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CC 2013-08-27_11.b. Amend Affordable Housing Loan Agreement - Peoples Self Help HousingMEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER ~ SUBJECT: CONSIDERATION OF THE FIRST AMENDMENT TO THE AFFORDABLE HOUSING AND LOAN AGREEMENT WITH COURTLAND STREET APARTMENTS, L.P. FOR FINANCIAL ASSISTANCE FOR COURTLAND STREET AFFORDABLE HOUSING PROJECT DATE: AUGUST 13, 2013 RECOMMENDATION: It is recommended the Council approve the First Amendment to the Affordable Housing and Loan Agreement with Courtland Street Apartments, LP. to provide an additional $400,000 in financial assistance for the Courtland Street affordable housing project. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The funding is proposed to come from the City's Affordable Housing In-Lieu Fee Fund. In 2006, the Redevelopment Agency entered into an agreement with the City to borrow $820, 130 from the Affordable Housing In-Lieu Fee Fund for the purchase of the vacant property at the corner of El Camino Real and Faeh Street. The current balance is $836,257. On May 14, 2013, the Oversight Board approved a loan repayment schedule, which was also approved by the City Council as the Successor Agency at the May 28, 2013 meeting. The action was not challenged by the Department of Finance (DOF). The loan will be repaid to the City over a four-year period beginning in July 2014. Under the proposal, a portion of those proceeds will be provided to Courtland Street Apartments, LP. at the time the City receives the payments. There is an available combined fund balance of approximately $564,000 in the Affordable Housing In Lieu Fee Fund and Successor Agency to Housing Function accounts. The balance will increase when the Faeh Street property loan is repaid since only a portion will be used for the Peoples' Self Help Housing project. Therefore, the recommendations are designed to avoid impacting funding for other ongoing affordable housing efforts. Item 11.b. - Page 1 CITY COUNCIL CONSIDERATION OF THE FIRST AMENDMENT TO THE AFFORDABLE HOUSING AND LOAN AGREEMENT WITH COURTLAND STREET APARTMENTS, L.P. FOR FINANCIAL ASSISTANCE FOR COURTLAND STREET AFFORDABLE HOUSING PROJECT AUGUST 13, 2013 PAGE2 BACKGROUND: In 2011, the City Council approved a project proposed by Peoples' Self Help Housing for thirty-six low and very-low income rental units at Courtland Street and East Grand Avenue. At the same meeting, the Redevelopment Agency Board of Directors approved an agreement to provide $930,000 in financial assistance from Redevelopment Agency affordable housing set aside funds. They also received funding from the County and State housing tax credits, which has enabled them to proceed with the project. Courtland Street Apartments, LP. is the partnership formed by Peoples' Self Help Housing to develop the Courtland Street affordable housing apartment project. Due primarily to an increase in material costs, the project was an estimated $500,000 over budget when construction bids were received. In response, Peoples' Self Help Housing requested and received approval from the Architectural Review Committee (ARC) for design modifications in order to reduce costs. As a result, they have proceeded to break ground and are in the process of site preparation work. Staff discussed the concept of providing additional finance assistance to maintain the preferred design features of the project, which representatives from Peoples' Self Help Housing are interested in. However, at the time, City staff had not yet determined if the loan repayment schedule would be challenged by DOF. Since Peoples' Self Help Housing is financing the project primarily through tax credits, they are required to meet stringent deadlines. As a result, it was agreed that they would proceed with their design changes concurrently as City staff pursued an agreement for additional financial assistance. If the agreement is approved, they can reinstitute the original design features. If it is not approved, they can proceed with the amended project design. ANALYSIS OF ISSUES: The financial assistance will be contingent upon the City receiving the funds from repayment of the loan to the Redevelopment Agency. The San Luis Obispo County Housing Trust Fund has agreed to increase their loan to People's Self Help Housing, which will be repaid from the additional financial assistance provided by the City. Attached is a summary of the project's costs and revenue sources. The majority of the remainder of the shortfall is being addressed through fees that were less than projected and other minor adjustments. The design changes approved include the following: • Eliminate cupolas; . • Eliminate skylights on Building C; • Simplify the roof design for Building C; Item 11.b. - Page 2 . CITY COUNCIL CONSIDERATION OF THE FIRST AMENDMENT TO THE AFFORDABLE HOUSING AND LOAN AGREEMENT WITH COURTLAND STREET APARTMENTS, LP. FOR FINANCIAL ASSISTANCE FOR COURTLAND STREET AFFORDABLE HOUSING PROJECT AUGUST 13, 2013 PAGE3 • Modify exterior materials (replace siding with stucco except the east elevation of Building A, all elevations of Building C, and south elevation of Buildings D and E); all colors as previously approved remain the same; • Eliminate the elevated walkway system for Building B and replace it with stairs; • Reduce patio size and private decks for Buildings D and E; and • Revise the guardrail design to allow side-mount installation in lieu of deck mounting. Of these changes, the ARC and staff determined that replacing the walkway system with stairs and revising the guardrail design were both improvements to the original design. The other changes were determined to be acceptable, but would be preferred to be maintained if possible. ALTERNATIVES: The following alternatives are provided for the Council's consideration: Approve staff's recommendation; Do not approve the financial assistance and have the project proceed with the amended design features; Direct staff to pursue an agreement for a reduced amount of financial assistance in order to restore some, but not all, of the proposed design features; Amend the terms of the Agreement and approve; or Provide other direction to staff. ADVANTAGES: Approval of the recommendations will maintain the project's original design, which will result in a higher quality and more attractive project. It will also help People's Self Help Housing to address the budget shortfall in order to ensure the project is successful. By utilizing future loan repayment funds, it maintains the existing fund balance for other ongoing efforts. Therefore, the proposed strategy enables the City to address its existing top priority of helping to make the Courtland project the best possible while not impacting efforts to achieve another affordable housing project in the near future. DISADVANTAGES: The recommendations will expend funds that could eventually be used to increase the number of available affordable housing units in the City. ENVIRONMENTAL REVIEW: No environmental review is required for this item. Item 11.b. - Page 3 CITY COUNCIL CONSIDERATION OF THE FIRST AMENDMENT TO THE AFFORDABLE HOUSING AND LOAN AGREEMENT WITH COURTLAND STREET APARTMENTS, L.P. FOR FINANCIAL ASSISTANCE FOR COURTLAND STREET AFFORDABLE HOUSING PROJECT AUGUST 13, 2013 PAGE4 PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Wednesday, August 7, 2013 and on the City's website on Thursday, August 8, 2013. No comments were received. ·Attachments: 1. Amendment No. 1 to Affordable Housing and Loan Agreement 2. Project Cost and Revenue Summary Item 11.b. - Page 4 Attachment 1 AMENDMENT NO. 1 TO AFFORDABLE HOUSING AND LOAN AGREEMENT THIS AMENDMENT NO. 1 TO AFFORDABLE HOUSING AND LOAN AGREEMENT ("Amendment No. l ") is made and entered into as of the _ day of August, 2013, by and between the CITY OF ARROYO GRANDE, a California municipal corporation ("City"), and COURTLAND STREET APARTMENTS, L.P., a California limited partnership ("Developer"). A. On or around March 8, 2011, People's Self-Help Housing Corporation, a California nonprofit public benefit corporation (the "Original Developer") and the former Arroyo Grande Redevelopment Agency ("Agency") entered into that certain Affordable Housing and Loan Agreement ("AHLA"). Pursuant to the AHLA, (i) Developer agreed to develop on the real property located on the west side of Courtland Street south of Grand A venue in the City of Arroyo Grande, County of San Luis Obispo, State of California, an affordable rental housing project serving very low income and low income households (the "Project"), and (ii) the Agency agreed to assist the Developer with developing the Project by providing to Developer a loan in the amount of Nine Hundred Thirty Thousand Dollars ($930,000) (the "Agency Loan"). B. