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HomeMy WebLinkAbout2009/09/01 Item 11 CHULA VISTA HOUSING AUTHORITYij AGENDA STATEMENT ITEM TITLE: SUBMITTED BY: REVIEWED BY: SEPTEMBER 1. 2009, Item II > ~ RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA APPROVING Ac'lD AUTHORIZING THE EXECUTION AND DELIVERY OF AMENDMENTS TO THE TRUST INDENTURE AND LOAN Ac"-iTI FIN.ANCING AGREEMENT OF THE CITY OF CHULA VISTA MULTIF~MILY HOUSING REVENUE BONDS (THE LANDINGS APARTMENTS), SERIES 2007C AND ANY DOCUMENTS N'ECESSARY TO CARRY OUT THE PURPOSES OF THIS RESOLYj7]9N DEPUTY CITY MANAGE~EVELOPMENT SERVICES DIRECTOR CITY MA.NAGERV <: r 4/STHS VOTE: YES D NO I X I SUMiV1ARY On December 28, 2007, the Housing Authority of the City of Chula Vista issued Multifamily Housing Revenue Bonds to fmance the development of an affordable 92-unit multifamily residential rental project, known as The Landings in Winding Walk, located at the intersection of Discovery Falls Drive and Crossroads Street in the City of Chula Vista. As a requirement of other financing obtained for The Landings through the State of California's Multifamily Housing Program, amendments to the Bonds are required at this time. ENVIRONMENT AL REVIEW The Environmental Review Coordinator has reviewed the proposed actIvIty for compliance with the California Environmental Quality Act (CEQA) and has determined that amendment of the loan and financing agreement and related documents is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section l5060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. RECOMMENDATION The Housing Authority adopt the Resolution. 11-1 SEPTEMBER I, 2009, Item~ Page 2 of3 BOARDS/COMMISSION RECOM1'1ENDATION Not Applicable DISCUSSION On December 28, 2007, the Housing Authority of the City of Chula Vista (the "Authority") issued its Housing Authority of the City of Chula Vista Multifamily Housing Revenue Bonds (The Landings Apartments), Series 2007C in the aggregate principal amount of $16,670,000 (the "Bonds") for the purpose of fmancing the acquisition, and construction of The Landings at Winding Walk (the "Project"). The project is a 92-unit affordable multifamily residential rental project located at Discovery Falls Drive and Crossroads Street in the City of Chula Vista. It is owned and operated by CIC Landings, L.P., a California limited partnership (CIC). Financing and development of The Landings was a joint pnvate-public partnership. CIC used Tax Exempt Multi-Family Revenue Bonds, Low Income Housing Tax Credit financing, California Department of Housing and Community Development (HCD) Multifamily Housing Program (MHP) and City of Chula Vista HOME Investment Partnership (HOME) funds to support the majority of the costs of the Project. Construction of The Landings was completed in November 2008. Amendment to Bond Financing Documents At this time, CIC wishes to convert the Bonds to the Permanent Loan Period. In order to convert to the Permanent Loan, State HCD has requested certain amendments to the Trust Indenture and the Loan and Financing Agreement of the Bonds to, among other things, eliminate the Bond Purchaser's right to put the Bonds on or after December I, 2024 pursuant to Section 3.3(b)(ii) of the Indenture and grant the Bond Purchaser the right to remarket the Bonds on or after December I, 2024 pursuant to the terms and conditions set forth in the Indenture. Staff is recommending that a First Amendment to the Trust Indenture and a First Amendment to the Loan and Financing Agreement for the Bonds be approved to allow for the conversion to permanent loan financing for the Project. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. CURRENT YEAR FISCAL IMPACT Bond financing is a self-supporting program with the owner responsible for the payment of all costs of issuance and other costs and repayment of the bonds. All costs related to the issuance of the bonds will be paid for from bond proceeds or profits. The bonds will be secured by the project and will not constitute a liability to or obligation of the City or Housing Authority. 11-2 SEPTEMBER 1, 2009, Item~ Page 3 of 3 The City of Chula Vista Housing Authority received compensation for its services in preparing the bond issuance by charging an origination fee of 1/8 of 1 % of the bond loan. ONGOING FISCAL IMPACT Staff costs associated with monitoring compliance of the regulatory restnctlOns and administration of the outstanding bonds will be reimbursed from an annual administrative fee based upon 1/8 of 1 % of the permanent bond loan paid to the Housing Authority by the owner. ATTACHNIENTS 1. Locator Map 2. First Amendment to the Trust Indenture 3. First Amendment to the Loan and Financing Agreement Prepared by: Leilani Hines, Principal Project Coordinator, Development Services-Redevelopment & Housing 11-3 The Landings II at Winding Walk BIR01 R 11-4 Attachment 1 S R , , S E A S n. A K The landings I & /I 2122 Burdock Way FIRST AiVIEl'illMENT TO TRUST Il'.'DENTURE THIS FIRST AL\1ENDMENT TO TRUST INDENTURE (this "First Amendment") is made as of and shall be