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HomeMy WebLinkAbout4.09 Eden House Predev Loan CITY CLERK File # Dru[Q][Q]-~~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: December 18,2007 SUBJECT: A Predevelopment Loan to Eden Housing, Inc. for the Arroyo Vista Project Report Prepared by: Joni Pattillo, Assistant City Manager, Sue Bloch, City Attorney's Office, Sabrina Wolfton, City Attorney's Office ATTACHMENTS: Resolution with Attachment 1 Predevelopment Loan Agreement, Attachment 2 Promissory Note, and Attachment 3 Assignment Agreement ~ 1) Receive Staff Report 2) Deliberate 3) Adopt a Resolution approving a) a Predevelopment Loan to Eden Housing, Inc. in the amount of up to $325,000 for predevelopment expenses for the Arroyo Vista project; and approving the Predevelopment Loan Agreement, Promissory Note, and Assignment Agreement; and b) Authorizing the City Manager to sign the Predevelopment Loan Agreement and the Assignment Agreement on behalf of the City of Dublin. RECOMMENDATION: FINANCIAL STATEMENT: A predevelopment loan in the amount of up to $325,000 will be made to Eden for predevelopment activities. Because Inclusionary Zoning In Lieu Fee Funds have already been set aside to finance a future construction loan to Eden in the amount of $1,500,000, and the predevelopment loan is an advance on the construction loan, no additional funds are necessary. DESCRIPTION: On July 17, 2007, the City Council approved execution of a Disposition and Development Agreement ("DDA") with the Housing Authority of the County of Alameda ("HACA"), the Housing Authority of the City of Dublin ("Authority"), SCS Development Corporation, dba Citation Central Homes ("Citation"), and Eden Housing, Inc. ("Eden"). Pursuant to the terms of the DDA, (i) Eden will acquire a portion of real property (the "Property") currently owned by the Authority and commonly known as Arroyo Vista; (ii) Eden will construct on its portion of the Property affordable multi-family and senior rental housing with related improvements (the "Project"); the (iii) the City will provide a loan to Eden in the sum of One Million Five Hundred Thousand Dollars ($1,500,000) to assist in financing the ------------------------------------------------------------------------------------------------------------- COpy TO: Eden Housing, Inc. 1036767.2 Page 1 of3 lTEMNO.~ CI construction of the Project (the "Construction Loan"); and (iv) Citation will develop additional housing on the remainder of the Property. Because Arroyo Vista is a federal public housing development, the Authority must obtain approval from the U.S. Department of Housing and Urban Development ("HUD") to convey the Property. In order to obtain HUD's approval, the City and Authority must conduct significant environmental review in accordance with the California Environmental Quality Act and the National Environmental Policy Act. The DDA requires Eden and Citation to pay for the costs incurred by the City and Authority for such environmental review ("Environmental Review Costs"). Eden has already deposited $87,000 into City's cost recovery account to cover Eden's initial share of such costs ("Initial Deposit"). In addition, the DDA requires Eden and Citation to pay for the transactional costs (legal, consulting, and other costs) incurred by the City and the Authority in connection with the DDA and application to HUD for approval of the disposition of the Property ("Transactional Costs"). DISCUSSION AND ANALYSIS: To cover predevelopment costs for the Project, including the Environmental Review Costs and the Transactional Costs, Eden has requested the City to provide an advance on the Construction Loan in the amount of $325,000 ("Predevelopment Loan"). Eden and City Staff have negotiated the terms and conditions of the predevelopment loan documents, which include: a predevelopment loan agreement ("Loan Agreement"); a promissory note in the amount of the Predevelopment Loan ("Note"); and an Assignment of Agreements Plans and Specifications ("Assignment Agreement"), which provides the City with a security interest in the plans, specifications and studies financed by the Predevelopment Loan. These loan documents are very similar to the predevelopment loan documents the City executed with Eden in 2003 for the Wicklow Square low-income senior project. The essential terms of the Predevelopment Loan are as follows: 1. City will provide a Predevelopment Loan of up to $325,000 to pay for Environmental Review Costs, the Transactional Costs, and other predevelopment costs incurred by Eden, such as architect, legal, and consultant fees. 2. The term of the Predevelopment Loan is 3 years; provided however, if the City disburses the Construction Loan prior to the end of the 3-year term, the outstanding balance of the Predevelopment Loan will be paid with the proceeds of the Construction Loan. Together, the amount of the Construction Loan and the Predevelopment Loan will not exceed the originally authorized amount of $1.5 million. The Construction Loan will be secured by a deed of trust recorded against the portion of the Property acquired by Eden. 3. Provided there is no default under the Loan Agreement, if the parties mutually agree to terminate the Loan Agreement, or if Eden terminates the Loan Agreement due to Project infeasibility (for example due to failure of the Dublin Housing Authority and City to obtain HUD approval for the disposition of the Property), the City will forgive the Predevelopment Loan upon Eden's delivery to the City of all architectural contracts, plans, specifications, reports, and studies to which City is entitled pursuant to the Assignment Agreement. 4. Provided there is no default under the Loan Agreement, upon termination of the Loan Agreement by mutual agreement or if Eden terminates the Loan Agreement due to Project infeasibility, Page 2 of3 the City will reimburse Eden for (i) predevelopment costs incurred prior to the termination date for which the City has not yet been invoiced, and (ii) the unspent portion of Eden's share of the Initial Deposit as of October 15,2007 (approximately $64,000), in an aggregate amount up to the undisbursed balance of the Predevelopment Loan as of the termination date. In no event will the City be obligated to disburse more than the $325,000 Predevelopment Loan amount. . RECOMMENDATION: Staff recommends that the City Council adopt a Resolution approving a) A predevelopment loan to Eden Housing, Inc. in the amount of up to $325,000 for predevelopment expenses for the Arroyo Vista project; and approving the Predevelopment Loan Agreement, Promissory Note, and Assignment Agreement; and b) Authorizing the City Manager to sign the Predevelopment Loan Agreement and the Assignment Agreement on behalf of the City of Dublin. Page 3 of3 '1.01 RESOLUTION NO. XX - 07 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* APPROVING A PRE DEVELOPMENT LOAN TO EDEN HOUSING, INC. WHEREAS, on July 17, 2007, the City Council of the City of Dublin ("City Council") approved execution of a Disposition and Development Agreement ("DDA") with the Housing Authority of the County of Alameda ("HACA"), the Housing Authority of the City of Dublin ("Authority"), SCS Development Corporation, dba Citation Central Homes ("Citation"), and Eden Housing, Inc. ("Eden"); and WHEREAS, pursuant to the terms of the DDA, (i) Eden will acquire a portion of real property (the "Property") currently owned by the Authority and commonly known as Arroyo Vista; (ii) Eden will construct on its portion of the Property affordable multi-family and senior rental housing with related improvements (the "Project"); and the (iii) the City will provide a loan to Eden in the sum of One Million Five Hundred Thousand Dollars ($1,500,000) to assist in financing the construction of the Project (the "Construction Loan"); and WHEREAS, Eden has requested, and City has agreed, to provide an advance on the Construction Loan in the amount of $325,000 ("Predevelopment Loan") for the purpose of financing predevelopment activities for the Project; and WHEREAS, Eden and City Staff have negotiated the terms and conditions of the predevelopment loan documents, which include: a predevelopment loan agreement ("Loan Agreement") attached hereto as Attachment 1; a promissory note in the amount of the Predevelopment Loan ("Note") attached hereto as Attachment 2; and an Assignment of Agreements Plans and Specifications ("Assignment Agreement")attached hereto as Attachment 3, which provides the City with a security interest in the plans, specifications and studies financed by the Predevelopment Loan. NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin, does hereby approve a predevelopment loan to Eden Housing, Inc. in the amount of up to $325,000 for predevelopment expenses for the Project. BE IT FURTHER RESOL VED THAT, the City Council approves the Loan Agreement, the Note, and the Assignment Agreement and authorizes and directs the City Manager to execute such documents substantially in the form attached hereto and to undertake such further action as may be necessary and desirable to carry out the intent of this resolution. Reso XX-07, Adopted 12/18/07, Item No. Page 1 of2 -r +emiF 4"'1 I P( 10'711 ~~Jl PASSED, APPROVED AND ADOPTED this 4th day of December, 2007. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: Interim City Clerk Reso XX-07, Adopted 12/18/07, Item No. Page 2 of2 3lb3l PREIDEVELOPMENT LOAN AGREEMENT This Predevelopment Loan Agreement (this "Agreement") IS entered Into effective as of ,2007 ("Effectuve Date") by and between the CIty of Dublin, a mUnicIpal corporation (the "Coty") and Eden Housing, Inc , a California nonprofit public benefit corporation (the "Borrower") City and Borrower are hereinafter collectively referred to as the "Partoes " WHEREAS, the City and Borrower, together With the Housing Authonty of the City of Dublin ("Autlhorlty"), the Housing Authonty of the County of Alameda ("HACA") and SCS Development Corporation, dba Citation Central Homes ("Cltatnon") have executed that certain DISposition and Development Agreement ("DDA") dated as of July 25, 2007 pursuant to which Borrower (I) Will acqUire a portion of the real property known as Alameda County Assessor's Parcel Number 941-0007-001-07 (the "Property") currently owned by the Authonty, and (II) Will construct on ItS portion of the Property affordable multi-family and senior rental housing With related Improvements (the "Project") Capitalized terms used but not defined herein shall have the meaning aSCribed to such terms In the DDA WIHIEREAS, pursuant to the DDA, the CIty agreed to proVide a loan to Borrower In the sum of One Million Five Hundred Thousand Dollars ($1,500,000) to assist In financing the construction of the Project (the "Constructnon loan") WHEREAS, Borrower has requested, and the City has agreed to provide, an advance on the Construction Loan (the "Predlevelopment loan") pursuant to the terms and condItIons set forth herein for the purpose of proViding financing for predevelopment activities which are necessary for envIronmental approval of the proposed development of the Property and to obtain HUD approval of the diSposition application (the "Dlsposutuon Apphcatlon"), as more particularly descnbed In the predevelopment budget attached hereto as Exhibit A (the "Predevelopmelllt Budget') , WHEREAS, the proceeds of the Predevelopment Loan ("Predevelopment loan Proceeds") Will be disbursed from the City'S lncluslonary ZOning In-Lieu Fee Fund (the "Fund") established pursuant to Section 8 68 080 of the Dublin MUnicipal Code, and the use of the Predevelopment Loan Proceeds pursuant to thiS Agreement WIll serve the purposes of the Fund by Increasing the City'S supply of affordable low-Income housing, and WHEREAS, concurrently herewith Borrower shall execute (I) a promissory note In the amount of the Predevelopment Loan, and (II) an assignment agreement (the "AssDgrnmell'llt Agreemernt) which shall proVide City With a secunty Interest In the plans, specifications and studies financed by the Predevelopment Loan NOW n-llEREIFORE, In consideration of their mutual undertakings and other valuable consideratIon, the receipt and suffiCiency of whIch are hereby acknowledged, 1 Attachmell1lt oj to ResoliJ.otlon 4~81 the Parties agree as follows 1 THE PREDEVELOPMENT LOAN AND DISBURSEMENT OF PREDEVELOPMENT LOAN PROCEEDS 1 1 Predevelopment Loan and Note City agrees to loan to Borrower, and Borrower agrees to borrow from and repay to City, a sum In the maximum principal amount of Three Hundred Twenty-Five Thousand Dollars ($325,000) (the "PredevelolPment loall1l") upon the terms and conditions and for the purposes set forth herein The Predevelopment Loan shall be eVIdenced by a promissory note dated as of the Effective Date and executed by Borrower substantially In the form, Attachmell1l~ 2 to the Resolution (the "promassmy Note") Provided that Borrower has compiled With all conditions set forth In Section 1 6, the Predevelopment Loan Proceeds shall be disbursed In accordance With Section 1 5 hereof The Parties acknowledge and agree that (I) Borrower's predevelopment costs for the environmental review and obtaining HUD approval of the DIspOSItion Application may exceed the aggregate of the Predevelopment Loan and Borrower's share of the $175,000 deposit In the cost recovery account established With City pursuant to SectIon 2 10 of the DDA (the "Imtual [)eposD~"), (II) the environmental review and HUD approval of the DISposition Application may not be obtained by the time the City has disbursed all of the Predevelopment Loan Proceeds to Borrower, (III) City shall have no obligation to disburse any funds In excess of the Predevelopment Loan, and (IV) any funds In excess of the Predevelopment Loan and the Initial Deposit necessary to complete the environmental review and to obtain HUD approval of the DISposition Application shall be the sole responsibility of Borrower as and to the extent set forth In the DDA 1 2 Interest Maturity Date ProVided that Borrower IS not In default under the terms of thiS Agreement, no Interest shall accrue on the PredeveJopment Loan The outstanding principal balance of the Predevelopment Loan and any other sums due under the Promissory Note shall be payable In full on the third (3rd) anniversary of the Predevelopment Loan origination date ("li\liIa~lUIrR'ty Da~e") unless the term of the Predevelopment Loan IS extended by mutual written agreement of the Parties or the Predevelopment Loan IS forgiven pursuant to the terms hereof, provided however, the Parties agree that If the City disburses the Construction Loan, or a portion thereof, prior to the Maturity Date, the outstanding balance of the Predevelopment Loan shall be repaid With such financing on the date such financing IS provided 1 3 Security for the Loan The Promissory Note shall be secured by Borrower's assignment to the City of Borrower's rights to any and all architectural contracts, plans, specifications, reports, and studies relating to the Property or the Project which have been financed With Predevelopment Loan Proceeds Borrower shall execute the Assignment Agreement substantially In the form, Attaclhmenfc 3 to the Resolution Upon Borrower's acquIsition of tItle to a portion of the Property for the Project, the Promissory Note shall be secured by a deed of trust (the "Deed of lmsfc") executed by 2 5oz,~t Borrower In favor of the City as beneficiary and recorded against Borrower's portion of the Property The Promissory Note shall provide that upon recordation of the Deed of Trust, the Promissory Note shall be nonrecourse 1 4 Use of Predevelooment Loan Proceeds The Predevelopment Loan Proceeds shall be used solely and exclusively for predevelopment costs for the Project as set forth In the Predevelopment Budget and such other costs related to the Project as the City may approve In wntlng Funds for Item (1) of the Predevelopment Budget shall be credited against Borrower's obligation to pay for (I) all costs Incurred by City, HACA and Authonty In connection with environmental review pursuant to Section 2 10 of the DDA and (II) City's and Authority's Transactional Costs (as such term IS defined In the DDA) pursuant to Section 2 11 of the DDA Funds for Item (2) of the Predevelopment Budget shall be disbursed to Borrower on a cost reimbursement basIs In accordance wIth Section 1 5 1 5 Disbursement of Proceeds Upon Borrower's satisfaction of the conditions set forth In Section 1 6, provided that Borrower has provided City with a written requIsition specifying the amount and use of the requested Predevelopment Loan Proceeds accompanied by copies of third-party inVOices for services rendered In connection with the Project, and such other documentation as City may reasonably require, the City shall disburse the Predevelopment Loan Proceeds to Borrower for Borrower's predevelopment costs In the amounts and for the Items set forth In the Predevelopment Bud get Notwlth sta nd Ing the p reced I ng sentence, fu nd s for Item (1) of the Predevelopment Budget shall be credited against Borrower's obligation to pay for (I) all costs Incurred by City, HACA and Authority In connection with environmental review pursuant to Section 2 10 of the DDA, and (II) City'S and Authority's Transactional Costs pursuant to Section 2 11 of the DDA 1 6 Conditions Precedent to Disbursement of Funds (a) City's obligation to disburse the Predevelopment Loan Proceeds IS condItioned upon satisfaction of all of the follOWing conditions (I) Borrower's execution and delivery