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxl 26") and Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABxl 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. A lawsuit was filed, challenging the constitutionality of both ABxl 26 and ABxl 27 (which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if certain remittance payments were made to cover certain State costs). The California Supreme Court upheld the constitutionality of ABxl 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxl 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231 ("CRA Case"). ABxl 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code ("Part 1.85"). Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. On June 27, 2012, the California Legislature passed, and the Governor signed, Assembly Bill 1484 ("AB 1484"). AB 1484, among other things, made certain revisions to certain statutes added by ABx 1 26. Pursuant to Health and Safety Code Section 34176(a), added by Part 1.85 and amended by AB 1484, and City Council Resolution No. 4421, City elected to be the "housing successor" to the Agency, enabling City to retain the housing assets and functions previously performed by the Agency, and allowing City to enforce affordability covenants and related activities pursuant to applicable provisions of the Community Redevelopment Law (Part 1 of Division 24). Administration of the AHLA is a housing function previously performed by the Agency that has been retained by City, and the loan proceeds of the Agency Loan are housing assets that have been retained by City. 882/029456-0003 5775814.2 a08/07/13 Item 11.b. - Page 5 C. As a result of increases in the cost of construction materials since the date the AHLA was executed, Developer made certain architectural revisions and omissions to the Project to avoid a funding gap. D. City has recently received its finding of completion from the State Department of Finance ("DOF"), and now anticipates receiving loan repayments on that certain Financing Agreement entered into between the City and the Agency on or about July 25, 2006, pursuant to which the Agency borrowed from City the sum of Eight Hundred Thirty Thousand Dollars ($830,000) out of City's affordable housing in-lieu fund (the "Financing Agreement"). City anticipates receiving the first loan repayment under the Financing Agreement in January 2015. E. City now wishes to provide a loan to Developer of a portion of the funds City receives as loan repayments under the Financing Agreement, in an amount up to Four Hundred Thousand Dollars ($400,000) (the "Second City Loan"), to enable Developer to re-incorporate certain of the architectural improvements previously omitted from the Project, all in accordance with the terms and conditions of this Amendment No. 1. In consideration of the foregoing Recitals, which are incorporated herein by this . reference, and the covenants and promises hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree to amend the AHLA as follows: Section I. Subject to the terms and conditions of this Amendment No. 1, City shall · provide to Developer the Second City Loan. City shall disburse the proceeds of the Second City Loan in accordance with the following process: Commencing in January, 2015, within ten (10) business days after City receives an annual loan repayment under the Financing Agreement, City shall disburse to Developer the lesser of (i) the full amount of said loan repayment, or (ii) Seventy-Five Thousand Dollars ($75,000). City shall continue to make annual disbursements to Developer pursuant to the foregoing process until such time as City has disbursed the full amount of the Second City Loan. Section 2. As a condition to City's disbursement of any portion of the Second City Loan, Developer shall issue change orders for, and reincorporate, the following improvements . (collectively, the "Reincorporated Improvements") into the Project: • Add cupolas (5 total) on the roofs of each building. • Add 3 skylights on Building C (Community Center). • Retain the original roof design for Building C. • Retain the original exterior materials (no plaster) and keep the siding on all buildings). • 8821029456-0003 5775814.2 e08/07/13 Maintain the original size of private patios and decks for Buildings D and E . -2- Item 11.b. - Page 6 Prior to the first disbursement to Developer, City's Building Official shall determine, in his or her reasonable discretion, whether Developer has complied with the provisions of this Section 2. Section 3. Concurrently with the execution of this Amendment No. 1, City and Developer shall execute, with signatures notarized (as applicable), and deliver to City (i) a promissory note substantially in the form attached hereto and incorporated herein as Exhibit "A" evidencing the Second City Loan (the "Second City Loan Note"), and (ii) a deed of trust and assignment of rents substantially in the form attached hereto and incorporated herein as Exhibit "B" securing Developer's repayment of the Second City Loan (the "Second City Loan Deed of Trust"). Section 4. Notwithstanding anything herein to the contrary, City's obligation to provide to Developer any portion of the Second City Loan is conditioned on City's receipt of funds in the same or greater amount as loan repayments under the Financing Agreement. Section 5. Except as expressly provided in this Amendment No. 1, all of the terms, conditions, and provisions set forth in the AHLA shall remain in full force and effect. Section 6. The effective date of this Amendment No. 1 shall be the later of the dates set forth next to the signatures of the parties hereto, after both parties hereto have signed this Amendment No. 1, which date shall be inserted into the preamble to this Amendment No. 1. Section 7. This Amendment No. 1 may be executed in counterparts, each of which, when both parties hereto have signed this Amendment No. 1, shall be deemed an original. ATTEST: City Clerk APPROVED AS TO FORM: RUT AN & TUCKER, LLP Special Counsel to the City 882/029456-0003 5775814.2 a08/07/13 "City" CITY OF ARROYO GRANDE, a California municipal corporation By: _____________ _ Its: --------------- -3- Item 11.b. - Page 7 . 8821029456-0003 5775814.2 a08/07/13 "Developer" COURTLAND STREET APARTMENTS, L.P., a California limited partnership By: People's Self-Help Housing Corporation, a California nonprofit public benefit corporation, its General Partner By: ____________ _ Name: ---------- Title: ----------~ [END OF SIGNATURES] -4- Item 11.b. - Page 8 8821029456-0003 5775814.2 a08/07/13 EXHIBIT "A" SECOND CITY LOAN NOTE [SEE FOLLOWING DOCUMENT] Item 11.b. - Page 9 PROMISSORY NOTE Loan Amount: $400,000 August_, 2013 Arroyo Grande, California FOR VALUE RECEIVED, COURTLAND STREET APARTMENTS, L.P., a California limited partnership ("Borrower") promises to pay to CITY OF ARROYO GRANDE, a California municipal corporation ("City"), the principal . sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000), or so much of such principal as may be disbursed pursuant hereto and in accordance with that certain Amendment No. 1 to Affordable Housing and Loan Agreement between City and Borrower dated on or about the same date hereof (the "Amendment"), plus interest on the outstanding principal balance, in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to City for the repayment of certain funds (the "City Loan") loaned to Borrower by City pursuant to the Amendment. Reference is also made to the following additional agreements and documents involving City and Borrower and/or pertaining to the Property: (i) Affordable Housing and Loan Agreement by and between Borrower as Developer, and City ("Original