effective for all purposes as of the day of , 2009, by and between HOUSING AUTHORITY OF THE CITY OF CffilLA VISTA, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Issuer"), and U.S. BA-I'\il< NATIONAL ASSOCIATION, a national banking association, its successors and assigns (the "Trustee"), and is consented to by CIC GLEN RIDGE, L.P., a California limited partnership (the "Borrower"), MIJ1'I.1MAE PORTFOLIO SERVICES, LLC, a Maryland limited liability company (the "Servicing Agent"), EMBASSY & CO., as nominee for U.S. BANK TRUST NATIONAL ASSOCIATION, in its capacity as the registered owner of the hereinafter defmed Bonds (the "Bondholder"), and CHELSEA ASSET CORPORATION, a California corporation fi'k/a CHELSEA INVESTMENT CORPORATION, and CHELSEA INVESTMENT CORPORATION, a California corporation, in their capacities as Key Principal. RECIT ALS WHEREAS, pursuant to and in accordance with Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (as amended from time to time, the "Act"), and a Trust Indenture dated as of December 1,2007 between the Issuer and the Trustee, the Issuer previously issued its Multifamily Housing Revenue Bonds (The Landings Apartments) Series 2007C in the maximum principal amount of$I6,670,000 (the "Bonds"); WHEREAS, the proceeds of the Bonds have been used to fund a loan to the Borrower pursuant to a Loan and Financing Agreement dated as of December 1, 2007 (the "Original Financing Agreement") between the Issuer and the Borrower, in order to provide financing for the acquisition and construction of an approximately 92-unit multifamily residential rental apartment project located in Chula Vista, California (the "Project"); and WHEREAS, the parties to this First lunendment desire to amend the Indenture as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the panies to this First Agreement hereby agree as follows: 1. IncOTDOratlOn of Recitals. The foregoing Recitals are incorporated in tbis First Amendment and made a part hereof by this reference to the same e;.,:tent as if set forth herein in full. All section references shall mean the corresponding section of the Indenture. 2. Definitions. All capitalized terms used herein shall have the meanings given such terms in the Recitals hereto or, if not defined therein, in Appendix I attached to the Indenture (as amended pursuant to Section 3 of this First Amendment). # 382055 011367-0292 11-5 3. Amendments. The Indenture is hereby amended as follows: (a) Section 3.3(b)(ii) of the Indenture is hereby deleted in its entirety. All references in the Indenture to Section 3.3(b )(ii) of the Indenture are hereby deleted and of no further force or effect. (b) Section 3.7 of the Indenture is hereby amended as follows: (i) following: . Paragraph (a) is deleted in its entirety and replaced with the "(a) The Borrower and the Holders of 100% of the outstanding principal amount of the Bonds shall each have the unilateral option to remarket the Bonds by providing Notice of such election to the Trustee, the Issuer, the Servicing Agent and, as applicable, the Borrower and the Holders. This initial election to cause the remarketing of the Bonds may only be made one time, by either the Borrower or the Holders of 100% of the outstanding principal amount of the Bonds (whichever shall make the election first). The date of the initial remarketing of the Bonds at the election of the Borrower or the Holders of 100% of the outstanding principal amount of the Bonds pursuant to the terms of this Section 3.7 (the "Initial Remarketing Date") shall be the first Business Day of any month occurring on or after December I, 2024. Not less than one hundred twenty (120) days prior to the Initial Remarketing Date and each ensuing Remarketing Date established in accordance with the terms of this Section 3.7, the Borrower (or, in the case of the Initial Remarketing Date following an initial election by the Holders of 100% of the outstanding principal amount of the Bonds, the Holders of the Bonds) shall give Notice to the Trustee, the Servicing Agent, the Holders, the Issuer, and, as applicable, the Borrower, of (i) the proposed Remarketing Date, and (ii) the election of the Borrower or the Holders of 100% of the outstanding principal amount of the Bonds to cause a remarketing of the Bonds to occur in accordance with the terms of this Section 3.7. Within fifteen (15) days of the provision by the Borrower or the Holders of 100% of the outstanding principal amount of the Bonds of the Notice required in the foregoing sentence, the Borrower shall provide to the Trustee, the Servicing Agent, the Holders, the Issuer, and the Remarketing Agent Notice of (i) appointment of a Remarketing Agent (who shall sa11sfy the criteria established in Section 9.19 hereof), (ii) the term of the Remarketing Period to be established by the Remarketing Agent, which shall be selected by the Borrower and may be any period of one (l) year or more (unless the Maturity Date for the Bonds is less than one year from such Remarketing Date) ending on the Maturity Date for the Bonds or an anniversary of the