HomeMy WebLinkAbout4.07 Regional Street Residential Project Affordable Housing Assistance Agreement (PLPA-2021-00035)r
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
DATE: .Line 20, 2023
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
Agenda Item 4.7
SU B.ECT : Regional Street Residential Project Affordable Housing Assistance Agreement
(PLPA-2021-00035)
Prepared by: Jason Earl, Senior Management Analyst
EXECUTIVE SUMMARY:
The City Council will consider approving an Affordable Housing Assistance Agreement with Eden
Housing's controlled affiliate, Corona/Ely Ranch, Inc., for the development of the 113-unit low -
and very -low-income affordable housing project located at 6541-6543 Regional Street.
STAFF RECOMMENDATION:
Adopt the Resolution Approving an Affordable Housing Assistance Agreement Between the City
of Dublin and Corona/Ely Ranch, Inc. and approve the budget change.
FINANCIAL IMPACT:
Funding to support construction of the proposed affordable housing project includes a $1 million
predevelopment loan from the City's Affordable Housing Fund, a $3.3 million Local Housing Trust
Fund loan funded by a grant from the California Department of Housing and Community
Development, the dedication of a 1.33-acre site at 6541-6543 Regional Street valued at
approximately $5 million, and about $5 million from Dublin's allocation of the Alameda County
Measure A-1 Bond funds.
DESCRIPTION:
Background
Eden Housing proposes to develop a 1.33-acre site that is currently occupied by a one-story
commercial building. The site is located at the corner of Regional Street and the future extension
of St. Patrick Way at 6541-6543 Regional Street as shown in Figure 1. The property is bound by
commercial uses and I-580 to the south, the future 499-unit Avalon West project to the east, the
future extension of St. Patrick Way and commercial uses to the north, and Regional Street and
commercial uses to the west.
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Fi _ure 1. Location Map
The project site is located in the Transit -Oriented District of the Downtown Dublin Specific Plan
(DDSP) as shown in Figure 2.
Fi • ure 2. Transit -Oriented District Vicinit M
Transit -Oriented District
On May 1, 2018, the City entered into a Community Benefit Agreement for the 499-unit Avalon
West project, which outlined contributions in exchange for those units. Those contributions
included dedication of the 1.33-acre site to the City or its designee. Eden Housing was selected as
the City's designee and Staff began working with Eden Housing on an affordable housing project
proposal for this site.
On July 21, 2020, the City Council authorized the City Manager to submit a Local Housing Trust
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Fund (LHTF) grant application to the California Department of Housing and Community
Development for the purpose of funding an affordable housing project on the subject property. On
February 3, 2021, the City was awarded an approximately $3.3 million LHTF grant for the project.
On March 16, 2021, the City Council authorized the City Manager to enter into an Option
Agreement with Eden Housing's controlled affiliate Corona/Ely Ranch, Inc., for the subject
property. The Option Agreement ensured the City's interest in the development of the subject
property with affordable housing. The Option Agreement also requires Eden to enter into an
Affordable Housing Assistance Agreement with the City within six months of executing the Option
Agreement; that requirement was extended. The City Council also acknowledged Eden's request
for a $1 million predevelopment loan from the City's Affordable Housing Fund, to be brought back
for consideration at a future date.
On October 5, 2021, the City Council authorized commitment of $5,048,319 of Alameda County
Measure A-1 Bond Funds to assist with development of the project.
Eden Housing applied for and received Site Development Review Permit approval by the Planning
Commission on November 23, 2021 (Resolution No. 23-21). On December 7, 2021, the City Council
approved a Community Benefit Program Agreement (CBA) with Eden Housing for the Regional
Street project (Resolution No. 137-21). The CBA allocates 113 units to the project in exchange for
certain benefits. These benefits include a project with 100% of the units affordable (except for the
manager's unit) to households earning no more than 60% of area median income, with 30% of the
units affordable to households earning no more than 30% of area median income. The term of the
agreement runs through December 2025, unless extended. Eden has applied for building permits
and is actively seeking funding sources. The five -story, 113-unit rental project will include 55
studios, 57 one -bedrooms and one unrestricted, two -bedroom manager's unit.
Eden Housing is currently requesting approval of an Affordable Housing Assistance Agreement, a
$1 million predevelopment loan from the City's Affordable Housing Fund requiring a budget
change (Attachment 3), and a $3.3 million LHTF loan.
Analysis
The Affordable Housing Assistance Agreement (AHAA) would be entered into with Eden Housing's
controlled affiliate, Corona/Ely Ranch, Inc. The AHAA sets forth the terms for the City's financial
assistance to the Regional Street Senior Affordable Housing Project.
The Predevelopment Loan of $1 million would be funded by the City's Affordable Housing Fund.
The loan begins bearing interest at the date the Promissory Note is completed at 3% interest until
repayment. The Predevelopment Loan is due and payable at Construction Loan Closing.
The LHTF Loan of $3.3 million would be funded by a grant from the California Department of
Housing and Community Development. The loan begins bearing interest at the date the
Promissory Note is completed at 3% interest until repayment. The LHTF Loan is to be repaid via
the City's pro rata percentage of 50% of the residual receipts and is due and payable no later than
the 55th anniversary of the date that a final certificate of occupancy is issued by the City of Dublin.
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The City Council Resolution approving the Affordable Housing Assistance Agreement is included
as Attachment 1, with the Agreement included as Attachment 2.
ENVIRONMENTAL REVIEW:
This information report is not subject to the requirements of the California Environmental Quality
Act (CEQA), pursuant to CEQA Guidelines Section 15378 as it does not meet CEQA's definition of a
project and will not result in direct or indirect physical changes in the environment.
STRATEGIC PLAN INITIATIVE:
Strategy 2: Housing Opportunities
Objective D: Facilitate production of affordable housing for lower income seniors, workforce, and
special needs households.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted and a copy of this Staff Report was provided to the Applicant.
ATTACHMENTS:
1) Resolution Approving an Affordable Housing Assistance Agreement between the City of Dublin
and Corona/Ely Ranch, Inc.
2) Exhibit A to the Resolution - Affordable Housing Assistance Agreement
3) Budget Change Form
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Attachment I
RESOLUTION NO. XX — 23
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AN AFFORDABLE HOUSING ASSISTANCE AGREEMENT BETWEEN THE
CITY OF DUBLIN AND CORONA/ELY RANCH, INC.
WHEREAS, Eden Housing is seeking approval of an Affordable Housing Assistance
Agreement for the 113-unit Regional Street Senior Affordable Housing Project, within walking
distance of the West Dublin/Pleasanton BART Station within the Downtown Dublin Specific Plan
Transit -Oriented District (the "Development"); and
WHEREAS, on July 21, 2020, the City Council authorized the City Manager to submit a
Local Housing Trust Fund (LHTF) grant application to the California Department of Housing and
Community Development (HCD) for the Development, and the City was subsequently awarded
an approximately $3.3 million grant; and
WHEREAS, on March 16, 2021, the City Council adopted Resolution No. 23-21 approving
an Option Agreement between the City of Dublin and Eden Housing's controlled affiliate,
Corona/Ely Ranch, Inc. requiring that Corona/Ely Ranch, Inc. enter into an Affordable Housing
Assistance Agreement with respect to the Development; and
WHEREAS, on November23, 2021, the Planning Commission adopted Resolution No. 21-
11 approving a Site Development Review Permit for the Development; and
WHEREAS, on December 7, 2021, the City Council adopted Resolution No. 137-21
approving a Community Benefit Program Agreement with Corona/Ely Ranch, Inc. with respect to
the Development; and
WHEREAS, on December 7, 2021, the City Council approved the Community Benefit
Agreement with Corona/Ely Ranch, Inc. allocating 113 Residential Allocations out of the
Development Pool established by the Downtown Dublin Specific Plan for the Development for
Affordable Senior and/or Special Needs Housing; and
WHEREAS, Corona/Ely Ranch, Inc. is requesting to enter into an Affordable Housing
Assistance Agreement for the Development which would provide a $1 million predevelopment
loan from the City using the City's Affordable Housing Funds "City Predevelopment Loan"); and
WHEREAS, pursuant to the Affordable Housing Assistance Agreement, Corona/Ely
Ranch, Inc. would execute a Secured Promissory Note ("City Predevelopment Loan Promissory
Note") promising to repay the City Predevelopment Loan, and a Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing ("City Predevelopment Loan Deed of Trust")
securing the City Predevelopment Loan Promissory Note; and
WHEREAS, pursuant to the Affordable Housing Assistance Agreement, the City and
Corona/Ely Ranch, Inc. would execute an Affordable Housing Regulatory Agreement and
Declaration of Restrictive Covenants ("Regulatory Agreement") that would require all of the units
(except for one on -site manager's unit) to be rented at an affordable housing cost to low- and
extremely -low income households; and
Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 1 of 3 155
WHEREAS, Corona/Ely Ranch, Inc. is also requesting a construction/permanent $3,333,
333 LHTF loan for the Development funded by the LHTF grant from HCD ("City
Construction/Permanent Loan"); and
WHEREAS, pursuant to the Affordable Housing Assistance Agreement, Corona/Ely
Ranch, Inc. would execute a Secured Promissory Note ("City Construction/Permanent Loan
Promissory Note") promising to repay the City Construction/Permanent Loan, and a Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing ("City Construction/Permanent Loan
Deed of Trust") securing the City Construction/Permanent Loan Promissory Note; and
WHEREAS, Article 34 of the Constitution of California requires new "low rent housing
projects" that are "developed, constructed, or acquired" by public bodies be authorized by a public
vote, and pursuant to California Health and Safety Code Section 37001.5 the words "developed,
constructed, or acquired" as used in Article 34 of the Constitution of California "shall not be
interpreted to apply to activities of a state public body when that body...provides assistance to a
low -rent housing project and monitors construction or rehabilitation of that project and compliance
with conditions of that assistance to the extent of: (1) Carrying out routine governmental functions.