Agreement"), pursuant to which Developer has agreed to develop on real property located at 150 Courtland Street, in the City of Arroyo Grande (the "Property") an affordable apartment development (the "Project"). The Original Agreement, as modified by the Amendment, is hereinafter referred to as the "Agreement." All capitalized terms unless otherwise defined herein shall have the same meaning as set forth in the Agreement, which is incorporated herein by this reference. (ii) Promissory Note Secured by Deed of Trust securing repayment of a loan in the amount of Nine Hundred Thirty Thousand Dollars ($930,000) provided to Borrower pursuant to the Agreement (the "First City Loan Note"). (iii) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, City as beneficiary, and First American Title Insurance Company as Trustee, and recorded in the Office of the San Luis Obispo County Recorder on April 3, 2013, as Instrument No. 2013-018879 ("First City Loan Deed of Trust"). The First City Loan Deed of Trust secures repayment of the First City Loan Note and performance under the Agreement and City Regulatory Agreement. (iv) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Borrower and City, for the benefit of City, and recorded in the Office of the San Luis Obispo County Recorder on April 3, 2013, as Instrument No. 2013- 018875 ("("City Regulatory Agreement"). (v) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, City as beneficiary, and First American Title Insurance Company as Trustee, and recorded in the Office of the San Luis Obispo County Recorder on or about the 8821029456-0003 5775814.2 a08/07/13 Item 11.b. - Page 10 same date hereof ("City Deed of Trust"). The City Deed of Trust secures repayment of this Note and performance under the Agreement, City Regulatory Agreement, and Amendment. l . Interest. Except as provided in section 3 below, the disbursed and unpaid principal balance of the City Loan shall bear interest at the simple rate of three percent (3%) per year (the "Basic Interest Rate"). As used herein, the term "disbursed" shall mean and refer to the time when City has disbursed such funds to Borrower, pursuant to the Amendment. 2. Repayment. Subject to the provisions of Section 4 herein, which provide for acceleration of the then outstanding principal and accrued interest and immediate payment thereof in the event of a default by Borrower, the outstanding principal balance of this Note, together with any outstanding interest and other amounts payable hereunder, shall be due and payable upon the earlier of (i) the fifty-fifth (55th) anniversary of the date the City issues a Release of Construction Covenants for the Project pursuant to Section 3.10 of the Agreement, or (ii) the date the City Regulatory Agreement terminates. 3 Default Rate. Any amounts (including but not limited to amounts of principal and interest on the City Loan) which Borrower does not pay when otherwise due under the terms of this Note, shall bear interest at the rate of the lesser of ten percent (l 0%) or the maximum rate allowed per law per annum ("Default Rate"), simple interest, from the date which is ten (l 0) days after such amount would otherwise be due until the date paid. 4. Acceleration. The entire outstanding principal balance of this Note, together with any outstanding interest and other amounts payable hereunder, shall, at the election of City and upon notice to Borrower thereof, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower: (a) Upon the occurrence of any "Event of Default" as set forth in Section 11 below; or (b) If Borrower sells or transfers the Property, including, without limitation, lease (other than leases of individual Project units to income-qualified residential tenants in the ordinary course of business in compliance with the City Regulatory Agreement), exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except a sale or transfer which under federal law would not, by itself, permit the Borrower to exercise a due on sale or due on encumbrance clause, and except as permitted by the Agreement. 882/029456--0003 5775814.2 a08/07/13 -2- Item 11.b. - Page 11 5. Prepayment: Application of Payments. At any time after the disbursement of the City Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the City Loan and accrued interest and any other sums outstanding without penalty. All payments, including any prepayments or funds received upon acceleration pursuant to Section 4 above, shall be applied first toward any outstanding costs of collection or other amounts (excluding City Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Basic Interest Rate, if any, and finally toward the remaining principal balance under the Note. 6. Security and Source of Payment. Borrower's obligations under this Note, the First City Loan Note, the Agreement, City Regulatory Agreement, and Amendment shall be secured by the City Deed of Trust. The City Loan shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any partner, member, or shareholder thereof shall have any personal liability for repayment. However, nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for this Note of all the rights and remedies of City, or (b) be deemed in any way to impair the right of City to assert the unpaid principal amount of this Note as a demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on this Note; nothing contained herein is intended to relieve the Borrower and, if Borrower is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Borrower of liability for damages caused to City as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Agreement and/or · Deed of Trust that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Project collected by Borrower after an Event of Default to the full extent of the rental income or other income retained and collected by Borrower after the giving of any such notice;; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (v) breach of any environmental covenant or representation made by the Borrower relating to the Project. 7. Obligation of Borrower Unconditional. The obligation of Borrower to repay the City Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid or this Note shall have been cancelled pursuant to the terms of Section 2 above, Borrower agrees that it: (a) will use the funds solely for the 8821029456-0003 5775814.2 a08f07fl3 -3- Item 11.b. - Page 12 purposes set forth herein and in the Amendment; and (b) will not terminate or suspend any payment or obligations under this Note, the First City Loan Note, the Agreement, the Amendment, the First City Loan Deed of Trust, the City Regulatory Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the First City Loan Note, the Agreement, the Amendment, the First City Loan Deed of Trust, the City Regulatory Agreement, or any document executed hereunder or in connection ·herewith. 8. Purpose of City Loan. The City Loan proceeds shall be used by Borrower as provided in the Amendment and for such other uses previously approved in writing by City. In no event shall Borrower use or otherwise invest the proceeds of the City Loan except as expressly provided in this Note and in the Amendment. 9. Covenants of Borrower. As additional consideration for the making of the City Loan by City, Borrower covenants as follows: 9.1 Compliance with Agreement, City Regulatory Agreement, First City Loan Note, First City Loan Deed of Trust, and City Deed of Trust. Borrower shall comply with all of its obligations under the Agreement, the City Regulatory Agreement, the First City Loan Note, the First City Loan Deed of Trust, and the City Deed of Trust. Any amounts payable by Borrower under the Agreement, the City Regulatory Agreement, the First City Loan Note, the First City Loan Deed of Trust, or the City Deed of Trust (other than amounts also payable hereunder) shall be deemed added to the principal amount of the City Loan payable hereunder. 