HomeMy WebLinkAboutItem 4.08 Veterans Family Apartments of
�9 - �2 STAFF REPORT CITY CLERK
CITY COUNCIL File #600-30
DATE: January 20, 2015
TO: Honorable Mayor and City Councilmembers
FROM: Christopher L. Foss, City Manager "
SUBJECT: Predevelopment Loan Agreement with Corona Crescent, Inc. (an affiliate of Eden
Housing, Inc.) for Veterans Family Apartments Development
Prepared by Amy Cunningham, Assistant to the City Manager
EXECUTIVE SUMMARY:
The City Council will consider a resolution approving a Predevelopment Loan Agreement in the
amount of $1.4 million to Corona Crescent, Inc. (an affiliate of Eden Housing, Inc.) for a
Veterans Family Apartments development. On November 18, 2014, the City Council committed
a total of $6.4 million to the Veterans Family Apartments and authorized staff to negotiate the
necessary agreements to develop the project. This Predevelopment Loan Agreement will
provide initial funding to Corona Crescent, Inc. to begin work on the project.
FINANCIAL IMPACT:
If approved, the Predevelopment Loan Agreement will require a budget change in the amount of
$1.4 million from the City's Affordable Housing Fund.
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Approving a Predevelopment
Loan Agreement between the City of Dublin and Corona Crescent, Inc., Relating to the
Development of an Affordable Housing Project with Veterans Preference; and approve the
budget change to allocate adequate funding for the Predevelopment Loan.
Submitted By 'Reviewed By
Community Development Director Assistant City Manager
DESCRIPTION:
At the November 18, 2014 City Council meeting, the City Council committed $6.4 million in the
form of a loan to Eden Housing, Inc. or its controlled affiliate for development of a Veterans
Family Apartments project at 6707 Golden Gate Drive. At that meeting, the City Council also
directed staff to work with Eden Housing, Inc. to negotiate the agreements (Loan Agreements,
Page 1 of 3 ITEM NO. 4.8
Regulatory Agreements, etc.) required to develop the project. The development of veterans
housing is a key City Council Strategic Initiative.
Currently Corona Crescent, Inc., a controlled affiliate of Eden Housing, Inc., is in contract to
acquire the project site from BWD Dublin, LLC. (an affiliate of Bay West Development Partners
IV LLC), the market rate developer of the adjacent site at 7544 Dublin Boulevard. Corona
Crescent, Inc. is completing the site acquisition as outlined in the Community Benefit Agreement
between the City of Dublin and BWD Dublin, LLC.
Corona Crescent, Inc. (Developer) intends to construct a residential project on the property at
6707 Golden Gate Drive consisting of between 64 — 72 affordable rental housing units primarily
for veterans and their families. The planned four-story building is in close proximity to amenities
and mass transit. The building will include a mix of one, two, and three bedroom apartments to
accommodate a variety of family types. Planned amenities include: a community room, private
meeting areas for smaller groups, computer lab, community gardens, play area, and
coordinated case management and other support services provided in partnership with local
veterans organizations.
Predevelopment Loan Agreement
As directed at the November 18, 2014 City Council meeting, Staff has been meeting with the
Developer to complete the necessary project agreements. A Predevelopment Loan Agreement
in the amount of$1.4 million has been negotiated. These loan funds will assist the Developer in
completing the predevelopment work necessary to construct the project. The Developer has
agreed to the loan terms as outlined in the Predevelopment Loan Agreement and related
Exhibits A-F (Attachment 2).
The key terms of the agreements include:
• City will provide $1.4 million as a deferred payment, 3% interest loan to the Developer for
pre-development costs associated with project construction.
• City will provide up to $250,000 in disbursements to developer for certain specified costs
relating to the property acquisition and initial plans for the development prior to
recordation of the Regulatory Agreement and Declaration of Restrictive Covenants.
• Developer will use loan proceeds only for City approved expenses on a cost
reimbursement basis, eligible expenses are outlined in Exhibit E.
• Developer will provide rental affordability for 55 years.
A budget change (Attachment 2) in the amount of$1.4 million from the Affordable Housing Fund
will be necessary to allocate adequate funding if the Predevelopment Loan Agreement is
approved.
Project Financing Summary
The Developer anticipates the total project will cost approximately $28 million to complete. The
Developer's identified funding sources, anticipated amount, and current status are identified in
the table below.
Page 2 of 3
Source Amount Status
Bank of America DOJ $3,000,000 Secured
Subordinate Loan
City of Dublin $6,400,000 Secured - City Council
Resolution #199-14
Home Depot Foundation Grant $250,000 Final Approval Pending
4% Low Income Housing Tax $14,000,000 Application Pending / Non-
Credits Competitive Award
Infill Infrastructure Grant, State $2,101,547 Pending —Award
of CA announcement April 2015
Alameda County HOME & $2,100,000 Pending —Award
Boomerang Fund Grants announcement March 2015
As of December 31, 2014
Next Steps
Staff anticipates the next steps in the project process to include negotiation of the Regulatory
Agreement and Declaration of Restrictive Covenants and Loan Agreement (Construction Loan
Component). These agreements will be brought to the City Council for consideration in
spring/summer 2015.
The developer anticipates final approvals for project financing to be received in August 2015.
Based on this timeline, they currently anticipate start of project construction in fall 2015.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
Not applicable.
ATTACHMENTS: 1. Resolution Approving a Predevelopment Loan Agreement between
the City of Dublin and Corona Crescent, Inc., Relating to the
Development of an Affordable Housing Project with Veterans
Preference
2. Predevelopment Loan Agreement with Exhibits A - F
3. Budget Change
Page 3 of 3
RESOLUTION NO. ** -15
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*********
APPROVING A PREDEVELOPMENT LOAN AGREEMENT BETWEEN THE CITY OF
DUBLIN AND CORONA CRESCENT, INC., RELATING TO THE DEVELOPMENT OF
AN AFFORDABLE HOUSING PROJECT WITH VETERANS PREFERENCE
WHEREAS, Corona Crescent, Inc., a California nonprofit public benefit
corporation ("Developer") and the City of Dublin (the "City") desire to enter into a
Predevelopment Loan Agreement ("Agreement") on property to be developed on a site
within the Downtown Dublin Specific Plan area, located at 6707 Golden Gate Drive,
Dublin, California, (APN 941-1500-030-02) as more particularly described in Exhibit A in
the Agreement attached to this Resolution ("Property"); and
WHEREAS, Developer is an affiliate of Eden Housing Inc., and is controlled by
the same board of directors; and
WHEREAS, Developer is in contract to acquire the Property from BWD Dublin,
LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability
company (the "Market Rate Developer") who intends to develop a mixed-use project
on Market Rate Developer's adjacent parcel (APN 941-1500-015-09) located at 7544
Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit
Agreement with Bay West Development Partners IV LLC," dated October 7, 2014, the
Market Rate Developer is to transfer the Property to Developer for a nominal sum; and
WHEREAS, Developer intends to construct a residential project on the Property
consisting of between approximately 64 to 72 affordable rental housing units primarily
for veterans and their families and other very low and low income families, and related
improvements ("Development"); and
WHEREAS, Developer has requested, and the City has agreed to provide a loan
to Developer in an amount not to exceed Six Million Four Hundred Thousand Dollars
($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the
predevelopment, development, and construction costs of the project. One Million Four
Hundred Thousand Dollars ($1,400,000) of the Total Approved Loan Amount shall be a
predevelopment loan (the "Predevelopment Loan"), which shall be made, disbursed,
used and repaid in accordance with this Agreement and the predevelopment loan
documents including a Promissory Note, Assignment Agreement, and Deed of Trust,
(the "Predevelopment Loan Documents"). The Promissory Note, Assignment
Agreement and Deed of Trust are attached as Exhibits to the Agreement; and
WHEREAS, the Total Approved Loan Amount and the Predevelopment Loan
amount were approved by the City Council on November 18, 20147 by Resolution No.
199-14; and
WHEREAS, the Agreement provides that only up to Two Hundred Fifty
Thousand Dollars ($250,000.00) will be disbursed to Developer for certain specified
costs relating to the Property acquisition and initial plans for the Development prior to
the recordation of the Regulatory Agreement and Declaration of Restrictive Covenants
(the "Regulatory Agreement") to establish the affordability and veterans preference
restrictions on the Property. The Regulatory Agreement must be recorded on the
Property within ninety (90) days of the Developer's acquisition.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of
Dublin approves and authorizes the City Manager to execute the Predevelopment Loan
Agreement and related Predevelopment Loan Documents in substantially the form
attached hereto as Exhibit A, upon the satisfaction of the conditions set forth in the
Agreement.
PASSED, APPROVED AND ADOPTED this 20th day of January, 2015 by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
PREDEVELOPMENT LOAN AGREEMENT
(Veterans Family Housing Project)
This Predevelopment Loan Agreement (this "Agreement") is entered into
effective as of , 2015 ("Effective Date") by and between the City of Dublin, a
municipal corporation (the "City") and Corona Crescent, Inc., a California nonprofit
public benefit corporation (the "Borrower"). City and Borrower are hereinafter
collectively referred to as the "Parties."
A. Borrower owns that certain real property located at 6707 Golden Gate
Drive, Dublin, California, (APN 941-1500-032-02) as more particularly described in
Exhibit A attached to this Agreement (the "Property").
B. Borrower acquired the Property from BWD Dublin, LLC, an affiliate of Bay
West Development Partners IV LLC, a California limited liability company (the "Market
Rate Developer") who intends to develop a mixed-use project on Market Rate
Developer's adjacent parcel (APN 941-1500-015-09) located at 7544 Dublin Boulevard
in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with
Bay West Development Partners IV LLC" dated October 7, 2014 (the "Community
Benefit Agreement"), the Market Rate Developer transferred the Property to Borrower,
an affordable housing developer, for a nominal sum. The Community Benefit
Agreement involves the Market Rate Developer's provision, pursuant to the Downtown
Dublin Specific Plan, of a Community Benefit in exchange for additional development
potential on its parcel and the Property.
C. The transfer of the Property to the Borrower satisfies the Market Rate
Developer's obligation under the Community Benefit Agreement to transfer the Property
to the City, Borrower, or another similar affordable housing provider. The transfer also
serves to satisfy the Market Rate Developer's affordable housing obligations under the
City's Inclusionary Zoning Regulations. Concurrently with Borrower's acquisition of title
to the Property, the Parties recorded that certain Option Agreement by Borrower in
favor of City recorded on , 2015 as Instrument No. of the Official
Records of Alameda County (the "City Option Agreement") under which City shall
have the right to acquire the Property from Borrower if construction of the affordable
housing project is not commenced within the time set forth therein.
D. Borrower intends to construct, own and operate on the Property an
affordable multifamily rental housing project consisting of approximately 64 to 72
affordable rental housing units primarily for veterans and their families and other Very
Low and Low income families, one resident manager's unit, and other related
improvements (the "Project"). The residential units in the Project will be rented at
affordable rents to low- and very low- income households as more particularly
described in an Affordable Housing Regulatory Agreement and Declaration of
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Restrictive Covenants (the "Regulatory Agreement") to be recorded against the
Property as set forth herein in Section 1.7.
E. Borrower has requested, and the City has agreed to provide a loan to
Borrower in an amount not to exceed Six Million Four Hundred Thousand Dollars
($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the
predevelopment, development, and construction costs of the Project. One Million Four
Hundred Thousand Dollars ($1,400,000) of the Total Approved Loan Amount shall be a
predevelopment loan (the "Predevelopment Loan"), which shall be made, disbursed,
used and repaid in accordance with this Agreement and the predevelopment loan
documents referred to herein. The Total Approved Loan Amount in excess of the One
Million Four Hundred Thousand Dollars ($1,400,000) predevelopment loan amount
shall be referred to herein as the "Construction Loan Component." The Total
Approved Loan Amount and the predevelopment loan component were approved by
the City Council on November 18, 2014 by Resolution No. 199-14.
F. The disbursement of any amount of the Construction Loan Component
shall require a separate agreement with the City and shall not be disbursed pursuant to
the terms of this Agreement.
G. The City has determined that development of the Project is in the interests
of the health, safety and welfare of the residents of the City, and that the City financing
is necessary to make the Project affordable to Low- and Very Low-Income households.
The City has further determined that provision of financing by City to Borrower for the
purposes described herein is a qualified use of the City Affordable Housing Fund.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows.
1. THE PREDEVELOPMENT LOAN AND DISBURSEMENT OF THE
PREDEVELOPMENT LOAN PROCEEDS.