Remarketing Date, and (iii) the amortization terms elected by the Borrower to apply during the term of such Remarketing Period, which amortization terms shall not provide for any interest-only period and shall # 382055 011367-0292 2 11-6 # 382055 011 367-0292 require the amortization in full of the remaining principal amount of the Bonds on or prior to the Maturity Date." (ii) following: Paragraph (b) is deleted in its entirety and replaced with the "(b)(i) On or before the ninth (9th) Business day prior to each Remarketing Date, the Remarketing Agent, having due regard to prevailing financial market conditions, shall determine the minimum rate of interest per annum which, if the Bonds were amortized during the Remarketing Period elected by the Borrower under paragraph (a) of this Section 3.7 pursuant to the amortization schedule elected by the Borrower under paragraph (a) of this Section 3.7, would .enable the Remarketing Agent to remarket and sell the Bonds on such Remarketing Date for a price equal to 100% of the principal amount thereof, and such interest rate will, subject to the terms of Section 3.7(b)(ii) below, be the Remarketing Rate for such Remarketing Period and monthly payments of principal and interest will be made on the Bonds in accordance \.\~th the amortization schedule elected by the Borrower under paragraph (a) of this Section 3.7; provided that subject to the further restrictions of paragraph (ii) below, the Remarketing Rate shall not exceed the M<L'Cimum Rate. (ii) Not\.\ithstanding the provisions of Section 3.7(b)(i), in the event that the interest rate detennined by the Remarketing Agent pursuant to Section 3. 7(b )(i) is in excess of nine percent (9.0%) per annum, then (A) the Remarketing Agent, having due regard to prevailing fmancial market conditions, shall, on such day, detennine the longest Remarketing Period ending on any anniversary of such Remarketing Date, but on or before the Maturity Date, that would enable the Remarketing Agent to sell the Bonds for a price equal to 100% of the principal amount thereof with an interest rate of nine percent (9%) per armum and combined monthly payments of principal and intere'st made on the Bonds in accordance with an amortization schedule which amortizes the remaining principal balance of the Bonds in full at such interest rate over the remaining term of the Bonds, and such interest rate \\ill be the Remarketing Rate for such Remarketing Period, and payments on the Bonds will be made in accordance with such schedule, and (B) if no Remarketing Period would enable the Remarketing Agent .to sell the Bonds for a price equal to 100% of the principal amount thereof at a rate of interest not exceeding nine percent (9%) per annum, then (1) the Remarketing Rate shall be set at nine percent (9%) per annum for a Remarketing Period of one (1) year from such Remarketing Date, (2) the Holders shall, subject to their rights to transfer the Bonds in accordance with the terms of Article II of this Indenture, be required to retain such Bonds during such Remarketing Period, and (3) combined monthly payments of principal and interest shall be made on the Bonds during such Remarketing Period in accordance with an amortization schedule which amortizes the 3 11-7 remaining principal balance of the Bonds in full at such Remarketing Rate over the remaining term of the Bonds." (iii) Paragraph (e) is hereby deleted in its entirety. (c) Section 3.8 of the Indenture is hereby amended by deleting the text in paragraph (h) thereof and replacing such text with the following: "(h) Notwithstanding the foregoing provisions of Section 3.7 or this Section 3.8, in the event the interest rate determined by the Remarketing Agent pursuant to Section 3.7(b)(i) is in excess of nine percent (9.0%) per annum, then the provisions of Section 3.7(b)(ii) shall apply, the Bonds shall no longer be subj ect to mandatory tender by the Holders pursuant to the terms of this Section 3.8 and the terms and conditions of this Section 3.8 shall be null and void and shall no longer apply with respect to such Remarketing Date, and the Bonds shall, subject to the rights of the Holders to transfer the Bonds in accordance with the terms of Article II of this Indenture, continue to be held by the Holders for the duration of the Remarketing Period pursuant to the terms and conditions of Section 3.7(b)(ii) hereof." (d) All references in the Indenture to the remarketing of the Bonds at the election of.the Borrower pursuant to the terms of Sections 3.7 and 3.8 of the Indenture (including, but not limited to, Sections 3.3(e) and 9.19 of the Indenture) shall, to the extent appropriate in the context, be deemed to also refer to and apply to any remarketing of the Bonds at the election of the Holders of the Bonds pursuant to the terms of Sections 3.7 and 3.8 ofthe Indenture. 