interest therein, whether
voluntary, involuntary, by operation of law or otherwise, the
executian af any installment land sale contract or similar
instrument affecting all ar a portion of the Property or Project,
or the lease of all or substantially all of the Froperty or
Project, except as provided in subparagraph (e) (iii) af this
Section 9, below.
ii) Transfer" shall also include the
transfer, assignment, hypothecation or conveyance af legal or
beneficial ownership of any interest in Developer other than to an
affiliate or other Forest City Entity, or any conversian of
Developer to an entity form other than that of Developer at the
time of execution af the Loan Agreement, except that a cumulative
change in ownership interest of any partner of forty-nine percent
49) or less shall not be deemed a "transfer" for purposes of this
Nate.
iii) Notwithstanding paragraphs {ij and (ii) ,
Transfer" shall not include any af the following Permitted
Transfers:
Aj a conveyance of a security interest in
the Property or Project to a Senior Lender, to secure a Senior
Loan, or the conveyance of title to the Property or Project in
org\vs\note.4 page 7 Of 13
8-23-95
connection with a foreclosure or a deed in lieu of foreclosure of
such loan;
B) (1) 5ubject to subparagraph (B) (2) ,
below, a conveyance of the Property or Project to a limited
partnership in which Developer's general partner or any other
Forest City Entity is the controlling and managing general partner,
or a sale back from such partnership to such general partner, or
the subs itution of such general partner as directed by the
investor limited partner in accordance with the terms of
Developer's partnership agreement.
2) Notwithstanding any provision tothecontrarycontainedherein, any event described in subparagraph
B) (1) shall not be deemed to be a Permitted Transfer unless the
Executive Director ar designee reasonably determines, which
determination shall not be unreasonably withheld, that Developer's
general partner, Forest City Properties Corpor tion or another
Forest City entity remains, or the limited partner providing any
portion of the Developer's Equity (or such limited partner's
designee) , or any other entity reasonably acceptable to the
Agency's Executive Director (which shall not be unreasanablywithheld) becomes, the c ntrolling and managing general partner of
the Developer.
C) The conveyance of security interests
in the Property and the Praject to FNMA in connection with the
issuance of the Bonds.
D) Any other refinancing that repays a
Senior Loan (referred to herein as a "Take-out Loan") , if the
resulting laan-to-value ratio will not exceed 90$ (including the
Take-out Loan and the Aqency Loan) , and the repayment terms of the
Take-out Loan do not materially impair the Developer's ability to
repay the Agency Loan.
E) The leasing for occupancy of all or
any part of the Property or Project.
F} The inclusion of equity participatian
by Developer by transfer or addition of limited or general partners
to the Developer or similar mechanism.
f) The Agency shall not unreasonably withhold,
condition or delay its approval of any matter for which its
approval is required hereunder, and such matter shall be deemed
approved unZess the Agency provides to Developer its written
disapproval within thirty (30) days after receipt of a request for
org vs\note.4
pa e 8 Of 138-23-95
approval, pravided Developer includes with its request, a written
notice, in capitai letters, stating as follows:
NOTICE: PURSUANT TO SECTION 9 OF THE PROMISSORY NOTE,
FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER
SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE
DEEMED AN APPRQVAL.
Any disapproval shall be in writing and contain the Agency's
reasans for disapproval
10. The Agency funds advanced or to be advanced hereunder are
provided by Agency s Low and Moderate Income Housing Trust Fund.
Accordingly, Developer agrees for itself, its successars and
assigns, that the use of the property shall be subject to the
restrictions on rent and occupancy set forth in the Loan Agreement,
and in the Agreement Containing Cavenants.
11. The obligation to repay the Agency Loan is a nonrecourse
obligatian of the Developer and its partners. Neither the
Developer nor any of its general or limited partners, nor any other
party, shall have any personal liability for repayment of the loan.
The sole recourse of the Agency shall be the exercise of its riqhts
against the Property and the Project and any related security for
the Agency Loan. Notwithstanding the foregoinq, Agency may recover
directly from Developer nr any other party:
a) any damages, costs and expenses incurred by Aqency as
a result of fraud or any criminal act or acts of
Developer or any partner, shareholder, officer, director
or emplayee of Developer or of any general or limited
partner of Developer;
b) any damages, costs and expenses i.ncurred by Agency as
a result of any misappropriation of funds provided far
the acquisition, relocatian of occupants from, or
rehabilitatian 4f the Project, as described in the Loan
Agreement, rents and revenues from the operation of the
Project, or proceeds of insurance policies or
condemnation proceeds;
c) any and all amounts owing by Developer pursuant to
Developer's indemnification regarding Hazardous
Substances pursuant to the Loan Agreement; and
d} a.l court costs and attorneys' fees reasonably
incurred in enforcing or collecting upon any of the
foregoing exceptions (provided that Agency shall pay
Developer's reasonable court costs and attorneys' fees if
org\vs\note.4 page 9 Of 13
8-23-95
Developer is the prevailing party in any such enforcement
or callection acti n} .
12. Developer waives presentment for payment, demand,
protest, and notices of dishonar and of protest; the benefits of
all waivable exemptions; and all defenses and pleas on the ground
of any extension or extensions of the time of payment or of any duedaeunderthisNote, in whole or in par.t, whether before or after
maturity and with or without notice. Developer hereby agrees to
pay all costs and expenses, including reasonable attorney's fees,
which may be incurred by the holder hereof, in the enforcement of
this Note, the Deed of Trust or any term or provision of either
thereof.
13 . Upon the failure of Developer to perform or observe any
other term ar provision of this Note, or upon the occurrence of any
event of default under the terms of the Deed of Trust, the Loan
Agreement or the Agreement Containing Covenants, the holder may
exercise its rights or remedies hereunder or thereunder.
14 . (a) Subject to the extensions of time set forth in
Section 15, and subject to the £urther provisions of this Section
14, failure or delay by Developer to perform any material term or
provision of this Note, the beed of Trust, the Loan Agreement or
the Agreement Containing Covenants constitutes a default under this
Note.
b) Ac}ency shall give written notice of default to
Developer, specifying the default complained of by the Agency.