1.1 Loan and Note. Upon the terms and conditions and for the purposes set
forth herein, City agrees to loan to Borrower, and Borrower agrees to borrow from and
repay to City the Predevelopment Loan, a sum in the maximum principal amount of
One Million, Four Hundred Thousand Dollars ($1,400,000).The Predevelopment Loan
shall be evidenced by a promissory note dated as of the Effective Date and executed
by Borrower substantially in the form attached hereto as Exhibit B (the "Promissory
Note").
As used herein, the term "Predevelopment Loan Documents" means this
Agreement, the Promissory Note, Assignment Agreement (defined below), Deed of
Trust (defined below), Regulatory Agreement, and City Option Agreement.
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Provided that Borrower has complied with all conditions set forth in Section 1.6,
the Predevelopment Loan proceeds shall be disbursed in accordance with Section 1.5
and 1.6 hereof.
1.2 Interest; Maturity Date. The outstanding principal balance of the
Predevelopment Loan shall bear simple interest at the rate of three percent (3%) per
year commencing from the date of disbursement until paid in full. 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 date of the
Promissory Note (the "Maturity Date") 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 Component, 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.
The Parties intend that on the Maturity Date: (i) Borrower (or, if applicable a
limited partnership in which Borrower serves as general partner) shall execute a 55-
year new promissory note evidencing the obligation to repay the Predevelopment Loan
together with the Construction Loan Component and amount of additional financing (if
any) committed by City for the Project on a residual receipts basis from Project cash
flow; (ii) City shall mark the Promissory Note "cancelled" and shall return the original to
Borrower; and (iii) the Parties shall execute and record an amendment to the Deed of
Trust evidencing the additional City financing as a secured obligation.
1.3 Security for the Predevelopment Loan; Subordination; Nonrecourse.
(a) Security. The Promissory Note shall be secured by Borrower's
assignment to the City of Borrower's rights to any and all architectural
agreements, contracts, plans, specifications, reports, and studies relating to the
Property or the Project which have been financed with the proceeds of the
Predevelopment Loan( the "Assignment Agreement") in the form attached
hereto as Exhibit C. The Assignment Agreement may be amended upon City's
request to reflect the additional financing provided pursuant to this Agreement.
Borrower shall execute a deed of trust substantially in the form attached hereto
as Exhibit D (the "Deed of Trust") pursuant to which City shall be provided a
lien against the Property and the improvements to be constructed thereon as
security for repayment of the Promissory Note. The Deed of Trust shall be dated
as of the Effective Date and shall be recorded in the official records of Alameda
County.
(b) Subordination. City agrees to execute, and record at Borrower's
cost, subordination agreements to subordinate the City's Deed of Trust and
Regulatory Agreement to Borrower's construction and/or permanent loans for the
Project if (A) such construction and/or permanent financing is provided by (i) the
Department of Housing and Community Development ("HCD"), the California
Housing Financing Agency ("CalHFA"), HUD, or other public senior lender that
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
requires by statute or regulation that regulatory agreements with local public
entities be subordinated, or (ii) in the case of tax-exempt bond financing,
subordination of the Regulatory Agreements is required by such financing or
Bond Counsel, or (B) (1) the affordable rental component is financed in part by
HUD, Low-Income Housing Tax Credits, or tax-exempt bond financing and is
subject to a recorded regulatory agreement in connection with such financing,
and (2) Borrower demonstrates to City that, compared to financing available to
Borrower if the Deed of Trust and Regulatory Agreements are subordinated,
financing without such subordination will be offered on materially less favorable
terms. In all cases, City shall each be entitled to receive notice of default and
shall each be entitled to cure defaults arising under the senior documents.
(c) Nonrecourse. Except as expressly provided in this Section 1.3(c),
Borrower shall have no personal liability for payment of the principal of, or
interest on the Promissory Note, and the sole recourse of City with respect to the
payment of the principal of, and interest on, the Promissory Note shall be to the
Property (as defined in the Deed of Trust), the Assigned Documents (as defined
in the Assignment Agreement) and any other collateral held by City as security
for the Promissory Note; provided however, nothing contained in the foregoing
limitation of liability shall:
(1) impair the enforcement against all such security for this Note of all
the rights and remedies of the City under the Deed of Trust, the
Assignment Agreement and any financing statements City files in
connection with the Promissory Note, as each of the foregoing may be
amended, modified, or restated from time to time;
(2) impair the right of City to bring a foreclosure action, an action for
specific performance or other appropriate action or proceeding to enable
City to enforce and realize upon the Property under the Deed of Trust, the
Assignment Agreement, the interest in the Assigned Documents created
thereby and any other collateral given to City in connection with the
indebtedness evidenced by the Promissory Note, and to name the
Borrower as party defendant in any such action;
(3) 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;
(4) 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 under the Promissory Note or to require that the Property (as
defined in the Deed of Trust) and the Assigned Documents shall continue
to secure all of the indebtedness owed to City in accordance with the
Promissory Note; or
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
(5) limit or restrict the ability of City to seek or obtain a judgment
against Borrower to enforce against Borrower to:
(i) recover under Sections 3.2 of this Agreement (pertaining to
Borrower's indemnification obligations), or
(ii) recover from Borrower 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 officer, director or authorized
representative of Borrower in connection with any
request for Predevelopment Loan proceeds, or
creation of the Predevelopment Loan, or in this
Agreement, the Deed of Trust, the Assignment
Agreement, or in connection with any request for any
action or consent by City in connection with the
Predevelopment Loan or the use of Predevelopment
Loan proceeds;
(b) the material misapplication of Predevelopment Loan
proceeds;
(c) any failure to maintain insurance on the Property and
the Project as required pursuant to this Agreement;
(d) any failure to pay taxes, assessments or other
charges which may become liens on the Property;
(e) the presence of Hazardous Materials on the Property
or other violation of the Borrower's obligations under
Section 7.10 of the Deed of Trust (pertaining to
environmental matters);
(f) the occurrence of any act or omission of Borrower
that results in waste to or of the Property or the
improvements to be constructed thereon (the
"Improvements") and which has a material adverse
effect on the value of the Property or the
Improvements;
(g) the removal or disposal of any personal property or
fixtures or the retention of rents, insurance proceeds,
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
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 Property.
1.4 Use of Predevelopment Loan Proceeds. The Predevelopment Loan
proceeds shall be used solely and exclusively for Predevelopment costs required for the
Project as set forth in the Predevelopment Budget attached hereto as Exhibit E, and
such other costs related to development of the Project as the City may approve in
writing. Predevelopment Loan proceeds shall be disbursed to Borrower on a cost
reimbursement basis in accordance with Section 1.5. Notwithstanding any contrary
provision of this Agreement, disbursements of Predevelopment Loan proceeds
pursuant to this Agreement, shall not exceed the aggregate sum of One Million, Four
Hundred Thousand Dollars ($1,400,000).
1.5 Disbursement of Predevelopment Loan Proceeds. Upon Borrower's
satisfaction of the conditions set forth in Section 1.6, provided that Borrower has
provided City with a written requisition that specifies the amount and use of the
requested funds and which is accompanied by copies of third-party invoices, evidence
of payment for services rendered in connection with the Project, Borrower's certification
that the funds requested will be used solely for the purposes described in the
requisition, and such other documentation as City may reasonably require, the City
shall disburse the Predevelopment Loan proceeds for Borrower's Predevelopment costs
in the amounts and for the items set forth in the Predevelopment Budget set forth in
Exhibit E. The Parties acknowledge and agree that the line items are subject to change
upon written agreement of the Parties.
1.6 Conditions Precedent to Disbursement of Funds.
City's obligation to disburse the Predevelopment Loan proceeds is conditioned
upon satisfaction of all of the following conditions:
(a) Borrower's execution and delivery to the City of this Agreement, the
Promissory Note, the Regulatory Agreement (subject to the terms in item (c)
below), the Deed of Trust, and the Assignment Agreement;
(b) Recordation of the Deed of Trust and Regulatory Agreement in the
official records of Alameda County, provided, however, that notwithstanding the
foregoing, prior to the recordation of the Regulatory Agreement and after
recordation of the Deed of Trust, the City agrees to a limited disbursement of
Predevelopment Loan proceeds not to exceed Two Hundred and Fifty Thousand
Dollars ($250,000.00) to reimburse Borrower for its acquisition costs paid to the
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Market Rate Developer for the Land and assigned Project documents and for
title, escrow, legal, and other costs relating to Borrower's acquisition of the Land,
which costs shall be subject to the City's review and approval;
(c) Borrower's delivery to City of consents to the assignment of
agreements, plans, specifications, studies, reports and other work product
prepared for the Project, executed by the Project architect and the other parties
preparing such plans, specifications, studies, reports and other work product;
(d) Borrower's delivery to the City of evidence of insurance coverage in
the form and in such amounts as specified in Exhibit F attached hereto;
(e) Borrower's delivery to City of each of the following: (i) certificate of
good standing, certified by the Secretary of State indicating 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, the Deed of
Trust, the Regulatory Agreement, and the Assignment Agreement on behalf of
Borrower have been duly authorized to do so; and (iii) certified copies of
Borrower's articles of incorporation, bylaws, and I.R.S. tax-exemption
determination letter; and
(f) The issuance of an ALTA lender's policy of title insurance for the
benefit of City, insuring that the Deed of Trust is a lien on the Property subject to
only such exceptions as City shall reasonably approve, and with such
endorsements as City shall reasonably require, with the cost of such policy to be
paid by Borrower.
1.7 Regulatory Agreement. A City Regulatory Agreement and Declaration of
Restrictive Covenants that includes restrictions on the eligible tenant household income
and eligible tenant rent, among other terms, conditions, and provisions, for a term of not
less than fifty-five (55) years shall be recorded against the Property not later than
ninety (90) days from the date of Borrower's acquisition of title, unless the 90-day
period is extended by the City in accordance with the City Option Agreement (defined in
Recital C). The Regulatory Agreement shall also provide that twenty-five (25) rental
units or such other number supported by Veteran Affairs Supporting Housing ("VASH")
vouchers shall be specifically rented to or set aside for rental to homeless or previously
homeless veterans and their families. The remainder of the rental units will house low-
income families with a preference for veteran families, to the extent consistent with fair
housing laws.
1.8 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any
other provision of this Agreement except as specified in Paragraph 1.9 (b), the City
shall have no obligation to disburse any Predevelopment Loan proceeds following:
(a) termination of this Agreement;
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
(b) the failure of any of Borrower's representations and warranties set
forth in this Agreement to be true and correct in all material respects; or
(c) the occurrence of an Event of Default on the part of Borrower
under this Agreement, the Promissory Note, the Deed of Trust, the Assignment
Agreement, the Regulatory Agreement, or the City Option Agreement.
1.9 Termination of Agreement.
(a) Termination by Borrower. Provided that Borrower is not in default
under this Agreement, the Promissory Note, the Assignment Agreement, the
Regulatory Agreement or the Deed of Trust, Borrower may terminate this
Agreement for any of the following reasons by providing written notice of such
termination to City:
(1) 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
(2) Borrower determines, in its commercially reasonable discretion,
that any (i) remediation work with respect to hazardous materials; 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
(3) 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 financing.
(b) Reimbursement. If this Agreement is terminated by Borrower
pursuant to paragraph (a) above, or 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: Predevelopment costs incurred
by Borrower prior to the date of termination of this Agreement provided that (1)
such costs and fees are identified in the Predevelopment Budget or have
otherwise been approved by City in writing, and (2) 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.
(c) Forgiveness of the Predevelopment Loan. If this Agreement is
terminated by Borrower pursuant to paragraph (a) above, or by mutual
agreement of the Parties for any other reason, City shall forgive the outstanding
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
balance of the Predevelopment Loan (including any amounts reimbursed to
Borrower pursuant to paragraph (b) above) upon completion of the following:
(1) Borrower's delivery of all architectural contracts, plans,
specifications, reports, and studies to which City is entitled pursuant to the
Assignment Agreement; and
(2) Transfer of title to the Property to City.
Upon delivery of such documents and transfer of title to the Property to City, City
shall deliver to Borrower the original Promissory Note marked "Cancelled" and this
Agreement shall be terminated; provided however, Borrower's obligation to indemnify
City pursuant to Section 3.2 of this Agreement shall survive termination of this
Agreement.
Notwithstanding the foregoing, the City shall have no obligation to forgive
Borrower's obligation to repay the Predevelopment Loan and cancel the Promissory
Note if, after the applicable notice and cure period, the City has declared Borrower in
default under this Agreement and such default remains uncured at the time of
Borrower's request for forgiveness of the Predevelopment Loan.
2. USE RESTRICTIONS
2.1 Non-Discrimination. Borrower covenants by and for itself and its
successors and assigns that there shall be no discrimination against or segregation of
any person or any 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 12955.2 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 discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in
the Project.