(2) Performing conventional activities of a lender. [and] (3) Imposing constitutionally mandated or
statutorily authorized conditions accepted by a grantee of assistance"; and
WHEREAS, the assistance to be provided by the City for the Development pursuant to the
Affordable Housing Assistance Agreement solely consists of (1) carrying out routine governmental
functions. (2) performing conventional activities of a lender. and (3) imposing constitutionally
mandated or statutorily authorized conditions accepted by a grantee of assistance within the
meaning of California Health and Safety Code Section 37001.5, and therefore is not subject to
the requirements of Article 34 of the Constitution of California; and
WHEREAS, the approval of this resolution shall be the date of the notice of funding
commitment and the date of adoption of the resolution approving this proposal for purposes of
California Health and Safety Code Section 36005.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin herby
approves the Affordable Housing Assistance Agreement, City Predevelopment Loan Promissory
Note, City Predevelopment Loan Deed of Trust, City Construction/Permanent Loan Promissory
Note, City Construction/Permanent Loan Deed of Trust, and Regulatory Agreement between the
City of Dublin and Corona/Ely Ranch, Inc., substantially in the form attached as Exhibit A to this
Resolution.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the
Affordable Housing Assistance Agreement and Regulatory Agreements, attached hereto as
Exhibit A, and make any necessary, non -substantive changes to such documents to carry out
the intent of this Resolution.
{Signatures on the following page}
Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 2 of 3 156
PASSED, APPROVED AND ADOPTED this 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 3 of 3 157
Attachment 2
AFFORDABLE HOUSING ASSISTANCE
AGREEMENT
by and between
THE CITY OF DUBLIN
and
CORONA/ELY RANCH, INC.
(Regional Street Apartments)
158
AFFORDABLE HOUSING ASSISTANCE AGREEMENT
(Regional Street Apartments)
THIS AFFORDABLE HOUSING ASSISTANCE AGREEMENT (this "Agreement") is
entered into effective as of , 2023 ("Effective Date") by and between the CITY
OF DUBLIN, a California municipal corporation ("City"), and CORONA/ELY RANCH, INC., a
California nonprofit public benefit corporation ("Developer"). City and Developer are hereinafter
collectively referred to as the "Parties."
RECITALS
A. Developer is the owner of approximately 1.33 acres of previously developed real
property located at 6541- 6543 Regional Street in the City of Dublin, California (the "Property").
B. City and Developer have entered into a Community Benefit Program Agreement
dated December 7, 2021, as amended June 7, 2023, with respect to the proposed development of a
multifamily rental housing development on the Property for seniors and/or persons with special
needs, with not less than one hundred thirteen (113) apartment units (the "Development"). The
Community Benefit Program Agreement provides for Developer to construct the Development and
to restrict the rental of all of the apartment units in the Development to lower income persons at an
affordable rent. The Community Benefit Program Agreement further provides for the City to grant
the Development one hundred thirteen (113) Residential Allocations from the Downtown Dublin
Specific Plan.
C. In addition, City and Developer have entered into an Option Agreement dated March
16, 2021, pursuant to which the City was given an option to purchase the Property under certain
limited circumstances set forth in Section 2(b) thereof, including that the City and Developer have
not timely entered into a mutually acceptable Affordable Housing Assistance Agreement ("AHAA")
as described in Section 2(b)(i) thereof. The Parties intend that this Agreement shall satisfy the
condition set forth in Section 2(b)(i) of the Option Agreement that the City and Developer timely
enter into a mutually acceptable AHAA. This Agreement is not intended to satisfy, modify or
terminate the other two conditions to the exercise of the option as set forth in Section 2(b)(ii) and
Section 2(b)(iii) of the Option Agreement.
D. In order to financially assist the Development, City and Developer desire for City to
provide to Developer (a) a low -interest loan of One Million Dollars ($1,000,000) from the City's
Affordable Housing Fund to be used for predevelopment expenses (the "City Predevelopment
Loan"), and (b) a low -interest construction and permanent loan of Three Million Three Hundred
Thirty -Three Thousand Three Hundred Thirty -Three Dollars ($3,333,333) from the Local Housing
Trust Funds received by the City from the State of California to be used for construction expenses
(the "City Construction/Permanent Loan"), pursuant to the terms and conditions set forth in this
Agreement.
E. Developer has represented to the City, and the City has determined that the Developer
has the necessary expertise, skill and ability to carry out the commitments set forth in this
Agreement. The City has further determined that this Agreement is in the best interests of the City,
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and will materially contribute to the improvement of the City by improving the supply of affordable
housing therein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and good
and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows.
ARTICLE I
DEFINITIONS
1.1. Definitions. The following terms shall have the meanings set forth in the Sections
referenced below whenever used in this Agreement and the Exhibits attached hereto. Additional
terms are defined in the Recitals and text of this Agreement.
(a) "Agreement" means this Affordable Housing Assistance Agreement,
including the attached Exhibits and all subsequent amendments to this Agreement and
implementation agreements.
(b) "Certificate of Completion" means the certificate to be provided by City to
Developer in accordance with Section 3.12, in the form attached hereto as Exhibit H.
(c) "City" means the City of Dublin, a California municipal corporation.
(d) "City Construction/Permanent Loan" means the loan from the City to the
Developer in the amount of Three Million Three Hundred Thirty -Three Thousand Three Hundred
Thirty -Three Dollars ($3,333,333), evidenced by the City Construction/Permanent Loan Promissory
Note.
(e) "City Construction/Permanent Loan Deed of Trust" means the deed of
trust that will encumber the Developer's interest in the Property to secure repayment of the City
Construction/Permanent Loan Promissory Note, and will be recorded against the Property,
substantially in the form attached hereto as Exhibit F_ and incorporated herein.
(f) "City Construction/Permanent Loan Promissory Note" means the
promissory note that will evidence the Developer's obligation to repay the City
Construction/Permanent Loan, substantially in the form attached hereto as Exhibit E and
incorporated herein.
(g) "City Deeds of Trust" shall mean the City Predevelopment Loan Deed of
Trust and City Construction/Permanent Loan Deed of Trust.
(h) "City Documents" means, collectively, this Agreement, the City
Predevelopment Loan Promissory Note, the City Predevelopment Loan Deed of Trust, the City
Construction/Permanent Loan Promissory Note, the City Construction/Permanent Loan Deed of
Trust, the City Regulatory Agreement, and all other documents required to be executed by the
Developer in connection with the transaction contemplated by this Agreement.
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(i) "City Loans" shall mean the City Predevelopment Loan and City
Construction/Permanent Loan.
(j) "City Manager" means the City Manager of the City.
(k) "City Predevelopment Loan" means the loan from the City to the Developer
in the amount of One Million Dollars ($1,000,000), evidenced by the City Predevelopment Loan
Promissory Note.
(1) "City Predevelopment Loan Deed of Trust" means the deed of trust that
will encumber the Developer's interest in the Property to secure repayment of the City
Predevelopment Loan Promissory Note, and will be recorded against the Property, substantially in
the form attached hereto as Exhibit D and incorporated herein.
(m) "City Predevelopment Loan Promissory Note" means the promissory note
that will evidence the Developer's obligation to repay the City Predevelopment Loan, substantially in
the form attached hereto as Exhibit C and incorporated herein.
(n) "City Promissory Notes" shall mean the City Predevelopment Loan
Promissory Note and the City Construction/Permanent Loan Promissory Note.
(o) "City Regulatory Agreement" means the regulatory agreement and
declaration of restrictive covenants to be executed by the Parties and recorded against the Property,
substantially in the form attached hereto as Exhibit I and incorporated herein.
(p) "Conditions of Approval" has the meaning set forth in Section 3.1.
(q) "Construction Loan Closing" means the close of escrow for the Developer's
construction financing for the construction of the Development.
(r) "Construction Plans" has the meaning set forth in Section 3.8.
(s) "Council Members" means the members of the City Council of the City.
(t) "County" means the County of Alameda, California.
(u) "Developer" means Corona/Ely Ranch, Inc., a California nonprofit public
benefit corporation, and its permitted successors and assigns as set forth herein.
(v) "Development" means the Property and the Improvements.
(w) "Environmental Laws" has the meaning set forth in Section 8.4.
(x) "Event of Developer Default" has the meaning set forth in Section 9.1.
(y) "Event of City Default" has the meaning set forth in Section 9.2.
(z) "Hazardous Materials" has the meaning set forth in Section 8.3.
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(aa) "Improvements" means: (i) one hundred thirteen (113) apartment units,
including one (1) unrestricted manager's unit, to be constructed in accordance with this Agreement,
and (ii) related onsite improvements, parking, landscaping and other onsite improvements located or
to be located on the Property, and all onsite and offsite improvements required by the City, all as
more particularly set forth in the Scope of Development attached as Exhibit H.
(bb) "Indemnitees" means the City and its elected and appointed officers,
officials, employees, agents, consultants, and contractors.
(cc) "Investor" means a tax credit investor to be identified by written notice from
Developer to City.
(dd) "Parties" means the City and the Developer. "Party" means either the City or
the Developer.
(ee) "Partnership Agreement" means the limited partnership agreement of the
Developer, as it may be amended and restated.
(ff) "Permanent Loan Conversion" means the closing of the Developer's
permanent financing for the Development.
(gg) "Preliminary Financing Plan" means the Developer's Financing Plan for
financing the acquisition of the Property and the construction of the Development in the form
attached hereto as Exhibit B and incorporated herein.
(hh) "Prevailing Wage Law" has the meaning set forth in Section 3.14.
(ii) "Property" means the real property to be acquired and developed by the
Developer pursuant to this Agreement, which real property is more particularly described in the
Legal Description attached hereto as Exhibit A which is incorporated herein.