to the City of thiS Agreement, the Promissory Note, and the ASSignment Agreement, (II) Reserved (Ill) Borrower's delivery to the City of eVidence of Insurance coverage In the form and In such amounts as may be reasonably required by City, and (IV) Borrower's delivery to City of each of the follOWing (I) certificate of good standing, certified by the Secretary of State Indlcattng that Borrower IS properly organized and authorized to do bUSiness In the State of California, (II) a certified resolution Indicating that Borrower has authorized thiS transactIon and that the persons executing thiS Agreement, the Promissory Note, and the ASSignment Agreement on 3 ~%3l behalf of Borrower have been duly authonzed to do so, and (III) certified copies of Borrower's articles of incorporation, bylaws, and IRS tax-exemptIon determination letter (b) Except as specified In Paraqraph 1 7 (b), the City shall have no oblIgation to disburse any portIon of the Predevelopment Loan Proceeds to Borrower follOWIng (I) termInation of thIs Agreement, (II) the faIlure of any of Borrower's representations and warranties set forth In thIs Agreement to be true and correct In all matenal respects, or (Ill) the occurrence of an Event of Default under this Agreement, the Promissory Note, the ASSignment Agreement or the DDA 1 7 TermInation of AQreement (a) TermInation by Borrower ProvIded that Borrower IS not In default under this Agreement, the Promissory Note, the ASSIgnment Agreement, or the DDA, Borrower may terminate thIs Agreement for any of the follOWing reasons by provIding wntten notice of such terminatIon to City (I) Despite Borrower's commercIally reasonable efforts, the development contingencIes set forth In Section 15 1 of the DDA are not performed by the tIme required for such performance and the partIes to the DDA are unable or unwIlling to agree upon extensions for such performance, or (II) An actIon or threatened action against the CIty, the Authonty, and/or HACA prevents the CIty, Authonty and/or HACA, WIthin the tlmeframes set forth In the DDA, from performing their obligations under the DDA or proceedIng With actions necessary for the transfer of the Property to Borrower, or (Ill) Borrower does not receIve all governmental approvals (includIng, Without lImItation, land use approvals) reqUired for development of the Property or construction of the Project, despite Borrower's commercially reasonable efforts to obtain such approvals, or (IV) Borrower determines, In ItS commercially reasonable dIscretion, that any (I) remediatIon work WIth respect to hazardous matenals, or (II) construction costs relatIng to the phYSIcal conditIon of the Property or to the proposed or required Improvements thereon are so expensive or burdensome as to make the ProJect, or a required part thereof, financially infeaSIble, or 4 l"b~! (v) Borrower does not receive commitments for all financing necessary for the development, construction and operation of the Project, despIte Borrower's commercially reasonable efforts to obtain such fmancmg (b) Reimbursement If this Agreement IS terminated (I) by Borrower pursuant to paragraph (a) above, (II) by mutual agreement of the Parties as a result of any pending or threatened litigation against the City, the Authority and/or HACA which may adversely affect Borrower's and City'S ability to perform under thiS Agreement and the DDA, or (III) by mutual agreement of the Parties for any other reason, City shall reimburse Borrower for the following costs In an aggregate amount not to exceed the undisbursed balance of the Predevelopment Loan on the date of termination (I) Predevelopment costs mcurred by Borrower prior to the date of termmatlon of thiS Agreement provided that (1) such costs and fees are Identified m the Predevelopment Budget or have otherwise been approved by City In writing, and (2) Borrower has provided CIty with a written reqUisItion speclfymg the amount and use of the requested Predevelopment Loan Proceeds accompanied by copIes of third-party mvolces for services rendered m connection With the Project, and such other documentatIon as City may reasonably reqUire (II) The unspent portion of Borrower's share of the Initial Deposit as of October 15, 2007 (The Parties agree that such amount IS equal to $64,000 as mdlcated m Item (3) of the Predevelopment Budget) (c) ForQlveness of the Predevelopment Loan If thiS Agreement IS terminated (I) by Borrower pursuant to paragraph (a) above, (II) by mutual agreement of the Parties as a result of any pending or threatened litigation agaInst the City, the AuthOrity and/or HACA which may adversely affect Borrower's, City'S, AuthOrity's and/or HACA's ability to perform under thiS Agreement and/or the DDA, or (III) by mutual agreement of the Parties for any other reason, CIty shall forgive the outstanding balance of the Predevelopment Loan (Includmg any amounts reimbursed to Borrower pursuant to paragraph (b) above) upon Borrower's delivery of all architectural contracts, plans, specifications, reports, and studies to which City IS entitled pursuant to the ASSignment Agreement Upon delivery of such documents, City shall deliver to Borrower the orlgmal Promissory Note marked "Cancelled" and thiS Agreement shall be termmated, proVided however, Borrower's obligation to Indemnify City pursuant to Section 32 of thiS Agreement shall survive termination of thiS Agreement Notvvlthstandlng the foregOing, the City shall have no obligation to forgive Borrower's obligation to repay the Predevelopment Loan and cancel the Promissory 5 "8: 00 b\ Note If, after the applicable notice and cure penod, the City has declared Borrower In default under this Agreement or the DDA and such default remains uncured at the time of Borrower's request for forgiveness of the Predevelopment Loan 2 USE RESTRICTIONS 2 1 Non-DISCnmlnatlon Borrower covenants by and for Itself and ItS successors and assigns that there shall be no dlSCnmlnatlon against or segregation of a person or of a group of persons on account of any basIs listed In subdiVISion (a) or (d) of Section 12955 of the Government Code, as those bases are defined In Sections 12926, 129261, subdiVISion (m) and paragraph (1) of subdivIsion (p) of Section 12955, and Section 129552 of the Government Code In the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project or the Property, nor shall Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of dlscnmlnatlon or segregation With reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees In the Project 22 Mandatory Lanauaae In All Subsequent Deeds, Leases and Contracts All deeds, leases or contracts made or entered mto by Borrower, ItS successors or assigns, as to any portion of the Property or the Project shall contain therein the follOWing language (a) In Deeds "Grantee herein covenants by and for Itself, ItS successors and assigns that there shall be no dlscnmlnatlon against or segregation of a person or of a group of persons on account of any baSIS listed In subdiVISion (a) or (d) of Section 12955 of the Government Code, as those bases are defined m Sections 12926, 129261, subdiVISion (m) and paragraph (1) of subdivIsion (p) of Section 12955, and Section 12955 2 of the Government Code In the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herem conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of dlscnmlnatlon or segregation With reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees In the property herein conveyed The foregOing covenant shall run With the land" (b) In Leases "The lessee herein covenants by and for the lessee and lessee's heIrs, personal representatives and assigns and all persons claiming under the lessee or through the lessee that thiS lease IS made subject to the condition that there shall be no dlSCnmlnatlon against or segregation of any person or of a group of persons on account of any baSIS listed In subdiVISion (a) or (d) of Section 12955 of the Government Code, as those bases are defined In SectIons 12926, 6 qUb~l 12926 1, su bd IVISlon (m) and parag rap h (1) of su bd IVIS Ion (p) of Sectlo n 12955, and Section 129552 of the Government Code In the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herem leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees In the land herein leased" (c) In Contracts "There shall be no diSCrimination against or segregation of any person or group of persons on account of any basIs listed In subdiVISion (a) or (d) of Section 12955 of the Government Code, as those bases are defined In Sections 12926, 12926 1, subdivIsion (m) and paragraph (1) of subdiVISion (p) of Section 12955, and Section 129552 of the Government Code In the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of diSCrimination or segregation With reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land" 