2.2 Mandatory Language in All Subsequent Deeds, Leases and Contracts.
All deeds, leases or contracts made or entered into by Borrower, its successors or
assigns, as to any portion of the Property or the Project shall contain therein the
following language:
In Deeds:
"Grantee herein covenants by and for itself, its successors and assigns
that there shall be no discrimination against or segregation of any person
or any 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
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
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 herein conveyed nor shall the grantee or any
person claiming under or through the grantee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenant shall run with the land."
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 discrimination against or segregation of
any person or any 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 12955.2 of
the Government Code in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein 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."
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 12955.2 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:
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
(a) Organization 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 to acquire 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, the Deed of
Trust, 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, the
Deed of Trust, and the Assignment Agreement have been duly authorized by
Borrower, and this Agreement, the Promissory Note, the Deed of Trust, and the
Assignment Agreement, , when duly executed and delivered will constitute the
valid and binding obligations of Borrower enforceable in accordance with their
respective terms. Borrower's execution of this Agreement, the Promissory Note,
the Deed of Trust, 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 which Borrower is a party or by which Borrower
may be bound. The persons executing this Agreement, the Note, the Deed of
Trust, and the Assignment Agreement on behalf of Borrower have been duly
authorized to do so.
(c) Litigation. 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 Predevelopment Note, the
Deed of Trust, and the Assignment Agreement. Borrower is not the subject of an
action under federal or state Bankruptcy Law (as defined below).
3.2 Indemnification. Borrower shall indemnify, defend (with counsel approved
by City) and hold the City and its elected and appointed officers, officials, employees,
contractors and agents (all of the foregoing, collectively "Indemnitees") harmless from
and against any and all demands, claims, suits, costs, expenses (including court costs
and reasonable attorneys' fees), losses, damage, causes of action, fines, judgments,
penalties, deficiencies, or liabilities of any kind (all of the foregoing, collectively
"Claims") arising directly or indirectly in 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 material respects, (c) any Claim,
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
whether meritorious or not, brought or asserted against any Indemnitee which relates to
or arises in connection with the Predevelopment Loan, the Promissory Note, the Deed
of Trust, the Assignment Agreement, or any transaction contemplated thereby, or the
relationship between Borrower and City. Borrower's obligations under this Section shall
survive the making 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
Indemnitees.
3.3 Books and Records. The City shall have the right, during business hours
and after reasonable notice to Borrower, to inspect and copy Borrower's books and
records concerning the Property, the Project, and the Predevelopment Loan.
3.4 Other Documents. Upon the City's reasonable request, Borrower shall
deliver to the City copies of documents related to the Project, including without
limitation, construction contracts, consulting agreements, architects' agreements, loan
and financing applications, studies, reports, management plans, loan documents, and
property management agreements.
4. DEFAULT AND REMEDIES
4.1 Events of Default. The occurrence of any one 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 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 Regulatory Agreement,
the Promissory Note, the Deed of Trust, the City Option Agreement, or the
Assignment Agreement, and such failure continues after expiration of the
applicable notice and cure periods set forth in such documents.
(c) The Regulatory Agreement is not recorded within the time set forth
in Section 1.7.
(d) 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.
(e) 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 (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
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
or similar official for Borrower; (iv) makes an assignment for the benefit of its
creditors; or (v) admits in writing its inability to pay its debts as they become due.
(f) 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, writ, 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.
(g) Borrower fails to maintain insurance as required pursuant to this
Agreement, and Borrower fails to cure such default within 10 days.
(h) Borrower fails to use Predevelopment Loan proceeds in
accordance with this Agreement or fails to use Predevelopment Loan proceeds
in accordance with the applicable request for disbursement.
(i) 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 period 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
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 arise
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 default.
4.2 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 this Agreement, the Deed of Trust (including without
limitation, pursuit of a judicial or nonjudicial foreclosure), the Promissory Note,
the Regulatory Agreement, the City Option Agreement, or the Assignment
Agreement;
(c) The City may seek an order of specific performance; and
(d) The City may terminate this Agreement.
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Each of the remedies provided herein is cumulative and not exclusive of, and shall not
prejudice any other remedy provided herein, in the Promissory Note, the Deed of Trust,
the Regulatory Agreement, the City Option Agreement, 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 right to
assert any remedy provided for in this Agreement, the Promissory Note, the Deed of
Trust, the Regulatory Agreement, 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 Assignment. This Agreement shall be binding upon and inure 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
otherwise 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
wholly-controlled affiliate of Borrower.
5.2 Insurance. Borrower shall maintain and keep in force, at Borrower's
expense, the insurance required pursuant to this Agreement as set forth in Exhibit F.
For each of Borrower's insurance 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 during the term of this Agreement without 30 days written
notice to the City prior 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
originals or copies of all such insurance policies and certificates evidencing such
policies.
5.3 Notices. Except as otherwise specified herein, all notices to be sent
pursuant to this Agreement shall be made in writing, and sent to the Parties 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:
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
(a) personal delivery, in which case notice is effective upon delivery;
(b) 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;
(c) 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;
(d) 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
Fax No. (925) 833-6651
BORROWER: Corona Crescent, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Fax No. (510) 582-6523
5.4 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 writing, 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 shall take such other actions,
as may reasonably be necessary to carry out the intent of this Agreement.
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
5.6 Parties Not Co-Venturers. Nothing in this Agreement is intended to or
shall establish the Parties as partners, co-venturers, or principal and agent with one
another.
5.7 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 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.
5.8 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.
5.9 No Third Party Beneficiaries. There shall be no third party beneficiaries to
this Agreement.
5.10 Captions; Construction; Time is of the Essence. The headings of the
sections and paragraphs of this Agreement have been inserted for convenience only
and shall not be used to construe this Agreement. The language of this 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 Agreement.
5.11 Governing Law; Venue. This Agreement, the Promissory Note, the Deed
of Trust, the Regulatory Agreement, the City Option Agreement, 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 agree that any
dispute regarding the interpretation or enforcement of this Agreement shall be filed and
heard in courts having jurisdiction in Alameda County, California.
5.12 Attorneys' Fees. In the event any legal action is commenced to interpret 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 unenforceability.
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
5.14 Entire Agreement; Exhibits. This Agreement, together with the
Promissory Note, the Deed of Trust, 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 F 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 City Status. Borrower recognizes and agrees that City is not a
commercial lending institution, but a municipal corporation exercising 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.
SIGNATURES ON FOLLOWING PAGE.
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
IN WITNESS WHEREOF, the Parties have executed this Amended and
Restated Predevelopment/Construction Loan Agreement as of the date first written
above.
BORROWER:
CORONA CRESCENT, INC., a California
nonprofit public benefit corporation
By:
Linda Mandolini,
President
CITY:
CITY OF DUBLIN,
a municipal corporation
By:
Christopher Foss,
City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Exhibit A
LEGAL DESCRIPTION OF PROPERTY
19
FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Exhibit B
FORM OF PROMISSORY NOTE
(Attach form of Promissory Note.)
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
PROMISSORY NOTE
(Predevelopment Loan)
(Dublin Veterans Family Housing Project)
$1,400,000 Dublin, California
, 2015
FOR VALUE RECEIVED, Corona Crescent, 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 One Million, Four Hundred Thousand Dollars ($1,400,000) 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. Interest shall accrue on
the outstanding principal balance of this Note at the simple rate of three percent (3%)
per year from the date of disbursement until this Note is paid in full.
This Promissory Note (this "Note") has been executed and delivered pursuant to
and in accordance with that certain Predevelopment Loan Agreement, dated as of the
date hereof, and executed by and between Borrower and City (the "Predevelopment
Loan Agreement"), and is subject to the terms and conditions of the Predevelopment
Loan Agreement which is 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 Predevelopment Loan Agreement.
This Note is secured by a Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof, executed
by Borrower for the benefit of City and encumbering the property described therein and
by the Assignment Agreement dated as of the date hereof. City shall be entitled to the
benefits of the security provided by the Deed of Trust and the Assignment Agreement
and shall have the right to enforce the covenants and agreements contained herein, in
the Predevelopment Loan Agreement, the Deed of Trust, the City Option Agreement,
and the Assignment Agreement.
1. PAYMENTS
1.1 MATURITY DATE. The entire principal balance outstanding under this
Note, together with all other sums accrued hereunder, shall be due and payable in one
lump sum on the third (3rd) anniversary of the date of this Note (the "Maturity Date")
unless the term of the Maturity Date is extended by mutual written agreement of the
Parties or the Predevelopment Loan is forgiven pursuant to Section 1.9 of the
Predevelopment Loan Agreement, however, the Parties agree that if the City disburses
the Construction Loan Component (as defined in the Predevelopment Loan
Agreement), or a portion thereof, prior to the Maturity Date, the outstanding balance of
the Predevelopment Loan shall become part of the repaid with such financing on the
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FINAL DUBLIN VET PROMISSORY NOTE
date such financing is provided.
The Parties intend that on the Maturity Date: (i) Borrower (or, if applicable a limited
partnership in which Borrower serves as general partner) shall execute a 55-year new
promissory note evidencing the obligation to repay the Predevelopment Loan proceeds
together with the Construction Loan Component and amount of any additional financing
committed by City for the Project) on a residual receipts basis from Project cash flow;
(ii) City shall mark this Note "cancelled" and shall return the original to Borrower; and
(iii) the Parties shall execute and record an amendment to the Deed of Trust
evidencing the addition of any such additional City financing as a secured obligation.
1.2 DUE ON SALE. The entire unpaid principal balance and all interest and
other sums accrued hereunder shall be due and payable upon the sale, conveyance or
other transfer of the Property or any part thereof or interest therein absent City's prior
written consent, provided however, City will not withhold consent to a transfer of the
Property to a limited partnership in which Borrower serves as general partner. Without
limiting the generality of the foregoing, this Note shall not be assumable without City's
prior written consent, which consent may be granted or denied in City's sole discretion;
provided however, City will not withhold consent to the assumption of this Note by a
limited partnership in which Borrower serves as general partner.
1.3 PREPAYMENT. Borrower may, without premium or penalty, at any time
and from time to time, prepay all or any portion of the outstanding principal 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.
1.4 MANNER OF PAYMENT. All payments on this Note shall be made to City
at 100 Civic Plaza, Dublin, CA 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 any one or more of the
following events shall constitute an event of default hereunder ("Event of Default")-
(a) Borrower fails to pay when due any sum payable hereunder and
such failure continues for ten (10) days after City notifies Borrower thereof in
writing.
(b) Borrower fails to use Predevelopment Loan proceeds in
accordance with the Predevelopment Loan Agreement, fails to use
Predevelopment Loan proceeds in accordance with the applicable request for
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FINAL DUBLIN VET PROMISSORY NOTE
disbursement and does not cure such failure within thirty (30) days following
written notice from City.
(c) Any representation or warranty contained in the Predevelopment
Loan Agreement, the Deed of Trust, the Assignment Agreement, City Option
Agreement, Regulatory Agreement or any certificate furnished in connection
therewith, or in connection with any request for disbursement of Predevelopment
Loan proceeds proves to have been false or misleading in any material adverse
respect when made and continues to be materially adverse to the City.
(d) Borrower fails to maintain insurance as required pursuant to the
Predevelopment Loan Agreement and Borrower fails to cure such default within
ten (10) days.
(e) 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: (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 writing its inability to pay its debts as they become due.
(f) 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, writ, 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.
(g) An Event of Default on the part of Borrower is declared under the
Predevelopment Loan Agreement, Regulatory Agreement, City Option
Agreement or the Deed of Trust, or Borrower has defaulted under the
Assignment Agreement and such default remains uncured beyond the expiration
of any applicable cure period.
(h) Borrower sells, conveys, assigns, encumbers, pledges or otherwise
transfers the Property or any part thereof or interest therein absent City's prior
written consent, provided however, City will not withhold consent to a transfer of
the Property to a limited partnership in which Borrower serves as general
partner.
(i) Subject to Borrower's right to contest the following charges
pursuant to the Deed of Trust, Borrower fails to pay prior to delinquency taxes or
assessments due on the Property or fails to pay when due any other charge that
may result in a lien on the Property, and Borrower fails to cure such default
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FINAL DUBLIN VET PROMISSORY NOTE
within ninety (90) days of the date of delinquency, but in all events prior to the
date upon which the holder of any lien has the right to pursue foreclosure
thereof;
(j) A default arises under any loan secured by a mortgage, deed of
trust or other security instrument recorded against the Property and remains
uncured beyond any applicable cure period such that the holder of such security
instrument has the right to accelerate repayment of such loan.