Delay in giving such notice shall not constitute a waiver of any
default nor shall it change the time of default.
c) Any failures or delays by Agency in asserting any of
its rights and remedies as to any default shall not operate as a
wai,ver of any default or of any such rights or remedies. Delays by
Agency in asserting any of its riqhts and remedies shall not
deprive Agency of its right to institute and maintain any actions
or proceedings which it may deem necessary to protec, assart, or
enforce any such rights or remedies.
d) If a monetary event of default occurs under the
terms of this Note or the Deed of Trust, prior to exercising any
remedies hereunder or thereunder Agency shall give Developer
written notice of such default. Devel per shall have a reasonable
period of time after such notice is given within which to cure the
default prior to exercise of remedies by Agency under this Note
and/or the Deed of Trust. In no event shall Agency be precluded
from exercising remedies if its security becomes or is about to
become materially impaired by any failure to cure a default Qr the
org vs\note.4
Page 10 Of 138-23-95
default is nat cured within ten (10} days after the notice of
default is first given.
e) If a non-monetary event of default occurs under the
terms of the Loan Agreement, this Note, the Deed of Trust, the
Agreement Containing Covenants or any dacument implementing the
Loan Agreement, prior to exercising any remedies hereunder or
thereunder, Agency shall give Developer notice of such defauit. If
the default is reasonably capable of being cured within thirty (30)
days, Developer shall have such period to effect a cure prior to
exercise of remedies by the Agency under the Laan Agreement, this
Note and/or the Deed of Trust. If the default is such that it is
not reasonably capable of being cured within thirty (30} days, and
Developer (i) initiates corrective action within said period, and
ii) diligently and in gocd faith works to effect a cure as soon as
possible, then Developer shall have such additional time as is
reasonably necessary to cure the default prior to exercise of any
remedies by Agency. If Developer fails to take corrective action
or cure the default wi hin a reasonable time, the Agency shall give
Developer and, as provided in paragraph (f) , below, the limited
partner of Developer notice thereof, whereupon the limited partner
of Developer may remove and replace the general partner with a
substitute general partner, who shall effect a cure within a
reasonable time thereafter in accordance with the foregoing
provisions. The Agency agrees to accept cures tendered by the
limited partner af Developer within the cure periods provided in
this Note or within the time periods provided in Civil Code Sectian
2924c, whichever is longer. Additionally, in the event the limited
partner of Developer is precluded from curing a non-monetary
default due to an inability to remove the general partner as a
result of a bankruptcy, injunction, or similar proceeding by or
against Aevelaper or its general partner, the Agency agrees to
forbear from completing a foreclosure (judicial or nonjudicial)
during the period during which the limited partner of Developer is
so precluded from acting, not to exceed 180 days, provided such
limited partner is otherwise in compliance with the foregoing
provisions. In no event shall Agency be precluded fram exercising
remedies if its security becomes or is about to become materially
jeopardized by any failure to cure a default or the default is not
cured within ane hundred eighty (180) days after the notice of
default is first given.
f) After Developer gives written notice to Agency that
the investor limited partner has been admittad to the Developer,
Agency shall send to the limited partner a copy of all notices af
default and all other noticas that Agency sends to Developer, at
the address for the limited partner as provided by written notice
to Agency by Developer.
org vs\note.4 page 11 of 13
8-23-95
15.Notwithstanding specific provisions of this Note,
performance by either party hereunder shall not be deemed to be in
default where delays or defaults are due to war; insurrection;
strikes; lock-outs; riots; floods; earthquakes; fires; casualties;
acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation;
governmentai restrictions or priority; litigation, including
litigation challenging the validity of this transaction or any
element thereof; unusually severe weather; inability to secure
necessary labor, materials or tools; delays of any contractor,
subcontractar, or suppliers; acts of the other party; acts or
failure to act of the Agency or any other public or governmental
agency or entity (except that acts or failure to act of the Agency
shall not excuse performance by the Agency) ; or any o her causes
beyand the control or without the fault of the party claiming an
extension of time to perform. Natwithstandinq the foregoing, none
of the foregoing events shall constitute a Force Majeure Event
unless and until the party claiming such deiay and interference
delivers to the other parties written notice describing the event,
its cause, when and how such party obtained knowledqe, the date the
event commenced, and the estimated delay resulting therefrom. Any
party claiminq a Force Majeure Delay shall deliver such written
notice within fifteen (15) days after it obtains actual knowledge
af the event. An extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from the
time of the commencement of the cause. Times of perfarmance under
this Note may also be extended in writing by the mutual agreement
of the Executive Director, and Developer.
16. If the rights created by this Note shall be held by a
court of competent jurisdiction to be invalid or unenforceable as
to any part of the obligations described herein, the remaining
obligations shall be completely performed and paid.
17. The Deed of Trust securing this Note shall be subordinate
and junior during the construction period to the Construction Loan
deed of trust in favor of Union Bank, the deed of trust in favor cf
FNMA and the Regulatory Agreement executed in connection with the
Bonds; following reconveyance af the Construction Loan deed of
trust, the Deed of Trust securing this Note wili remain subordinate
and j unior to the deed of trust in f avar of FNMA or other permanent
Primary Laan permitted by this Note.
18 . Developer shall have the right to prepay the obliqation
evidenced by this Nate, ar any part thereof, without penalty.
org\vs\note.4 page 12 Of 13
8-23-95
IN WI NESS WHEREOF Developer has executed this Note as o€ the
day and year set forth above.
ORANGE ASSOCIATES, a CaliforniA
limited partnership
By: F. C. ORANGE, INC. , a
California corparation, its
general partner
Dated: By:
Gregory M. Vilkin
President
org\vs\note.4 Page 13 Of I3
8-23-95
ATTACHMENT NO. 8
OFFICIAL BUSINESS
Document entitled to free
recarding per Gvvernment
Code Sectian 6103
Recordzng Requested by:
ORANGE REDEVELOPMENT AGENCY
When Recorded Return to:
orange Redevelopment Agency
300 E3st Chapman Avenue
Orange, California 92666-1591
efa Agency Clerk
SPACE ABOVE THIS LINE F R RECOR ING USE
DEED OF TRUST, SECURITY AGAEEMENT AND FIXTURE FILZNG
ITH ASSIGNMENT OF RENTS AND LEASES)
This Deed of Trust, Security Agreement and Fixture Filing
With Assignment of Rents and Leases) s made as of
1995, by ORANGE ASSOCIATES, a California limited
partnership (hereinafter referred to as "Developer") , and F.. C.