4. Ratification of Agreement. Except as set forth in this First Amendment, all the terms and conditions contained in the Indenture are hereby ratified and shall remain in full force and effect. In the event that any of the terms, conditions and provisions of this First Amendment shall conflict with any of the terms, conditions and provisions of the Indenture, then, and in such event, the terms, conditions and provisions of this First Amendment shall prevail and be controlling. Hereafter, all references to the Indenture shall mean the Indenture as amended by this First Amendment. 5. shall be Effective Date of First Amendment. The effective date of this First Amendment ,2009. 6. Countemarts. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, when taken together, shall be deemed to be a single instrument. 7. Applicable Law. This First Amendment shall be governed by the laws of the State of California. [Signature Page Follows] # 382055 011367-0292 4 11-8 IN WITNESS WHEREOF, and intending to be legally bound, tbe Issuer and tbe Trustee have caused this First Amendment to be executed on tbeir behalf by their duly autborized representatives as oftbe date set forth above. ISSUER: HOUSING AUTHORITY OF THE CITY OF CHULA VISTA, CALIFORNIA By: James D. Sandoval, Executive Director TRUSTEE: U.S. BA..l'\!K. NATIONAL ASSOCIATION, as Trustee By: Name: Title: [SignalUre Page to First Amendment to Trust lndenture- continued on the following page] # 382055 011367-0292 11-9 CONSENT The undersigned hereby execute this First Amendment to evidence their approval of the terms of this First Amendment. BORROWER: CIC LANDINGS, L.P., a California limited partnership By: Ajax-Landings, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: James 1. Schmid, President By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Jack K. Jaynes, Executive Director/President SERVICING AGENT: MlJNliYlA.E PORTFOLIO SERVICES, LLC By: Name: Title: [Signature Page to First Amendment to Trust Indenture- continued on the following page] # 382055 011367-0292 11-10 BONDHOLDER: EMBASSY & CO., as nominee for U.S. BAAl( TRUST NATIONAL ASSOCIA nON By: Name: Title: KEY PRINCIPAL: CHELSEA ASSET CORPORATION, a California corporation fi'kla Chelsea Investment Corporation By: James 1. Schmid, President CHELSEA INVESTMENT CORPORATION, a California corporation By: James 1. Schmid, President [Signature Page to First Amendment to Trust Indenture- continued fi'om the previous page] # 382055 011367-0292 11-11 FIRST AMENDMENT TO LOAJ'" M'D FINANCING AGREEMENT THIS FIRST AMENDWlENT TO LOAN MID FINANCING AGREEWlENT (this "First Amendment") is made as of and shall be effective for all purposes as of the _ day of ,2009, by and between HOUSING AUTHORITY OF THE CITY OF CHULA VISTA, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Issuer"), and CIC LAi'lil)INGS, L.P., a California limited partnersillp (the "Borrower"), and is consented to by U.S. BA1'-'K NAnONAL ASSOCIATION, a national banking association, its successors and assigns (the "Trustee"), MUNli\1....\E PORTFOLIO SERVICES, LLC, a Maryland limited liability company (the "Servicing Agent"), EMBASSY & CO., as nominee for U.S. BANK TRUST NATIONAL ASSOCIATION, in its capacity as the registered owner of the hereinafter defmed Bonds (the "Bondholder"), and CHELSEA ASSET CORPORATION, a California corporation flkIa CHELSEA INVESTWlENT CORPORATION, and CHELSEA INVESTMENT CORPORAnON, a California corporation, in their capacities as Key Principal. RECITALS WHEREAS, pursuant to and in accordance with Chapter I of Part 2 of Division 24 of the California Health and Safety Code (as amended from time to time, the "Act"), and a Trust Indenture dated as of December 1,2007 between the Issuer and the Trustee, the Issuer previously issued its Multifamily Housing Revenue Bonds (The Landings Apartments) Series 2007C in the maximum principal amount of $16,670,000 (the "Bonds"); WHEREAS, the proceeds of the Bonds have been used to fund a loan to the Borrower pursuant to a Loan and Financing Agreement dated as of December I, 2007 (the "Financing Agreement") between the Issuer and the Borrower, in order to provide fmancing for the acquisition and construction of an approximately 92-unit multifamily residential rental apartment project located in Chula Vista, California (the "Project"); and WHEREAS, the parties to tills First Amendment desire to amend the Financing Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing recitals, and other good and valuable consideration, the receipt and sufficiency of willch are hereby acknowledged, the parties to this First Agreement hereby agree as follows: I. Incorooration of Recitals, The foregoing Recitals are incorporated in this First Amendment and made a part hereof by this reference to the same extent as if set forth herein in full. Ail section references shall mean the corresponding section of the Financing Agreement. 2. Definitions. Ail capitalized terms used herein shall have the meanings given such terms in the Recitals hereto or, if not defmed therein, in Appendix I attached to the Financing Agreement (as amended pursuant to Section 3 of this First Amendment). # 382052 011367-0292 11-12 3. Amendments. All references in the Financing Agreement to the remarketing of the Bonds at the election of the Borrower pursuant to the terms of Sections 3.7 and 3.8 of the Indenture shall, to the extent appropriate in the context, be deemed to also refer to and apply to any remarketing of the Bonds at the election of the Holders of the Bonds pursuant to the terms of Sections 3.7 and 3.8 ofthe Indenture. 