2.2 REMEDIES. The rights and remedies of City under this Note shall be
cumulative and not alternative. 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 and all sums due hereunder, immediately due and payable regardless of
any prior forbearance, (ii) exercise any and all rights and remedies available to it
under law or equity, and (iii) exercise any and all rights and remedies available to
City pursuant to the Predevelopment Loan Agreement, the Deed of Trust (including
without limitation the right to pursue judicial or nonjudicial foreclosure), the City
Option Agreement, Regulatory 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' fees, incurred in connection with
City's enforcement of this Note and the exercise of any or all of its rights and
remedies hereunder and all such sums shall constitute an indebtedness secured by
the Deed of Trust.
2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest
shall automatically accrue without notice at a rate equal to the lesser of the
maximum rate permitted by law or ten percent (10%) per annum (the "Default
Rate"). When Borrower is no longer in default, the Default Rate shall no longer
apply, and the interest rate shall once again be the rate specified in the first
paragraph of this Note. 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. 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 waiver that may be given by City will be applicable
except in the specific instance for which it is given. 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
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FINAL DUBLIN VET PROMISSORY NOTE
Note. To the maximum extent permitted by applicable law, 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 Predevelopment 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; VENUE. This Note shall be construed and enforced
in accordance with the laws of the State of California without regard to principles of
conflicts of law. Any legal action filed in connection with this Note shall be filed and
heard in the Superior Court of Alameda County, California, or in the Federal District
Court for the Northern District of California.
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 Predevelopment Loan
evidenced by this Note and secured by the Deed of Trust and 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 NON-RECOURSE. Except as expressly provided in this Section 3.9,
Borrower shall have no 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 Property (as defined in the Deed of Trust), the
Assigned Documents (as defined in the Assignment Agreement) and any other
collateral held by City as security for this Note; provided however, nothing contained in
the foregoing limitation of liability shall:
5
FINAL DUBLIN VET PROMISSORY NOTE
(A) impair the enforcement against all such security for this Note of all the
rights and remedies of the City under the Deed of Trust, the Assignment Agreement,
the City Option Agreement, and any financing statements City files in connection with this
Note, 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, an action for specific
performance or other appropriate action or proceeding to enable City to enforce and
realize upon the Property under the Deed of Trust, the Assignment Agreement, the
interest in the Assigned Documents created thereby and any other collateral given to
City in connection with the indebtedness evidenced by this Note, 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 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 under this Note
or to require that the Property (as defined in the Deed of Trust) and the Assigned
Documents shall continue to secure all of the indebtedness owed to City in accordance
with this Note; or
(E) limit or restrict the ability of City to seek or obtain a judgment against
Borrower to enforce against Borrower to:
(1) recover under Sections 3.2 of the Predevelopment Loan
Agreement (pertaining to Borrower's indemnification obligations), or
(2) recover from Borrower 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 officer, director or authorized representative of Borrower
in connection with any request for Loan Proceeds, or creation of the Loan,
or in the Predevelopment Loan Agreement, the Deed of Trust, the City
Option Agreement, the Assignment Agreement, or in connection with any
request for any action or consent by City in connection with the Loan or
the use of Loan Proceeds;
(b) the material misapplication of Loan Proceeds;
(c) any failure to maintain insurance on the Property and the
Project as required pursuant to the Predevelopment Loan Agreement;
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FINAL DUBLIN VET PROMISSORY NOTE
(d) any failure to pay taxes, assessments or other charges which
may become liens on the Property;
(e) the presence of Hazardous Materials on the Property or other
violation of the Borrower's obligations under Section 7.10 of the Deed of
Trust (pertaining to environmental matters);
(f) the occurrence of any act or omission of Borrower that results
in waste to or of the Property or the improvements to be constructed
thereon (the "Improvements") and which has a material adverse effect on
the value of the Property or the Improvements;
(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 Property.
SIGNATURE ON FOLLOWING PAGE.
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FINAL DUBLIN VET PROMISSORY NOTE
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of
the date first written above.
BORROWER:
Corona Crescent, Inc.,
a California nonprofit public benefit corporation
By:
Name:
Title:
2385220.2
8
FINAL DUBLIN VET PROMISSORY NOTE
Exhibit C
FORM OF ASSIGNMENT AGREEMENT
(Attach form of Assignment Agreement
21
FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS
(Dublin Veterans Housing Project)
This Assignment of Agreements, Plans and Specifications (this "Agreement") is
entered into effective as of , 2015 ("Effective Date") by and among the
City of Dublin, a municipal corporation ("City") and Corona Crescent, Inc., a California
nonprofit public benefit corporation ("Developer"). City and Developer are hereinafter
collectively referred to as the "Parties." Capitalized terms used but not defined herein
shall have the meaning ascribed to such terms in the Predevelopment Loan Agreement
(defined below).
For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows.
1. Developer hereby assigns to City and grants to City a security interest in
all of its right, title and interest in and to the contracts and agreements listed in Exhibit A
attached hereto and incorporated herein by reference, and all of the items listed in the
following paragraphs (A), (B) and (C). All of the foregoing are collectively hereafter
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 Developer (or Developer's sponsor
Eden Housing, Inc., or other affiliate limited partnership formed to
construct, own and operate the Improvements (defined below) 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");
(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 Developer
or any affiliate, agent, employee or Contractor of Developer with respect to
the Property, the Project or the Improvements; and
(C) All Construction Plans.
2. This Agreement is entered into pursuant to that certain Predevelopment
Loan Agreement executed by and between Developer and City dated as of the date
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FINAL DUBLIN VET ASSIGNMENT AGREEMENT
hereof (the " Predevelopment Loan Agreement"). The Parties acknowledge that
pursuant to the Predevelopment Loan Agreement, Developer shall repay the funds
advanced by the City pursuant to the Predevelopment Loan Agreement.
3. This Agreement is made to secure: (a) payment to the City of all sums
now or hereafter owing to City pursuant to the Promissory Note, and any and all
additional advances, modifications, extensions, renewals and amendments thereof; and
(b) payment and performance by Developer of all of its obligations under the
Predevelopment Loan Agreement.
4. Developer hereby irrevocably appoints City as its attorney-in-fact (which
City is coupled with an interest) upon the occurrence of an Event of Default under the
Predevelopment Loan Agreement, to demand, receive, and enforce any and all of such
Developer's rights with respect to the Assigned Documents, and to perform any and all
acts in the name of such Developer or in the name of the City with the same force and
effect as if performed by such Developer in the absence of this Agreement.
5. Developer agrees to obtain from each Contractor and deliver to City a duly
executed Consent substantially in the form attached hereto as Exhibit B.
6. Developer 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 Predevelopment Loan
Agreement or the Promissory Note, Developer agrees not to assign, sell, pledge,
transfer, mortgage, or hypothecate its respective rights or interest in any of the
Assigned Documents without prior written approval of the City. The preceding sentence
shall not apply to the permitted assignment to an affiliate limited partnership described
in the last sentence of Section 5.1 of the Predevelopment Loan Agreement.
7. This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, assigns, and successors-in-interest of Developer 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 contained in the Predevelopment Loan Agreement.
8. Unless an Event of Default (as defined in the Predevelopment Loan
Agreement) shall have occurred, Developer shall be entitled (subject to the provisions of
Section 6 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 Agreement and stating that such an
Event of Developer 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 Developer under such Assigned Document and shall become
bound to perform all future obligations of Developer thereunder, it being understood that
in no event shall City be liable for payments or costs relating to any work which any
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FINAL DUBLIN VET ASSIGNMENT AGREEMENT
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 Developer under the Assigned Documents.
9. Developer 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.
10. Developer 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.
11. City may assign its rights under this Agreement, and the Assigned
Documents, and the rights and obligations of any assignee of City shall be the 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.
12. This Agreement shall not be deemed to release or affect in any way the
obligations of Developer to any Contractor under the Assigned Documents.
13. Developer is executing this Agreement to induce City to enter into and
disburse funds pursuant to the Predevelopment Loan Agreement, and Developer
understands that City would not do so but for the execution and delivery of this
Agreement by Developer.
14. Financing Statements.
14.1 Developer shall execute any and all further agreements,
assignments (including separate assignments of Assigned Documents), documents,
financing statements, and authorizations of financing statements, and shall take such
other further actions as City may reasonably request from time to time, in order to
evidence, protect, perfect, or continue the security interest of City in the Assigned
Documents or otherwise carry out the purposes and intent of this Agreement.
14.2 Developer authorizes City to file financing statements (and
continuation statements, and amendments thereto) in all states, counties, and other
jurisdictions as City may elect without the signature of Developer to the extent permitted
by law.
15. Notices. Except as otherwise specified herein, all notices to be sent
pursuant to this 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
3
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
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
Fax No. (925) 833-6651
DEVELOPER: Corona Crescent, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Fax No. (510) 582-6523
16. Amendments. This Agreement may be modified only by a written
instrument signed by the Parties.
17. Further Assurances; Consents. 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.
18. Parties Not Co-Venturers. Nothing in this Agreement is intended to or
shall establish the Parties as partners, co-venturers, or principal and agent with one
another.
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FINAL DUBLIN VET ASSIGNMENT AGREEMENT
19. 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 writing, and such
action may be given, made or taken by the City's Community Development Director or
by any person who shall have been designated by the City's Community Development
Director, without further approval by the City's governing board unless the City's
Community Development Director determines that such matter requires the consent of
such governing board.
20. Non-Liability of City and City Officials, Employees and Agents. No
member, official, employee or agent of the City shall be personally liable to Developer,
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 Developer or its successor or for any
obligation of City under this Agreement.
21. No Third Party Beneficiaries. There shall be no third party beneficiaries to
this Agreement.
22. Headings; Construction. The headings of the sections and paragraphs of
this Agreement have been inserted for convenience only and shall not be used to
construe this Agreement. The language of this 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 Agreement.
23. Governing Law; Venue. This Agreement shall be construed in
accordance with the laws of the State of California without regard to principles of
conflicts of law. Developer agrees that any controversy arising under or in relation to
this Agreement, the Predevelopment Loan Agreement or any other City Document shall
be litigated exclusively in courts having jurisdiction in Alameda County.
24. Attorneys' 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.
25. 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 unenforceability.
26. Counterparts. This 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
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
IN WITNESS WHEREOF, Developer and City have each duly executed this
Agreement effective as of the date first above written.
DEVELOPER:
CORONA CRESCENT, INC., a California
nonprofit public benefit corporation
By:
Linda Mandolini,
President
CITY:
CITY OF DUBLIN,
a municipal corporation
By:
Christopher Foss,
City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
6
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
Exhibit A
CONTRACTS AND AGREEMENTS
(Attach List.)
7
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
Exhibit B
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 Corona Crescent, Inc., a
California nonprofit public benefit corporation ("Developer") and the City of Dublin, a
municipal corporation ("City") dated as of , 20—. Unless otherwise
defined herein, capitalized terms used in this Consent shall have the meanings given
them in the Assignment Agreement.
The undersigned architect, engineer, 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 Developer 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 Assigned Documents for the purposes for which they
were prepared, and Contractor will continue to perform 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 performed for the benefit or account of Developer 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 Developer
and its successors in interest for performance of Developer'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 Developer Default
under the Predevelopment Loan Agreement and the giving of an Exercise Notice by
City, Contractor will perform 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 Developer may not have paid and/or may be
8
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
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 Assigned Documents relating to the
Property, the Project or the Improvements, as the same may be amended or modified
from time to time, which 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 Developer Default has occurred), it will execute and deliver
a certification confirming City's rights with respect to such Assigned Documents as City
from time to time may reasonably request.
Contractor agrees that for so long as the Assignment Agreement is effective, if
Developer 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 Developer 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
Developer 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.
SIGNATURE ON FOLLOWING PAGE.
9
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
IN WITNESS WHEREOF, Contractor has duly executed this Consent as of the
date first written above.
CONTRACTOR
By: Contractor's Address:
Its: Telephone:
Facsimile:
2384744.3
10
FINAL DUBLIN VET ASSIGNMENT AGREEMENT
Exhibit D
FORM OF DEED OF TRUST
(Attach form of Deed of Trust.)
22
FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
RECORDING REQUESTED BY
North American Title Company
Escrow No. 54605-1135999
APN: 941-1500-032-02
AND WHEN RECORDED MAIL TO:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE 6103,27383
Space above this line for Recorder's use.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(Predevelopment Loan)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING ("Deed of Trust") is made as of , 2015, by Corona
Crescent, Inc., a California nonprofit public benefit corporation ("Trustor") to North
American Title Company as trustee ("Trustee"), for the benefit of the City of Dublin, a
municipal corporation ("Beneficiary").
RECITALS
A. Trustor owns fee simple title to the land described in Exhibit A attached
hereto and incorporated herein by this reference (the "Land"). The Land is located in
the City of Dublin, Alameda County, California. Trustor intends to construct, own and
operate an affordable multifamily residential development on the Land (the "Project" or
"Improvements").