(a) "Residual Receipts" means the excess of annual Operating Revenues over
annual Operating Expenses for the Development. "Operating Revenues" means all income derived
from the Development, and includes, without limitation: (i) rents; (ii) rent subsidy payments
received on behalf of tenants; and (iii) receipts from laundry, parking, vending, or other services in
which a fee is charged. "Operating Expenses" means all direct costs and expenses necessary to
operate the Development including: (1) debt service on any loans secured by the Property as
described in the Revised Financing Plan or otherwise approved by City, provided that such loans
have been used to develop or improve the Development (or to refinance loans used for development
or improvement of the Development); (2) resident service program and property management fees
and costs; (3) property taxes and assessments (if any); (4) insurance premiums; (5) maintenance and
repair; (6) reasonable payments to reserves for operating contingencies, replacement of capital items,
and other reserve uses in such amounts as are required by the loans described in paragraph (1); (7)
deferred developer fee to the Developer for development services for the Development in such
amount as set forth in the Revised Financing Plan, as such amount may be updated by the final cost
certification upon completion of construction; (8) credit adjuster payments, limited partner loans,
and developer loans, all as set forth in the Partnership Agreement; and (9) payments for partnership
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management fee, asset management fees, and other fees payable to a partner of the Partnership
pursuant to the Partnership Agreement, in such amounts as are set forth in the Revised Financing
Plan, including any annual inflationary increases included in the Revised Financing Plan.
(jj) "Revised Financing Plan" means the Developer's updated and revised
Financing Plan for financing the construction of the Development approved by the City pursuant to
Section 4.5 hereof.
(kk) "Schedule of Performance" means the summary schedule of actions to be
taken by the Parties pursuant to this Agreement to achieve the construction of the Improvements.
The Schedule of Performance is attached to this Agreement as Exhibit G.
(11) "Scope of Development" means the description of the Development which is
attached to this Agreement as Exhibit H.
(mm) "Term" means the term of this Agreement, which shall commence on the
Effective Date and shall continue until expiration or termination of the City Regulatory Agreement,
except for such provisions hereof which survive the expiration or termination of the City Regulatory
Agreement.
(nn)
"Title Company" means Old Republic Title Company.
(oo) "Title Report" means the preliminary title report for the Property prepared by
the Title Company, as it may be updated from time to time.
(pp)
"Transfer" has the meaning set forth in Section 6.2.
ARTICLE II
REPRESENTATIONS; EFFECTIVE DATE AND TERM
2.1. Developer's Representations. Developer represents and warrants to City as follows,
and Developer covenants that until the expiration or earlier termination of this Agreement, upon
learning of any fact or condition which would cause any of the warranties and representations in this
Section 2.1 not to be true, Developer shall immediately give written notice of such fact or condition
to City. Developer acknowledges that City shall rely upon Developer's representations made herein
notwithstanding any investigation made by or on behalf of City.
(a) Authority. Developer is a nonprofit corporation duly formed and in good
standing under the laws of the State of California. Developer has the full right, power and authority
to undertake all obligations of Developer as provided herein, and Developer's execution,
performance and delivery of this Agreement and the City Documents have been duly authorized by
all requisite actions.
(b) No Conflict. Developer's execution, delivery and performance of its
obligations under this Agreement will not constitute a default or a breach under any contract,
agreement or order to which Developer is a party or by which it is bound.
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(c) No Litigation or Other Proceeding. No litigation or other proceeding (whether
administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or
delay the ability of Developer to perform its obligations under this Agreement.
(d) No Developer Bankruptcy. Developer is not the subject of a bankruptcy or
insolvency proceeding.
2.2. City Representations. City represents and warrants to Developer as follows, and City
covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact
or condition which would cause any of the warranties and representations in this Section 2.2 not to
be true, City shall immediately give written notice of such fact or condition to Developer. City
acknowledges that Developer shall rely upon City's representations made herein notwithstanding
any investigation made by or on behalf of Developer.
(a) Authority. City is a municipal corporation duly organized and in good
standing under the laws of the State of California. City has the full right, power and authority to
undertake all of the respective obligations as provided herein, and the execution, performance and
delivery of this Agreement by City has been duly authorized by all requisite actions on the part of
the City.
(b) No Conflict. City's execution, delivery and performance of its obligations
under this Agreement will not constitute a default or a breach under any contract, agreement or order
to which City is a party or by which it is bound.
(c) No Litigation or Other Proceeding. No litigation or other proceeding (whether
administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or
delay the ability of City to perform its obligations under this Agreement.
(d) No Bankruptcy. City is not the subject of a bankruptcy or insolvency
proceeding.
2.3. Effective Date. The representations and warranties of Developer and City hereunder
shall be effective as of the Effective Date.
ARTICLE III
DEVELOPMENT OF THE PROJECT
3.1. Scope of Development. Developer shall construct and develop the Development on
the Property substantially in accordance with the terms and conditions of this Agreement, the Scope
of Development attached hereto as Exhibit H (subject to the last sentence of this Section 3.1), and in
compliance with the terms and conditions of all approvals, entitlements and permits that the City or
any other governmental body or agency with jurisdiction over the Development or the Property has
granted or issued as of the date hereof or may hereafter grant or issue in connection with
development of the Development, including without limitation, all mitigation measures imposed in
connection with environmental review of the Property and the Development and all conditions of
approval imposed in connection with any entitlements, approvals or permits (all of the foregoing
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approvals, entitlements, permits, mitigation measures and conditions of approval are hereafter
collectively referred to as the "Conditions of Approval"). Notwithstanding the foregoing, City
acknowledges that the Development is currently in the conceptual design phase and that aspects of
the Scope of Development may need to be changed, and therefore agrees to reasonably discuss such
proposed changes to the Scope of Development with Developer in good faith, and shall not
unreasonably withhold consent to such proposed changes to the Scope of Development.
3.2. Development Approvals. Developer acknowledges and agrees that execution of this
Agreement by City does not constitute approval for the purpose of the issuance of building permits
for the construction of the Development, does not limit in any manner the discretion of City in such
approval process, and does not relieve Developer from the obligation to obtain all necessary
entitlements, approvals, and permits for the construction of the Development, including without
limitation, the approval of architectural plans, and the completion of any required environmental
review of the Development pursuant to CEQA.
Developer covenants that it shall: (i) obtain all necessary permits and approvals which may
be required by City and any other governmental agency having jurisdiction over the construction of
the Development or the development of the Property, (ii) comply with all Conditions of Approval,
(iii) comply with all mitigation measures, if any, imposed in connection with any environmental
review of the Property or the Development, and (iv) not commence construction of the Development
prior to issuance of required permits.
3.3. Fees. Developer shall be solely responsible for, and shall promptly pay when due, all
customary and usual fees and charges of City in connection with obtaining building permits and
other approvals for the Development, including without limitation, those related to the processing
and consideration of amendments, if any, to the current entitlements, any related approvals and
permits, environmental review, architectural review, historic review, and any subsequent approvals
for the Development or the development of the Property.
3.4. Schedule of Performance. Developer shall commence and complete construction of
the Development and shall satisfy all other obligations of Developer under this Agreement within the
time periods set forth herein and in the Schedule of Performance attached hereto as Exhibit G, as
such time periods may be extended upon the mutual written consent of the Parties. Developer's
failure to commence or complete construction of the Development in accordance with the foregoing
schedule as such may be amended by the written consent of the Parties shall constitute a default
hereunder. The Developer shall provide quarterly progress reports to the City regarding the status of
the construction of the Development. The Developer shall provide the reports and information
required under this Section until the Development is fully leased up.
3.5. Cost of Acquisition and Construction. Except as expressly set forth herein, Developer
shall be solely responsible for all direct and indirect costs and expenses incurred in connection with
the acquisition of the Property, the design, development and construction of the Development and
compliance with the Conditions of Approval, including without limitation the installation and
construction of all off -site or on -site improvements required by City in connection therewith, and
none of such costs and expenses shall be the obligation of the City.
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3.6. Rights of Access: Books and Records. For the purpose of ensuring that the
Development is developed in compliance with this Agreement, Developer shall permit
representatives of the City to enter upon the Property to inspect the Development following 48
hours' written notice (except in the case of emergency in which case such notice as may be practical
under the circumstances shall be provided). Upon request, Developer shall permit the City to inspect
at reasonable times and on a confidential basis those books, records and all other documents of
Developer necessary to determine Developer's compliance with the terms of this Agreement.
3.7. City Disclaimer. Developer acknowledges that the City is under no obligation, and
City neither undertakes or assumes any responsibility or duty to Developer or to any third party, to in
any manner review, supervise, or inspect the progress of construction or the operation of the
Development. Developer and all third parties shall rely entirely upon its or their own supervision and
inspection in determining the quality and suitability of the materials and work, the performance of
architects, subcontractors, and material suppliers, and all other matters relating to the construction
and operation of the Development. Any review or inspection undertaken by the City is solely for the
purpose of determining whether Developer is properly discharging its obligations under this
Agreement, and shall not be relied upon by Developer or any third party as a warranty or
representation by the City as to the quality of the design or construction of the Development and
other improvements constructed on the Property (collectively, the "Improvements") or otherwise.
3.8. Construction Plans. Developer shall submit to City detailed construction plans for
the Development (the "Construction Plans") for City's approval, which approval shall not be
unreasonably withheld or delayed. As used herein "Construction Plans" means all construction
documents upon which Developer and Developer's contractors shall rely in the construction of the
Development and development of the Property and shall include, without limitation, final
architectural drawings and materials specifications. The Construction Plans shall be based upon the
Scope of Development and upon the development approvals issued by the City for the Development,
and shall not materially deviate therefrom without the express written consent of City. Such
approval of the Construction Plans by the City shall not relieve Developer's obligation to obtain any
and all approvals and permits required by the City or the City Building Division.