9.2 Other Loans. Borrower shall comply with all monetary and non-monetary covenants associated with any loan secured by an interest in the Property or the Project. Borrower shall provide to City a copy of any notice of default within five business days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the City Loan. 10. Assignment of this Note. This Note shall be assignable by Borrower pursuant to, and in compliance with, Section 7 .5 of the Agreement. Notwithstanding anything which may be or appear to be herein to the contrary, no purported assignment of this Note and/or the City Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any applicable ordinances, laws, or regulations. City's consent to such assignment shall be expressly conditioned upon (a) the assignee's execution of such documents as required by City including, without limitation, any and all documents deemed necessary by City to provide for said assignee's assumption of all 882/029456-0003 · 5775814.2 a08/07/13 -4- Item 11.b. - Page 13 of the obligations of Borrower hereunder, under the City Regulatory Agreement, under the First City Loan Note, under the First City Loan Deed of Trust, under the City Deed of Trust, and under the Agreement, and (b) City's approval of the financial and credit worthiness of such proposed assignee. 1 I. Events of Default and Remedies. I I. I Borrower Events of Default. The occurrence of any of the following shall, after the giving of any notice described therein, constitute an event of default by Borrower hereunder ("Event of Default"): (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note or the First City Loan Note without curing such failure within ten (10) days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower); (b) The failure of Borrower to perform any non-monetary covenant or obligation under this Note or the First City Loan Note without curing such failure within thirty (30) days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non-monetary obligation is such that it cannot be cured within a 30-day period, it shall be deemed cured if Borrower commences the cure within said 30-day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections I l.I(e) or 11.l(t) below; ( c) The failure of Borrower to perform any covenant or obligation under the Agreement, the City Deed of Trust, the First City Loan Note, the First City Loan Deed of Trust, or the City Regulatory Agreement, unless the default is cured within the applicable cure period (if any); ( d) The material falsity of any representation or breach of any representation or warranty made by Borrower under the terms of this Note, the Agreement, the City Regulatory Agreement, the First City Loan Note, the First City Loan Deed of Trust, or the City Deed of Trust; (e) Borrower or any constituent member or general partner, or maJonty shareholder, of Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (I 0) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; 8821029456-0003 5775814.2 a08/07/13 -5- Item 11.b. - Page 14 (f) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower or any constituent member or general partner or majority shareholder of Borrower, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (g) Voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) days or the involuntary cessation of the operation of the Project for a continuous period of more than sixty (60) days; (h) A transfer in violation of Section 7 .5 of the Agreement; or (i) Subject to the notice and cure provisions set forth in the Agreement, Borrower shall be in default under any of the terms of any other Project financing, or any other secured or unsecured obligation relating to the Project, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. 11.2 City Remedies. Upon the occurrence and during the continuance of an Event of Default hereunder, City may, in its sole discretion, take any one or more of the following actions: (a) By notice to Borrower, except in the case of a default by Borrower under Section 11.l(e) or Section 11.l(f) in which event no notice pursuant to this Note shall be required, declare the entire then unpaid principal balance of the City Loan immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the City Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; (b) Subject to the nonrecourse provisions of Section 6 above, take any and all actions and do any and all things which are allowed, permitted, or provided by law, in equity, or by statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due hereunder, to exercise its rights under the City Deed of Trust, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, under the First City Loan Note, under the First City Loan Deed of Trust, under the City Regulatory Agreement or under any other document executed in connection herewith; ( c) Subject to the nonrecourse provision of Section 6 above, upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, City may, but shall not be obligated to, make such payment. If such payment is made by City, Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has 8821029456-0003 5775814.2 a08/07/13 -6- Item 11.b. - Page 15 been made by City shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded the amounts evidenced by this Note; or ( d) Subject to the nonrecourse prov1s1ons of Section 6 above, upon the occurrence of an Event of Default described in Section 11.l(e) or 11.l(f) hereof, City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the City Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of City and its counsel to protect the interests of City and to collect and receive any monies or other property in satisfaction of its claim. 11.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by City. In order to entitle City to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 12. Agreement to Pay Attorneys' Fees and Expenses. In the event that City brings any action or files any proceeding in connection with the enforcement of its rights under this Note or the City Deed of Trust, as a consequence of any breach by Borrower of its obligations hereunder or thereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid by the losing party. The attorneys' fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing award of attorneys' fees, the prevailing party in any lawsuit on this Note or the City Deed of Trust shall also be entitled to its reasonable attorneys' fees incurred in any post judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or reimburse City, upon demand by City, for all costs incurred by City in connection with enforcement of this Note or the City . Deed of Trust, including without limitation, reasonable attorneys' fees and costs, ifthere shall be filed by or against Borrower any proceedings under any federal or state bankruptcy or insolvency laws, whether City is a creditor in such proceedings or otherwise. 13. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, first class mail certified or registered, return receipt requested, or reputable overnight 8821029456-0003 5775814.2 a08/07/13 -7- Item 11.b. - Page 16 delivery service that provides a receipt with the time and date of delivery and addressed as follows: To City With a copy to: To Borrower: With a copy to: City of Arroyo Grande 300 East Branch Street Arroyo Grande, CA 93420 Attn: City Manager Rutan & Tucker, LLP 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626 Attn: Dan Slater, Esq. Courtland Street Apartments, L.P. 3533 Empleo Street San Luis Obispo, CA 93401 Attn: Executive Director Merritt Community Capital Fund XV, L.P. 1970 Broadway, Suite 250 Oakland, California 94612 Attn: Bernard Deasy Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 14. Severability. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 15. Intemretation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Borrower has been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor of or against any party on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 8821029456-0003 5775814.2 a08/07/13 -8- Item 11.b. - Page 17 16. No Waiver: Consents. Any waiver by City must be in writing and will not be construed as a continuing waiver. No waiver will be implied from any delay or failure by City to take action on account of any default of Borrower. Consent by City to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirements for City's consent to be obtained in any future or other instance. 1 7. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 18. Representations and Warranties of Borrower. Borrower hereby warrants and represents to City that: 18.1 Organization and Standing. Borrower is a California legal entity as described in the Agreement, duly organized, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this Note, the Agreement, the First City Loan Note, the First City Loan Deed of Trust, the City Deed of Trust, the City Regulatory Agreement and all other documents executed in connection with any of the foregoing. 18.2 Enforceabilitv. This Note and all other instruments to be executed by Borrower in connection with the City Loan constitute the legal, valid and· binding obligation of Borrower, without joinder of any other party. 18.3 Authorization and Consents. The execution, delivery and performance of this Note and all other instruments to be executed in connection herewith is consistent with any articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders. 18.4 Due and Valid Execution. This Note and all other instruments to be executed in connection herewith, will, as of the date of their execution, have been duly and validly executed by Borrower. 18.5 Licenses. Borrower will obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate the Project. 18.6 Litigation and Compliance. To the best of Borrower's knowledge, there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower (other than those as have been previously disclosed in writing to City) which could materially impair its ability to perform its obligations under this Note, nor is Borrower in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note. 882/029456-0003 5775814.2 a08/07/13 -9- Item 11.b. - Page 18 18.7 Default. To Borrower's current actual knowledge, there are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in Section 11. 18.8 No Violations. To the best of Borrower's knowledge, the execution and delivery of this Note, the Agreement and all other documents executed or given hereunder or thereunder, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor, to the best of Borrower's knowledge, will the same constitute a breach of or violate any law or governmental regulation. 19. Approvals. Any review or approval of any matter by City or any City official or employee under this Note shall be solely for the benefit of City, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, Borrower and riot City shall be solely responsible for assuring compliance with laws, the suitability of the Property for the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof. 20. Waiver. Subject to Section 2 above, Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of City or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which City may have. · 8821029456-0003 5775814.2 a08/07/13 [End -Signature page follows] -10- Item 11.b. - Page 19 IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. Dated: 2013 _______ ___, 882/029456-0003 5775814.2 a08/07/13 COURTLAND STREET APARTMENTS, L.P., a California limited partnership By: People's Self-Help Housing Corporation, a California nonprofit public benefit corporation, its General Partner By: ___________ _ Name: ---------- Title: ~---------~ -11- Item 11.b. - Page 20 882/029456-0003 5775814.2 a08/07/13 EXHIBIT"B" SECOND CITY LOAN DEED OF TRUST [SEE FOLLOWING DOCUMENT] Item 11.b. - Page 21 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Arroyo Grande 300 East Branch Street Arroyo Grande, CA 93420 Attn: City Clerk (SPACE ABOVE FOR RECORDER'S USE) This Deed of Trust is recorded at the request and for the benefit of the City of Arroyo Grande and is exempt from the payment of a recording fee pursuant to Government Code Sections 6103 and 27383. DEED OF TRUST WITH ASSIGNMENT OF RENTS (This Deed of Trust Contains an Acceleration Clause) THIS DEED OF TRUST is made this_ day of August, 2013, between COURTLAND STREET APARTMENTS, L.P., a California limited partnership ("Trustor"), whose address is 3533 Empleo Street, San Luis Obispo, CA 93401, FIRST AMERICAN TITLE INSURANCE COMPANY ("Trustee"), and the CITY OF ARROYO GRANDE, a California municipal corporation ("Beneficiary"). 1. Grant In Trust. For the purposes and upon the terms and conditions in this Deed of Trust, Trustor grants, transfers, and assigns to Trustee, in trust, with power of sale and right of entry and possession, the following property and any interest therein (collectively, the "Trust Estate"): (i) the real property located in the City of Arroyo Grande, County of San Luis Obispo, State of California described in Exhibit "A" attached hereto and incorporated herein by this reference ("Real Property"); (ii) all buildings and other improvements and structures now or hereafter located on the Real Property (collectively, the "Improvements" and together with the Real Property shall sometimes be referred to as the "Property"); (iii) all existing and future leases, subleases, subtenancies, licenses, agreements and concessions relating to the use, occupancy or enjoyment of all or any part of the Property, together with any and all guaranties and other agreements relating to or made in connection with any of the foregoing (individually, a "Lease'', and collectively, the "Leases"); and (iv) all rents, issues, income, revenues, royalties, profits, proceeds and earnings now or hereafter payable with respect to or otherwise derived from the ownership, use, management, operation, leasing or occupancy of the Property, including, without limitation, cash or security deposited under any of the Leases to secure the performance by the lessees of their obligations thereunder (collectively, the "Rents"). 2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following: (i) payment of the sum of Four Hundred Thousand Dollars ($400,000.00), with interest thereon according to the terms of a promissory note or notes of even date herewith made to Trustor, payable to the order of Beneficiary, and any extensions or renewals thereof (the "Note"), and all other amounts due under the Note; (ii) Trustor's payment and performance of its obligations under this Deed of Trust; and (iii) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. 8821029456-0003 5775814.2 a03/28/13 Item 11.b. - Page 22 3. Right of Acceleration upon Sale/Encumbrance, Default. In the event Trustor shall: (i) directly or indirectly, voluntarily or involuntarily, sell, assign, transfer, dispose of, alienate, encumber, lease, or agree to sell, assign, transfer, dispose of, alienate, encumber, or lease all or any portion of any interest in the Property (excluding the lease of the residential units on the Property to income-eligible households in accordance with that certain Regulatory Agreement and Declaration of Covenants and Restrictions between Trustor and Beneficiary dated March 28, 2013 and recorded against the Real Property on April 3, 2013, as Instrument No. 2013-018875 ("Regulatory Agreement"), the lien of the Permitted Encumbrances, a Permitted Transfer, and any other assignment, transfer, or encumbrance approved in writing by · Beneficiary); or (ii) refinance any lien or encumbrance for a loan amount in excess of the then outstanding sum secured by such lien or encumbrance or extend the term of any loan secured by any such lien or further encumber the Property; or (iii) default on any of its obligations set forth in the Loan Documents and fail to cure the default within the applicable cure period, or ( d) default on any obligations under any documents relating to any other financing that is secured by the Property, then, or at any time thereafter, Beneficiary, at its option, may declare the entire indebtedness evidenced secured by this Deed of Trust immediately due and payable. This term "Loan Documents" shall mean this Deed of Trust, the Note, the Affordable Housing and Loan Agreement between Trustor and the former Arroyo Grande Redevelopment Agency ("Agency") dated March 8, 2011, as modified by that certain Amendment No. 1 to Affordable Housing and Loan Agreement dated on or about the same date hereof ("Loan Agreement"), the Promissory Note Secured by Deed of Trust executed by Trustor and dated March 28, 2013 ("First City Loan Note") the Deed of Trust with Assignment of Rents dated March 28, 2013 executed by Trustor and recorded against the Real Property on April 3, 2013, as Instrument No. 2013-018879 ("First City