B. Beneficiary and Trustor have entered into a Predevelopment Loan
Agreement dated as of , 2015, pursuant to which Beneficiary has agreed to
provide a loan to Trustor in the aggregate amount of up to One Million, Four Hundred
Thousand Dollars ($1,400,000) (the "Loan") for the purpose of partially financing the
Project. To evidence Trustor's obligation to repay the Loan, Trustor has issued to
Beneficiary a Predevelopment Secured Promissory Note dated as of 2015, in
the original principal amount of$1,400,000 (the "Note").
C. As a condition precedent to the making of the Loan, Beneficiary has
required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of
Beneficiary, a lien and security interest in the Property (defined below) to secure
repayment of the Note and performance of Trustor's obligations under the Loan
Agreement and under the Loan Documents (defined below).
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FINAL DUBLIN VET DEED OF TRUST
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows.
1. Grant in Trust. In consideration of the foregoing and for the purpose of securing
payment and performance of the Secured Obligations defined and described in Section
2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns
to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry
and possession, all estate, right, title and interest which Trustor now has or may later
acquire in and to the Land, and all of the following, whether presently owned or
hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or
constructed on the Land;
b. All appurtenances, easements, rights of way, pipes, transmission lines or
wires and other rights used in connection with the Land or the Improvements or as a
means of access thereto, whether now or hereafter owned or constructed or placed
upon or in the Land or Improvements and all existing and future privileges, rights,
franchises and tenements of the Land, including all minerals, oils, gas and other
commercially valuable substances which may be in, under or produced from any part of
the Land, and all water rights, rights of way, gores or strips of land, and any land lying in
the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and
Improvements (collectively, "Appurtenances");
C. All machinery, equipment, fixtures, goods and other personal property of
the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor
and now or hereafter located at or used in connection with the Land, the Improvements
or Appurtenances, and all improvements, restorations, replacements, repairs, additions
or substitutions thereto (collectively, "Equipment");
d. All existing and future leases, subleases, licenses, and other agreements
relating to the use or occupancy of all or any portion of the Land or Improvements
(collectively, "Leases"), all amendments, extensions, renewals or modifications thereof,
and all rent, royalties, or other payments which may now or hereafter accrue or
otherwise become payable thereunder to or for the benefit of Trustor, including but not
limited to security deposits (collectively, "Rents");
e. All insurance proceeds and any other proceeds from the Land,
Improvements, Appurtenances, Equipment, Leases, and Rents, including without
limitation, all deposits made with or other security deposits given to utility companies, all
claims or demands relating to insurance awards which the Trustor now has or may
hereafter acquire, including all advance payments of insurance premiums made by
Trustor, and all condemnation awards or payments now or later made in connection
with any condemnation or eminent domain proceeding ("Proceeds");
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FINAL DUBLIN VET DEED OF TRUST
f. All revenues, income, rents, royalties, payments and profits produced by
the Land, Improvements, Appurtenances and Equipment, whether now owned or
hereafter acquired by Trustor ("Gross Revenues");
g. All architectural, structural and mechanical plans, specifications, design
documents and studies produced in connection with development of the Land and
construction of the Improvements (collectively, "Plans"); and
h. All interests and rights in any private or governmental grants, subsidies,
loans or other financing provided in connection with development of the Land and
construction of the Improvements (collectively, "Financing").
All of the above-referenced interests of Trustor in the Land, Improvements, Project,
Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and
Financing as hereby conveyed to Trustee or made subject to the security interest herein
described are collectively referred to herein as the "Property."
2. Obligations Secured. This Deed of Trust is given for the purpose of securing
payment and performance of the following (collectively, the "Secured Obligations")- (i)
all present and future indebtedness evidenced by the Note and any amendment and/or
restatement thereof, including principal, interest and all other amounts payable under
the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary
under the Loan Documents (defined below); (iii) all additional present and future
obligations of Trustor to Beneficiary under any other agreement or instrument
acknowledged by Trustor (whether existing now or in the future) which states that it is or
such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to
Beneficiary under all modifications, supplements, amendments, renewals, or extensions
of any of the foregoing, whether evidenced by new or additional documents; and (v)
reimbursement of all amounts advanced by or on behalf of Beneficiary to protect
Beneficiary's interests under this Deed of Trust or any other Loan Document as such
may be modified, supplemented, amended, renewed or extended. The Note, the Loan
Agreement, this Deed of Trust, any Affordable Housing Regulatory Agreements and
Declaration of Restrictive Covenants that shall hereafter be recorded against the Land
for the benefit of Beneficiary, that certain Option Agreement by Trustor in favor of
Beneficiary recorded on 2015, as Instrument No. 2015- , and any
and all amendments, restatements, modifications and extensions of any of the foregoing
are hereafter collectively referred to as the "Loan Documents."
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely,
presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits,
revenue, income and proceeds of the Property. This is an absolute assignment and not
an assignment for security only. Beneficiary hereby confers upon Trustor a license to
collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds
as they become due and payable prior to any Event of Default hereunder. Upon the
occurrence of any such Event of Default, Beneficiary may terminate such license
without notice to or demand upon Trustor and without regard to the adequacy of any
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FINAL DUBLIN VET DEED OF TRUST
security for the indebtedness hereby secured, and may either in person, by agent, or by
a receiver to be appointed by a court, enter upon and take possession of the Property or
any part thereof, and sue for or otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorneys' fees, to any indebtedness
secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to
the rents, royalties, issues, profits, revenue, income and proceeds of the Property does
not depend upon whether or not Beneficiary takes possession of the Property. The
entering upon and taking possession of the Property, the collection of such rents,
issues, and profits, and the application thereof as aforesaid, shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
If an Event of Default occurs while Beneficiary is in possession of all or part of the
Property and/or is collecting and applying Rents as permitted under this Deed of Trust,
Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and
invoke every right and remedy afforded any of them under this Deed of Trust and at law
or in equity, including the right to exercise the power of sale granted hereunder.
Regardless of whether or not Beneficiary, in person or by agent, takes actual
possession of the Land or the Improvements, Beneficiary shall not be deemed to be a
"mortgagee in possession," shall not be responsible for performing any obligation of
Trustor under any Lease, shall not be liable in any manner for the Property, or the use,
occupancy, enjoyment or operation of any part of it unless due to the willful misconduct
or gross negligence of Beneficiary„ and shall not be responsible for any waste
committed by Trustor, lessees or any third parties, or for dangerous or defective
condition of the Property or any negligence in the management, repair or control of the
Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of
Rents for any rental period exceeding one month.
4. Security Agreement. The parties intend for this Deed of Trust to create a lien on
the Property, and an absolute assignment of the Rents and Leases, all in favor of
Beneficiary. The parties acknowledge that some of the Property may be determined
under applicable law to be personal property or fixtures. To the extent that any Property
may be or be determined to be personal property, Trustor as debtor hereby grants to
Beneficiary as secured party a security interest in all such Property to secure payment
and performance of the Secured Obligations. This Deed of Trust constitutes a security
agreement under the California Uniform Commercial Code, as amended or recodified
from time to time (the "UCC"), covering all such Property. To the extent such Property
is not real property encumbered by the lien granted above, and is not absolutely
assigned by the assignment set forth above, it is the intention of the parties that such
Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in
and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such
section may be modified or supplemented) of the Land and Improvements.
5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby
authorizes Beneficiary, as secured party, to file such financing statements and
amendments thereof and such continuation statements with respect thereto as
Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest
4
FINAL DUBLIN VET DEED OF TRUST
in the Property and Rents, without requiring any signature or further authorization by
Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary
may incur in filing such documents in public offices and in obtaining such record
searches as Beneficiary may reasonably require. If any financing statement or other
document is filed in the records normally pertaining to personal property, that filing shall
not be construed as in any way derogating from or impairing this Deed of Trust or the
rights or obligations of the parties under it.
Everything used in connection with the Property and/or adapted for use therein and/or
which is described or reflected in this Deed of Trust is, and at all times and for all
purposes and in all proceedings both legal or equitable shall be regarded as part of the
estate encumbered by this Deed of Trust irrespective of whether (i) any such item is
physically attached to the Improvements, (ii) serial numbers are used for the better
identification of certain equipment items capable of being thus identified in a recital
contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or
reflected in any such financing statement so filed at any time. Similarly, the mention in
any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard
insurance policy, or (2) any award in eminent domain proceedings for a taking or for
lessening of value, or (3) Trustor's interest as lessor in any present or future lease or
rights to income growing out of the use and/or occupancy of the property conveyed
hereby, whether pursuant to lease or otherwise, shall not be construed as in any way
altering any of the rights of Beneficiary as determined by this instrument or impugning
the priority of Beneficiary's lien granted hereby or by any other recorded document.
Such mention in any financing statement is declared to be solely for the protection of
Beneficiary in the event any court or judge shall at any time hold, with respect to the
matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's
priority of interest is required in order to be effective against a particular class of
persons, including but not limited to the federal government and any subdivisions or
entity of the federal government.
6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing
pursuant to the provisions of the UCC with respect to all of the Property constituting
fixtures, is being recorded as a fixture financing statement and filing under the UCC,
and covers property, goods and equipment which are or are to become fixtures related
to the Land and the Improvements. Trustor covenants and agrees that this Deed of
Trust is to be filed in the real estate records of Alameda County and shall also operate
from the date of such filing as a fixture filing in accordance with Section 9502 and other
applicable provisions of the UCC. This Deed of Trust shall also be effective as a
financing statement covering minerals or the like (including oil and gas) and accounts
subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and
Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.
7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the
Parties.
7.1 Representations and Warranties. Trustor represents and warrants that:
(i) Trustor lawfully possesses and holds a fee simple interest in the Land and the
5
FINAL DUBLIN VET DEED OF TRUST
Improvements when constructed or installed, (ii) Trustor has good and marketable title
to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the
full and unlimited power, right and authority to encumber the Property and assign the
Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant
to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted
Encumbrances"), this Deed of Trust creates a valid lien on Trustor's entire interest in
the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the
Property free and clear of all deeds of trust, mortgages, security agreements,
reservations of title or conditional sales contracts, (vi) there is no financing statement
affecting the Property on file in any public office other than as disclosed in writing to
Beneficiary; and (vii) the correct address of Trustor's chief executive office is specified
in Section 10.2.
7.2 Condition of Property. Trustor represents and warrants that except as
disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received
any notice from any governmental authority of any threatened or pending zoning,
building, fire, or health code violation or violation of other governmental regulations
concerning the Property that has not previously been corrected, and no condition on the
Land violates any health, safety, fire, environmental, sewage, building, or other federal,
state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or
commitments regarding the maintenance or use of the Property or allowing any third
party rights to use the Property are in force; (iii) there are no threatened or pending
actions, suits, or administrative proceedings against or affecting the Property or any
portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or
pending condemnation, eminent domain, or similar proceedings affecting the Property
or any portion thereof; (v) Trustor has not received any notice from any insurer of
defects of the Property which have not been corrected; (vi) there are no natural or
artificial conditions upon the Land or any part thereof that could result in a material and
adverse change in the condition of the Land; (vii) all information that Trustor has
delivered to Beneficiary, either directly or through Trustor's agents, is accurate and
complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material
facts concerning the Property.
7.3 Authority. Trustor represents and warrants that this Deed of Trust and all
other documents delivered or to be delivered by Trustor in connection herewith: (a)
have been duly authorized, executed, and delivered by Trustor; (b) are binding
obligations of Trustor; and (c) do not violate the provisions of any agreement to which
Trustor is a party or which affects the Property. Trustor further represents and warrants
that there are no pending, or to Trustor's knowledge, threatened actions or proceedings
before any court or administrative agency which may adversely affect Trustor's
ownership of the Property.
7.4 Payment and Performance of Secured Obligations. Trustor shall promptly
pay when due the principal and any interest due on the indebtedness evidenced by the
Note, and shall promptly pay and perform all other obligations of Trustor arising in
6
FINAL DUBLIN VET DEED OF TRUST
connection with the Secured Obligations or the Loan Documents in accordance with the
respective terms thereof.