4. PaYment of Costs. The Borrower shall be responsible for the payment of all costs (including, without limitation, the reasonable legal fees of the Holders, the Servicing Agent, the Trustee and the Issuer, the fees of the Remarketing Agent, and all fInancing costs and commitment fees necessary in connection therewith) incurred in connection with any optional or mandatory remarketing of the Bonds pursuant to the terms of Sections 3.7 or 3.8 of the Indenture; provided, however, that in the event any such remarketing is initiated at the option of the Holders of the Bonds, then (a) the Holders of the Bonds shall be responsible for the payment of the fees of the Remarketing Agent and the fees of counsel to the Holders of the Bonds, (b) Ajax-Landings, LLC, as administrative general partner of the Borrower, and PacifIc Southwest Community Development Corporation, as managing general partner of the Borrower (collectively, the "General Partners"), shall, in lieu of the Borrower, be jointly and severally responsible for the payment of all other fees, costs and expenses otherwise payable by the Borrower under the terms of this Section 4, and (c) Chelsea Investment Corporation, a California corporation (the "Guarantor"), shall guarantee the payment in full by the General Partners of all fees, costs and expenses required to be paid by the General Partners under the terms of the foregoing clause (b). The Department of Housing and Community Development, a public agency of the State of California ("HCD") is an express third- party beneficiary of the terms of this Section 4. In providing the guaranty in clause (c) above, the Guarantor waives the rights of the Guarantor or any other surety to subrogation, reimbursement, inderrmification and contribution and any other rights and defenses that are or may become available to the Guarantor or any other surety by reasons of Sections 2787 to 2855, inclusive, of the California Code of Civil Procedure, and waives all rights and defenses arising out of an election of remedies by the Issuer, the Trustee or the Servicing Agent, even though that election of remedies has destroyed the Guarantor's rights of subrogation and reimbursement against the Borrower or the General Partner by the operation of Section 580d of the California Code of Civil Procedure or otherwise. IN EXECUTING THE CONSENT AT THE END OF THIS AMENDMENT, THE GENERAL PARTNERS AND THE GUARANTOR EXPRESSLY ACKNOWLEDGE AND AGREE TO BE BOUNTI BY THE TERMS OF, AND TO PERFOR.lv1 THEIR OBLIGATIONS UNDER, THIS SECTION 4. 5. RatifIcation of Agreement. Except as set forth in this First Amendment, all the terms and conditions contained in the Financing Agreement are hereby ratifIed and shall remain in full force and effect. In the event that any of the terms, conditions and provisions of this First .A.mendment shall conflict with any of the terms, conditions and provisions of the Financing Agreement, then, and in such event, the terms, conditions and provisions of this First Amendment shall prevail and be controlling. Hereafter, all references to the Financing Agreement shall mean the Financing Agreement as amended by this First Amendment. 6. shall be Effective Date of First Amendment. The effective date of this First Amendment ,2009. # 382052 011367-0292 2 11-13 7. Counterparts. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, when taken together, shall be deemed to be a single instrument. 8. ADDlicable Law. This First Amendment shall be governed by the laws of the State of California. [Signature Page Follows] # 382052 011367-0292 3 11-14 IN WITNESS WHEREOF, and intending to be legally bound, the Issuer and the Borrower have caused this First Amendment to be executed on their behalf by their duly authorized representatives as of the date set forth above. ISSUER: HOUSJNG AUTHORITY OF THE CITY OF CHlTLA, VISTA, CALIFOR..NLA. By: James D. Sandoval, Executive Director BORROWER: CIC LANDJNGS, L.P., a California limited partnership By: Ajax-Landings, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Investment Corporation, a California corporation, its Manager By: James 1. Schmid, President By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Jack K. Jaynes, Executive DirectorlPresident [Signature Page to First Amendment to Loan and Financing Agreement- continued on the following page] # 382052 011367-0292 11-15 CONSENT The undersigned hereby execute this First .Amendment to evidence their approval of the terms of this First Amendment. TRUSTEE: U.S. BA.l\,TK NATIONAL ASSOCIATION, as Trustee By: Name: Title: SERVICING AGENT: MUNil'vlA,E PORTFOLIO SERVICES, LLC By: Name: Title: [Signature Page to First Amendment to Loan and Financing Agreement- continued on the following page] # 382052 011367-0292 11-16 # 382052 011367-0292 BONDHOLDER: EMBASSY & CO., as nominee for U.S. BAl'lK TRUST NATIONAL ASSOClA. TION By: Name: Title: KEY PRlNCIP AL: CHELSEA ASSET CORPORATION, a California corporation fi'k/a Chelsea Investment Corporation By: James J. Schmid, President CHELSEA INVESTMENT CORPORATION, a California corporation By: James J. Schmid, President [Signature Page to First Amendment to Loan and Financing Agreement- continuedfrom the previous page] 11-17 HA RESOLUTION NUMBER RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA APPROVING At"JD AUTHORIZLNG THE EXECUTION AND DELIVERY OF AMENDMENTS TO THE TRUST INDENTURE AND LOAt"J At'lD FINANCING AGREEMENT OF THE CITY OF CHULA VISTA MUL TIF AMIL Y HOUSING REVENUE BONDS (THE LANDINGS APARTMENTS), SERIES 2007C AND ANY DOCUMENTS NECESSARY TO CARRY OUT THE PURPOSES OF THIS RESOLUTION WHEREAS, on December 28,2007, pursuant to Chapter 1 of Part 2 of Division 24 of the California Health & Safety Code ("Housing Authorities Law"), the Housing Authority of the City of Chula Vista (the "Authority") issued its Housing Authority of the City of Chula Vista Multifamily Housing Revenue Bonds (The Landings Apartments), Series 2007C in the aggregate principal amount of $16,670,000 (the "Bonds") for the purpose of financing the acquisition, and construction of a 92-unit affordable multifamily residential rental project located at the intersection of Discovery Falls Drive and Crossroads Street in the City of Chula Vista (the "Project") to be owned and operated by CIC Landings, L.P., a California limited partnership (the "Borrowerll); and ' WHEREAS, the Bonds were issued pursuant to that certain Trust Indenture, dated as of December 1,2007, by and between the Authority and U.S. Bank National Association, as trustee (the "Indenture"); and WHEREAS, the Bonds were purchased by MMA Landings, LLC (the "Purchaser") in a private placement to the Purchaser. The proceeds of the Bonds were loaned to the Borrower pursuant to the terms of that certain Loan and Financing Agreement, dated as of December 1, 2007, by and between the Authority and the Borrower (the "Loan Agreement"); and WHEREAS, the Borrower used the proceeds of the Bonds loaned to it through the Loan Agreement to finance costs of the development of the Project; and WHEREAS, the Project has been completed and the Borrower wishes to convert the Bonds to the Permanent Loan Period (as defined in the Indenture) pursuant to terms and conditions of the Indenture, including but not limited to Section 3.4 thereof; and WHEREAS, in connection therewith, the California Department of Housing and Community Development (the "MI-IP Lender") has requested certain amendments to the Indenture and the Loan Agreement to, among other things, eliminate the Purchaser's right to put the Bonds on or after December 1,2024 pursuant to Section 3.3(b)(ii) of the Indenture and grant the Purchaser the right to remarket the Bonds on or after December 1, 2024 pursuant to the terms and conditions set forth in the Indenture; and DOCSOC/1359174v2/024036-0038 11-18 WHEREAS, there has been presented to the Board of Commissioners of the Housing Authority of the City of Chula Vista (the "Board") a proposed form of First Amendment to the Trust Indenture (the "First Amendment to the Trust Indenture") amending the Indenture and a proposed form of First Amendment to Loan and Financing Agreement (the "First Amendment to the Loan and Financing Agreement") amending the Loan Agreement. NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing Authority of the City of Chula Vista, as follows: Section 1. The form of First Amendment to the Trust Indenture is hereby approved in substantially the form presented to the Board, a copy of which is on file in the office of the Executive Director. Anyone of the Chair or Executive Director or any designee thereof (each, an "Authorized Officer") is authorized to execute, and the Secretary of the Authority is authorized to attest, the First Amendment to the Trust Indenture in substantially said form, with such additions thereto and changes therein as such Authorized Officer may approve or recommend in accordance with Section 3 hereof. Section 2. The form of First Amendment to the Loan and Financing Agreement is hereby approved in substantially the form presented to the Board, a copy of which is on file in the office of the Executive Director. Any Authorized Officer is authorized to execute, and the Secretary of the Authority is authorized to attest, the Financing Agreement, in substantially said form, with such additions thereto and changes therein as such Authorized Officer may approve or recommend in accordance with Section 3 hereof. Section 3. Any Authorized Officer executing a document approved herein, in consultation with General Counsel to the Authority and Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, is authorized to approve and make such modifications, changes or additions to such document, including, but not limited to, the First Amendment to the Trust Indenture and the First Amendment to the Loan and Financing Agreement, or other document as may be