ORANGE, INC. , a California corporation (hereinafter referred tv as
wnar") , whase address is 949 South Hope Street, Los Angeles,
California 90015-OOlU (collectively, the "Trustors") , to
Commonwealth Land Title Insurance Company, a California corporation
hereinafter called "Trustee") , whase address is 888 West 6th
Street, Los Angeles, California 90017, for the benefit af ORANGE
REDEVELOPMENT AGENCY, a public body corporate and politic
hereinafter called "Beneficiary") , whose address is 300 East
Chapman Avenue, Orange, California 92666-1591.
Witnegsetb:That Trustors IRREVOCABLY GRANT, TRANSFER AND ASSIGN
ta Trustee, its successors and assigns, in Trust, with POWER OF
SALE TOGETHER WITH RZGHT F ENTRY AND POSSESSION the followinq
property (the "Trust Estate") :
a) That certain real property in the City af
Orange, County of Orange, State of California more particularly
described in Exhibit "A" attached hereto and by this reference made
a part hereof (such reaZ property is hereafter referred to as the
Subject Property") ;
b) All buildings, structures and other
improvements now or in the future located or ta be constructed on
the Subj ect Praperty (the 'Improvements) ;
org vs\dot.4 page 1 af 138-23•95
c) all tenements, hereditaments, appurtenances,
privileges, franchises and other rights and interests now or in the
future benefiting or atherwise relating to the subject Property or
the Improvements, includinq easements, rights-of-way, development
rights, mineral rights, water and water rights, pumps and putnping
plants and all shares af stock evidencing the same (the
Appurtenances') . (The Appurtenances, together with the Subject
Property and the Improvements, are hereafter referred ta as the
Real Property") ;
e) subject to the assignment to Beneficiary set
forth in Paragraph 10 below, all rents, issues, income, revenues,
royalties and profits now or in the future payable with respect to
or otherwise derived from the Trust Estate or the ownership, use,
management, aperation leasing or oocupancy of tha Trust Estate,
including those past due and unpaid (the "Rents') ;
f} all present and €uture right, title and
interest of Trustors in and to all inventory, equipment, fixtures
and other goads (as those terms are defined in Division 9 of the
California Uniform Commercia2 Code (the "UCC") , and whether
existing now ar in the future) now or in the future located at,
upon or about, or affixed or attached to or installed in, the Real
Property, or used or to be used in connection with or otherwise
relating to the Real Property or the ownership, use, development,
construction, maintenance, management, operation, marketing,
leasing vr occupancy af the Real Property, including furniture,
furnishings, machinery, appliances, building materials and
supplies, generators, boilers, furnaces, water tanks, heating
ventilating and air conditioning equipment and all ather typ s of
tangible personal property af any kind or nature, and all
accessories, additions, attachments, parts, proceeds, products,
repairs, replacements and substitutions of or to any of such
property (the "Goods, " and together with the Real Property, the
Property") ; and
g) all present and future right, title and
interest of Trustors in and to all accounts, general intangibles,
chattel paper, deposit accounts, money, instruments and documents
as those terms are defined in the UCC) and all other agreements,
obligations, rights and wri.tten material (in each case whether
existing now or in the future} now or in the future relating to or
otherwise arisinq in connection with or derived from the Property
or any other part of the Trust Estate or the ownership, use,
development, construction, maintenance, management, operation,
marketing, leasing, accupancy, sale or financing of the property or
any ather part of the Trust Estate, including (to the extent
applicable to the Praperty or any other portion af the Trust
Estate) (i) permits, approvals and ather governmental
authorizations, {ii) impravement plans and specifications and
architectural drawings, (iii) agreements with cantractors,
subcontractors, suppliers, project managers, supervisors,
org\vs\dot,4 page 2 af 138-23-45
designers, architects, engineers, sales agents, leasing agents,
consultants and property managers, (iv) takeout, refinancing and
permanent loan commitments, (v) warranties, guaranties, indemnities
and insurance policies, together with insurance payments and
unearned insurance premiums, (vi) claims, demands, awards,
settlements, and other payments arising or resulting fram or
otherwise relating to any insurance or any loss or destruction of,
injury or damage to, trespass on ar taking, condemnation (or
conveyance in lieu of condemnation} or public use of any of the
Property, (vii) license agreements, service and maintenance
agreements, purchase and sale agreements and purchase vptions,
together with advance payments, security deposits and other amounts
paid to or deposited with Trustors under any such agreements,
viii) reserves, deposits, bonds, deferred payments, refunds,
rebates, discounts, cost savings, escrow proceeds, sale proceeds
and other rights to the payment of money, trade names, trademarks,
goodwiXl and all ather types on intangible personal property of anykindornature, and (ix) all supplements, modifioations,
amandments, renewals, extensions, proceeds, replacements and
substitutions of or to any of such property (the "Intangibles") .
Trustors further grant to Trustee and Beneficiary, pursuant to
the UCC, a security interest in all present and future right, title
and interest of Trustors in and to all Goods and Intangibles and
all of the Trust Estates described above in which a securi yinterestmaybecreatedundertheUCC (collectively, the "Personal
Property") . This Deed af Trust constitutes a security agreement
under tbe UCC, canveyinq a security interest in the Personal
Property ta Trustee and Beneficiary. Trustee and Beneficiary shall
have, in addition tQ all riqhts and remedies provided herein, all
the rights and remedies of a "secured party" under the UCC and
other applicable California law. Trustors covenant and agree that
this Deed df Trust constitutes a fixture filing under Section 9313
and 9402 {6) of the UCC.
FOR THE PUItP08E OF SECURING, in such arder of pziority as
Beneficiary may elect, the following: (1) due, prompt and complete
observance, performance and discharge of each and every condition,
obligation, covenant and agreement contained herein or contained in
a promissory note executed by Developer of even date herewith (the
Note") ; the Affordable Housing Agreement dated on or about the
date hereof (the "Loan Agreement" or "Agreement") , between
Developer ("Developer" therein) and Beneficiary ("Agency" therein) ;
and the Agreement Containing Covenants (Including Rental
Restrictions) between Trustars (Developer" and "Owner" therein)
and Beneficiary ("Agency" therein) , recorded concurrently herewith
Covenants") ; and (2) payment of indebtedness of the Trustor to
the Beneficiary in the principal sum of THREE MILLION SEVEN HUNDRED
FIFTY THOUSAND DOLLARS and No/100 cents ($3,?50,000) or so much
thereof as shall be advanced, evidenced by the Note, with interest,
according to the terms of the Nete. Said Note, Loan Agreement and
Covenant (collectively "Secuzed obligations") and all of their
org\vs dot.4 pa E 3 Of 138-23-95 g
terms are incorporated herein by reference and this conveyance
shall secure any and all extensians, amendments, modificativns or
renewals thereof hawever evidenced, and additional advances
evidenced by any note reciting that it is secured hereby.