7.5 Use of Loan Proceeds; Preservation and Maintenance of Property;
Compliance with Laws. Trustor covenants that it shall use the Loan Proceeds solely for
purposes authorized by the Loan Documents. Trustor covenants that it shall keep the
Land and Improvements in good repair and condition, and from time to time shall make
necessary repairs, renewals and replacements thereto so that the Property shall be
preserved and maintained. Trustor covenants to comply with all federal, state and local
laws, regulations, ordinances and rules applicable to the Property and the Project,
including without limitation all applicable requirements of state and local building codes
and regulations, and all applicable statutes and regulations relating to accessibility for
the disabled. Trustor shall not remove, demolish or materially alter any Improvement
without Beneficiary's consent, shall complete or restore promptly and in good and
workmanlike manner any building, fixture or other improvement which may be
constructed, damaged, or destroyed thereon, and shall pay when due all claims for
labor performed and materials furnished therefor. Trustor shall use the Land and the
Improvements solely for purposes authorized by the Loan Documents, shall not commit
or allow waste of the Property, and shall not commit or allow any act upon or use of the
Property which would violate any applicable law or order of any governmental authority,
nor shall Trustor bring on or keep any article on the Property or cause or allow any
condition to exist thereon which could invalidate or which would be prohibited by any
insurance coverage required to be maintained on the Property pursuant to the Loan
Documents.
7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be
an Event of Default hereunder if the Property, any part thereof, or interest therein is
sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered
in violation of the Loan Documents or if any other Transfer (as defined in the Loan
Agreement) occurs in violation of the Loan Documents. If any such Transfer shall occur
in violation of such requirements, without limiting the provisions of Section 8 hereof, all
obligations secured by this Deed of Trust, irrespective of the maturity dates of such
obligations, shall at the option of Beneficiary, and without demand, immediately become
due and payable, subject to any applicable cure period.
7.7 Inspections; Books and Records. Beneficiary and its agents and
representatives shall have the right at any reasonable time upon reasonable notice to
Trustor to enter upon the Land and inspect the Property to ensure compliance with the
Loan Documents. Trustor shall maintain complete and accurate books of account and
other records (including copies of supporting bills and invoices) adequate to document
the use of the Loan Proceeds and the operation of the Property, together with copies of
all written contracts, Leases and other instruments which affect the Property. The
books, records, contracts, Leases and other instruments shall be subject to examination
and inspection by Beneficiary at any reasonable time following two business days prior
notice.
7
FINAL DUBLIN VET DEED OF TRUST
7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before
delinquency all taxes, levies, assessments and other charges affecting the Property that
are (or if not paid may become) a lien on all or part of the Property. Trustor may, at
Trustor's expense, contest the validity or application of any tax, levy, assessment or
charge affecting the Property by appropriate legal proceedings promptly initiated and
conducted in good faith and with due diligence, provided that (i) Beneficiary is
reasonably satisfied that neither the Property nor any part thereof or interest therein will
be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor
shall have posted a bond or furnished other security as may reasonably be required
from time to time by Beneficiary; and provided further that Trustor shall timely make any
payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.
7.9 Subrogation. Beneficiary shall be subrogated to the liens of all
encumbrances, whether released of record or not, which are discharged in whole or in
part by Beneficiary in accordance with this Deed of Trust.
7.10 Hazard, Liability and Workers' Compensation Insurance. At all times
during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and
personal property now existing or hereafter located on the Property insured against loss
by fire, vandalism and malicious mischief by a policy of standard fire and extended all-
risk insurance. The policy shall be written on a full replacement value basis and shall
name Beneficiary as loss payee as its interest may appear. The full replacement value
of the improvements to be insured shall be determined by the company issuing the
policy at the time the policy is initially obtained. Not more frequently than once every
two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other
party that it elects to have the replacement value redetermined by the insurance
company. Subject to the rights of any senior lienholder, the proceeds collected under
any insurance policy may be applied by Beneficiary to any indebtedness secured
hereby and in such order as Beneficiary may determine, or at the option of Beneficiary,
the entire amount so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default or notice of default hereunder
or invalidate any act done pursuant to such notice. Notwithstanding anything to the
contrary set forth herein, provided that Trustor is not in default under any Loan
Document, Trustor shall be permitted to use the proceeds of insurance to rebuild the
Improvements.
7.10.1 Trustor shall at all times during the term hereof, maintain a
comprehensive general liability insurance policy in an amount not less than One Million
Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual
aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage or
such other policy limits as Agency may require in its reasonable discretion, including
coverage for bodily injury, property damage, products, completed operations and
contractual liability coverage. Such policy or policies shall be written on an occurrence
basis and shall name the Beneficiary as an additional insured. Trustor shall maintain
workers' compensation insurance as required by law.
8
FINAL DUBLIN VET DEED OF TRUST
7.10.2 Trustor shall file with Beneficiary prior to the commencement of the
term hereof, certificates (or such other proof as Beneficiary may require, including
without limitation, copies of the required insurance policies) evidencing each of the
insurance policies and endorsements thereto as required by this Section, and such
certificates (or policies) shall provide that at least thirty (30) days' prior written notice
shall be provided to Beneficiary prior to the expiration, cancellation or change in
coverage under each such policy.
7.10.3 If any insurance policy required hereunder is canceled or the
coverage provided thereunder is reduced, Trustor shall, within fifteen (15) days after
receipt of written notice of such cancellation or reduction in coverage, but in no event
later than the effective date of cancellation or reduction, file with Beneficiary a
certificate showing that the required insurance has been reinstated or provided through
another insurance company or companies. Upon failure to so file such certificate,
Beneficiary may, without further notice and at its option, procure such insurance
coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for
such expense upon receipt of billing from Beneficiary.
7.10.4 The insurance policies required hereunder shall be issued by
insurance companies authorized to do business in the State of California with a financial
rating of at least A VII status as rated in the most recent edition of Best's Key Rating
Guide. Each policy of insurance shall contain an endorsement requiring the insurer to
provide at least thirty (30) days written notice to Beneficiary prior to change in coverage,
cancellation or expiration thereof. If any insurance policy required pursuant to the Loan
Documents is canceled or the coverage provided thereunder is reduced, Trustor shall,
within ten (10) days after receipt of written notice of such cancellation or reduction in
coverage, but in no event later than the effective date of cancellation or reduction, file
with Beneficiary a certificate showing that the required insurance has been reinstated or
provided through another insurance company or companies. Upon failure to so file
such certificate, Beneficiary may, without further notice and at its option, procure such
insurance coverage at Trustor's expense, and Trustor shall promptly reimburse
Beneficiary for such expense upon receipt of billing from Beneficiary.
7.11 Hazardous Materials. Trustor represents and warrants that except as
disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of
Trustor: (i) the Land is free and has always been free of Hazardous Materials (as
defined below) and is not and has never been in violation of any Environmental Law (as
defined below); (ii) there are no buried or partially buried storage tanks located on the
Land; (iii) Trustor has received no notice, warning, notice of violation, administrative
complaint, judicial complaint, or other formal or informal notice alleging that conditions
on the Land are or have ever been in violation of any Environmental Law or informing
Trustor that the Land is subject to investigation or inquiry regarding Hazardous
Materials on the Land or the potential violation of any Environmental Law; (iv) there is
no monitoring program required by the Environmental Protection Agency or any other
governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste,
or substances of any kind have ever been spilled, disposed of, or stored on, under or at
9
FINAL DUBLIN VET DEED OF TRUST
the Land, whether by accident, burying, drainage, or storage in containers, tanks,
holding areas, or any other means; (vi) the Land has never been used as a dump or
landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and
studies in Trustor's possession or reasonably available to Trustor relating to the Land
concerning Hazardous Materials.
Trustor shall not cause or permit any Hazardous Material (as defined below) to
be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its
agents, employees, contractors or invitees except for incidental supplies ordinarily used
in connection with the construction, rehabilitation, repair, and operation of residential
developments and in compliance with all applicable laws, and shall not cause any
release of Hazardous Materials into, onto, under or through the Land. If any Hazardous
Material is discharged, released, dumped, or spilled in, on, under, or about the Land and
results in any contamination of the Land or adjacent property, or otherwise results in the
release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall
promptly take all actions at its sole expense as are necessary to comply with all
Environmental Laws (as defined below).
To the fullest extent permitted by law, Trustor shall indemnify, defend (with
counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and
appointed officials, officers, agents and employees (collectively, "Indemnitees")
harmless from and against any and all loss, claim, liability, damage, demand, judgment,
order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees
and expenses of attorneys, expert witnesses, and other professionals advising or
assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter
individually "Claim" and collectively "Claims") arising in connection with the breach of
Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in
connection with the presence or release of Hazardous Materials in, on, under, or from
the Property. The foregoing indemnity includes, without limitation, all costs of
investigation, assessment, containment, removal, remediation of any kind, and disposal
of Hazardous Materials, all costs of determining whether the Land is in compliance with
Environmental Laws, all costs associated with bringing the Land into compliance with all
applicable Environmental Laws, and all costs associated with claims for damages or
injury to persons, property, or natural resources.
Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost
and expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any
Indemnitee or Indemnitees in any legal or administrative proceeding incident to any
matters against which Indemnitees are entitled to be indemnified under this Deed of
Trust;
b. reimburse Indemnitees for any expenses paid or incurred in connection
with any matters against which Indemnitees are entitled to be indemnified under this
Deed of Trust; and
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FINAL DUBLIN VET DEED OF TRUST
C. reimburse Indemnitees for any and all expenses, including without
limitation out-of-pocket expenses and fees of attorneys and expert witnesses, paid or
incurred in connection with the enforcement by Indemnitees of their rights under this
Deed of Trust, or in monitoring and participating in any legal or administrative
proceeding.
Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired
by any of the following, or by any failure of Trustor to receive notice of or consideration
for any of the following: (i) any amendment or modification of any Loan Document; (ii)
any extensions of time for performance required by any Loan Document; (iii) any
provision in any of the Loan Documents limiting Beneficiary's recourse to property
securing the Secured Obligations, or limiting the personal liability of Trustor, or any
other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or
inaccuracy of any representation and warranty made by Trustor under this Deed of
Trust or by Trustor or any other party under any Loan Document, (v) the release of
Trustor or any other person, by Beneficiary or by operation of law, from performance of
any obligation under any Loan Document; (vi) the release or substitution in whole or in
part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly
perfect any lien or security interest given as security for the Secured Obligations.
The provisions of this Section 7.11 shall be in addition to any and all other
obligations and liabilities that Trustor may have under applicable law, and each
Indemnitee shall be entitled to indemnification under this Section without regard to
whether Beneficiary or that Indemnitee has exercised any rights against the Property or
any other security, pursued any rights against any guarantor or other party, or pursued
any other rights available under the Loan Documents or applicable law. The obligations
of Trustor to indemnify the Indemnitees under this Section shall survive any repayment
or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure
sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien
of this Deed of Trust.
Without limiting any of the remedies provided in this Deed of Trust, Trustor
acknowledges and agrees that each of the provisions in this Section 7.11 is an
environmental provision (as defined in Section 736(f)(2) of the California Code of Civil
Procedure) made by Trustor relating to real property security (the "Environmental
Provisions"), and that Trustor's failure to comply with any of the Environmental
Provisions will be a breach of contract that will entitle Beneficiary to pursue the
remedies provided by Section 736 of the California Code of Civil Procedure ("Section
736") for the recovery of damages and for the enforcement of the Environmental
Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or
enforcement of the Environmental Provisions shall not constitute an action within the
meaning of Section 726(a) of the California Code of Civil Procedure or constitute a
money judgment for a deficiency or a deficiency judgment within the meaning of
Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure.
"Hazardous Materials" means any substance, material or waste which is or
becomes regulated by any federal, state or local governmental authority, and includes
11
FINAL DUBLIN VET DEED OF TRUST
without limitation (i) petroleum or oil or gas or any direct or indirect product or by-
product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance,
material or waste regulated by or listed (directly or by reference) as a "hazardous
substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant",
"toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or
similarly identified as hazardous to human health or the environment in or pursuant to,
the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive
Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et
seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section
5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901,
et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air
Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous
Substances Act [California Health and Safety Code Section 25280, et seq.], the
California Hazardous Substances Account Act [California Health and Safety Code
Section 25300, et seq.], the California Hazardous Waste Act [California Health and
Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic
Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the
Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et
seq.], as they now exist or are hereafter amended, together with any regulations
promulgated thereunder; (iv) any substance, material or waste which is defined as such
or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v)
any other substance, material, chemical, waste or pollutant identified as hazardous or
toxic and regulated under any other federal, state or local environmental law, including
without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and
synthetic fuel products and by-products.
"Environmental Law" means all federal, state or local statutes, ordinances,
rules, regulations, orders, decrees, judgments or common law doctrines, and provisions
and conditions of permits, licenses and other operating authorizations regulating, or
relating to, or imposing liability or standards of conduct concerning (i) pollution or
protection of the environment, including natural resources; (ii) exposure of persons,
including employees and agents, to any Hazardous Material (as defined above) or other
products, raw materials, chemicals or other substances; (iii) protection of the public
health or welfare from the effects of by-products, wastes, emissions, discharges or
releases of chemical substances from industrial or commercial activities; (iv) the
manufacture, use or introduction into commerce of chemical substances, including
without limitation, their manufacture, formulation, labeling, distribution, transportation,
handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous
substances or Hazardous Materials or the remediation of air, surface waters,
groundwaters or soil, as now or may at any later time be in effect, including but not
limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the
Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C.
Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49
U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C.
6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the
Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of
12
FINAL DUBLIN VET DEED OF TRUST
Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.],
the California Hazardous Substances Account Act [California Health and Safety Code
Section 25300, et seq.], the California Hazardous Waste Act [California Health and
Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic
Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the
Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et
seq.], as they now exist or are hereafter amended, together with any regulations
promulgated thereunder.
7.12 Notice of Claims; Defense of Security; Reimbursement of Costs.
a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any
uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or
property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within
five (5) business days of the occurrence of such loss. Trustor shall use its best efforts
to ensure that Beneficiary shall receive timely notice of, and shall have a right to cure,
any default under any other financing document or other lien affecting the Property and
shall use best efforts to ensure that provisions mandating such notice and allowing such
right to cure shall be included in all such documents. Within three business days of
Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of
default Trustor receives in connection with any financing document secured by the
Property or any part thereof.
b. Defense of Security. At Trustor's sole expense, Trustor shall protect,
preserve and defend the Property and title to and right of possession of the Property,
the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee
created under it, against all adverse claims.
C. Compensation; Reimbursement of Costs. Trustor agrees to pay all
reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service
that Beneficiary or Trustee may render in connection with this Deed of Trust, including
without limitation, fees and expenses related to provision of a statement of obligations
or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for
all costs, expenses and other advances which may be incurred or made by Beneficiary
or Trustee in any efforts to enforce any terms of this Deed of Trust, including without
limitation any rights or remedies afforded to Beneficiary or Trustee or both of them
under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any
action or proceeding arising under or relating to this Deed of Trust, including reasonable
attorneys' fees and other legal costs, costs of any disposition of the Property under the
power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of
title.
d. Notice of Changes. Trustor shall give Beneficiary prior written notice of
any change in the address of Trustor and the location of any property, including books
and records pertaining to the Property.
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FINAL DUBLIN VET DEED OF TRUST
7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably
acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as
defined in Section 7.11) from and against all Claims arising directly or indirectly in any
manner in connection with or as a result of (a) any breach of Trustor's covenants under
any Loan Document, (b) any representation by Trustor in any Loan Document which
proves to be false or misleading in any material respect when made, (c) injury or death
to persons or damage to property or other loss occurring on the Land or in any
improvement located thereon, whether caused by the negligence or any other act or
omission of Trustor or any other person or by negligent, faulty, inadequate or defective
design, building, construction or maintenance or any other condition or otherwise, (d)
any claim, demand or cause of action, or any action or other proceeding, whether
meritorious or not, brought or asserted against any Indemnitee which relates to or arises
out of the Property, or any Loan Document or any transaction contemplated thereby, or
any failure of Trustor to comply with all applicable state, federal and local laws and
regulations applicable to the Property, provided that no Indemnitee shall be entitled to
indemnification under this Section for matters caused by such Indemnitee's gross
negligence or willful misconduct. The obligations of Trustor under this Section shall
survive the repayment of the Loan and shall be secured by this Deed of Trust.
Notwithstanding any contrary provision contained herein, the obligations of Trustor
under this Section shall survive any foreclosure proceeding, any foreclosure sale, any
delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed
of Trust.
7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to
Trustor or any other person as a consequence of any of the following: (i) Beneficiary's
exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary
in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any
obligation or liability of Trustor under any agreement related to the Property or under
this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or
any third parties, or any dangerous or defective condition of the Property; or (iv) any
loss sustained by Trustor or any third party resulting from any act or omission of
Beneficiary in managing the Property after an Event of Default, unless the loss is
caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor
hereby expressly waives and releases all liability of the types described in this Section
7.14 and agrees that Trustor shall assert no claim related to any of the foregoing
against Beneficiary.
7.15 Insurance and Condemnation Proceeds. Subject to the rights of any
senior lienholders, any award of damages in connection with any condemnation for
public use of, or injury to the Property or any part thereof is hereby assigned and shall
be paid to Beneficiary who may apply such moneys to any indebtedness secured
hereby in such order as Beneficiary may determine, or at the option of Beneficiary the
entire amount so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default or notice of default hereunder
or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so
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FINAL DUBLIN VET DEED OF TRUST
long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation
proceeds shall be used to repair and/or restore the Project.
7.16 Release, Extension, Modification. At any time and from time to time,
without liability therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust and the Note for endorsement, Trustee may release
or reconvey all or any part of the Property, consent to the making of any map or plat of
the Land or part thereof, join in granting any easement or creating any restriction
affecting the Property, or join in any extension agreement or other agreement affecting
the lien or charge hereof. At any time and from time to time, without liability therefor
and without notice, Beneficiary may (i) release any person liable for payment of any
Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of
payment of any Secured Obligation; (iii) accept additional real or personal property of
any kind as security for any Secured Obligation, or (iv) substitute or release any
property securing the Secured Obligations.
7.17 Reconveyance. Upon written request of Beneficiary stating that all of the
Secured Obligations have been paid in full, and upon surrender of this Deed of Trust,
and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as
is then held under this Deed of Trust. The recitals in any reconveyance executed under
this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness
thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such
reconveyance.
7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any
breach or default of Trustor, and if it chooses to do so in connection with any such cure,
Beneficiary or Trustee may also enter the Property and/or do any and all other things
which it may in its sole discretion consider necessary and appropriate to protect the
security of this Deed of Trust. Such other things may include: appearing in and/or
defending any action or proceeding which purports to affect the security of, or the rights
or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing,
contesting or compromising any encumbrance, charge, lien or claim of lien which in
Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of
Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary,
Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for
insurance required to be carried hereunder; otherwise caring for and protecting any and
all of the Property; and/or employing counsel, accountants, contractors and other
appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take
any of the actions permitted under this Section 7.18 either with or without giving notice,
except for notices required under applicable law or under the Loan Documents. Any
amounts disbursed by Beneficiary pursuant to this paragraph shall become additional
indebtedness secured by this Deed of Trust.
7.19 Limited Partners Right to Cure. Trustor's limited partners shall have the
right to cure any default of Trustor hereunder upon the same terms and conditions
afforded to Trustor. Provided that Beneficiary has been given written notice of the
address for delivery of notices to the limited partners, Beneficiary shall provide any
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FINAL DUBLIN VET DEED OF TRUST
notice of default hereunder to the limited partners concurrently with the provision of
such notice to Trustor, and as to the limited partners, the cure periods specified herein
shall commence upon the date of delivery of such notice in accordance with Section
10.2.
8. Default and Remedies.
8.1 Events of Default. Trustor acknowledges and agrees that an Event of
Default shall occur under this Deed of Trust upon the occurrence of any one or more of
the following events:
a. Beneficiary's declaration of an Event of Default under any Loan
Document, subject to the expiration of any applicable cure period set forth in such
document;
b. Trustor fails to perform any monetary obligation which arises under
this Deed of Trust, and does not cure that failure within ten (10) days following written
notice from Beneficiary or Trustee;
C. If Trustor's interest in the Property or any part thereof is voluntarily
or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in
violation of Section 7.6 hereof or if any other Transfer occurs in violation of the Loan
Agreement and Trustor fails to rescind such conveyance or otherwise cure such breach
within the time period specified in paragraph j below;
d. Trustor fails to maintain the insurance coverage required hereunder
or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor
fails to cure such default within the applicable time specified in Section 7.10;
e. Subject to Trustor's right to contest such charges as provided
herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements
or fails to pay any other charge that may result in a lien on the Land or the
Improvements, and Trustor fails to cure such default within 10 days.
f. Any representation or warranty of Trustor contained in or made in
connection with the execution and delivery of this Deed of Trust or in any certificate or
statement furnished pursuant hereto or in any other Loan Document proves to have
been false or misleading in any material adverse respect when made;
g. If, 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"), Trustor or any general partner thereof (i) commences a
voluntary case or proceeding; (ii) consents to the entry of an order for relief against
Trustor or any general partner thereof in an involuntary case; (iii) consents to the
appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or
any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or
(v) admits in writing its inability to pay its debts as they become due.
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FINAL DUBLIN VET DEED OF TRUST
h. If a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in
an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Trustor or any general partner thereof or substantially all of such entity's
assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues
or levies a judgment, writ, warrant of attachment or similar process against the Property
or the Project or any part thereof, and in each case the order or decree is not released,
vacated, dismissed or fully bonded within 60 days after its issuance.
i. The holder of any other debt instrument secured by a mortgage or
deed of trust on the Property or part thereof declares an event of default thereunder and
exercises a right to declare all amounts due under that debt instrument immediately due
and payable, subject to the expiration of any applicable cure period set forth in such
holder's documents; or
j. Trustor fails to perform any obligation arising under this Deed of
Trust other than one enumerated in this Section 8.1, and does not cure that failure
either within ten (10) days after written notice from Beneficiary or Trustee in the event of
a monetary default, or within thirty (30) days after such written notice in the event of a
nonmonetary default, provided that in the case of a nonmonetary default that in
Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days,
an Event of Default shall not arise hereunder if Trustor commences to cure such default
within thirty (30) days and thereafter prosecutes such cure to completion with due
diligence and in good faith and in no event later than sixty (60) days following receipt of
notice of default or such longer period as Beneficiary may allow.
8.2 Remedies. Subject to the applicable notice and cure provisions set forth
herein and the limited recourse provisions set forth in the Note, at any time after an
Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the
rights and remedies described below, and may exercise any one or more or all, of the
remedies set forth in any Loan Document, and any other remedy existing at law or in
equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and
the exercise of any one or more of them shall not constitute an election of remedies.
Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies
provided hereunder, including without limitation reasonable attorneys' fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured
Obligations, including without limitation all sums payable under the Note and this Deed
of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent
jurisdiction for, and obtain appointment of, a receiver for the Property.
C. Entry. Beneficiary, in person, by agent or by court-appointed
receiver, may enter, take possession of, manage and operate all or any part of the
Property, and may also do any and all other things in connection with those actions that
Beneficiary may in its sole discretion consider necessary and appropriate to protect the
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FINAL DUBLIN VET DEED OF TRUST
security of this Deed of Trust. Such other things may include: taking and possessing
copies of all of Trustor's or the then owner's books and records concerning the Property;
entering into, enforcing, modifying, or canceling Leases on such terms and conditions
as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying
Rents; collecting and receiving any payment of money owing to Trustor; completing any
unfinished construction; and/or contracting for and making repairs and alterations. If
Beneficiary so requests, Trustor shall assemble all of the Property that has been
removed from the Land and make all of it available to Beneficiary at the site of the Land.
Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-
fact to perform such acts and execute such documents as Beneficiary in its sole
discretion may consider to be appropriate in connection with taking these measures,
including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the
remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of
competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for
foreclosure of mortgages on real property and/or to obtain specific enforcement of any
of the covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted,
Beneficiary shall have the discretionary right to cause some or all of the Property,
including any Property which constitutes personal property, to be sold or otherwise
disposed of in any combination and in any manner permitted by applicable law.
8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby
granted, Beneficiary shall execute or cause the Trustee to execute a written notice of
such default and of its election to cause the Property to be sold to satisfy the obligations
hereof, and shall cause such notice to be recorded in the office of the Recorder of each
County wherein the Property or some part thereof is situated as required by law and this
Deed of Trust.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this
Deed of Trust and the Note or other evidence of indebtedness which is secured hereby,
together with a written request for the Trustee to proceed with a sale of the Property,
pursuant to the provisions of law and this Deed of Trust.
Notice of sale having been given as then required by law, and not less than the
time then required by law having elapsed after recordation of such notice of default,
Trustee, without demand on Trustor, shall sell the Property at the time and place fixed
by it in the notice of sale, either as a whole or in separate parcels and in such order as it
may determine, at public auction to the highest bidder for cash in lawful money of the
United States, payable at time of sale. Trustee may, and at Beneficiary's request shall,
postpone sale of all or any portion of the Property by public announcement at such time
and place of sale, and from time to time thereafter may postpone such sale by public
announcement at the time and place fixed by the preceding postponement. Trustee
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FINAL DUBLIN VET DEED OF TRUST
shall deliver to the purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any matters or
facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby
created, including reasonable attorneys' fees in connection with sale, Trustee shall
apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary
or Trustee under the terms hereof and all outstanding sums then secured hereby, and
the remainder, if any, to the person or persons legally entitled thereto.