If rejected by the City in whole or in part, Developer shall submit new or corrected
Construction Plans within forty-five (45) days after notification of the City's rejection and the
reasons therefor. The City shall then have thirty (30) days to review and approve Developer's new
or corrected Construction Plans. The provisions of this Section relating to time periods for approval,
rejection, or resubmission of new or corrected Construction Plans shall continue to apply until the
Construction Plans have been approved by the City.
3.9. Construction Pursuant to Plans. Developer shall construct and develop the
Development in accordance with the approved Construction Plans, the Conditions of Approval, and
all other permits and approvals granted by the City pertaining to development of the Development.
Developer shall comply with all directions, rules and regulations of any fire marshal, health officer,
building inspector or other officer of every governmental agency having jurisdiction over the
Property or the Development. Each element of the work shall proceed only after procurement of
each permit, license or other authorization that may be required for such element by any
governmental agency having jurisdiction. All design and construction work on the Development
shall be performed by licensed contractors, engineers or architects, as applicable.
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3.10. Change in Construction Plans. If Developer desires to make any material change in
the approved Construction Plans, Developer shall submit the proposed change in writing to the City
for its written approval, which approval shall not be unreasonably withheld or delayed if the
Construction Plans, as modified by any proposed change, conform to the requirements of this
Agreement and any approvals issued by City after the Effective Date. The Parties shall meet in good
faith to discuss the changes if the City propose to reject the changes. Any change in the Construction
Plans required in order to comply with applicable codes shall be deemed approved, so long as such
change does not substantially nor materially change the design, function, use, or amenities of the
Development as shown on the latest approved Construction Plans. For purposes of this section, a
"material change" means a change order that would result in a change of costs of a single item of
work of One Hundred Fifty Thousand Dollars ($150,000) or any set of changes in the work the costs
of which cumulatively exceeds Five Hundred Thousand Dollars ($500,000) or more.
3.11. Defects in Plans. City shall not be responsible to Developer or to any third party for
any defect in the Construction Plans or for any structural or other defect in any work done pursuant
to the Construction Plans. Developer shall indemnify, defend (with counsel approved by City, such
approval not to be unreasonably withheld) and hold harmless the Indemnitees from and against all
Claims arising out of, or relating to, or alleged to arise from or relate to defects in the Construction
Plans or defects in any work done pursuant to the Construction Plans whether or not any insurance
policies shall have been determined to be applicable to any such Claims. Developer's
indemnification obligations set forth in this Section shall survive the expiration or earlier termination
of this Agreement and the recordation of a Certificate of Completion. It is further agreed that City
does not, and shall not, waive any rights against Developer which it may have by reason of this
indemnity and hold harmless agreement because of the acceptance by City, or Developer's deposit
with City of any of the insurance policies described in this Agreement. Developer's indemnification
obligations pursuant to this Section shall not extend to Claims arising due to the gross negligence or
willful misconduct of the Indemnitees.
3.12. Certificate of Completion for Development. Promptly after completion of
construction of the Development, issuance of a final Certificate of Occupancy (or other applicable
final City Building Department approval) by the City, and the written request of Developer, the City
will provide an instrument ("Certificate of Completion") so certifying. The Certificate of
Completion shall be conclusive evidence that Developer has satisfied its obligations regarding the
construction and development of the Development on the Property.
The Certificate of Completion shall be issued substantially in the form attached hereto as
Exhibit J, and at Developer's option, shall be recorded in the official records of Alameda County.
The Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any
obligation of Developer to any holder of a deed of trust or mortgage securing money loaned to
finance the Development or any part thereof and shall not be deemed a notice of completion under
the California Civil Code, nor shall such Certificate provide evidence that Developer has satisfied
any obligation that survives the expiration of this Agreement, including without limitation,
Developer's obligations pursuant to the City Regulatory Agreement.
3.13. Equal Opportunity. During the construction of the Development, there shall be no
discrimination on the basis of race, religious creed, color, national origin, ancestry, physical
disability, mental disability, reproductive health decisionmaking, medical condition, genetic
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information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation,
or veteran or military status of any person in the hiring, firing, promoting or demoting of any person
engaged in construction of the Development, and Developer shall direct its contractors and
subcontractors to refrain from discrimination on such basis.
3.14. Prevailing Wage Requirements. If and to the extent required by state and federal
prevailing wage laws, Developer and its contractors and agents shall pay prevailing wages for all
construction, alteration, demolition, installation, and repair work performed with respect to the
construction of the Development as required herein and described in the Scope of Development, in
compliance with Labor Code Section 1720, et seq., and its implementing regulations, and perform all
other obligations including the employment of apprentices in compliance with Labor Code Section
1770, et seq., keeping of all records required pursuant to Labor Code Section 1776, complying with
the maximum hours requirements of Labor Code Sections 1810 through 1815, and fulfilling all
duties under the Civil Code or any other provision of law pertaining to providing, obtaining and
maintaining all bonds to secure the payment of wages to workers required to be paid prevailing
wages, all as may be amended from time to time (the "Prevailing Wage Law"). City does not make
any representations to Developer as to the applicability of the Prevailing Wage Law to the
construction of the Development, and Developer agrees and acknowledges that it is not relying on
any representations of City in making its determination as to the applicability of the Prevailing Wage
Law. It is agreed by the Parties that, in connection with the construction of the Development, as
between City and Developer, Developer shall be solely responsible for determining whether the
Prevailing Wage Law is applicable to the construction of the Development, and Developer shall bear
all risks of payment or non-payment of prevailing wages under the Prevailing Wage Law and/or the
implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or
any other similar law. For purposes of this paragraph, "construction" includes work performed
during the design and preconstruction phases of construction, including, but not limited to,
inspection and land surveying work, and work performed during the postconstruction phases of
construction, including, but not limited to, all cleanup work at the jobsite. The Developer shall
periodically, upon request of the City, certify to the City that, to its knowledge, it is in compliance
with the requirements of this paragraph.
Developer shall indemnify, defend (with counsel approved by City, such approval not to be
unreasonably withheld) and hold the City, and its respective elected and appointed officers, officials,
employees, agents, consultants, and contractors (collectively, the "Indemnitees"), harmless from
and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of
litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency,
fine, order, and damage (all of the foregoing collectively "Claims") which directly or indirectly, in
whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be
caused by, arise in connection with, or relate to, the payment or requirement of payment of
prevailing wages or the requirement of competitive bidding in the construction of the Development,
the failure to comply with any state or federal labor laws, regulations or standards in connection with
this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of
Developer related to this Agreement with respect to the payment or requirement of payment of
prevailing wages or the requirement of competitive bidding, whether or not any insurance policies
shall have been determined to be applicable to any such Claims. It is further agreed that City does
not and shall not waive any rights against Developer which it may have by reason of this indemnity
and hold harmless agreement because of the acceptance by City, or Developer's deposit with City of
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any of the insurance policies described in this Agreement. The provisions of this Section 3.14 shall
survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of
Completion for the Development. Developer's indemnification obligations under this Section 3.14
shall not apply to any Claim which arises as a result of an Indemnitee's gross negligence or willful
misconduct.
3.15. Compliance with Laws. Developer shall carry out and shall cause its contractors to
carry out the construction of the Development in conformity with all applicable federal, state and
local laws, rules, ordinances and regulations, including without limitation, all applicable federal and
state labor laws and standards, the City zoning and development standards, building, plumbing,
mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable
disabled and handicapped access requirements, including without limitation, the Americans with
Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq.,
Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et
seq.
3.16. Liens and Stop Notices. Until the expiration of the term of the City Regulatory
Agreement and full repayment of the City Loans, Developer shall not allow to be placed on the
Property or any part thereof any lien or stop notice on account of materials supplied to or labor
performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting
the Development, Developer shall within thirty (30) days of such recording or service: (a) pay and
discharge (or cause to be paid and discharged) the same; or (b) effect the release thereof by
recording and delivering (or causing to be recorded and delivered) to the party entitled thereto a
surety bond in sufficient form and amount or provide other assurance satisfactory to City that the
claim of lien or stop notice will be paid or discharged.
3.17. Right of City to Satisfy Liens on the Property. If Developer fails to satisfy or
discharge any lien or stop notice on the Property pursuant to Section 3.16 above, the City shall have
the right, but not the obligation, to satisfy any such liens or stop notices at Developer's expense and
without further notice to Developer. In such event Developer shall be liable for and shall
immediately reimburse City for such paid lien or stop notice. Alternatively, the City may require
Developer to immediately deposit with City the amount necessary to satisfy such lien or claim
pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is
adversely determined against Developer. Developer shall file a valid notice of cessation or notice of
completion upon cessation of construction of the Development for a continuous period of thirty (30)
days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens
against the Property or the Development. The City may (but has no obligation to) record any notices
of completion or cessation of labor, or any other notice that the City deems necessary or desirable to
protect its interest in the Property and the Development.
ARTICLE IV
CITY FINANCIAL ASSISTANCE
4.1. City Predevelopment Loan. The City shall provide a loan to Developer from the
City's Affordable Housing Fund in the amount of One Million Dollars ($1,000,000) (the "City
Predevelopment Loan"), upon the terms and conditions and for the purposes set forth in this
Agreement. The City Predevelopment Loan shall be evidenced by a promissory note (the "City
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Predevelopment Loan Promissory Note") substantially in the form attached hereto as Exhibit C,
and shall be secured by a deed of trust (the "City Predevelopment Loan Deed of Trust") executed
by Developer as Trustor substantially in the form attached hereto as Exhibit D and recorded against
the Property concurrently with the effective date of the Promissory Note, and subordinate only to
such liens as City shall approve in writing. The outstanding principal balance of the Note will accrue
simple interest at the rate of three percent (3%) per annum.
Provided that Developer has complied with all conditions precedent to disbursement of the
City Predevelopment Loan set forth in Section 4.6, the proceeds of the City Predevelopment Loan
("City Predevelopment Loan Proceeds") shall be disbursed promptly thereafter to fund
predevelopment costs of the Development, in accordance with the Loan Budget included in the
Preliminary Financing Plan. City Predevelopment Loan Proceeds shall not be used or disbursed for
developer fee, overhead or profit.