Following the repayment in full af the Agency Loan evidenced by the
Note, this Deed of Trust shall continue to secure performance of
the Covenants.
AND TO PROTECT THE SECURITY F THIS DEED OF TAUST, TRUSTOAS
COVENANT AND AGREEs
l. That it will pay the Note at the time and in the manner
provided therain, and perform the obligations of Developer as set
forth in the Laan Agreement and Cvvenants at the time and in the
manner resgectively provided therein;
2 . That it will nQt permit or suffer the use f any of the
property for any purpose other than the use fvr which the same was
intended at the time this Deed of Trust was executed;
3 . That the Secured obligations are incorporated in and made
a part of the Deed of Trust. Upon default of a 5ecured Obligation,
and after the giving of natice and the expiration of any applicable
cure period, the Beneficiary, at its aption, may declare the whole
of the indebtedness secured hereby to be due and payable.
4. That all rents, profits and income from the property
covered by this Deed of Trust are hereby assigned to the
Beneficiary far the purpose of discharging the debt hereby secured.
Permission is hereby given to Trustors so long as no default exists
hereunder after the giving of notice and the expiration of any
applicable cure period, to collect such rents, profits and income
for use in accordance with the pravisions of the Loan Agreement.
5. That upon default hereunder or under the aforementioned
agreements, and after the giving of notice and the expiration of
any applicable cure period, Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without
notice, to take possession and protect the property described
herein and aperate same and collect the rents, profits and income
therefrom;
6. That the Trustors will keep the improvements naw existinq
or hereafter erected on the deeded property insured against loss by
fire and such other hazards, casualties, and contingencies as may
reasonably be required in writing from time to time by the
Beneficiar, and all such insurance shall be evidenced by standard
fire and extended caverage insurance policy ar poliaies. In no
event shall the amounts of coverage be less than I00 percent of the
insurable value of the Property. Such policies shall be sndorsed
with standard mortgage clause with loss payable to the Beneficiary
org vs\dot.4 Page 4 af 13
e-23-95
and certificates thereof tagether with copies of original policies
shall be deposited with the Beneficiary;
7. To pay, at least l0 days befare delinquency, any taxes
and assessments affecting said Property including assessments on
appurtenant water stock; to pay, when due, all encumbrances,
charges and liens, with interest, on said Property or any part
thereo€ which appear to be priar or superior hereto; and to pay all
costs, fees, and expenses of this Trust. Notwithstanding anything
to the contrary contained in this Deed of Trust, Trustors shall not
be required to pay and discharge any such tax, assessment, charge
or levy sa long as Trustors are contestinq the legality thereof in
gaod faith and by appropriate proceedings, and Trustors have
adequate funds to pay any liabilities contested pursuant to this
section 7.
8. To keep said property in good condition and repair,
subject to ordinary wear and tear, casualty and condemnation, not
to remove or demolish any buildings thereon; to complete or restora
promptly and in good and workmanlike manner any building which may
be constructed, damaged, or destroyed thereon and to pay when due
all claims for labor perfarmed and materials furnished therefor; to
comply with all laws affecting said property ar requiring any
alterations or improvements to be made thereon (subject to
Trustors' right ta cantest the validity or applicability of 2aws or
regulations) ; not to commit or ermit waste thereof; not to commit,
suffer or permit any act upon said property in violation of law
and/or covenants, conditions and/or restrictions affecting said
property; not to permit or suff r any material alteration of or
addition ta the buildings or improvements hereafter canstructed in
or upon said property without the consent of the Beneficiary;
9. To appear in and defend any action or proceeding
purporting to affect the security hereof or the rights ar powers of
Beneficiary or Trustee, and to pay all costs and expenses,
including cost of evidence of title and reasonable attorney's fees
in a reasonable surn, in any such action or praceeding in which
Beneficiary or Trustee may appear;
I
10. Should Trustors fail, after the giving of notice and the
expiration of any applicable cure period, to make any payment or do
any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and without notice to ar demand upon
Trustors and without releasing Trustars from any obligation hereof,
may make or do the same in such manner and to such extent as either
may deem necessary to protect the security hereof. Follawing
default, after the giving of notice and the expiration of any
applicable cure period, Beneficiary ar Trustee being authorized to
enter upon said property far such purposes, may commence, appear in
andJor defend any actian ar praceeding purporting to affect the
securit hereof or the rights or pawers of eeneficiary or Trustee;
may pay, purchase, contest, ar compromise any encumbrance, charqe,
org vs\dot.4 Page 5 of 138-23-95
or lien which in the judgment of either appears to be prior or
superior hereto; and, in exercising any such powers, may pay
necessary expenses, employ counsel, and pay his reasonable fees;
il. The Beneficiary shall have the right to pay fire and
ather property insurance premiums when due should Trustors fail to
make any required premium payments. All such payments made by the
Beneficiary shall be added to the principal sum secured hereby;
12 . Ta pay immediately and withaut demand all sums so
expended by Beneficiary or Trustee, under permission given under
this Deed of Trust, with interest from date of expenditure at the
rate specified in the Note
13 . That the funds to be advanced hereunder are to be tzsed in
accordance with the Loan Aqreement; and upon the failure of the
Trustors, after the giving af notice and the expiration of any
applicable cure period, to keep and perform all the covenants,
conditions, and agreements of said Loan Agreement, the principal
sum and all arrears of interest, and other charges provided for in
th Note shall at the option of the Beneficiary of this Deed of
Trust become due and payable, anything contained herein to the
contrary notwithstanding;
14 . The Trustors further covenant that they will not
voluntarily create, suffer, or permit to be created against the
property subject to this Deed of Trust any lien ar liens except as
authorized by Beneficiary and further that it will keep and
maintain the praperty free from the claims of all persQns supplying
labar or materials which will enter into the construction of any
and all buildings now being erected or to be erected on said
premises. lvatwithstanding anything to the contrary eontained in
this I7eed of Trust, Trustors shall not be obligated to pay any
claims for labor, materials or services which Trustors in gvod
faith dispute and are diligently contestinq, provided that Trustars
shall, at Beneficiary's written request, within thirty {30) days
after the filing of any claim or lien (but in any event, and
without any requirement that Beneficiary must first pravide a
written request, prior to foreclosure) record in the Office of the
Recorder of Orange County, a surety bond in an amount one-and-one-
half (ls) times the amount of such claim item ta protect against a
claim of lien, or provide such other security reasonably
satisfactory to Beneficiary;
15. That any and all improvements made or about ta be made
upon the premises, covered by the Deed of Trust, and all plans and
specifications, comply with all applicable municipal ordinances and
regulations and all other applicable regulations made or
promulgated, now or hereafter, by lawful authority, and that the
same will upon completian camply with all such municipal ordinances
and regulations and with the rules of the applicable f ire rating or
inspection orqanization, bureau, association or office;
org\vs\dot.4 p g 6 Of 138-23-95
16. Trustors herein agree to pay to seneficiary or to the
authorized loan servicing representative af the Beneficiary a
reasonable charge for providing a statement regardinq the
obligation secured by this Deed of Trust as provided by Section
2954, Article 2 , Chapter 2 Title 14, Division 3 , of the California
Civil Code.