Loan Deed of Trust"), and the Regulatory Agreement, as such agreements may be amended from time to time. Pursuant to Assembly Bill 26 from the 2011-12 First Extraordinary Session of the California Legislature, which was signed by the Governor on June 28, 2011 ("ABxl 26"), all redevelopment agency activities, except continued performance of "enforceable obligations," were immediately suspended. A lawsuit was filed, challenging the constitutionality of ABxl 26 and companion bill ABx 1 27 (which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if the legislative bodies that established the agencies elected to participate in a "voluntary alternative redevelopment program" and make certain remittance payments). The California Supreme Court upheld the constitutionality of ABxl 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxl 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231 (the "CRA Case"). ABxl 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) ("Part 1.85") of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. On June 27, 2012, the California Legislature passed, and the Governor signed, Assembly Bill 1484 ("AB 1484"), which, among other things, made certain revisions to certain of the statutes added by ABxl 26, and added Chapter 9 to Part 1.85. Pursuant to Health and Safety Code section 34176(a), added by Part 1.85 and amended by AB 1484, the City Council of the City of Arroyo Grande adopted its Resolution No. 4421 on January 10, 2012, electing to retain the housing assets and functions previously performed by the Agency. Pursuant to said resolution, all housing assets of the Agency were transferred to Beneficiary on February 1, 2012. Pursuant to subdivision (e)(2) of Health and Safety Code 882/029456-0003 5775814.2 a03/28/13 -2- Item 11.b. - Page 23 section 34176, which subdivision was added by AB 1484, administration of the Loan Agreement is a housing function of the Agency that was so transferred to the City, and the loan proceeds to be provided pursuant to the Loan Agreement are one of the "housing assets" of the Agency that · was so transferred to Beneficiary. Any capitalized terms contained in this Deed of Trust which are not defined herein shall have the meaning given in the Loan Agreement, unless expressly provided to the contrary. 4. Assignment of Rents and Performance of Leases. 4.1 Assignment of Rents and Leases. Trustor hereby irrevocably absolutely and unconditionally assigns and transfers to Beneficiary all of Trustor' s right, title and interest in and to the Leases and the Rents; provided, however, that so long as no Event of Default (as defined in Section 5.1 below) has occurred and is continuing, Trustor shall have the right under a license granted hereby to collect and receive all Rents as trustee for the benefit of Beneficiary and to apply the amounts so collected first to the payment of costs and expenses associated with the ownership maintenance, operation and leasing of the Property, including, principal, interest and all other amounts required to be paid under the Loan Documents, before using or applying such Rents for any other purpose. No Rents or such other income shall be distributed or paid to Trustor, unless such costs and expenses which are then due have been paid in full. Thereafter, so long as no Event of Default has occurred and is continuing, the balance may be distributed to Trustor. If an Event of Default has occurred and is continuing, Trustor's right to collect and receive the Rents under the license granted hereby shall cease and the license shall be revoked automatically and, pursuant to Section 5.2.l hereof, Beneficiary shall have the sole right, with or without taking possession of the Property, to collect all Rents; provided, however, if such Event of Default is cured, then such license shall be automatically reinstated. This is an absolute assignment and not an assignment for security only. 4.2 Covenants Regarding Leases. Trustor shall not, without the prior written consent of Beneficiary, (i) collect any rent from any lessee for a period of more than one (1) month in advance, or (ii) execute any further assignment of any of its right, title and interest in the Leases and the Rents, except in connection with financing otherwise approved by the Beneficiary. Trustor shall (i) observe, perform and discharge each and every obligation, term, covenant, condition and agreement of Trustor under the Leases in all material respects, (ii) enforce the performance of each and every obligation, term, covenant, condition and agreement in the Leases to be performed by any lessee or guarantor thereof in all material respects, (iii) use good faith commercially reasonable efforts to keep the Property leased at a good and sufficient rental (but at affordable rents in accordance with the Regulatory Agreement) and on such other terms and conditions as are reasonably acceptable to Beneficiary, and (iv) execute and deliver to Beneficiary upon demand, at any time and from time to time, any and all assignments and other instruments which Beneficiary may deem reasonably advisable to carry out the true purposes and intent of the assignment set forth in Section 4.1 above. S. Events of Default and Remedies. 5.1 Events of Default. Any of the following events shall, at Beneficiary's option, constitute an event of default (an "Event of Default") hereunder: 882/029456-0003 5775814.2 a03/28/13 -3- Item 11.b. - Page 24 5.1.1 Failure to Pay. The failure of Trustor to pay (i) within ten (10) days of its due date, any installment of principal or interest under the Note (except at maturity, by acceleration or as part of a prepayment hereunder); (ii) all outstanding principal and accrued interest under the Note at maturity, by acceleration or as part of a prepayment thereunder; or (ii) · within ten (I 0) days after written notice that same is due, any sum as provided in this Deed of Trust or any other Loan Document or any other instrument or agreement secured hereby (other than as described in the foregoing (i) and (ii)). 5.1.2 Failure to Perform. The failure of Trustor to promptly and completely observe or perform any term, condition, covenant, agreement or obligation contained in this Deed of Trust, any other Loan Document or any other instrument or agreement secured hereby, and the continuation of such failure following the expiration of any applicable notice, cure or grace period, if any, provided for therein or herein; provided, however, that in the event no cure or grace period is otherwise provided for herein or therein, such failure shall not be an Event of Default hereunder if Trustor observes or performs such term, condition, covenant, agreement or obligation within thirty (30) days of receipt of written notice from Beneficiary of Trustor's failure to observe or perform any such term, condition, covenant, agreement or obligation (or if not reasonably susceptible of cure within thirty (30) days, then for a reasonable time thereafter provided the cure is commenced in thirty (30) days and diligently and continuously prosecuted to a cure within ninety (90) additional days thereafter). 5.1.3 Other Defaults. The occurrence of any "default" or "Event of Default" under any of the other Loan Documents (as defined therein) or any other instrument or agreement secured hereby and the continuation of such "default" or "Event of Default" following the expiration of any applicable notice, cure or grace period, if any, provided for in such other Loan Document or such other instrument or agreement secured hereby. 