4.2. City Construction/Permanent Loan. The City shall provide a loan to Developer from
the Local Housing Trust Fund grant received by City from the State of California, in the amount of
Three Million Three Hundred Thirty -Three Thousand Three Hundred Thirty -Three Dollars
($3,333,333) (the "City Construction/Permanent Loan"), upon the terms and conditions and for
the purposes set forth in this Agreement. The City Construction/Permanent Loan shall be evidenced
by a promissory note (the "City Construction/Permanent Loan Promissory Note") substantially
in the form attached hereto as Exhibit E, and shall be secured by a deed of trust (the "City
Construction/Permanent Loan Deed of Trust") executed by Developer as Trustor substantially in
the form attached hereto as Exhibit F and recorded against the Property concurrently with the
effective date of the City Construction/Permanent Loan Promissory Note, and subordinate only to
such liens as City shall approve in writing. The outstanding principal balance of the Note will accrue
simple interest at the rate of three percent (3%) per annum.
Provided that Developer has complied with all conditions precedent to disbursement of the
City Construction/Permanent Loan set forth in Section 4.7, the proceeds of the City
Construction/Permanent Loan ("City Construction/Permanent Loan Proceeds") shall be disbursed
promptly thereafter to fund costs of the Development, in accordance with the Loan Budget included
in the Preliminary Financing Plan. City Construction/Permanent Loan Proceeds shall not be used or
disbursed for developer fee, overhead or profit.
4.3. Security. As security for repayment of the City Predevelopment Loan Promissory
Note, Developer shall execute the City Predevelopment Loan Deed of Trust, pursuant to which City
shall be provided a lien against the Property and the Improvements. The City Predevelopment Loan
Deed of Trust shall be recorded in the Official Records concurrently with the effective date of the
Promissory Note. The City Predevelopment Loan Deed of Trust shall be in first lien priority and
shall not be subordinate to any other financing.
As security for repayment of the City Construction/Permanent Loan Promissory Note,
Developer shall execute the City Construction/Permanent Loan Deed of Trust, pursuant to which
City shall be provided a lien against the Property and the Improvements. The City
Construction/Permanent Loan Deed of Trust shall be recorded in the Official Records concurrently
with the effective date of the City Construction/Permanent Loan Promissory Note. The City
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Construction/Permanent Loan Deed of Trust shall be subordinate to such loans that are shown as
senior in the Revised Financing Plan approved by the City.
4.4. Title Policies. The Title Company shall issue a lender's policy of title insurance
naming City as the insured, in a policy amount not less than the principal amount of the City
Predevelopment Loan, showing Developer as holding fee title to the Property and insuring the City
Predevelopment Loan Deed of Trust to be a valid lien on the Property subject only to exceptions
approved by City (the "City Predevelopment Loan Title Policy"), together with such endorsements
as are required by the City. The Title Company shall issue a lender's policy of title insurance
naming City as the insured, in a policy amount not less than the principal amount of the City
Construction/Permanent Loan, showing Developer as holding fee title to the Property and insuring
the City Construction/Permanent Loan Deed of Trust to be a valid lien on the Property subject only
to exceptions approved by City (the "City Construction/Permanent Loan Title Policy"), together
with such endorsements as are required by the City.
4.5. Financing Plan. As set forth in the attached Exhibit B, Developer has provided City
with a preliminary financing plan for the Development ("Preliminary Financing Plan") which
describes (i) the estimated costs of development, including predevelopment costs, acquisition costs,
and hard and soft construction costs, (ii) an operating pro forma which describes projected revenue
and expenses for the Development, and (iii) identification of sources of acquisition, predevelopment,
construction and permanent financing. The Parties acknowledge that certain proposed forms of
funding in the Preliminary Financing Plan are available through competitive funding programs, and
that the Development may not be successful in actually obtaining one or more of such forms of
financing. The Developer shall submit timely and complete applications for each of the forms of
financing which are included in the Preliminary Financing Plan, in a manner that maximizes the
competitiveness thereof. In the event any of Developer's applications therefor are disapproved,
Developer shall continue to submit such applications in each subsequent application round until
successful. The Parties anticipate that the types and amounts of financing for the Development will
change and be refined during the period between the Effective Date and the Construction Loan
Closing. Accordingly, following the disbursement of the City Predevelopment Loan Proceeds,
Developer shall submit quarterly updated and revised financing plans (each, a "Revised Financing
Plan") which shall include a revised development budget, updated amounts for each of the foregoing
funding sources and any other funding sources obtained, and copies of written commitments
received for each funding source. Developer shall submit the first Revised Financing Plan no more
than three (3) months following the date on which the City Predevelopment Loan Proceeds are
disbursed and shall continue to provide the City a Revised Financing Plan on a quarterly basis
thereafter until the Construction Loan Closing. The City shall promptly review and shall provide
Developer written approval or disapproval of each Revised Financing Plan in writing within thirty
(30) days, provided that the Revised Financing Plan under review conforms to the terms of this
Agreement. The City's review of each Revised Financing Plan shall be limited to (i) determining if
the financing contemplated therein will be reasonably available and will provide sufficient funds to
undertake and complete construction of the Development, and (ii) determining if the updates to the
Revised Financing Plan then under review are consistent with the terms of this Agreement. If the
City disapproves an update to the Revised Financing Plan, the City shall specify in writing the
reasons for the disapproval within thirty (30) days of receipt. Within thirty (30) days of receiving the
City's written notification of disapproval, the Developer shall thereafter resubmit a further amended
Revised Financing Plan to the City for review. The City shall either approve or disapprove the
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resubmitted Revised Financing Plan from Developer within thirty (30) days of receiving the
resubmission. If the City approves of the resubmitted Revised Financing Plan, Developer will
resume quarterly submission of Revised Financing Plans with the subsequent Revised Financing
Plan to be submitted not less than three (3) months after receiving the City's approval of the prior
Revised Financing Plan. In the event the City disapproves the resubmitted Revised Financing Plan,
the City and the Developer agree to negotiate in good faith to develop a submission that is
reasonably acceptable to both the City and the Developer within a reasonable period of time.
4.6. Conditions to Disbursement of City Predevelopment Loan. City's obligation to fund
the City Predevelopment Loan for the purposes of Section 4.1 above is conditioned upon the
satisfaction of all of the following conditions:
(a) Developer's delivery to City of each of the following: (i) certificate of good
standing, certified by the Secretary of State indicating that Developer is properly organized, in good
standing, and authorized to do business in the State of California, and (ii) a certified resolution
indicating that Developer has authorized to consummate this transaction and that the persons
executing this Agreement and the City Documents on Developer's behalf have been duly authorized
to do so.
(b) Developer has acquired fee title to the Property or will acquire fee title
concurrently with the disbursement of the City Predevelopment Loan proceeds.
(c) Developer's delivery to the City of evidence of insurance coverage pertaining
to property insurance and commercial general liability (but not builder's risk or other insurance
associated with the construction of the Development) in accordance with the requirements set forth
in Section 10.2.
(d) Developer's delivery of the City Predevelopment Loan Promissory Note, City
Predevelopment Loan Deed of Trust and City Regulatory Agreement, each fully executed and
acknowledged as applicable.
(e) Recordation of the City Regulatory Agreement and the City Predevelopment
Loan Deed of Trust in the Official Records simultaneously with the disbursement of the first City
Predevelopment Loan Proceeds.
(f) The Title Company's issuance of the City Title Policy, together with such
endorsements as are required by the City, in accordance with Section 4.4 hereof.
(g) There exists no Event of Developer Default nor any act, failure, omission or
condition that would constitute an Event of Developer Default under this Agreement.
(h) The City's receipt of a written requisition for disbursement of funds from
Developer specifying the amount and use of the requested funds.
(i) The proposed use of the funds is in accordance with the City Loans Budget in
the Preliminary Financing Plan.
4.7. Conditions to Disbursement of City Construction/Permanent Loan.
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City's obligation to fund the City Construction/Permanent Loan for the purposes of Section
4.2 above is conditioned upon the satisfaction of all of the following conditions:
(a) Developer's delivery to the City of evidence of all insurance coverage
required in accordance with the requirements set forth in Section 10.2.
(b) Developer's delivery of the City Construction/Permanent Loan Promissory
Note and City Construction/Permanent Loan Deed of Trust, each fully executed and acknowledged
as applicable.
(c) Recordation of the City Construction/Permanent Loan Deed of Trust in the
Official Records simultaneously with the Construction Loan Closing.
(d) The Title Company's issuance of the City Construction/Permanent Loan Title
Policy, together with such endorsements as are required by the City, in accordance with Section 4.4
hereof.
(e) There exists no Event of Developer Default nor any act, failure, omission or
condition that would constitute an Event of Developer Default under this Agreement.
(f) The City's receipt of a written requisition for disbursement of funds from
Developer specifying the amount and use of the requested funds.
(g) The proposed use of the funds is in accordance with the City Loans Budget in
the Revised Financing Plan.
4.8. Repayment of the City Predevelopment Loan. Developer shall pay all outstanding
principal and accrued interest on the City Predevelopment Loan, in full, on the earliest to occur of (i)
a Developer Event of Default for which the City exercises its right to cause the City Predevelopment
Loan indebtedness to become immediately due and payable, and (ii) the Construction Loan Closing.
4.9. Repayment of the City Construction/Permanent Loan.
(a) Annual Payments. Upon and after the completion of the Development, the
Developer shall make annual payments of principal and interest to the City in the amount of the City
Prorata Percentage of fifty percent (50%) of the Residual Receipts. Such annual payments shall be
due and payable in arrears no later than May 1 of each year with respect to the previous calendar
year, commencing on May 1st of the first year after the City's issuance of a certificate of occupancy
for the Development. The Developer shall provide the City with any documentation reasonably
requested by the City to substantiate the Developer's determination of Residual Receipts.