Without limiting the generality of the foregoing, Trustor acknowledges and agrees
that regardless of whether or not a default has occurred hereunder, if an Event of
Default has occurred under the Loan Documents, and if in connection with such Event
of Default Beneficiary exercises its right to foreclose on the Property, then: (i)
Beneficiary shall be entitled to declare all amounts due under the Note immediately due
and payable, and (ii) the proceeds of any sale of the Property in connection with such
foreclosure shall be used to pay all Secured Obligations, including without limitation, the
outstanding principal balance and all other amounts due under the Note.
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary,
may bid for and acquire the Property or any part of it to the extent permitted by then
applicable law. Instead of paying cash for such property, Beneficiary may settle for the
purchase price by crediting the sales price of the property against the following
obligations:
a. First, the portion of the Secured Obligations attributable to the
expenses of sale, costs of any action and any other sums for which Trustor is obligated
to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and
b. Second, the remaining balance of all other Secured Obligations in
any order and proportions as Beneficiary in its sole discretion may choose.
8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of
the sums secured by this Deed of Trust, Trustor shall have the right to have any
proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any
time prior to five days before sale of the Property pursuant to the power of sale
contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this
Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under
the Loan Documents if the Secured Obligations had no acceleration provision; (b)
Trustor cures all breaches of any other covenants or agreements of Trustor contained in
this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and
Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of
Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein,
including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such
action as Beneficiary may reasonably require to assure that the lien of this Deed of
Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums
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FINAL DUBLIN VET DEED OF TRUST
secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure
by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full
force and effect as if no acceleration had occurred..
9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all
statutes of limitations as a defense to any action or proceeding brought against Trustor
by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be
enacted providing for any appraisement, valuation, stay, extension, redemption or
moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all
presentments, demands for performance, notices of nonperformance, protests, notices
of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the
existence, creation, or incurring of new or additional indebtedness, and demands and
notices of every kind.
10. Miscellaneous Provisions.
10.1 Additional Provisions. The Loan Documents grant further rights to
Beneficiary and contain further agreements and affirmative and negative covenants by
Trustor which apply to this Deed of Trust and the Property.
10.2 Notices. Trustor requests that a copy of notice of default and notice of
sale be mailed to Trustor at the address set forth below. That address is also the
mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth
below is the address for Beneficiary as secured party under the UCC. Except for any
notice required under applicable law to be given in another manner, all notices to be
sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties 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:
a. personal delivery, in which case notice shall be deemed delivered
upon receipt;
b. certified or registered mail, return receipt requested, in which case
notice shall be deemed delivered two (2) business days after deposit, postage prepaid
in the United States mail;
C. nationally recognized overnight courier, in which case notice shall
be deemed delivered one (1) day after deposit with such courier; or
d. facsimile transmission, in which case notice shall be deemed
delivered on transmittal, provided that a transmission report is generated reflecting the
accurate transmission thereof.
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FINAL DUBLIN VET DEED OF TRUST
BENEFICIARY: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attention: City Manager
Fax No. (925) 833-6651
TRUSTOR: Corona Crescent, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: President
Fax No. (510) 582-6523
With a copy to: Trustor's investor limited partner at its address to be
provided.
10.3 Binding on Successors. The terms, covenants and conditions of this
Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators,
executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary
and Trustee; provided however this Section 10.3 does not waive the provisions of
Section 7.6.
10.4 Substitution of Trustee. Beneficiary may from time to time or at any time
substitute a trustee or trustees to execute the trust hereby created, and when any such
substitution has been filed for record in the office of the Recorder of Alameda County, it
shall be conclusive evidence of the appointment of such trustee or trustees, and such
new trustee or trustees shall succeed to all of the powers and duties of the Trustee
named herein.
10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this
Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to
Beneficiary and Trustee all costs of such action or proceeding, including reasonable
attorneys' fees.
10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be
governed by the laws of the State of California without regard to principles of conflicts of
laws. Trustor agrees that any controversy arising under or in relation to this Deed of
Trust shall be litigated exclusively in the jurisdiction where the Land is located (the
"Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have exclusive jurisdiction over all controversies which
shall arise under or in relation to the Loan Documents. Trustor 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. If any provision of this Deed of Trust is held unenforceable or void, that
provision shall be deemed severable from the remaining provisions, and shall in no way
affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for
convenience only and are not intended to affect the interpretation or construction of the
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FINAL DUBLIN VET DEED OF TRUST
provisions herein contained. In this Deed of Trust, whenever the context so requires,
the singular number includes the plural.
10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any
obligation of Trustor hereunder must be in writing, and no waiver shall be construed as
a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary
or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or
Trustee to any act or omission by Trustor shall not be construed as a consent to any
other or subsequent act or omission or to waive the requirement for Beneficiary's or
Trustee's consent to be obtained in any future or other instance. No amendment to or
modification of this Deed of Trust shall be effective unless and until such amendment or
modification is in writing, executed by Trustor and Beneficiary. Without limiting the
generality of the foregoing, Beneficiary's acceptance of payment of any sum secured
hereby after its due date shall not constitute a waiver by Beneficiary of its right either to
require prompt payment when due of all other sums so secured or to declare default for
failure so to pay.
10.8 Action by Beneficiary. Except as may be otherwise specifically provided
herein or required by law, whenever any approval, notice, direction, or consent by the
Beneficiary is required or permitted under this Agreement, such action shall be in
writing, and such action may be given, made or taken by Beneficiary's City Manager or
by any person who shall have been designated by Beneficiary's City Manager, without
further approval by the City Council of Beneficiary.
10.9 Joint and Several Liability. If Trustor consists of more than one person or
entity, each shall be jointly and severally liable for the faithful performance of all of
Trustor's obligations under this Deed of Trust.
10.10 Time is of the Essence. Time is of the essence for each provision of this
Deed of Trust.
10.11 Partial Subordination to Extended Use Agreement. Trustor and the
California Tax Credit Allocation Committee may enter into a Regulatory Agreement(s)
(the "TCAC Extended Use Agreement"), which constitutes the extended low-income
housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as
amended (the "Code"). In the event of a foreclosure of Beneficiary's interest under this
Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a
"Foreclosure"), the following rule shall apply:
In the event of a Foreclosure, throughout the extended use period
specified in the TCAC Extended Use Agreement, with respect to any
unit that had been regulated by the TCAC Extended Use Agreement,
(i) none of the eligible tenants occupying those units at the time of
Foreclosure may be evicted or their tenancy terminated (other than for
good cause, including but not limited to, the tenants' ineligibility
pursuant to regulations of the HOME Program or Section 42 of the
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FINAL DUBLIN VET DEED OF TRUST
Code), (ii) nor may any rent be increased except as otherwise
permitted under Section 42 of the Code.
SIGNATURE ON FOLLOWING PAGE.
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FINAL DUBLIN VET DEED OF TRUST
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the
date first written above.
TRUSTOR:
Corona Crescent, Inc.,
a California nonprofit public benefit corporation
By:
Name: Linda Mandolini
Title:
SIGNATURE MUST BE NOTARIZED.
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FINAL DUBLIN VET DEED OF TRUST
STATE OF CALIFORNIA )
COUNTY OF ALAMEDA )
On , 20 , before me, (here insert name and title of the
officer), personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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FINAL DUBLIN VET DEED OF TRUST
Exhibit A
Legal Description of Land
Real property in the City of Dublin, County of Alameda, State of California,
described as follows:
PARCEL D, AS SHOWN ON PARCEL MAP 2621, FILED DECEMBER 20, 1978 IN
BOOK 107, PAGE 50 OF MAPS, ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM, THAT PORTION CONVEYED IN THE DEED TO THE
COUNTY OF ALAMEDA, A POLITICAL SUBDIVISION OF THE STATE OF
CALIFORNIA, RECORDED FEBRUARY 14, 2004 AS INSTRUMENT NO. 2002-073439
OF OFFICIAL RECORDS.
APN: 941-1500-032-02
2385062.3
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FINAL DUBLIN VET DEED OF TRUST
Exhibit E
PREDEVELOPMENT BUDGET
Predevelopment Loan proceeds may be disbursed for predevelopment costs incurred
by Borrower for predevelopment activities for the Project, including:
Architecture
Landscape architecture
Engineering
Joint trench
Environmental
Consultant fees (e.g. Financial/syndication, fair housing, relocation)
Legal/organizational costs
Planning, permit, and impact fees
Site acquisition and predevelopment loan closing costs
Site holding costs (insurance, real estate taxes, security)
Financial application fees (TCAC tax credit fees, CDLAC bond fees, Section 8
application fee)
Market study
Appraisal
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FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
Exhibit F
INSURANCE REQUIREMENTS
(a) Borrower and all contractors working on behalf of Borrower on the Project
shall maintain a commercial general liability policy in the amount of One Million Dollars
($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate,
together with Three Million Dollars ($3,000,000) excess liability coverage, or such other
policy limits as City may require in its reasonable discretion, including coverage for
bodily injury, property damage, products, completed operations and contractual liability
coverage. Such policy or policies shall be written on an occurrence basis and shall
name the Indemnitees as additional insureds.
(b) Borrower and all contractors working on behalf of Borrower shall maintain
a comprehensive automobile liability coverage in the amount of One Million Dollars
($1,000,000), combined single limit including coverage for owned and non-owned
vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City
that Borrower and any contractor with whom Borrower has contracted for the
performance of work on the Property or otherwise pursuant to this Agreement carries
workers' compensation insurance as required by law. Automobile liability policies shall
name the Indemnitees as additional insureds.
(c) Upon commencement of construction work and continuing until issuance
of the final certificate of occupancy or equivalent for the Project, Borrower and all
contractors working on behalf of Borrower shall maintain a policy of builder's all-risk
insurance in an amount not less than the full insurable cost of the Project on a
replacement cost basis naming City as loss payee. Such insurance shall include
coverage for risks of direct physical loss or damage, excluding the perils of earthquake,
flood, and earth movement.
(d) Upon completion of construction, Borrower shall maintain property
insurance covering all risks of loss (other than earthquake and flood) for 100% of the
replacement value of the Project with deductible, if any, in an amount acceptable to
City, naming City as loss payee.
(e) Companies writing the insurance required hereunder shall be licensed to
do business in the State of California or shall be listed on the California Department List
of Approved Surplus Line Insurers (LASLI) . Insurance shall be placed with insurers
with a current A.M. Best's rating of no less than A: VII. The Commercial General
Liability and comprehensive automobile policies required hereunder shall name the
Indemnitees as additional insureds. Builder's Risk and property insurance shall name
City as loss payee as its interests may appear.
(f) Borrower shall furnish City with certificates of insurance in form
acceptable to City evidencing the required insurance coverage and duly executed
24
FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
endorsements evidencing such additional insured status. The certificates shall contain
a statement of obligation on the part of the carrier to notify City of any material adverse
change, cancellation, termination or non-renewal of the coverage at least thirty (30)
days in advance of the effective date of any such material adverse change,
cancellation, termination or non-renewal.
(g) If any insurance policy or coverage required hereunder is canceled or
reduced, Borrower shall, within fifteen (15) days after receipt of notice of such
cancellation or reduction in coverage, but in no event later than the effective date of
cancellation or reduction, file with City a certificate showing that the required insurance
has been reinstated or provided through another insurance company or companies.
Upon failure to so file such certificate, City may, without further notice and at its option,
procure such insurance coverage at Borrower's expense, and Borrower shall promptly
reimburse City for such expense upon receipt of billing from City.
(h) Coverage provided by Borrower shall be primary insurance and shall not
be contributing with any insurance, or self-insurance maintained by City, and the
policies shall so provide. The insurance policies shall contain a waiver of subrogation
for the benefit of the City. Borrower shall furnish the required certificates and
endorsements to City prior to the commencement of construction of the Project, and
shall provide City with certified copies of the required insurance policies upon request of
City.
2384517.5
25
FINAL DUBLIN VET PREDEVELOPMENT LOAN AGREEMENT
CITY OF DUBLIN
FISCAL YEAR 2014-15
BUDGET CHANGE FORM
Budget Change Reference#:
City Council's Approval Required,,,,
From Un-Appropriated Reserves Budget Transfer Between Funds
From Designated Reserves x Other
DECREASE,BUDGET AMOUNT I,N CI EASE BUDGET AMOUNT
Account Amount Account Amount
Affordable Housing Fund -Housing -Housing Dev. Loan
2901.5701.66102 $1)4007000
REASON,N FOR,BUDG'ET CHANGE, ,
On 11/18/14 the City Council approved to fund $6.4 million to Eden Housing for the Veterans Family Apartments project, the
budget change of$1.4 million is for pre-development costs
As Presented at the City Council Meeting 1/20/2015
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