necessary or advisable, and the approval of any modification, change or addition to any of the aforementioned agreements shall be evidenced conclusively by the execution and delivery thereof by such Authorized Officer. Section 4. The officers, employees and agents of the Authority are authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements, assignments and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful execution and delivery of the First Amendment to the Trust Indenture and the First Amendment to the Loan and Financing and to effectuate the purposes thereof and of the documents herein approved in accordance with this resolution and resolutions heretofore adopted by the Board. In the event that the Secretary of the Authority is unavailable to sign the First Amendment to the Trust Indenture and the First Amendment to the Loan and Financing or any document related thereto, any Deputy Secretary of the Authority may sign on behalf of the Secretary. DOCSOC/1359174v2/024036-0038 11-19 Section 5. All prior resolutions or parts thereof in conflict with this resolution are, to the extent of such conflict, repealed. Section 6. If any section, paragraph or provision of this resolution shall be held to be invalid or lmenforceable for any reason, the invalidity or unenforeeability of such section, paragraph or provision shall not affect any remaining sections, paragraphs or provisions of this resolution. Section 7. This resolution shall take effect immediately upon its adoption. Presented by Approved as to form by: Gary Halbert Deputy City Services Director Manager/Development Ah~~ 4-e fort- Bart Miesfeld Housing Authority Attorney DOCSOC!l359174v2/024036-0038 11-20 THE A TT ACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALL Y SIGNED UPON APPRO V AL BY THE CITY COUNCIL Az~A7V7 ~ h,y Bart C. Miesfeld City Attorney Dated: ql"25 !o~ I I First Amendment to Loan Financing Agreement between the Housing Authority of the City ofChula Vista and CIC Landings, L.P. 11-21 FIRST AMENDMENT TO LOAt~ AND FINAt~CING AGREEMENT THIS FIRST A.MENDMENT TO LOAN AND FINANCING AGREEMENT (this "First Amendment") is made as of and shall be effective for all pwposes as of the _ day of ,2009, by and between HOUSING AUTHORITY OF THE CITY OF CHULA VISTA, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Issuer"), and CIC LAt'iDINGS, L.P., a California limited partnership (the "Borrower"), and is consented to by U.S" BANK NATIONAL ASSOCIATION, a national banking association, its successors and assigns (the "Trustee"), MUNIMAE PORTFOLIO SERVICES, LLC, a Maryland limited liability company (the "Servicing Agent"), EMBASSY & CO., as nominee for U.S. BANK TRUST NATIONAL ASSOCIATION, in its capacity as the registered owner of the hereinafter defined Bonds (the "Bondholder"), and CHELSEA ASSET CORPORATION, a California corporation f7k/a CHELSEA INVESTMENT CORPORi\.TION, and CHELSEA INVESTMENT CORPORATION, a California corporation, in their capacities as Key Principal. RECITALS WHEREAS, pursuant to and in accordance with Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (as amended from time to time, the "Act"), and a Trust Indenture dated as of December 1, 2007 between the Issuer and the Trustee, the Issuer previously issued its Multifamily Housing Revenue Bonds (The Landings Apartments) Series 2007C in the maximum principal amount of$16,670,000 (the "Bonds"); WHEREAS, the proceeds of the Bonds have been used to fund a loan to the Borrower . pursuant to a Loan and Financing Agreement dated as of December 1, 2007 (the "Financing Agreement") between the Issuer and the Borrower, in order to provide fmancing for the acquisition and construction of an approximately 92-unit multifamily residential rental apartment project located in ChuIa Vista, California (the "Project"); and WHEREAS, the parties to this First Amendment desire to amend the Financing Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this First Agreement hereby agree as follows: 1. Incomoration of Recitals. The foregoing Recitals are incorporated in this First Amendment and made a part hereof by this reference to the same extent as if set forth herein in full. All section references shall mean the corresponding section of the Financing Agreement. 2. Definitions. All capitalized terms used herein shall have the meanings given such terms in the Recitals hereto or, if not defmed therein, in Appendix I attached to the Financing Agreement (as amended pursuant to Section 3 of this First Amendment). # 382052 011367-0292 11-22 3. Amendments. All references in the Financing Agreement to the remarketing of the Bonds at the election of the Borrower pursuant to the terms of Sections 3.7 and 3.8 of the Indenture shall, to the extent appropriate in the context, be deemed to also refer to and apply to any remarketing of the Bonds at the election of the Holders of the Bonds pursuant to the terms of Sections 3.7 and 3.8 of the Indenture. 