IT IS MUTUALLY AGREED THATs
17. Should the property or any part thereof be taken or
damaged by reason of any public improvement or condemnation
proceeding, or damaqed by fire, or earthquake, or in any other
manner, subject to the rights of any Primary Lender, the
Beneficiary shall be entitled to all compensation, awards, and
other payments or relief therefor which are not used to
recanstruct, restore or otherwise improve the preperty or partthereafthatwastakenordamaged, and shall be entitled at its
optian to commence, appear in and prosecute in its own name, any
action or proceedings, or ta make any compromise or set lement, in
cennection with such taking or damage. Subject to the rights vf
any Primary Lender, all such compensation, awards, damages, rights
of action and proceeds which are not used ta reconstruct, restore
or otherwise improve the property or part thereof that was taken or
damaged, including the proceeds of any policies oP fire and ather
insurance affecting said property, are hereby assigtted to the
Beneficiary. After deducting therefrom all its expenses, including
attorney s fees, the balance of the proceeds which are net used to
reconstruct, restore or otherwise improve the property ar part
thereof that was taken or damaged, shall be applied to the amount
due under the Note secured hereby. No amount applied to the
reduction of the principal shall relieve the trustar from making
regular payments as required by the N te;
18 . Upon default by Trustors in making any payments provided
for herein vr upon default by Developer in making any payment
required in the Nate secured hereby, and if such default is not
made good prior to the due date of the next such installment, ar if
Trustors shall fail to perform any cavenant or agreement in this
Deed of Trust within 30 days after written demand therefar by
Beneficiary (or, in the avent that more than 30 days is reasonably
required to cure such default, shauld Trustors fail to prQmptly
commence such cure, and diliqently prosecute same to completion) ,
after the giving of notice and the expiration of any applicable
cure period, the Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written
declaration af default and demand for sale, and of written notice
df default and of election to cause the property to be sold, which
notice Trustee shall cause to be duly filed far record and the
Beneficiary may foreclase this Deed of Trust. Beneficiary shall
also depasit with Trustee this Deed, the Note and all documents
evidencing expenditures secured hereby;
orQ vs doc.4
Pa e 7 of 138-23-95 g
19. After the lapse of such time as may then be required bylawfallowingtherecardationofsaidnoiceafdefault, and notice
of sale having been given as then required by law, Trustee, without
demand on Trustors, shall sell said property at the time and place
fixed by it in said notice of saie either as a whole or in
separate parcels, and in such order as it may determine at public
auction ta the hiqhest bidder for cash in lawful money of the
United States, payable at time of sale. Trustee may postpone sale
of all or any portian of said property by public announcement at
the time and place of sale, and from time to time thereafter may
postpone the sale by .public announcement at the time and place of
sale, and from time to time thereafter may pastpone the sale by
public annauncement at the time fixed by the preceding
postponement. Trustee shall deliver ta the purchaser its Deed
conveyinq the pr perty so sald, but without any covenant or
warranty, express or implied. The recitals in the Deed of any
matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustors, Trustee or Beneficiary,
may purchase at the sale. The Trustee shall apply the proceeds of
sale to payment of (1) the expenses of such sale, together with the
reasonable expenses of this trust includinq therein reasonable
Trustee's fees or attorney's fees for conducting the sale, and the
actual cost of publishing, recording mailing and posting notice of
the sale; (2) the cast of any search and/or ather evidence of title
procured in connection with such sale and revenue stamps on
Trustee's Deed; (3) all sums expe ded under the terms hereof, not
then repaid, with accrued interest at the rate specified in the
Note; (4) all dther sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled
thereto;
2p. Beneficiary may from time to time substitute a successar
or successors to any Trustee named herein or actinq hereunder to
execute this Trust. Upvn such appointment, and without conveyance
to the successor trustee, the latter shall be v sted with all
tit e, 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 Beneficiary, containing
reference to this Deed of Trust and its place of rec rd, which,
when duly recarded in the proper office vf the county or caunties
in which the property is situated, shall be conclusive proof of
proper appointment of the successor trustee;
21. The pleading of any statute of limitations as a defense
to any and all obligations secured by this [3eed is hereby waived to
the ful.l extent permissible by law;
22. Upon written request of Beneficiary stating that all sums
secured hereby have been paid and all obligations secured hereby
have been satisfied, and upon surrender of this Deed of Trust and
the Note to Trustee for cancellation and retentian and upon payment
of its fees, Trustee shall recanvey without warranty, the praperty
org\vs\dot.4
page $ Of 138-2•95
then held hereunder. The recitals in such reconveyance of any
matters or fact shall be canclusive praof af the truthfulness
thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto";
23. The trust created hereby is irrevocabie by Trustors;
24 . This Deed of Trust applies to, inures to the beriefit of,
and binds all parties hereto, their heirs, legatees, devisees,
administr tors, executors, successors, and assigns. The term
Beneficiary" shall include nat only the original Beneficiary
hereunder but alsa any future owner and holder including pledgees,
o€ the Note secured hereby. In this peed of Trust, whenever the
context so requires, the masculine gender includes the feminine
and/or neuter, and the singular number inaludes the plural. All
obligations of each Trustor hereunder are jaint and several;
25. Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made public recard as provided by
law. Except as otherwise provided by law the Trustee is nat
ob.igated to notify any party hareto of pending sale under this
Deed of Trust or of any action of proceeding in which Trustors,
Beneficiary, oz Trustee shall be a party unless brought by Trustee;
26. The undersigned Trustars request that a copy of any
notice of default and of any notice of sale hereunder be mailed to
them at 949 South Hope Street, Los Angeles, California 90015-0010,
with a copy (which capy shall nat canstitute notice to the
Developer} ta Bret H. Reed, A Law Carporation, 1300 Dove Street,
Suite 2n0, Newpart Beach, California 92660.