3 ADDITIONAL COVENANTS,'REPRESENTATIONS AND WARRANTIES OF BORROWER 3 1 Representations of Borrower Borrower represents and warrants to the City as follows a OrQanlzatlon of the Borrower, Tax-exempt Status Borrower IS a duly organized nonprofit publiC benefit corporation, validly eXisting and In good standing under the laws of the State of California Borrower has all requIsite power and authOrity In the State of California to purchase the Property, to develop, own and operate the Project, to carry on ItS bUSiness as now conducted, and to execute, deliver and perform ItS obligations under thiS Agreement, the Promissory Note, and the ASSignment Agreement Borrower has received a determinatIon from the Internal Revenue Service that It IS exempt from federal tax under Section 501 (c)(3) of the Internal Revenue Code of 1986 as amended and such determination IS In full force and effect as of the Effective Date b AuthOrization of the Predevelopment Loan, No Violation The execution, delivery and performance of thiS Agreement, the Promissory Note, and the ASSignment Agreement have been duly authOrized by Borrower, and thiS Agreement, the Promissory Note and the ASSignment Agreement, when duly executed and delivered Will constitute the valid and binding obligations of Borrower enforceable m accordance With their respective terms Borrower's execution of thiS Agreement, the Promissory Note and the ASSignment Agreement and performance thereunder Will not result In a breach of or constitute a default under any agreement, Indenture or other Instrument to 7 tV Db 3-1 which Borrower IS a party or by which Borrower may be bound c lItloatlon Except for that action filed by Arroyo VIsta Tenants Association, et al , In the Supenor Court of California, County of Alameda, Case No RG07351015, there are no pending or threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower or Its ability to carry out the obligations of Borrower under thiS Agreement, the Promissory Note, the Assignment Agreement or the DDA Borrower IS not the subject of an action under federal or state Bankruptcy Law (as defined below) 32 Indemnification Borrower shall indemnify, defend and hold the City, Its elected and appointed offiCials, employees, contractors and agents (collectIvely "llI'1ldlemll'1lutees") harmless from and against any and all demands, claims, SUitS, costs (Including reasonable attorneys' fees), losses, damage, causes of action, fines, judgments, penalties, deficiencies, or liabilities of any kind (collectively "Claums") anslng directly or indirectly m any manner In connection With or resulting from (a) any and all predevelopment, development or construction activIties conducted In connection With the Property or the Project, Including Without limitation, site investigations conducted by or for Borrower, (b) any failure of any of Borrower's representations or warranties set forth In thiS Agreement, or made by Borrower In connection With the execution and delivery of thiS Agreement or In any certificate furnished pursuant hereto, or In connection With any request for disbursement of Predevelopment Loan Proceeds to be correct In all matenal respects, (c) any Claim, whether mentorlous or not, brought or asserted against any Indemnitee which relates to or anses In connection With the Predevelopment Loan, the Promissory Note, the ASSignment Agreement, or any transaction contemplated thereby, or the relationship between Borrower and City Borrower's obligations under thiS Section shall survive the makmg and repayment of the Predevelopment Loan and the expiration or termination of thiS Agreement Borrower's Indemnity obligations shall not apply to any Claims arising as a result of the Willful mIsconduct or gross negligence of the CIty, ItS officers, employees or agents ThiS Section IS subject to, and shall not modify the relative nghts and obligations of the partIes, set forth In Section 3 2 (f) of the DDA 3 3 Books and Records The City shall have the nght, dUring bUSiness hours and after reasonable notice to Borrower, to Inspect and copy Borrower's books and records With respect to the Property, the Project and the Predevelopment Loan 34 Other Documents Upon the City's reasonable request, Borrower shall deliver to the City a copy of documents related to the ProJect, including Without limitation, construction contracts, consulting agreements, architects' agreements, loan and finanCing documents, studies, reports, management plans, and property management agreements 8 \lV"Q 31 4 DEFAULT AND REMEDIES 4 1 Events of Default The occurrence of anyone or more of the following events shall constitute an event of default hereunder ("Eve~t o~ Default") (a) Borrower falls to pay when due the pnnclpal payable under the PromIssory Note, and such failure continues for ten (10) days after City notifies Borrower thereof In writing (b) An Event of Default IS declared under the DDA, the Promissory Note or the Assignment Agreement, and such failure continues after eXpiration of the applicable notice and cure periods set forth In such documents (c) Any of Borrower's representations or warranties contained In thiS Agreement, or made by Borrower In connection With the execution and delivery of thiS Agreement or In any certificate furnished pursuant hereto, or In connection With any request for disbursement of Predevelopment Loan Proceeds shall prove to have been Incorrect when made In any material respect (d) Pursuant to or Within the meaning of the United States Bankruptcy Code or any other federal or state law relating to Insolvency or relief of debtors ("lBankrupfccy lawn), Borrower (I) commences a voluntary case or proceeding, (II) consents to the entry of an order for relief against Borrower In an Involuntary case, (III) consents to the appoIntment of a trustee, receiver, assignee, liquidator or Similar offiCial for Borrower, (IV) makes an assignment for the benefit of ItS creditors, or (v) admits In wntmg ItS Inability to pay ItS debts as they become due (e) A court of competent JUrisdiction enters an order or decree under any Bankruptcy Law that (I) IS for relief against Borrower In an Involuntary case, (II) appoints a trustee, receiver, assignee, liqUidator or Similar offiCial for Borrower or substantIally all of such entIty's assets, (III) orders the liquidation of Borrower, or (IV) Issues or levies a Judgment, wnt, warrant of attachment or Similar process against the Property or the ProJect, and In each case the order or decree IS not released, vacated, dismissed or fully bonded Within 60 days after ItS Issuance (f) Borrower falls to maintain Insurance as required pursuant to thiS Agreement, and Borrower falls to cure such default Within 10 days (g) Borrower falls to use Predevelopment Loan Proceeds In accordance With thiS Agreement or falls to use Predevelopment Loan Proceeds In accordance With Borrower's request for disbursement (h) Borrower defaults In the performance of any term, proVIsion, covenant or agreement contained In thiS Agreement other than an obligation enumerated In thiS Section 4 1, and unless such a shorter cure penod IS specified for such default, the default continues for ten (10) days In the event of a monetary default or thirty (30) days In the event of a nonmonetary default after 9 l2OQ3j the date upon which City shall have given written notice of the default to Borrower, provided that In the case of a nonmonetary default that IS not susceptible of cure within thirty (30) days, an Event of Default shall not anse hereunder If Borrower commences to cure the default within thIrty (30) days and thereafter prosecutes the cUring of such default to completion with due diligence and In good faith, but In no event longer than 120 days from the receipt of notice of defau It 42 Remedies Upon the occurrence of an Event of Default, the City shall have the following rights, In addition to any other rights and remedies provided by law (a) The City may declare the entire outstanding principal balance of the Predevelopment Loan Immediately due and payable, (b) The City may exercise any and all rights and remedies granted to the City pursuant to the Assignment Agreement, (c) The City may seek an order of specIfic performance, and (d) The City may terminate this Agreement Each of the remedies provided herein IS cumulative and not exclusive of, and shall not prejudice any other remedy provided herem, In the Promissory Note or the Assignment Agreement The City may exerCise any rights and remedies available under applicable law, In addition to, and not In lieu of, any rights and remedies expressly granted In this Agreement 4 3 No Waiver No failure or delay by City at any time to require performance by Borrower of any provIsion of this Agreement or to exercise any right, power