Repayments shall be credited first to interest, then to principal.
(b) Sharing of Residual Receipts with Other Lenders. The City acknowledges
that other governmental lenders, such as the California Department of Housing and Community
Development, the County of Alameda, and other lenders to be set forth in the Financing Plan may
provide additional financing for the Development. The City agrees to share pro rata in the Residual
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Receipts, in proportion to the amount of City Construction/Permanent Loan and the financing
provided by such other lenders (the "City Prorata Percentage").
(c) Payment of Remaining Balance. Developer shall pay all outstanding principal
and accrued interest on the City Construction/Permanent Loan, in full, on the earliest to occur of (i) a
Developer Event of Default for which the City exercises its right to cause the City
Construction/Permanent Loan indebtedness to become immediately due and payable, and (ii) the
expiration of the term of the City Construction/Permanent Promissory Note.
4.10. Prepayment: Acceleration
(a) Prepayment. Developer shall have the right to prepay the City Loans at any
time and from time to time, without penalty or premium. Prepayments shall be applied first to
accrued but unpaid interest and then to principal. Any such prepayment shall have no effect upon
Developer's obligations under the City Regulatory Agreement which shall survive for the full term
of the City Regulatory Agreement.
(b) Due On Sale or Encumbrance. Unless City agrees otherwise in writing, the
entire unpaid principal balance and all interest and other sums accrued under the City
Predevelopment Loan Promissory Note and City Construction/Permanent Loan Promissory Note
shall be due and payable upon a Transfer (as defined in Section 6.2) absent the prior written consent
of City of all or any part of or interest in the Property, except for a Transfer permitted under Section
6.3 of this Agreement or as otherwise permitted pursuant to this Agreement.
4.11. Nonrecourse. Except as expressly provided in this Section 4.11, Developer and the
general and limited partners of the Developer shall have no personal liability for payment of the
principal of, or interest on the City Promissory Notes, and the sole recourse of City with respect to
the payment of the principal of, and interest thereon shall be to the Property and the Improvements
and any other collateral held by City as security for the City Promissory Notes; provided however,
nothing contained in the foregoing limitation of liability shall: (i) limit or impair the enforcement
against all such security for the City Promissory Notes of all the rights and remedies of the City
thereunder; (ii) be deemed in any way to impair the right of the City to assert the unpaid principal
amount of the City Promissory Notes as demand for money within the meaning and intendment of
Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; or (iii)
be deemed in any way to limit the rights of the City to obtain specific performance by the Developer
of its covenants under the City Documents, other than the covenants to pay the City principal and
interest due under the City Promissory Notes.
The foregoing limitation of liability is intended to apply only to the obligation for the
repayment of the principal of, and payment of interest on the City Promissory Notes; nothing
contained herein is intended to relieve the Developer of its obligation to indemnify the City under
this Agreement, or liability to the extent of any loss for: (i) fraud or intentional misrepresentation, or
bad faith, waste, willful misrepresentation by the Developer; (ii) the failure to pay taxes, assessments
or other charges which may create liens on the Property that are payable or applicable prior to any
foreclosure under the City Deeds of Trust (to the full extent of such taxes, assessments or other
charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by
the Developer other than in accordance with the City Deeds of Trust; and/or the misappropriation of
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any proceeds by the Developer under any insurance policies or awards resulting from condemnation
or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any
portion of the Development.
ARTICLE V
USE OF THE PROPERTY
5.1. Use; Affordable Housing. Developer covenants and agrees for itself and its
successors and assigns that the Property shall be used for the development and operation of the
Development in accordance with the terms and conditions of this Agreement and the City
Regulatory Agreement.
5.2. Affordable Housing. Developer covenants and agrees for itself, its successors and
assigns that one hundred twelve (112) of the one hundred thirteen (113) residential units developed
within the Development shall be occupied by and rented at an affordable rent to households of
Extremely Low Income and Lower Income (as defined in the Regulatory Agreement) in accordance
with the terms hereof and the City Regulatory Agreement, and one unit may be reserved for property
managers with no income restrictions. The Parties shall execute the City Regulatory Agreement,
substantially in the form attached hereto as Exhibit I, concurrently with the effective date of the City
Promissory Note and City Deed of Trust. The City Regulatory Agreement shall be recorded in the
Official Records of Alameda County ("Official Records") concurrently with the recording of the
City Deed of Trust. Upon request of Developer, City shall reasonably consider changes to or
subordination of the Regulatory Agreement as proposed by the lender and/or Investor.
5.3. Maintenance. Developer shall at its own expense, maintain the Property, the
Improvements and related landscaping and common areas in good physical condition, in good repair,
and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all
applicable state, federal, and local laws, ordinances, codes, and regulations, consistent with the
standards of maintenance of similar multifamily apartment complexes in Alameda County. Without
limiting the foregoing, Developer agrees to maintain the Improvements and the Property (including
without limitation, the residential units, common areas, landscaping, driveways, parking areas and
walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti,
disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to
prevent the same from occurring on the Property or at the Development. Developer shall prevent
and/or rectify any physical deterioration of the Property and the Improvements and shall make all
repairs, renewals and replacements necessary to keep the Property and the Improvements in good
condition and repair. Developer shall provide adequate security services for occupants of the
Development.
5.4. Taxes and Assessments. Developer shall pay all real and personal property taxes,
assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes
assessed against the Property and payable by Developer, at such times and in such manner as to
prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided,
however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or
charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the
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Developer, on final determination of the proceeding or contest, shall immediately pay or discharge
any decision or judgment rendered against it, together with all costs, charges and interest. Developer
shall have the right to apply for all applicable tax exemptions, including, without limitation, the
welfare exemption from property tax for low- income housing.
5.5. Obligation to Refrain from Discrimination. Developer shall not restrict the rental,
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Development, or any
portion thereof, on the basis of race, color, religion, sex, gender, gender identity, gender expression,
sexual orientation, marital status, national origin, ancestry, familial status, source of income,
disability, veteran or military status, or genetic information of any person. Developer covenants for
itself and all persons claiming under or through it, and this Agreement is made and accepted upon
and subject to the condition that 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 Development or part
thereof, nor shall Developer or any person claiming under or through Developer 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, of, or
for the Development or part thereof. Developer shall include such provision in all deeds, leases,
contracts and other instruments executed by Developer, and shall enforce the same diligently and in
good faith.
ARTICLE VI
LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF
DEVELOPER
6.1. Change Pursuant to this Agreement. Developer has represented that it possesses the
necessary expertise, skill and ability to carry out the development and operation of the Development
on the Property pursuant to this Agreement. The qualifications, experience, financial capacity and
expertise of Developer is of particular concern to the City. It is because of these qualifications,
experience, financial capacity and expertise that the City has entered into this Agreement with
Developer. No voluntary or involuntary successor, assignee or transferee of Developer shall acquire
any rights or powers under this Agreement, except as expressly provided herein.
6.2. Prohibition on Transfer. Prior to the later of expiration of the term of the City
Regulatory Agreement and the payment in full of the City Promissory Note, Developer shall not,
except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or
by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or
lease (collectively, "Transfer") of the whole or any part of the Property, the Development, the
Improvements, or this Agreement or any of the City Documents, without the prior written approval
of City, which approval shall not be unreasonably withheld. Any such attempt to assign this
Agreement without the City's consent shall be null and void and shall confer no rights or privileges
upon the purported assignee. Notwithstanding the foregoing, Developer is permitted to assign this
Agreement and the City Documents to a Controlled Affiliate, as defined in Section 6.3 below. In
addition to the foregoing, prior to the later of expiration of the term of the City Regulatory
Agreement and the payment in full of the City Promissory Note, except as expressly permitted by
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this Agreement, Developer shall not undergo any significant change of ownership without the prior
written approval of City. For purposes of this Agreement, a "significant change of ownership" shall
mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the
present ownership and/or control of Developer, taking all transfers into account on a cumulative
basis.
6.3. Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions
set forth in this Article VI shall not be deemed to prevent: (i) the granting of utility easements or
permits to facilitate development of the Property; (ii) the dedication of any property required
pursuant to this Agreement; (iii) the lease of individual units to tenants for occupancy as their
principal residence in accordance with the City Regulatory Agreement; (iv) assignments creating
security interests for the purpose of financing the acquisition, construction or permanent financing of
the Development or the Property in accordance with the approved Financing Plan and subject to the
requirements of Article VII, or Transfers directly resulting from the foreclosure of, or granting of a
deed in lieu of foreclosure of, such a security interest; and (v) a Transfer to an entity which is under
the direct control or under common control with Eden Housing, Inc. or in which Eden Housing, Inc.
or one of its affiliates, is the general partner or sole member of the general partner ("Controlled
Affiliate").
The City hereby approves the initial Transfer, if any, of the limited partnership interest in
Developer to an investor limited partner (the "Investor") and approves future Transfers of the
limited partner interest in Developer provided that: (i) such Transfers do not affect the timing and
amount of the limited partner capital contributions provided for in the Partnership Agreement of
Developer approved by the City; and (ii) in subsequent Transfers, the initial limited partner or an
affiliate of the initial limited partner retains a membership or partnership interest and the general
partner of the Investor or a wholly -owned affiliate thereof serves as a managing member or
managing general partner of the successor limited partner.
In the event the general partner of Developer is removed by the Investor for cause following
default under the Partnership Agreement, the City hereby approves the Transfer of the general
partner interest to a nonprofit corporation that is exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code (the "Code"), or a limited liability company whose
sole member is a nonprofit corporation exempt from federal income taxation pursuant to Section
501(c)(3) of the Code, selected by the Investor and approved by the City in writing, which approval
shall not be withheld unreasonably.