27. Trustors agree at any time and from time to time upon
receipt of a written request from Beneficiary, to furnish to
Beneficiary detailed statements in writing of income, rents,
profits, and operating expenses of the premises, and the names of
the occupants and tenants in possession, together with the
expiration dates of their leases and full information regarding all
rental and occupancy agreements, and the rents provided for by such
leases and rental and occupancy agreements, and such other
information regarding the premises and their use as may be
requested by Beneficiary.
28. Trustars agree that the loan sacured by this Deed of
Trust is made expressly for the purpose of financing the
acquisition and rehabilitation of the Property so that it can be
used as 260 dwel2ing units of affordable housing for law-income
tenants, and such dwelling units shall be occupied exclusively by
such persons as set forth in the Loan Agreement and the Covenants.
29. Trustors agree that, except as otherwise provided in he
Note, upon sale or refinancing of the property, the entire
principal balance of the debt secured by this Deed of Trust plus
org vs\dot.4 Page 9 Of 135-23-95
accrued interest shall at the option of Beneficiary be immsdiately
due and payable.
30. The abligation ta repay the Agency L an is a nonrecourse
ob2igation of the Trustors and their partners. Nei her he
mrustors nar any of their general or limited par ners, nor any
other party, sha 11 have any pexsona 1 liabi 1 ity f or repayment of the
loan. The sole recaurse of the Beneficiary shall be the exercise
of its rights against the Site and the Improvements and any related
security for the Agency Loan. Notwithstanding the foregoing,
Beneficiary may recover directly from Trustors or from any other
party:
a) any damages, costs and expenses incurred by Beneficiary as
a result of fraud or any criminal act or aats o Trustors or
any partner, shareholder, officer, director or employee of
Trustors, or either of them, or of any general or limited
partner of Trustars;
b) any damaqes, casts and expenses incurred by Beneficiary as
a result af any misappropriation of funds provided for the
acquisition, relocation of accupants from, ar rehabilitation
of the Praject, as described in the Loan Agreement, rents and
revenues from the aperation of the Project, or proceeds of
insurance policies or condemnation praceeds;
c) any and all amounts owing by Developer pursuant to
Developer's indemnification regarding Hazardous Substances
pursuant ta the Loan Aqreement, and
d) all court .costs and attorneys' fees reasonably incurred in
enforcing or collecting upon any of the foregoing exceptivns
provided that Beneficiary shall pay Trustors' reasonable
court costs and attorneys' fees if either Trustor is the
prevailing party in any such enfarcement or collection
action) .
31. Notwithstanding specific provisions o this Deed of
Trust, non-monetary perfarmance hereunder shall not be deemed to be
in default where delays or defaults are due to: war; insurxection;
strikes; lock-outs; riots; floods; earthquakes; f ires; casualties;
acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority; litigation; unusually severe
weather; inabili ty to secure necessary labor, materials or tools;
delays of any contractor ar supplier; acts of the other party; acts
or failure to act of the City of Orange or any other public or
governmental agency or entity (except that any act or failure to
act of Beneficiary shall not excuse perfarmance by Beneficiary) ; or
any other causes beyond the reasonable control or without the fault
of the party claiming an extension of time to perform. An
extension of time for any such cause (a "Force Majeure Delay")
org vs dot.4 page 10 of 13
8-23-45
shall be for the peri d of the enforced delay and shall commence to
run from the time of the commencement af the cause. If, however,
notice by the party claiming such ex ension is sent to the other
party more than thirty (30) days after the commencement of the
cause, the period shall commence to run only thirty (30) days prior
to the givirig of such notice. Times af performance under this Deed
of Trust may also be extended in writing by the Beneficiary and
Trustors. Notwithstanding the foregoing, none of the foregoing
events shall constitute a Force Majeure Delay unless and until
Trustors deliver to Beneficiary written natice describing the
event, its cause, when and how Trustars obtained knowledge, the
c3ate the event commenced, and the estimated delay resulting
therefrom. Trustors shall deliver such written notice within
fifteen (15) days after they obtain actual knowledge of the event.
32. If the rights and liens created by this Deed of Trust
shall be held by a court af competent jurisdiction to be invalid or
unenforceable as to any part of the obligations described herein,
the unsecured portion of such obligations shall be completely
performed and paid prior ta the per€ormance and payment of the
remaining and secured portion of the obligations, and all
performance and payments made by Trustars shaii be ccnsidered to
have been performed and paid on and applied first to the complete
payment of the unsecured portion of the obligations.
33. (a) Subject to the extensions af time set farth in
Section 31, and subject ta the further provisions of this Sectian
33, failure or delay by Developer or Owner to perform any term or
provision respectively required to be performed by such party under
the Note, the Loan Agreement, Covenants or this Deed of Trust
constitutes a default under this Deed of Trust.
b) Beneficiary shall give written notice of default to
Trustars, specifying the default complained of by the Beneficiary.
Delay in giving such notice shall not constituta a waiver of any
default nor shall it chanqe the time of default.
c) Any failures or delays by Beneficiary in asserting
any of its rights and remedies as to any default shall not operate
as a waiver of any default or of any such rights or remedies.