or remedy hereunder shall be construed as a waiver of any other provIsion or any succeeding breach of the same or any other provIsion hereof The failure of CIty to InSist upon the strict performance of any provIsion of this Agreement, or to exercise any election contained herein shall not be construed as a waiver or relinquishment for the future of such provIsion or election nor shall It constitute a waiver of the City'S nght to assert any future remedy provided for In this Agreement the Promissory Note or the ASSignment Agreement on the baSIS of the same or a similar breach of a covenant or warranty or other event of default 5 MISCELLANEOUS 5 1 AsslQnment This Agreement shall be binding upon and mure to the benefit of the Parties and their respective successors and assigns Notwithstanding the foregOing, CIty's obligation to make the Predevelopment Loan IS personal to Borrower, and shall not be assIgnable by Borrower by operation of law or otherwise absent the express written consent of CIty, and any such assignment by operation of law or othervvlse shall be VOId This Section shall not apply to an assignment to a wholly- controlled affiliate of Borrower or a limited partnership whose general partner IS a 10 ~3OCJ 31 wholly-controlled affiliate of Borrower 52 Insurance Borrower shall maintaIn and keep In force, at Borrower's expense, the msurance reqUired pursuant to thiS Agreement For each of Borrower's msurance polICIes, Borrower shall provIde to City withIn ten (10) days followIng executIon of thIS Agreement, but In no event later than the inItial disbursement of Predevelopment Loan Proceeds, a certificate of Insurance and an endorsement which provIdes that no cancellatIon, major change In coverage or expIration Will be effective dunng the term of thiS Agreement without 30 days written notIce to the CIty pnor to the effective date of such cancellatIon, change In coverage or expiration Upon request by the CIty from tIme to tIme, Borrower shall deliver to the CIty onglnals or copIes of all such Insurance poliCies and certificates eVidencIng such poliCies 53 NotIces Except as otherwise specIfied herem, all notices to be sent pursuant to thiS Agreement shall be made In Writing, and sent to the Partles at their respective addresses specIfied below or to such other address as a Party may desIgnate by written notIce delivered to the other partIes In accordance WIth thiS Section All such notices shall be sent by (I) personal delIvery, In which case notice IS effective upon delivery, (II) certified or registered mall, return receipt requested, In whIch case notice shall be deemed delivered on receipt If delivery 1$ confirmed by a return receIpt, (III) natIonally recognIzed overnight COUrier, With charges prepaid or charged to the sender's account, In whIch case notIce IS effectIve on delIvery If delIvery IS confirmed by the delivery service, (IV) facsimIle transmissIon, In whIch case notIce shall be deemed delivered upon transmittal, proVided that (a) a duplIcate copy of the notice IS promptly delIvered by first-class or certIfied mall or by overnIght delIvery, or (b) a transmISSion report IS generated reflectIng the accurate transmiSSIon thereof Any notIce given by faCSimile shall be consIdered to have been receIved on the next busmess day If It IS received after 5 00 pm reCipient's time or on a nonbUSiness day CITY City of DublIn 100 CIVIC Plaza Dublin, CA 94568 AttentIon City Manager Fax No (925) 829-9248 11 l~Ob~1 !BORROWER Eden Housing, Inc 409 Jackson Street Hayward, CA 94544-1567 Attention Executive Director Fax No (510) 582-6523 54 Waiver, ModificatIon and Amendment No modification or waiver of any provISion of thiS Agreement, nor any consent to any departure by Borrower therefrom, shall In any event be effective unless the same shall be In writing, and then such waiver or consent shall be effective only In the specIfiC Instance and for the specific purpose for which given No notice to or demand on the Borrower In any case shall entItle the Borrower to any other or further notice or demand In similar or other circumstances No amendment to or modification of thiS Agreement shall be effective unless and until such amendment or modIfication IS In wntlng, properly approved In accordance With applicable procedures, and executed by the Parties 5 5 Further Assurances The Parties shall execute, acknowledge and deliver to the other such other documents and Instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the Intent of thiS Agreement 56 Parties Not Co-Venturers Nothing In thiS Agreement IS Intended to or shall establish the Parties as partners, co-venturers, or pnnclpal and agent With one another 57 Action by the City Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City IS required or permItted under thiS Agreement, such action shall be In wntlng, and such action may be given, made or taken by the City Manager or by any person who shall have been deSignated by the City Manager, Without further approval by the City CounCil 58 Non-Liability of City, City OffiCials, Directors, Employees and Agents No member, offiCial, employee or agent of the City shall be personally liable to Borrower, or any successor In Interest, In the event of any default or breach by the City, or for any amount of money which may become due to Borrower or ItS successor or for any obligatIon of City under thiS Agreement No director, officer, employee or agent of Borrower shall be personally liable to the City, or any successor In Interest, In the event of any default or breach by Borrower, or for any amount of money which may become due to CIty or Its successor or for any obligation of Borrower under thiS Agreement 59 No Third Party Beneficlanes There shall be no third party beneficlanes to thiS Agreement 5 10 Captions. Construction The headings of the sections and paragraphs of thiS Agreement have been Inserted for convemence only and shall not be used to construe thiS Agreement The language of thiS Agreement shall be construed as a whole 12 LSPb ~I according to Its fair meaning and not strictly for or against any Party Time IS of the essence In the performance of this Agreement 5 11 Governing Law, Venue This Agreement, the Promissory Note and the Assignment Agreement shall be construed and enforced In accordance with the laws of the State of California without regard to principles of conflicts of law The Parties consent to the JUrisdiction of any federal or state court In the jUrisdiction In which the Property IS located (the "Property JLlII/'ISdIC~DOIl1") Borrower agrees that any controversy arising under or In relation to this Agreement, the Promissory Note or the ASSignment Agreement shall be litigated exclusively In courts haVing JUrisdiction In the Property JUrisdiction Borrower Irrevocably consents to service, JUrisdiction, and venue of such courts for any such litigation and waIves any other venue to which It might be entitled by virtue of domicile, habitual reSidence or otherwise 5 12 Attornevs' Fees In the event any legal action IS commenced to mterpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing In any such action shall be entitled to recover against the other Party all reasonable attorneys' fees and costs Incurred In such action 5 13 Severability If any term of this Agreement IS held by a court of competent JUrisdiction to be Invalid, vOid or unenforceable, the remainder of the provIsions shall continue In full force and effect unless the rights and obligations of the Parties are materially altered or abridged by such Invalidation, vOiding or unenforceablllty 5 14 Entire Agreement. Exhibits This Agreement, together with the Promissory Note, the ASSignment Agreement, and the additional documents referenced herein contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto Exhibits A through C attached hereto are Incorporated herein by this reference 5 15 Counterparts This Agreement may be executed In multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same Instrument 5 16 Cltv Status Borrower recognizes and agrees that City IS not a commercial lending Institution, but a mUnicipal corporation exerclsmg ItS authority to protect the public health, safety and welfare Any duties or obligations which a commercial lending Institution may have to Borrower shall not apply to this transaction except as set forth herein or In the Promissory Note or as otherwise reqUired by law SIGNA TURES ON FOLLOWING PAGE 13 1~~3, IN WITNESS WHEREOF, the PartIes have executed thIs Agreement as of the date first wntten above DEVELOPER EDEN HOUSING, INC , a CalifornIa nonprofit publIc benefit corporation By LInda Mandollnl, ExecutIve Director CITY CITY OF DUBLIN, a mUnicipal corporation By RIchard C Ambrose CIty Manager ATTEST By CIty Clerk APPROVED AS TO FORM By CIty