6.4. Requirements for Proposed Transfers. The City may, in the exercise of its sole
discretion, consent to a proposed Transfer of this Agreement, the Property or portion thereof if all of
the following requirements are met (provided however, the requirements of this Section 6.4 shall not
apply to permitted Transfers described in Section 6.3):
(i) The proposed transferee demonstrates to the City's satisfaction that it has the
qualifications, experience and financial resources necessary and adequate as may be reasonably
determined by the City to competently complete construction and operation of the Development and
to otherwise fulfill the obligations undertaken by the Developer under this Agreement.
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(ii) The Developer and the proposed transferee shall submit for City review and
approval all instruments and other legal documents proposed to effect any Transfer of this
Agreement, the Property or interest therein together with such documentation of the proposed
transferee's qualifications and development capacity as the City may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and
obligations of the Developer under this Agreement, the City Regulatory Agreement, the City
Documents and all obligations of Developer arising prior to the effective date of the Transfer (unless
Developer expressly remains responsible for such obligations) and shall agree to be subject to and
assume all of Developer's obligations pursuant to the Conditions of Approval and all other
conditions, and restrictions set forth in this Agreement and the City Regulatory Agreement.
(iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory
to the City in form recordable in the Official Records.
Consent to any proposed Transfer may be given by the City Manager unless the City
Manager, in his or her discretion, refers the matter of approval to the City Council. If the City rejects
a proposed Transfer, the City, as applicable, shall provide the reasons for such rejection in writing
within thirty (30) days following receipt of written request by Developer, and representatives of the
City shall meet with Developer and the proposed transferee to discuss in good faith the reasons for
the rejection and Developer's and transferee's responses thereto.
6.5. Effect of Transfer without City Consent.
6.5.1 In the absence of specific written agreement by the City, no Transfer by
Developer shall be deemed to relieve the Developer or any other party from any obligation under
this Agreement or the City Regulatory Agreement.
6.5.2 Without limiting any other remedy City may have under this Agreement, or
under law or equity, this Agreement may be terminated by City if without the prior written approval
of the City, Developer assigns or Transfers this Agreement or the Property. This Section 6.5.2 shall
not apply to Transfers permitted under Section 6.3.
6.6. Recovery of City Costs. Developer shall reimburse City for all costs, including but
not limited to attorneys' fees, incurred in reviewing instruments and other legal documents proposed
to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources
of a proposed successor, assignee, or transferee within ten days following City's delivery to
Developer of an invoice detailing such costs. This Section 6.6 shall not apply to Transfers permitted
under Section 6.3.
ARTICLE VII
SECURITY FINANCING AND RIGHTS OF MORTGAGEES
7.1. Mortgages and Deeds of Trust for Develonment. Mortgages and deeds of trust, or any
other reasonable security instrument are permitted to be placed upon the Property only for the
purpose of securing loans approved pursuant to the approved Financing Plan for the purpose of
financing the acquisition of the Property, the design and construction of the Improvements, other
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expenditures reasonably necessary for development of the Property pursuant to this Agreement, and
the construction and/or refinancing of the Development. Developer shall not enter into any
conveyance for such financing without the prior written approval of the City Manager or his or her
designee. As used herein, the terms "mortgage" and "deed of trust" shall mean any security
instrument used in financing real estate acquisition, construction and land development.
7.2. Holder Not Obligated to Construct. The holder of any mortgage or deed of trust
authorized by this Agreement shall not be obligated to construct or complete the Improvements or to
guarantee such construction or completion. Nothing in this Agreement shall be deemed to permit or
authorize any such holder to devote the Property or any portion thereof to any uses, or to construct
any improvements thereon, other than those uses or improvements provided for or authorized by this
Agreement.
7.3. Notice of Default and Right to Cure. Whenever City delivers any notice of default
hereunder, City shall concurrently deliver a copy of such notice to each holder of record of any
mortgage or deed of trust secured by the Property, and the Investor, provided that City has been
provided with the address for delivery of such notice. City shall have no liability to any such holder
for any failure by the City to provide such notice to such holder. Each such holder shall have the
right, but not the obligation, at its option, to cure or remedy any such default or breach, and City will
accept tender of such cure as if delivered by the Developer.
7.4. City Right to Cure Defaults. In the event of a breach or default by Developer under a
mortgage or deed of trust secured by the Property, City may (but has no obligation to) cure the
default, without acceleration of the subject loan, following prior notice thereof to the holder of such
instrument and Developer. In such event, Developer shall be liable for, and City shall be entitled to
reimbursement from Developer, for all costs and expenses incurred by City associated with and
attributable to the curing of the default or breach and such sum shall constitute a part of the
indebtedness secured by the City Deed of Trust.
7.5. Holder to be Notified. Developer, for itself, its successors and assigns, hereby
warrants and agrees that each term contained herein dealing with security financing and rights of
holders shall be either inserted into the relevant deed of trust or mortgage or acknowledged by the
holder prior to its creating any security right or interest in the Property.
7.6. Modifications to Agreement. City shall not unreasonably withhold its consent to
modifications of this Agreement requested by Development lenders or Investors, provided such
modifications do not alter City's substantive rights and obligations under this Agreement.
7.7. Estoppel Certificates. Any Party shall, at any time, and from time to time, within
thirty (30) days after receipt of written request from the other Party, execute and deliver to such
Party a written statement certifying that, to the knowledge of the certifying Party: (i) this Agreement
is in full force and effect and a binding obligation of the Parties (if such be the case), (ii) this
Agreement has not been amended or modified, or if so amended, identifying the amendments, and
(iii) the requesting Party is not in default in the performance of its obligations under this Agreement,
or if in default, describing the nature of any such defaults.
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ARTICLE VIII
ENVIRONMENTAL MATTERS
8.1. No City Liability: Developer's Covenants. City shall not be responsible for the cost of
any soil, groundwater or other environmental remediation or other response activities for any
Hazardous Materials, if any, existing or occurring on the Property or any portion thereof, and
Developer shall be solely responsible for all actions and costs associated with any such activities
required by any regulatory agency with jurisdiction over the Property and/or required for the
construction of the Development and the development of the Property, or any portion thereof. Upon
receipt of any notice regarding the presence, release or discharge of Hazardous Materials in, on or
under the Property, or any portion thereof, Developer agrees to timely initiate and diligently pursue
and complete all appropriate response, remediation and removal actions for the presence, release or
discharge of such Hazardous Materials within such deadlines as specified by applicable
Environmental Laws. Developer hereby covenants and agrees that:
(1) Developer shall not knowingly permit the Development or the
Property or any portion of either to be a site for the use, generation, treatment, manufacture, storage,
disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence or
release of Hazardous Materials in, on, under, about or from the Development or the Property with
the exception of any previously disclosed existing conditions on the Property and cleaning supplies
and other materials customarily used in construction, construction, use or maintenance of residential
property and used, stored and disposed of in compliance with Environmental Laws, and
(2) Developer shall keep and maintain the Development and the
Property and each portion thereof in compliance with, and shall not cause or permit the Development
or the Property or any portion of either to be in violation of, any Environmental Laws.
8.2. Environmental Indemnification. Developer shall indemnify, defend (with counsel
approved by City) and hold the Indemnitees harmless from and against any and all Claims, including
without limitation any expenses associated with the investigation, assessment, monitoring, response,
removal, treatment, abatement or remediation of Hazardous Materials and administrative,
enforcement or judicial proceedings resulting, arising, or based directly or indirectly in whole or in
part, upon (i) the presence, release, use, generation, discharge, storage or disposal or the alleged
presence, release, discharge, storage or disposal of any Hazardous Materials on, under, in or about,
or the transportation of any such Hazardous Materials to or from, the Property, or (ii) the failure of
Developer, Developer's employees, agents, contractors, subcontractors, or any person acting on
behalf of any of the foregoing to comply with Environmental Laws or the covenants set forth in
Section 8.1. The foregoing indemnity shall further apply to any residual contamination in, on, under
or about the Property or affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the generation, use, handling, treatment, storage,
transport or disposal of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with Environmental Laws. The provisions of this
Section 9.2 shall survive the issuance of a Certificate of Completion for the Development and the
expiration or earlier termination of this Agreement. Developer's indemnification obligation under
this Section 8.2 shall not apply to acts described in clause (i) above caused by the gross negligence
or willful misconduct of an Indemnitee.
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8.2.1 No Limitation. Developer hereby acknowledges and agrees that Developer's
duties, obligations and liabilities under this Agreement, including, without limitation, under Section
8.2 above, are in no way limited or otherwise affected by any information the City may have
concerning the Property and/or the presence in, on, under or about the Property of any Hazardous
Materials, whether the City obtained such information from the Developer or from its own
investigations. It is further agreed that City does not and shall not waive any rights against
Developer that it may have by reason of this indemnity and hold harmless agreement because of the
acceptance by City, or the deposit with City by Developer, of any of the insurance policies described
in this Agreement.
8.3. Hazardous Materials. As used herein, the term "Hazardous Materials" means any
substance, material or waste which is or becomes regulated by any federal, state or local
governmental authority, and includes 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. 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 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.
8.4. Environmental Laws. As used herein, the term "Environmental Laws" 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 pollution or
protection of the environment, including natural resources; (ii) exposure of persons, including
employees and agents, to Hazardous Materials (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
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hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwater
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
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 each of the foregoing now exist or are hereafter amended, together
with any regulations promulgated thereunder.
