Attachment 2... •.
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AGREEMENT TO CANCEL DEBT IN EXCHANGE
FOR SOLE NONPROFIT OWNERSHIP
THIS AGREEMENT TO CANCEL DEBT IN EXCHANGE FOR SOLE
N_?~f~FIT OWNX~SHIPl (the "Agreement••) is entered into as ot the
~day ot ___:____ , 1992 by and amonq Mid-Peninsula Open
Doors corporati n, a California nonprofit public benetit
corporation ("MPODC 0 ) and the Town of Los Gatos, a municipal
corporation (the HTown").
A. MPODC is a non-profit affiliate of Mid-Peninsula .
Housing coalition ("MPHC") and is involved in the development and
ownership or 64 units ot attordable housing located on certain
real property in the Town of Los GatC!a (the "Project").
. ~
B. Town, MPHC and West Valley Open Doors, a California
nonprofit public benefit corporation ("WVOD 11 ) entered into that
certain cooperation Agreement Between 'the Town o! Los ·Gatos, Mid-
Pen.insula Housinq Coal_ition and West Valley Open Doors For the
Provision of a Low rncome Housing Development dated December 31,
1990 (the "Oriqina1 Aqreement").
c. By a First Amendment to Cooperation Aqreement Between
the Town of Los .Gatos, Mid-Peninsula Housing coalition, and West
Valley open Doors tor the Provision of a Low income Housing
Oeyelopment dated November-.11; 1991 and executed by Town, MPHC
and wvoo ·(the "First Amendment"), the parties agreed to
substitute the site described in the original Aqreement 1cx:ated
on Knowles Drive tor an adjacent site located on West · Parr Avenue
(~he · "Site")· The Project wtll be developed on the Site.
D·. The Federal Low I.neoae Housing Tax Credit Program jthe __ _
"Tl'lx · ci::1ta:!ts") is an inte-c;rral part ol the llnancin9 ~o.r the
Project.
E. To realize the economic benefit of the Tax Credits for
the Project, HPHC assigned its right to purchase the Site· to · a
limited partnership, Open Doors Associates c•oDA"), of which an
af!il~ate of MPHC, Mid-Peninsula open Doors Corporation, a
· · -ca-:t1:rorn111£-nl5?1pre5'f·re·--pu1>-i:1c-fieiiiif ItCoJ:Porat!on .. P'HPbllc-•1-is ... tlie .... _ .. ·
general partner. ODA will develop the Project. ·
F . Project .feasibility is also dependent upon the
availability to the Project o~ the benefits obtained by MPH~ and
wvoo in the original Agreement as amended by the First Amendment.
· G. MPHC therefore wished to assign its rights and
obligations under the Original Aqreement, as amended by the First
Alllend.m.ent, to ODA .
191038.PSO
011:!'4/92 -1-ATTAC.HMEN'!r 2
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H.. Pursuant to the Second Alllendment to Cooperation
Agreement Between the Town of Los Gatos, Mid-Peninsu.la Housing
Coalition and West Valley Open Doors For the Provision of a Low
Income Housing Deve1opment (the nsecond .Al11endment"), Town agreed
to the assiqnment of tha Original Agreement, as amended by the
First. ~endment, to. ODA. . . . .
I. The Original Agreement as amended by the First
Amendment and the Second Amendment shall be called the
ncooperation Agreement" in this Agreement.
J. The terms and conditions of the Second Amendment
included the requirement that certain tees not be valved for· the
Project hut rather that .the Tovn loan ODA the funds necessary to
pay such fees. This loan is evidenced by a promissory note in
the principal amount of ~339 250 . Dollars
($ 339,250 ) dated · AprHl 1 f992 / executed by.-ODA
for the benerit or Town ·cthe "PrOilssory Note").
K . --·---Pursuant to the CoQperation Agreement, the Town has
also 1oaned Three Hundred Thousand Dollars ($300,000) to the
Project. This amount was used for a portion of the downpayment
for the acquisition of the Site. It is evidenced by a pramissory
note in the amount ot Three Hundred Thousand Doll ars ($300,000)
executed by MPHC and dated . November -6, , 199 l (the
"Acquisition Note"). With the Town•s consent the obligations
under the Acquisition Note have .been assigned to ODA .
L •.. It is MPOD~'s intention to become the so1e owner o~ the
Project by .purchasinq the limited partner's interest in ODA in
approximately 15-20 years and the Town supports this qoal . ·
NOW, THEREFORE, for valuable consideration the receipt and
sufficiency ot which is hereby acknowledged, ·the parties agree as
-----~f-o+-l:tow . -
1 -.. tri' ·ithe. event t:hat XPODC becom•• th• sole owner of th•
Project, the Town will cancel all principal and interest due
under the terms ot the Promissory Note.
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2. At the time of the cancellation or the Note as provided
tn· ·trts·-~·o-Uiiih~;t:neTOWn -cdiarr marlttlie-P-roiifiusoryffotil--··-_ .. -. . . -. --
cancelled, and return the cancelled Promissory Note to MPODC.
J. Notbinq in this Agreement shall affect the terms,
conditions or obl igations contained ·in the Acqu~sition Note.
191038 .PSO
0112-4/92
.~'
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. IN WITNESS WHEREOF, this Agreement is executed by Town and
MPOOC.
APPROVED AS TO FORM:
191038.PSO
01/24192
TOWN OF LOS GATOS,
a municipal corporation
';lJu)L .. ·
Town Manager '(;\("
MIO-·PENrNSDLA OPEN DOORS
.CORPORATrON', a Cali~ornia
nonprofit public benefit
corpor ti · -
-3-
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, .. ·.·
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