4. PaYment of Costs. The Borrower shall be responsible for the payment of all costs (including, without limitation, the reasonable legal fees of the Holders, the Servicing Agent, the Trustee and the Issuer, the fees of the Remarketing Agent, and all fmancing costs and commitment fees necessary in connection therewith) incurred in connection with any optional or mandatory remarketing of the Bonds pursuant to the terms of Sections 3.7 or 3.8 of the Indenture; provided, however, that in the event any such remarketing is initiated at the option of the Holders of the Bonds, then (a) the Holders of the Bonds shall be responsible for the payment of the fees of the Remarketing Agent and the fees of counsel to the Holders of the Bonds, (b) Ajax-Landings, LLC, as administrative general partner of the Borrower, and Pacific Southwest Community Development Corporation, as managing general partner of the Borrower (collectively, the "General Partners"), shall, in lieu of the Borrower, be jointly and severally responsible for the payment of all other fees, costs and expenses otherwise payable by the Borrower under the terms of this Section 4, and (c) Chelsea Investment Corporation, a California corporation (the "Guarantor"), shall guarantee the payment in full by the General Partners of all fees, costs and expenses required to be paid by the General Partners under the terms of the foregoing clause (b). The Department of Housing and Community Development, a public agency of the State of California ("HCD") is an express third- party beneficiary of the terms of this Section 4. In providing the guaranty in clause (c) above, the Guarantor waives the rights of the Guarantor or any other surety to subrogation, reimbursement, indemnification and contribution and any other rights and defenses that are or may become available to the Guarantor or any other surety by reasons of Sections 2787 to 2855, inclusive, of the California Code of Civil Procedure, and waives all rights and defenses arising out of an election of remedies by the Issuer, the Trustee or the Servicing Agent, even though that election of remedies has destroyed the Guarantor's rights of subrogation and reimbursement against the Borrower or the General Partner by the operation of Section 580d of the California Code of Civil Procedure or otherwise. IN EXECUTING THE CONSENT AT THE ENTI OF THIS AMENDMENT, THE GENERAL PARTNERS AND THE GUARANTOR EXPRESSLY ACKNOWLEDGE AND AGREE TO BE BOUND BY THE TERMS OF, AND TO PERFORM THEIR OBLIGATIONS UNDER, THIS SECTION 4. 5. Ratification of Agreement. Except as set forth in this First Amendment, all the terms and conditions contained in the Financing Agreement are hereby ratified and shall remain in full force and effect. In the event that any of the terms, conditions and provisions of this First Amendment shall conflict with any of the terms, conditions and provisions of the Financing Agreement, then, and in such event, the terms, conditions and provisions of this First Amendment shall prevail and be controlling. Hereafter, all references to the Financing Agreement shall mean . the Financing Agreement as amended by this First Amendment. 6. shall be Effective Date of First Amendment. The effective date of this First Amendment ,2009. # 382052 011367-0292 2 11-23 7. Countemarts. Tbis First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, when taken together, shall be deemed to be a single instrument. 8. Applicable Law. Tbis First Amendment shall be governed by the laws of the State of California. [Signature Page Follows] # 382052 011367-0292 3 11-24 IN WITNESS WHEREOF, and intending to be legally bound, the Issuer and the Borrower have caused this First Amendment to be executed on their behalf by their duly authorized representatives as of the date set forth above. ISSUER: HOUSING AUTHORITY OF THE CITY OF CHULA, VISTA, CALIFORNIA By: Name: Title: BORROWER: CIC LANDINGS, L.P., a California limited partnership By: Ajax-Landings, LLC, a California limited liability company, its Administrative General Partner By: Chelsea Corporation, a corporation, its Manager Investment California By: James 1. Schmid, President By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Jack K. Jaynes, Executive OirectorlPresident [Signature Page to First Amendment to Loan and Financing Agreement- continued on the following page] # 382052 011367-0292 11-25 CONSENt The undersigned hereby execute this First Amendment to evidence their approval of the terms of this First Amendment. TRUSTEE: U.S. BAAl( NA TlONAL ASSOCIA nON, as Trustee By: Name: Title: SERVICING AGENT: MUNIMAE PORTFOLIO SERVICES, LLC By: Name: Title: [Signature Page to First Amendment to Loan and Financing Agreement- continued on the following page] # 382052 011367-0292 11-26 # 382052 011367-0292 BO]\lTIHOLDER: EMBASSY & CO., as nominee for U.S. BAi"\JK TRUST NATIONAL ASSOClA TION By: Name: Title: KEY PRINCIPAL: CHELSEA ASSET CORPORATION, a California corporation :flk/a Chelsea Investment Corporation By: James J. Schmid, President CHELSEA INVESTMENT CORPORATION, a California corporation By: James J. Schrnid, President [Signature Page to First Amendment to Loan and Financing Agreement- continued from the previous page] 11-27