Delays by Heneficiary in asserting any of its rights and remedies
shall not deprive Beneficiary of its right to institute and
maintain any actions or proceedings which it may deem necessary to
protect, assert, or enforce any such rights or remedies.
d) If a monetary event of default occurs under the
terms of the Note ar this Deed of Trust, prior to exercising any
remedies hereunder or thereunder Beneficiary shall give Trustors
written notice of such default. Trustors shall have a reasonable
period of time after such notice is given within which to cure the
default prior to exercise of remedies by Beneficiary under the Note
andjor this Deed of Trust. In no event shall 8eneficiary be
org vs\do[.4 Page 11 of 138-23-95
precluded from exercising remedies if its security becomes or is
about to become materially jeopardized by any fai3ure to cure a
default or the default is not cured within ten (10) days after the
notice of default is first qiven.
ej If a non-monetary event of default accurs under the
terms of the Agreement, the Note, this Deed of Trust, the Aqreement
Containing Covenants or any document implementing the Aqreement,
prior to exercising any remedies hereunder or thereunder,
Beneficiary shall give Trustvrs notice of such default. If the
default is reasanably capable of being cured within thirty (34)
days, Trustors shall have such period ta effect a cure prior ta
exercise of remedies by the Beneficiary under the Agreament, the
Note and/or this Deed of Trust. If the default is such that it is
not reasonably capable of being cured within thirty (30) days, and
Trustors (i) initiate corrective action within said period, and
ii) diligently and in good faith work to ef£ect a cure as soon as
possible, then Trustors shall have such additianal time as is
reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. If Trustors fail to take carrective
action or cure the default within a reasoneble time, the
Benef iciary shall qive Trustors and, as provided in paragraph (f} ,
below, the limited partner of Developer notice thereof, whereupon
the limited partner af Developer may remove and replace the general
partner with a substitute general partner (as provided in Section
307. 1 of the Agreement) , who shall effect a cure within a
reasonable time thereafter in accordance with the foregoing
provisions. The Beneficiary agrees to accept cures tendered by the
limited partner of Developer within the cure periods provided in
this Deed of Trust ar within the time periads provided in Civil
Code Section 2924c, whichever is longer. Additionally, in the
event the limited partner of Developer is precluded from curing a
nan-monetary default due to an inability to remove the general
partner as a result of a bankruptcy, injunction, or similar
proceeding by or against Developer or its general partner, the
Beneficiary agrees ta farbear from completing a foreclosure
judicial or nonjudicial} during the period durinq which the
limited partner of Developer is so precluded from acting, not to
exceed 180 days, provided such limited partner is otherwise in
campliance with the foregoinq provisions. In no event shall
Beneficiary be precluded from exercising remedies if its security
becomes or is about to become materially jeopardized by any failure
to cure a default or the default is not cured within one hundred
eighty (18oj days after the notice of default is first given.
f) After Trustors give written natice to Beneficiary
that the investor limited partner has been admitted to the
Developer, Beneficiary shall send to the limited partner a copy of
all notices of default and aIl other notices that Beneficiary sends
ta Trustors, at the address far the limited partner as pravided lay
writtan notice to Beneficiary by Trustors.
org\vs dot.4 Pa e 12 of 138-23-95 g
34. This Deed of Trust shall be subordinate and junior during
the construction period to the deed af trust recorded concurrentlyherewithsecuringtheConstructionLoanmadebyUnionBank, and the
deed of trust securing the obligations to Federal National Mortgage
Assaciation ("FNMA) , and, following reconveyance of the
Construction Loan deed of trust, this De d of Trust will be
subordinate and junior to the deed of trust in favor of FNMA or
other permanent Primary Loan as described in the Note. In the
event of a default or breach by Trustors of any seaurity instrument
securing a Primary Loan described in this Section 34, Beneficiaryshallhavetherighttocurethedefaultpriortocompletionofanyforeclsure. In such event, Beneficiary shall be entitlec2 ta
reimbursement by Trustars af all costs and expenses incurred byBeneficiaryincuringthedefault. The amount of any suchdisbursementsshallbealienaqainsttheSubjectPropertyand
added to the obligation secured by this Deed of Trust until repaid,
with interes at the highest rate permitted by law.
IN WITNESS WHEREOF the Trustors have executed this Deed of
Trust as of the day and year set forth above.
Signature af Trustors
Developer"
oRANGE ABSOCIATEB, t California limited
partnership
By: F. c. oRANaB, INc. , a california
corporatian, its qeneral partner
Dated• gY;
Greqory M. vilkin
President
owner"
F. C. ORANGE, INC. , a California
aorparation
Dated: gY;
Gregory M. Vilk n
President
org vs dot.4
Pa e 13 of 13e-23-95 g
EXHIBIT "A"
TO DEED OF TRUST tATTACHMENT NO. 8)
LEGAL DESCRIPTZON OF THE PROPERTY
ALL THAT CERTAIN LAND SITUATED IN THE STATE F CALIFORNIA, COUNTY
OF ORANGE, CITY OF ORANGE, DESCRIBED AS FOLL WS:
LOTS 13, 14, 15, 16, 26 AND THE SOUTHERLY 7 FEET OF LOT I7
EXCEPTING THAT PORTION LYING WEST OF THE EAST LIKE OF MCPHERSON
ROAD BY FINAL ORDER OF CONDEMNATION RECORDED FEBRUARY 21, 1991 AS
INSTRUMENT N0. 91-078842, OFFICIAL RECORDS) , OF THE G. HOWARD
THOMPSON TRACT, AS SHOWN ON A MAP RECORDEO IN BOQK 1 PAGE 22 OF
RECORD OF SURVEYS,. IN THE OFFICE THE CC?UNTY RECORDER OF ORANGE
COUNTY, CALIFORNIA, AND THAT PORTION OF THE NORTH HALF OF CENTER
STREET ADJ INING SAID LOTS 13, 14, 15 AND 26, LYYNG BETWEEN THE
CENTERLINE OF MAIN STREET AND THE EAST LINE OF FIRST STR ET,
ABANDONED BY 4RDER OF' THE BOARD OF SUPERVI50RS QF ORANGE CQUNTY,
CALIFORNIA, A CERTIFIED COPY OF WHICH WAS RECORDED MAY 25, 1927 IN
BOOK 55, FAGE 60 OF OFFICIAL RECORDS.
ATTACHMENT N0. 9
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement entered into as of
1995 by and among THE ORANGE REDEVELOPMENT
AGENCY ("Agency") , F. C. ORANGE, INC. , a California corporation
FCOI") and ORANGE ASSOCZATES, a California limited partnership
Associates") with reference to the following facts:
A. The Agency and FCOI have heretofore entered into
that certain Affordable Housing Agreement, dated
1995 (the "Agreement") . The Agreement i.s incorporated herein by
this reference.