5.1.4 Limited Partner Cure Rights. During any period in which there is a tax credit investor admitted as a limited partner of Trustor, in the event Trustor fails to commence or complete a cure of a Trustor default within any applicable cure period set forth above and such limited partner notifies Beneficiary in writing prior to the expiration of the required time period to commence the curing of the default that the limited partner will cure the default (or if Trustor timey commences the cure but fails to compete the cure within the applicable cure period, the notice shall be provided before the expiration of the cure period), then the cure period provided for any monetary default shall be extended by ten (10) days and the cure period provided for any non-monetary default shall be extended by thirty (30) days. 5.2 Remedies. During the existence of any Event of Default, Beneficiary may, at its option, declare all indebtedness secured hereby, and the same shall thereupon become, immediately due and payable without any presentment, demand, protest or notice of any kind. Thereafter, Beneficiary may, at its option: 5.2.1 Termination of License. Subject to the provisions of Section 5.1 hereof, terminate Trustor's right and license to collect the Rents, and either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, enter upon and take possession of the Trust Estate or any part thereof, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Trust Estate, or 8821029456-0003 5775814.2 a03/28/13 -4- Item 11.b. - Page 25 any part thereof or interest therein, make, modify, enforce, cancel or accept the surrender of any Lease, increase the income therefrom or protect the security hereof and, with or without taking possession of the Trust Estate, sue for or otherwise collect the Rents, including those past due and unpaid, and apply the same, less reasonable, actual, out-of-pocket costs and expenses of operation and collection, including, without limitation, reasonable, actual, out-of-pocket attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of all or any portion of the Trust Estate, the collection of such Rents and the application thereof as aforesaid, or any of such acts, shall not cure or waive any Event of Default or recorded notice of default hereunder or invalidate any notice or act done in response to such Event of Default or pursuant to such notice of default and, notwithstanding the continuance in possession of all or any portion of the Trust Estate or the collection, receipt and application of Rents, Trustee or Beneficiary shall be entitled to exercise every right provided for in any of the Loan Documents or by law during the existence of any Event of Default, including the right to exercise the power of sale. Failure of Beneficiary at any time, or from time to time, to collect the Rents shall not in any manner affect the subsequent enforcement of Beneficiary of the right to collect the same. 5.2.2 Appointment of Receiver. As a matter of right and without notice to Trustor or anyone claiming under Trustor, and without regard to the then value of the Trust Estate or the interest of Trustor therein, to apply to any court having jurisdiction to appoint a receiver or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided in this Deed of Trust and shall continue as such and exercise all such powers until the later of (i) the date of confirmation of sale of the Trust Estate, (ii) the disbursement of all proceeds of the Trust Estate collected by such receiver and the payment of all expenses incurred in connection therewith, and (iii) the termination of such receivership with the consent of Beneficiary or pursuant to an order by a court of competent jurisdiction. 5.2.4 Judicial Foreclosure of Deed of Trust. Commence an action to foreclose this Deed of Trust as a mortgage, or specifically enforce any of the covenants hereof. 5.2.5 Power of Sale. Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Trust Estate or any portion thereof to be sold, which notice Trustee or Beneficiary shall cause to be transmitted and recorded, if applicable, in accordance with governing law. Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor or Obligor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Trust Estate at the time and place of sale fixed by it in said Notice of Sale, either as a whole, or in separate lots or parcels or items as Beneficiary shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustor hereby expressly waives any right which it may have to direct the order in which any of the Trust Estate may be sold when it consists of more than one lot or parcel, and such order of sale, whether in a single sale or in multiple sales held on different days or at different times, shall be at the sole 882/029456-0003 5775814.2 a03/28/13 -5- Item 11.b. - Page 26 discretion of Beneficiary. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale to the extent permitted by law. After deducting all costs, fees and expenses of Trustee and of this Deed of Trust and all reasonable, actual out-of-pocket costs, fees and expenses of Beneficiary, including reasonable, actual, out-of- pocket costs of evidence of title, and attorneys' fees of Trustee and Beneficiary, in connection with such sale, and subject to applicable law, Trustee shall apply, in the following priority, the proceeds of sale to payment of: (i) first, all sums expended under the terms hereof, not then repaid, with interest thereon according to the terms of the Debt Instrument, (ii) second, all other sums then secured hereby, in such order of priority and in such proportion as Beneficiary in its sole discretion may elect, and (iii) the remainder, if any, to the person or persons legally entitled thereto. Subject to applicable law, Trustee may postpone the sale of all or any portion of the Trust Estate by public announcement at the time and place of such sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. 5.2.6 Other Remedies. Exercise all other rights and remedies provided herein, in any Loan Document or other document or agreement now or hereafter securing all or any portion of the obligations secured hereby, or provided by law. During the existence of an Event of Default hereunder, Beneficiary may proceed in any sequence to exercise its rights . hereunder with respect to all or any portion of the Trust Estate. 5.3 Remedies Not Exclusive; Waiver. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Trustee or Beneficiary, or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary. If there exists additional security for the obligations secured hereby, Beneficiary, at its sole option, and without limiting or affecting any of the rights or remedies hereunder, may exercise any of the rights or remedies to which it may be entitled hereunder either concurrently with whatever rights it may have in connection with such other security or in such order and in such manner as Beneficiary may deem fit without waiving any rights with respect to such other security. 6. Actions Affecting Property. Trustor shall give Beneficiary and Trustee prompt written notice of the assertion of any claim with respect to, or the filing of any action or proceeding purporting to affect the Property, the security hereof or the rights or powers of Beneficiary or Trustee. Trustor shall appear in and contest any such action or proceeding and shall pay all costs and expenses, including cost of evidence of title and attorney's fees, in any such action or proceeding. 7. Beneficiary Expenditures. If any action or proceeding is commenced that would materially affect Beneficiary's interest in the Property, or if Trustor fails to pay any indebtedness secured by the Property or that could result in a lien being recorded against the Property, or if 8821029456-0003 5775814.2 a03f28/\3 -6- Item 11.b. - Page 27 Trustor fails to comply with any provision of this Deed of Trust or any Loan Documents, including but not limited to Trustor's failure to discharge or pay when due any amounts Trustor is required to discharge or pay under this Deed of Trust or the Loan Documents, Beneficiary on Trustor's behalf may (but shall not be obligated to) take any action that Beneficiary deems appropriate, including but not limited to discharging or payi~g all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenses, together with interest thereon from the date of such expenditures at the rate of ten percent ( 10%) per annum or the maximum legal rate then applicable, whichever is less ("Default Interest Rate"), from the date of such expenditure until the date paid, will become a part of the indebtedness secured by this Deed of Trust and, at Beneficiary's option, will (a) be payable upon demand, (b) be added to the balance of the Note and be payable on the same terms as the original amount provided thereunder, or (c) be treated as a balloon payment which will be due and payable upon the maturity date of the Note. This Deed of Trust shall secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Beneficiary may be entitled upon a default. 