Attorney 14 ~~ "631 Exhibit A PREDEVELOPMENTBUDGET Predevelopment Loan Proceeds shall be disbursed to Borrower for Borrower's share of the following costs Incurred atter October 15, 2007, (the filing date of the Arroyo Vista Tenant Association laWSUit (Case No RG07351015)), and which are necessary to secure HUD approval ot the DISposition ApplicatIon and environmental approval (1) $186,OOOCosts Incurred by the City and the Authonty (I) In connection with environmental review pursuant to Sections 2 10 at the DDA, but only atter Borrower's 50% share otthe $175,000 depOSit has been spent and (II) Transactional Costs (as defined In Section 2 11 ot the DDA) Incurred by the City and the Authonty pursuant to Section 211 otthe DDA, (2) $ 75,000Costs Incurred by Borrower for predevelopment actIVIties tor the Project, Including but not limited to, fees tor o Architects o CIvil Engineers o Landscape Architects o AppraIsals o Dublin San Ramon ServIces Dlstnct Fees o Borrower's Legal Counsel (3) $64,000 Reimbursement of the unspent portion of Borrower's share of the Initial DepOSit as of October 15, 2007, provIded, however, that this Ime Item shall only be disbursed It the Project does not proceed due, In whole or In part, to the Arroyo Vista Tenant Association laWSUit In the event such laWSUit IS dIsmissed With preJudice, the funds allocated for thIS line Item may be used for Items (1) and (2) $325,000 MaXimum Predevelopment Loan Amount (total of (1)-(3)) 1 lE)(hlulbni A tto Attachlment ~ }S tj 3/ PROMISSORY NOTE Dublin, California ,2007 $325,000 FOR VALUE RECEIVED, Eden Housing, Inc., a California nonprofit public benefit corporation ("Borrower"), promises to pay to the City of Dublin, a municipal corporation ("City"), in lawful money of the United States of America, the principal sum of Three Hundred Twenty-Five Thousand Dollars ($325,000) or so much thereof as may be advanced by City from time to time pursuant to the Predevelopment Loan Agreement referred to below in the manner provided below. This promissory note (this "Note") has been executed and delivered pursuant to and in accordance with the terms and conditions of the Predevelopment Loan Agreement, dated as of the date hereof, by and between Borrower and City (the "Loan Agreement"), and is subject to the terms and conditions of the Loan Agreement, which are by this reference incorporated herein and made a part hereof. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Loan Agreement. This Note is secured by an assignment of agreements, reports, plans, specifications and approvals pursuant to that certain Assignment Agreement dated as of the date hereof, executed by Borrower as Assignor in favor of City. City shall be entitled to the benefits of the security provided by the Assignment Agreement and shall have the right to enforce the covenants and agreements of Borrower contained in the Loan Agreement. Upon Borrower's acquisition of title to a portion of the Property ("Borrower's Property") for the Project, this Note shall be secured by a deed of trust executed by Borrower in favor of the City as beneficiary and recorded against Borrower's Property (the "Deed of Trusf'). 1. PAYMENTS 1.1 MATURITY DATE; INTEREST. The entire principal balance outstanding under this Note shall be due and payable in full on the third (3rd) anniversary of the date first written above ("Maturity Date") unless the term of this Note is extended by mutual written agreement of the Parties or City forgives this Note pursuant to the terms and conditions set forth in Section 1.7 of the Loan Agreement; provided however, the Parties agree that if the City provides construction and/or permanent financing for the Project prior to the Maturity Date, the outstanding balance of the Predevelopment Loan shall be repaid with the proceeds of such financing on the date such financing is provided. Provided that Borrower is not in default under the Loan Agreement, the DDA, or the Assignment Agreement, no interest shall accrue on the outstanding principal balance due under this Note. 1.2 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal Attachment 2 to the Resolution r1fJ balance due under this Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due and then to principal. In no event shall any amount due under this Note become subject to any rights of offset, deduction or counterclaim on the part of Borrower. 1.3 MANNER OF PAYMENT. All payments of principal on this Note shall be made by certified or bank cashier's check to City at 100 Civic Plaza, Dublin, California 94568 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 2. DEFAULTS 2.1. EVENTS OF DEFAULT. The occurrence of anyone or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after City notifies Borrower thereof in writing. (b) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (Hi) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due. (c) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of Borrower's assets, or (iii) orders the liquidation of Borrower, and in each case the order or decree is not dismissed within 60 days. (d) An Event of Default is declared under the DDA, the Loan Agreement, or the Assignment Agreement after expiration of the applicable notice and cure periods provided in such documents. (e) Borrower fails to use Predevelopment Loan Proceeds in accordance with the Loan Agreement or Borrower's request for disbursement. 2.2. REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City pursuant to the Loan Agreement or the Assignment Agreement. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' 2 Q~~31 fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder. 2.3. DEFAULT RATE. During any time that Borrower is in default under this Note, interest shall accrue on the outstanding principal balance at the rate often percent (10%) per annum (the "Default Rate"). When Borrower is no longer in default, the Default Rate shall no longer apply. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. 3. MISCELLANEOUS 3.1. WAIVER; AMENDMENT. The rights and remedies of City under this Note shall be cumulative and not alternative. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this Note. Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City. 3.2. NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 5.3 of the Loan Agreement. 3.3. SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 3.4 GOVERNING LAW. This Note shall be construed and enforced in accordance with the laws of the State of California without regard to principles of conflicts of laws. The Parties consent to the jurisdiction of any federal or state court in the jurisdiction in which the Property is located (the "Property Jurisdiction"). Borrower agrees that any controversy arising under or in relation to this Note shall be litigated exclUSively in courts having jurisdiction in the Property Jurisdiction. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. 3 0<'5t3) 3.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. 3.6 SECTION HEADINGS. CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. 3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Assignment Agreement will in no manner make City the partner or joint venturer of Borrower. 3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note. 3.9 NONRECOURSE. (a) Prior to recordation of the Deed of Trust against Borrower's Property, this Note shall be fully recourse against the Borrower and any judgment or execution thereof entered in any action, legal or equitable, on this Note may be enforced personally against the Borrower (b) Following the recordation of the Deed of Trust against Borrower's Property, except as expressly provided in this Section 3.9, neither Borrower nor its partners, if any, shall have personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Project and Borrower's Property and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall: (A) impair the enforcement against all such security for the Predevelopment Loan of all the rights and remedies of the City under the Deed of Trust and any financing statements City files in connection with the Predevelopment Loan as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Deed of Trust, the interest in the Project and Borrower's Property created thereby and any other collateral given to City in connection with the indebtedness evidenced hereby and to name the Borrower as party defendant in any such action; (C) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Predevelopment Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City hereunder or to require that the Project and Borrower's Property shall continue to secure all of the 4 c201 ~J I indebtedness owed to City hereunder in accordance with this Note and the Deed of Trust; or (E) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower and its general partners, if any, to: (1) recover under Section 3.2 of the Loan Agreement (pertaining to Borrower's indemnification obligations), or (2) recover from Borrower and its general partners, if any, compensatory damages as well as other costs and expenses incurred by City (including without limitation attorney's fees and expenses) arising as a result of the occurrence of any of the following: (a) any fraud or material misrepresentation on the part of the Borrower or any general partner thereof, or any officer, director or authorized representative of Borrower in connection with the request for or creation of the Predevelopment Loan, or in any Predevelopment Loan document, or in connection with any request for any action or consent by City in connection with the Predevelopment Loan; (b) any failure to maintain insurance on Borrower's Property and the Project as required pursuant to the Predevelopment Loan documents; (c) failure to pay taxes, assessments or other charges which may become liens on Borrower's Property or the Project; (d) the presence of hazardous or toxic material or waste on Borrower's Property or the Project or other violation of the Borrower's obligations- under of the Loan Agreement, the DDA or the Deed of Trust pertaining to environmental matters; (e) the occurrence of any act or omission of Borrower that results in waste to or of the Borrower's Property or the Project and which has a material adverse effect on the value of the Project or Borrower's Property; (f) the material misapplication of the Predevelopment Loan Proceeds; (g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; and (h) the material misapplication of the proceeds of any insurance policy or award 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 or Borrower's Property. 5 cQ313/ IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER Eden Housing, Inc., a California nonprofit public benefit corporation By: Linda Mandolini Executive Director 6 .2If ~31 ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS FOR VALUE RECEIVED, effective as of ,2007 (the "Effective Date"), Eden Housing, Inc., a California nonprofit public benefit corporation ("Assignor") hereby assigns and grants to the City of Dublin, a municipal corporation (the "City") all of its right, title and interest in and to all of the following but (i) only as to the following documents that have been paid for with Predevelopment Loan Proceeds, or if only a portion of a document has been paid for with Predevelopment Loan Proceeds then only that portion of such document paid for with Predevelopment Loan Proceeds; and (ii) only for those contracts and agreements in which Assignor as the developer and the Contractor (other than Citation) are the sole parties (all of which hereafter shall collectively be referred to as the "Assigned Documents"). (A) All architectural, design, engineering, consulting and construction . contracts, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively "Agreements"), heretofore or hereafter entered into by Assignor and any architect, engineer, analyst, contractor or other person or entity ("Contractor") in connection with the preparation of plans, specifications, studies, analyses, drawings or any other similar service related to the Property, the Project, or the improvements existing or to be installed or constructed on the Property (the "Improvements"); and (B) All reports, analyses, studies, plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively "Reports, Plans and Specifications") heretofore or hereafter prepared by or for Assignor or its agents, employees or any Contractor with respect to the Property, the Project or the Improvements. In addition, the parties hereto agree as follows: 1. This Assignment of Agreements, Plans, and Specifications (this "Assignment Agreement") is made pursuant to that certain Predevelopment Loan Agreement executed by and between Assignor and City dated as of the date hereof (the "Loan Agreement"). Capitalized terms used without definition herein shall have the meaning ascribed to such terms in the Loan Agreement. 2. This Assignment Agreement is made to secure: (a) payment to the City of all sums now or hereafter owing under the Promissory Note dated as of the date hereof made by Assignor for the benefit of City, and any and all additional advances, modifications, extensions, renewals and amendments thereof; and (b) payment and performance by Assignor of all its obligations under the Loan Agreement. Attachment 3 to the Resolution J'S ~31 3. Assignor hereby irrevocably appoints City as its attorney-in-fact (which agency is coupled with an interest) upon the occurrence of an Event of Default by Assignor under the Loan Agreement, to demand, receive, and enforce any and all of Assignor's rights with respect to the Assigned Documents, and to perform any and all acts in the name of Assignor or in the name of the City with the same force and effect as if performed by Assignor in the absence of this Assignment Agreement. 4. Assignor agrees to obtain from each Contractor and deliver to City a duly executed Consent substantially in the form attached hereto as Exhibit A. Assignor represents and warrants to City that no previous assignment of its respective rights or interest in or to any of the Assigned Documents has been made. So long as the City holds or retains any interest under the Loan Agreement or the Promissory Note, Assignor agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its rights or interest in any of the Assigned Documents without prior written approval of the City. The City shall be deemed to have approved any assignment of the Assigned Documents to a senior lender provided that City has approved such senior lender. 5. This Assignment Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors-in-interest of Assignor and the City; provided, however, this shall not be construed and is not intended to waive the restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by Assignor contained in the Loan Agreement or the DDA. 6. Unless an Event of Default (as defined in the Loan Agreement) shall have occurred, Assignor shall be entitled (subject to the provisions of Section 4 above) to enjoy and enforce all of its rights under the Assigned Documents. If such an Event of Default occurs and City gives written notice to any Contractor who is a party to any Assigned Document referring to this Assignment Agreement and stating that such an Event of Default has occurred and that City intends to exercise its rights hereunder (an "Exercise Notice"), then City shall be entitled thereafter to enjoy and enforce all of the rights of Assignor under such Assigned Document and shall become bound to perform all future obligations of Assignor thereunder, it being understood that in no event shall City be liable for payments or costs relating to any work which any Contractor has performed prior to the date of City's delivery of such Exercise Notice. Unless and until such Exercise Notice is given, City shall not be obliged to perform any of the obligations of Assignor under the Assigned Documents. . 7. Assignor represents and warrants that to the best of its knowledge after reasonable inquiry, there are no defaults under any Assigned Document by any party thereto. 8. Assignor further represents and warrants that all sums due and owing to any Contractor to date under any Assigned Document have been duly paid in full, except to the extent deferral of such sums is allowed pursuant to such Assigned Document. 9. City may assign its rights under this Assignment Agreement, and the Assigned Documents, and the rights and obligations of any assignee of City shall be the 2 02G 131 same as provided herein as to City and Contractor. City may, in its discretion, make any such assignment to a third party, with the consent of the Contractor who is a party to such Assigned Documents, provided such consent shall not be unreasonably withheld, conditioned or delayed. 10. This Assignment Agreement shall not be deemed to release or affect in any way the obligations of Assignor to any Contractor under the Assigned Documents. 11. Assignor is executing this Assignment Agreement to induce City to enter into and disburse f~nds pursuant to the Loan Agreement, and Assignor understands that City would not do so but for the execution and delivery of this Assignment Agreement by Assignor. 12. Notices. Except as othelWise specified herein, all notices to be sent pursuant to this Assignment Agreement shall be made in writing, and sent to the parties at their respective addresses specified below (or in the case of Contractor, to the address specified in the Consent attached hereto) or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first.class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. CITY: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager 3 ~'1J{ 3/ ASSIGNOR: Eden Housing, Inc. 409 Jackson Street Hayward, CA 94544-1567 Attention: Executive Director 13. Amendments.. This Assignment Agreement may be modified only by a written instrument signed by the Parties. 14. Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Assignment Agreement. 15. Parties Not Co-Venturers. Nothing in this Assignment Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 16. Action by the Citv. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Assignment Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council unless the City Manager determines that such matter requires the consent of the City Council. 17. Non-Liabilitv of Citv and City Officials. Employees and Aaents. No member, official, employee or agent of the City shall be personally liable to Assignor, or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Assignor or its successor or for any obligation of City under this Assignment Agreement. 18. No Third Partv Beneficiaries. There shall be no third party beneficiaries to this Assignment Agreement. 19. Headinas: Construction. The headings of the sections and paragraphs of this Assignment Agreement have been inserted for convenience only and shall not be used to construe this Assignment Agreement. The language of this Assignment Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. Time is of the essence in the performance of this Assignment Agreement. 20. Governina Law: Venue. This Assignment Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. The Parties consent to the jurisdiction of any federal or state court in the jurisdiction in which the Property is located (the "Property Jurisdiction"). Assignor agrees that any controversy arising under or in relation to this Agreement shall be 4 )2 ~3' litigated exclusively in courts having jurisdiction in the Property Jurisdiction. Assignor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. 21. Attornevs' Fees. If any claim, at law or otherwise is made by either Party, the prevailing party or the nondefaulting party, as the case may be, shall be entitled to its costs and reasonable attorneys' fees. 22. Severabilitv. If any term of this Assignment Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties are materially altered or abridged by such invalidation, voiding or unenforceability. 23. Counterparts. This Assignment Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOllOWING PAGE. 5 ;tCJ ~31 IN WITNESS WHEREOF, Assignor and City have duly executed this Assignment Agreement effective as of the date first above written. CITY: CITY OF DUBLIN, a municipal corporation By: Name: City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney ASSIGNOR: EDEN HOUSING, INC., a California nonprofit public benefit corporation By: Its: 6 30 ~31 Exhibit A CONSENT This Consent ("Consent") is executed effective as of , 20_, pursuant to that certain Assignment of Agreements, Plans and Specifications ("Assignment Agreement") executed by and between Eden Housing, Inc., a California nonprofit pUblic benefit corporation ("Assignor") and the City of Dublin, a municipal corporation (the "City") dated as of ,2007. Unless otherwise defined herein, capitalized terms used in this Consent shall have the meanings given them in the Assignment Agreement. The undersigned architect, en.,9ineer, contractor and/or Contractor ("Contractor") hereby consents to the Assignment Agreement and the assignments contemplated thereby, and hereby waives all provisions in the Assigned Documents to which Contractor is a party which would impair, hinder or prevent the making of any such assignment by Assignor to City or the enforcement thereof by City. Contractor agrees that if, at any time, the City shall, pursuant to its rights under the Assignment Agreement deliver an Exercise Notice to Contractor, then provided that Contractor has received, receives or continues to receive the compensation called for under the Assigned Documents to which Contractor is a party, the City may, at its option, use and rely upon the Reports, Plans and Specifications for the purposes for which they were prepared, and Contractor will continue to petform its obligations under the Assigned Documents to which Contractor is a party for the benefit and account of the City in the same manner as if petformed for the benefit or account of Assignor in the absence of the Assignment Agreement. Contractor agrees that it shall rely conclusively upon any Exercise Notice given to Contractor by City, and Contractor agrees to be bound by such Exercise Notice. By its execution of this Consent, Contractor agrees to look solely to Assignor and its successors in interest for petformance of Assignor's obligations under the Assigned Documents to which Contractor is a party unless and until Contractor shall have received an Exercise Notice from City. Contractor agrees that, after the occurrence of an Event of Default under the Loan Agreement and the giving of an Exercise Notice by City, Contractor will petform all of its obligations under the Assigned Documents to which Contractor is a party, City being liable to pay the costs thereof relating to any services performed at the direction of City after the giving of the Exercise Notice. However, City is not and will in no event become liable for any costs, charges, expenses and liabilities incurred under the Assigned Documents or otherwise unless it has given the Exercise Notice (and, if it has given the Exercise Notice, City will not become liable for any such costs, charges or expenses incurred prior to the giving of such Exercise Notice), and the fact that Assignor may not have paid and/or may be unable to pay any such costs, charges, expenses or liabilities may not be asserted by Contractor as a defense to its obligations to perform services for City as set forth herein. Contractor agrees that, notwithstanding anything hereinabove contained or contained in the Assigned Documents to the contrary, City will have the right to receive and to use (without cost to City) any and all Reports, Plans and Specifications relating to the Property, the Project or the Improvements, as the same may be amended or modified from time to time, which 1 Exhibit A to Attachment 3 3{ aj 3/ Contractor may own or have the right to use and to grant others the right to use. Contractor further agrees that, upon the written request of City (whether or not any Event of Default has occurred), it will execute and deliver a certification confirming City's rights with respect to such Reports, Plans, and Specifications as City from time to time may reasonably request. Contractor agrees that for so long as the Assignment Agreement is effective, if Assignor defaults in making any required payment or in performing any other obligation under any Assigned Document to which Contractor is a party, Contractor shall give prompt written notice thereof to City. Unless and until such notice is given to City, and for a period of 15 business days thereafter, Contractor shall not exercise any of its rights or remedies against Assignor under the Assigned Documents (including, without limitation, the right to terminate any Assigned Document or to stop work thereunder). After such notice is given and for a period of 15 business days thereafter, City may, at its option, cure (but shall have no obligation to cure) any such default by Assignor and, if such default is so cured during such notice period, Contractor shall continue performance under the Assigned Documents to which such Contractor is a party. Contractor represents and warrants that (i) the Assigned Documents to which Contractor is a party are in full force and effect, and to Contractor's knowledge there are no defaults thereunder by any party thereto; (ii) Contractor has made no assignment of any Assigned Document to which Contractor is a party or of its rights thereunder (other than to City); and (iii) there presently exists no unpaid claims presently due to Contractor, except as disclosed in writing to the City, arising in connection with the performance of Contractor's obligations under the Assigned Documents to which Contractor is a party. Contractor agrees that for so long as the Assignment Agreement is effective, Contractor shall not assign its rights or interest in any of the Assigned Documents (absent the prior written consent of City) to any entity other than a lender whose loan is secured by the Property, the Project or the Improvements with the prior written approval of the City. IN WITNESS WHEREOF, Contractor has duly executed this Consent as of the date first written above. CONTRACTOR By: Contractor's Address: Its: Telephone: Facsimile: 2 Exhibit A to Attachment 3