B. Pursuant to the Agreement, amonq other things, FCOI
has agreed , to acquire aertain real property described therein as
the Property, and rehabilitate the improvements thereon in
accordance with the requirements of the Agreement, including a
Scape of Development attached thereto (the "Project") .
C. Pursuant to the Agreement, among other thinqs, FCOI
has agreed that the apartment units to be rehabilitated in the
Project will be rented exclusively to Low Income households at
affordable housinq rents, as provided in the Agreement and in that
certain Agreement Cflntaining covenants {Includinq Rental
Restrictions) , to be executed concurrently herewith (the
covenants") .
D. Pursuant to the Agreement, among other things,
Agency has agreed to make a grant to FCOI (the "Agency Grant') , for
the purpose of assisting FCOI ta purahase the land an which the
Project is located (the "Land") , and to provide for the payment of
other Project Costs.
E. Pursuant to the Agreement, among other things, the
Agency has agreed to make a loan to FCOI (the "Agency Laan") , far
the purpose of assistinq 'COI to acquire the Property and
rehabilitate the Project, subject ta the terms and conditions of
the Agreement and a promissory note (the Agency Note") and deed of
trust (the "Deed of Trust') to be executed concurrently herewith,
to be disbursed as provided in the Agreement or as otherwise
decided amonq the Agency, FCOI and Union Bank in a Disbursement and
Intercreditor Agreement or other agreement (the "Disbursement
Agreement") .
F. FCOI, a wholly owned subsidiary of Forest City
Residential Develapment, Inc. , an hio corporation, has formed
org\vs\assume.3 pdge 1 f 4
8•23-95
Associates, a limited partnership in which FCOI is the controlling
and managing general partner, to own, obtain financinq for,
rehabilitate, manage and operate the Project, as contemplated by
the Agreement.
G. For the purposes of financing the Praject, FCoI will
obtain title to the Land, and convey a lease ta Associates, and
Associates will obtain fee title to the Improvements on the Land.
H. As cantemplated by the Agreement, FCOI intends to
assign the Agreement and all related agreements to which Developer
is a party to Associates, and Associates intends to assume alZ
rights and obligations of FCOI, as "Developer" thereunder, except
to the extent that FCOI, as owner of the Land, has rights and
obligations that are independent of those of the "Develaper".
NOW, THEREFORE, the Agency, FCOI and Associates hereby agree
as follows:
1.0. FCOI hereby assigns to Associates ali of its right, title
and interest in and to the Agreement and Associates hereby accepts
such assignment, and assumes all of the obligations of the
Developer thereunder, except that FCOI, and nat Associates, shall
have and retain all right to the Agency Grant pursuant to the
Agreement. FCOI intends to use the Agency Grant to purchase the
Land, and ta maka a lean to Associates with the balance. FCOI and
Associates shall provide for such lease and such loan in a separate
aqreement.
2 .0. Associates shall execute in its name the Agreement, the
Covenants, the Note, the Deed of Trust, the bisbursement Agreement
and any other instrument or dacument to be xecuted by the
Developer pursuant to the Agreement (callectively, the "Assigned
Agreements") , and be bound thereby in accordance with the terms
thereof.
3.0. Notwithstanding the foregoing, FCOI shall execute in its
name the Covenants and the Deed of Trust and any other instrument
or document to be executed by FCOI in its capacity as owner of the
Land.
4.0. Associates shall rehabilitate the Project in conformance
with the Agreemant and the plans and specifications heretofore
approved by the ,Agency pursuant thereta, subject to revisions and
change orders previously approved or deemed approved pursuant to
the Agreement.
5.0. Associates shall assume and perform all executory
abligations af FCoI pursuant to the Agreement, without exception.
ory vs ass soe.3 paqe 2 of 4
8-23•95
6.0. Aqancy hereby consents to and approves the assumption of
the Agreement by Associates.
7.0. The Agency shall perform any executory obligations of the
Agency pursuant to the Agreement.
8 . 0. The principal address of Associates for purposes of the
Agreement is 949 South Hope Street, Los Angeles, California 90015-
Od10.
9.0. This Agreement is made for the sole benefit and
protection of the parties hereto, and their successors and assigns,
and no other person or persons shall have any right of action or
right to rely hereon. As this Agreement contains all the terms and
conditions agreed upon between the parties, na ather agreement
regarding the subject matter thereof, shall be deemed to exist or
bind any party unless in writing and signed by the party to be
charged. Wherever required, any consent or approval af either
party shall not be unreasonably withheld or delayed.
This Agreement may be executed in several duplicate originals, each
of which shall be deemed an original, but all of which tagether
shall constitute on and the same instrument, and shall become
effective upon executian by the parties, as indicated by the
signatures below. The signature pages of one or more counterpart
copies may be removed from such counterpart copies and all attached
to the same capy of this Aqreement, which, with all attached
signature pages, shall be deemed to be an original Agreement. When
fully executed, the date of this Agreement shall be the later of
the dates indicated belaw:
or9\vs assunr.3 Page 3 of 4
8-23-95
IN WITNESS WHEREOF, the Agency, FCOI and Associates have
executed this Agreement.
ORANGE REDEVELOPMENT AGENCY
Dated:By:
Executive Director
ATTEST:
By:
Agency Clerk
APPROVED AS TO FORM AND LEGALITY:
KANE, BALLMER & BERKMAN
Agency Special Counsel
By:
Glenn F. Wasserman
FCOI"
F. C. tiRANGE, iNC. a California
corporation
Dated•By:
Gregvey M. Vilkin
President
Assaciates
ORANGE ASSOCIATEB, a California
limited partnersbip
By: F. C. ORANGfE, INC. , a
California corparatioa, ita
qeneral partner
Dated: By:
Gregory M. Vilk.n
President
orgtvs assome.3 page 4 Of 4
8-23-95
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DEDICATION OF LAND TO CITY FOR GRIJALVA PARK TURN LANE
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CITY OF ORANGEF
OFFICE OF 7HE CITY ENGINEER
EXHIBIT 1
y RIGHT TURN LANE MODIFlCATION
PROSPECT STREET AT SPRING STREET
FY
LEGEND:
NAME DATE HORIZ AS NOiED
PROPERTY TO BE DEDICATED
uRnwN E.M.L ze zo
SCALE:
YERT. AS N07ED F.B.PG. sH Er t oF 1 SHEETS
TO CITY OF ORANGE oEs cr,Eu E.M.L 2D SP-4131
s CHECKEU E.M.L 7 29 20