8. Liens and Encumbrances. Trustor shall pay and promptly discharge, at Trustor's cost and expense, all taxes and assessments, liens, encumbrances and charges upon the Property, or any part thereof or interest therein, including any other financing secured by the Property as such payments become due. If Trustor shall fail to pay any such amount or to remove and discharge any such lien, encumbrance or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in a court a bond or the amount claimed or otherwise giving security for such claim, or by procuring such discharge in such manner as is or may be prescribed by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing rights, together with interest thereon from the date of such expenditure at the Default Interest Rate. This Deed of Trust shall secure payment of these amounts and all other amounts payable under this Deed of Trust. 8. Extended Use Agreement. Beneficiary acknowledges that Trustor intends to enter into an extended use agreement with the California Tax Credit Allocation Committee (CTCAC), which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code (IRC), as amended ("Extended Use Agreement"). As of the date hereof, IRC Section 42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other than for good cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect to such unit not otherwise permitted under Section 42 for a period of three (3) years after the date the building is acquired by foreclosure or instrument in lieu of foreclosure. In the event such an Extended Use Agreement is recorded against the Property, the Beneficiary agrees to comply with the provisions set forth in IRC Section 42(h)(6)(E)(ii) with respect to any unit that is regulated by the Extended Use Agreement. 882/029456--0003 5775814.2 a03/28/13 -7- Item 11.b. - Page 28 9. Incorporation of Fictitious Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Luis Obispo 6213 768 Sutter 655 585 Contra Costa 4684 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137· Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barllara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kem 3756 690 Oranae 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the Property. Said agreements, terms and provisions contained in said subdivision A and B are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein. 882/029456-0003 5775814.2 a03128/13 (signatures on next page) -8- Item 11.b. - Page 29 Trustor has caused this Deed of Trust to be executed as of the date set forth above. 882/029456-0003 5775814.2 a03/28/13 "TRUSTOR" COURTLAND STREET APARTMENTS, L.P., a California limited partnership By: People's Self-Help Housing Corporation, a California nonprofit public benefit corporation, its General Partner By: ___________ _ Name: ---------- Title: ----------~ -9- Item 11.b. - Page 30 State of California County of _________ _ ) ) (insert name and title of the officer) Notary Public, personally appeared--------------------- who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. 882/029456-0003 5775814.2 a03/28/13 (Seal) -10- Item 11.b. - Page 31 The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the secwity of this Deed of Trust, Trustor agrees: I) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the secwity hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the secwity hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due ofall other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as ''the person or persons legally entitled thereto." 5) That as additional secwity, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any secwity for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property 882/029456-0003 5775814.2 a03f28/13 -11- Item 11.b. - Page 32 so sold, but without any covenant or warranty, express or implied The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 882/029456-0003 5775814.2 a03/28/13 -12- Item 11.b. - Page 33 EXHIBIT "A" LEGAL DESCRIPTION OF REAL PROPERTY All that certain real property situated in the CITY OF ARROYO GRANDE, County of SAN LUIS OBISPO, State of CALIFORNIA, described as follows: PARCEL 2 AS DESCRIBED IN THAT CERTAIN CERTIFICATE OF COMPLIANCE RECORDED JULY 15, 2009 AS DOCUMENT NO. 2009-038586 OF OFFICIAL RECORDS IN THE OFFICE OF THE COUNTY RECORDER AND MORE FULLY DESCRIBED AS FOLLOWS: A PORTION OF LOT 1 OF THE J.F. BECKETT'S GRAND A VENUE TRACT, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STA TE OF CALIFORNIA, ACCORDING TO MAP FILED SEPTEMBER 26, 1891 IN BOOK B, PAGE 75 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AND THAT PORTION OF BLOCK 114 OF THE TOWN OF GROVER, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STA TE OF CALIFORNIA, ACCORDING TO MAP FILED NOVEMBER 23, 1892 IN BOOK A, PAGE 6 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AND THAT PORTION OF REMAINDER OF TRACT 2471, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED AUGUST 16, 2004 IN BOOK 24, PAGES 9, 10 AND 11 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AND BEING THE SOUTH 172.25 FEET OF THE FOLLOWING DESCRIPTION; BEGINNING AT THE NORTHEAST CORNER OF LOT 1 OF TRACT 2158, IN THE CITY OF GROVER BEACH, COUNTY OF SAN LUIS OBISPO, ST ATE OF CALIFORNIA, ACCORDING TO MAP FILED MAY 2, 1994 IN BOOK 17, PAGE 23 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG THE EASTERLY LINE THEREOF AND ALONG THE EAST LINE OF THE LAND DESCRIBED IN DEED TO JOHN BRADLEY FORDE AND ANITA MADELINE FORDE IN DOCUMENT NO. 2003-122906 FILED OCTOBER 22, 2003 IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, SOUTH 03° 14' 51" WEST, 645.07 FEET TO THE NORTHWEST CORNER OF LOT 7 OF SAID TRACT 2471; THENCE ALONG THE NORTHERLY LINE OF SAID TRACT 2471 AND THE NORTHERLY LINE OF TRACT 2260 PHASE I, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STA TE OF CALIFORNIA, ACCORDING TO MAP FILED NOVEMBER 3, 2000, IN BOOK 19, PAGE 43 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY THEREOF, SOUTH 86° 45' 35" EAST, 411.86 FEET TO A POINT ON THE WESTERLY LINE OF AN EXISTING 50-FOOT EASEMENT FOR ROAD PURPOSES, AS SHOWN ON PARCEL MAP AG 00-301, IN THE CITY OF ARROYO GRANDE, COUNTY OF SAN LUIS OBISPO, STA TE OF CALIFORNIA, ACCORDING TO MAP FILED JUNE 25, 2002 IN BOOK 56, PAGE 54 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WHICH POINT IS 882/029456-0003 5775814.2 a08107/13 -13- Item 11.b. - Page 34 SOUTH 86° 45' 35" EAST, 7.00 FEET FROM THE NORTHEAST CORNER OF LOT 84 OF SAID TRACT 2260 PHASE I; THENCE ALONG THE WESTERLY LINE OF SAID 50-FOOT EASEMENT FOR ROAD PURPOSES, NORTH 03° 14' 46" EAST, 645.00 FEET TO A POINT ALONG THE SOUTHERLY RIGHT-OF-WAY OF EAST GRAND A VENUE; THENCE ALONG SAID SOUTHERLY RIGHT-OF-WAY LINE THEREOF, NORTH 86° 45' 00" WEST, 411.84 FEET TO THE POINT OF BEGINNING. Assessor Parcel No(s).: 077-131-053 077-131-055 8821029456-0003 5775814.2 a03/28/13 -14- Item 11.b. - Page 35 PEOPLES' SELF-HELP HOUSING CORP COURTLAND STREET APTS. DEVELOPMENT BUDGET DESCRIPTION LAND PURCHASE LEGAL, BROKER & TITLE TAXES CONSTRUCTION • RESIDENTIAL SUPERVISION, PROFIT AND OVERHEAD ARCHITECTURAL & ENGINEERING CONSTRUCTION LOAN INTEREST ORIGINATION FEE & EXPENSES INSURANCE CONSTRUCTION TITLE + RECORDING PERM LOAN FEES PERM LOAN LEGAL and TITLE + RECORDING APPRAISAL + AUDIT SOFT COST CONTIGENCY CONSTRUCTION CONTINGENCY (5%) TCAC MONITORING FEES ENVIRONMENTAL AUDIT LOCAL FEES MARKET STUDY MARKETING CAPITALIZED OPERATING RESERVE DEVELOPER FEE SYNDICATION CONSULTANT LEGAL TAX CREDIT USES REVISED 993,188 31,656 17,000 5,932,307 812,905 375,000 255,635 101,385 75,000 15,000 18,649 25,000 15,000 91,950 313,630 29,592 3,725 372,245 9,010 50,000 196,905 1,133,432 35,000 45,000 10,948,214 CrTY/ COUNTY CITY HOME RDA1 1,500,000 930,000 1,500,000 930,000 SOURCES TRANCHE CITY A&BBANK RDA2 AHP PERM LOAN 400,000 360,000 1,157,700 755,500 400,000 380,000 1,913,200 PSHHC LAND DONATION 993,188 993,188 9%TAX CREDIT EQUITY 0 31,656 17,000 1,584,607 57,405 375,000 255.635 101.385 75,000 15,000 18,649 25,000 15,000 91,950 313,830 29,592 3,725 372,245 9,010 50,000 196,905 1,133,432 35,000 45,000 4,851,826 ~ DI n :::J" 3 CD ::s -N Item 11.b. - Page 36