ARTICLE IX
DEFAULTS, REMEDIES AND TERMINATION
9.1. Event of Developer Default. The following events shall constitute an event of default
on the part of Developer ("Event of Developer Default"):
(a) Subject to force majeure, Developer fails to commence or complete
construction of the Development within the times set forth in Section 3.4, or abandons or suspends
construction of the Development prior to completion for a period of sixty (60) days or more;
(b) Developer fails to pay when due the principal and interest (if any) payable
under the City Promissory Note and such failure continues for thirty (30) days after City notifies
Developer thereof in writing;
(c) A Transfer occurs, either voluntarily or involuntarily, in violation of Article
VI;
(d) Developer fails to maintain insurance on the Property and the Development as
required pursuant to this Agreement, and Developer fails to cure such default within ten (10) days
following notice thereof from the City;
(e) Subject to Developer's right to contest the following charges pursuant to
Section 5.4, if Developer fails to pay prior to delinquency taxes or assessments due on the Property
or the Development or fails to pay when due any other charge that may result in a lien on the
Property or the Development, and Developer fails to cure such default within thirty (30) days of date
of delinquency, but in all events upon the imposition of any such tax or other lien;
(f) A default is declared in writing 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 re
payment of such loan;
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(g) Any representation or warranty contained in this Agreement or in any
financial statement, certificate or report submitted to the City in connection with this Agreement or
Developer's request for the City Loans proves to have been false in any material and adverse respect
when made and continues to be materially adverse to the City;
(h) 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"),
Developer (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for
relief against Developer in an involuntary case; (iii) consents to the appointment of a trustee,
receiver, assignee, liquidator or similar official for Developer; (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;
(i)
order:
A court of competent jurisdiction shall have made or entered any decree or
(1) adjudging the Developer to be bankrupt or insolvent,
(2) approving as properly filed a petition seeking reorganization of the
Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable
debtor's relief law or statute of the United States or any state or other jurisdiction,
(3) appointing a receiver, trustee, liquidator, or assignee of the Developer in
bankruptcy or insolvency or for any of its properties, or
(4) directing the winding up or liquidation of the Developer;
(j) Developer shall have assigned its assets for the benefit of its creditors (other
than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any
substantial part of its property, unless the property so assigned, sequestered, attached or executed
upon shall have been returned or released within sixty (60) days after such event (unless a lesser
time period is permitted for cure under any other mortgage on the Property, in which event such
lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to
such sequestration, attachment, or execution;
(k) The Developer shall have voluntarily suspended its business or Developer
shall have been dissolved or terminated;
(1) An event of default arises under this Agreement or any City Document and
remains uncured beyond any applicable cure period; or
(m) Developer defaults in the performance of any term, provision, covenant or
agreement contained in this Agreement other than an obligation enumerated in this Section 9.1 and
unless 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 Developer; provided however,
if the default is of a nature that it cannot be cured within thirty (30) days, a Developer Event of
Default shall not arise hereunder if Developer commences to cure the default within thirty (30) days
and thereafter prosecutes the curing of such default with due diligence and in good faith to
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completion and in no event later than ninety (90) days after receipt of notice of the default or such
longer period as the City may allow.
9.2. City Default. An event of default on the part of City ("Event of City Default") shall
arise hereunder if City fails to keep, observe, or perform any of its covenants, duties, or obligations
under this Agreement, and the default continues for a period of thirty (30) days after written notice
thereof from Developer to City, or in the case of a default which cannot with due diligence be cured
within thirty (30) days, City fails to commence to cure the default within thirty (30) days of such
notice and thereafter fails to prosecute the curing of such default with due diligence and in good faith
to completion.
9.3. City's Right to Terminate Agreement. If an Event of Developer Default shall occur
and be continuing beyond any applicable cure period, then City shall, in addition to other rights
available to it under law or this Agreement, have the right to terminate this Agreement. If City
makes such election, City shall give written notice to Developer and to any mortgagee entitled to
such notice specifying the nature of the default and stating that this Agreement shall expire and
terminate on the date specified in such notice, and upon the date specified in the notice, this
Agreement and all rights of Developer under this Agreement, shall expire and terminate.
9.4. City's Remedies and Rights Upon an Event of Developer Default. Upon the
occurrence of an Event of Developer Default and the expiration of any applicable cure period, City
shall have all remedies available to it under law or equity, including, but not limited to the following.
City may, at its election, without notice to or demand upon Developer, except for notices or demands
required by law or expressly required pursuant to this Agreement or the City Documents, exercise
one or more of the following remedies:
(a) Accelerate and declare the balance of the City Promissory Note and interest
accrued thereon immediately due and payable;
Documents;
(b) Seek specific performance to enforce the terms of this Agreement or City
(c) Foreclose on the Property pursuant to the City Deed of Trust;
(d) Pursue any and all other remedies available under law to enforce the terms of
this Agreement and the City Documents and City's rights thereunder.
9.5. Developer's Remedies Upon an Event of City Default. Upon the occurrence of an
City Event of Default, in addition to pursuing any other remedy allowed at law or in equity or
otherwise provided in this Agreement, Developer may bring an action for equitable relief seeking the
specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or
preventing any violation of such terms and conditions, and/or seeking to obtain any other remedy
consistent with the purpose of this Agreement.
9.6. Remedies Cumulative; No Consequential Damages. Except as otherwise expressly
stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by
any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same
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or different time, of any other rights or remedies for the same or any other default by the other Party.
Notwithstanding anything to the contrary set forth herein, a party's right to recover damages in the
event of a default shall be limited to actual damages and shall exclude consequential damages.
9.7. Inaction Not a Waiver of Default. No failure or delay by any Party in asserting any of
its rights and remedies as to any default shall operate as a waiver of such default or of any such
rights or remedies, nor deprive any Party of its rights to institute and maintain any action or
proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in
the same or any subsequent default.
ARTICLE X
INDEMNITY AND INSURANCE
10.1. Indemnity. Developer shall indemnify, defend (with counsel approved by City, such
approval not to be unreasonably withheld) and hold Indemnitees harmless from and against any and
all Claims, including without limitation, Claims arising directly or indirectly, in whole or in part, as a
result of or in connection with Developer's or Developer's contractors, subcontractors, agents or
employees development, construction, improvement, operation, ownership or maintenance of the
Development or the Property, or any part thereof or otherwise arising out of or in connection with
Developer's performance under this Agreement. Developer's indemnification obligations under this
Section 10.1 shall not extend to Claims resulting from the gross negligence or willful misconduct of
Indemnitees. The provisions of this Section 10.1 shall survive the issuance of a Certificate of
Completion for the Development and the expiration or earlier termination of this Agreement. It is
further agreed that City does not and shall not waive any rights against Developer that it may have
by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the
deposit with City by Developer, of any of the insurance policies described in this Agreement.
10.2. Insurance.
(a) Developer and all contractors working on behalf of Developer on the
Development shall maintain the insurance coverage as described in the City Insurance
Requirements attached hereto Exhibit K and incorporated herein.
(b) Prior to closing of each of the City Loans, Developer shall furnish City with
certificates of insurance in form acceptable to City evidencing the required insurance coverage and
duly executed endorsements evidencing such additional insured status. Each certificate shall contain
all provisions required in the City Insurance Requirements.
(c) If any insurance policy or coverage required hereunder is canceled or reduced,
Developer 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 Developer's expense, and Developer
shall promptly reimburse City for such expense upon receipt of billing from City.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Brokers. Developer agrees to pay any real estate commission, brokerage fee, finder's
fee, or other compensation due with respect to the acquisition of the Property, and agrees to defend,
indemnify and hold harmless the City from any claims, expenses, costs or liabilities arising in
connection with a breach of this warranty and representation. The terms of this Section shall survive
the expiration or earlier termination of this Agreement.
11.2. Enforced Delay; Extension of Times of Performance. Subject to the limitations set
forth below, performance by any Party shall not be deemed to be in default, and all performance and
other dates specified in this Agreement shall be extended where delays are due to: war, insurrection,
strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy,
epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority,
litigation, including court delays, unusually severe weather, acts or omissions of the other Parties,
acts or failures to act of any other public or governmental agency or entity (other than the acts or
failures to act of City which shall not excuse performance by City), or any other cause beyond the
affected Party's reasonable control. An extension of time for any such cause shall be for the period
of the enforced delay and shall commence to run from the time of the commencement of the cause, if
notice by the Party claiming such extension is sent to the other Parties within thirty (30) days of the
commencement of the cause and such extension is not rejected in writing by the other Parties within
ten (10) days of receipt of the notice. None of the Parties shall unreasonably withhold consent to an
extension of time pursuant to this Section.
Times of performance under this Agreement may also be extended in writing by the mutual
agreement of Developer and City (acting in the discretion of its City Manager unless he or she
determines in his or her discretion to refer such matter to the City Council). City and Developer
acknowledge that adverse changes in economic conditions, either of the affected Party specifically or
the economy generally, changes in market conditions or demand, and/or inability to obtain financing
to complete the work of Improvements shall not constitute grounds of enforced delay pursuant to
this Section. Each Party expressly assumes the risk of such adverse economic or market changes
and/or financial inability, whether or not foreseeable as of the Effective Date.
11.3. Notices. Except as otherwise specified in this Agreement, 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: (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; or (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;
City: City of Dublin
100 Civic Plaza
Dublin, CA 94568
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Attention: City Manager
(with copy to City Attorney)
Developer: Corona/Ely Ranch, Inc.
22645 Grand Street
Hayward, California 94541
Attention: Chief Executive Officer
The City agrees that it shall provide Developer's Investor a duplicate copy of all notices of
default that the City may give to or serve in writing upon Developer pursuant to the terms of the
Loan Documents, at an address provided to the City; provided, the City shall have no liability to the
Investor for its failure to do so. The Investor shall have the right, but not the obligation, to cure any
Default of Developer set forth in such notice, during any applicable cure period described in the
Loan Documents, and the City will accept tender of such cure as if delivered by Developer.
11.4. Attorneys' Fees. If any Party fails to perform any of its obligations under this
Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of
any provision hereof, then the prevailing party in any proceeding in connection with such dispute
shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or
establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys'
fees and disbursements.
11.5. Waivers; Modification. No waiver of any breach of any covenant or provision of this
Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall
be valid unless in writing and executed by the waiving party. An extension of time for performance
of any obligation or act shall not be deemed an extension of the time for performance of any other
obligation or act, and no extension shall be valid unless in writing and executed by the waiving
party. This Agreement may be amended or modified only by a written instrument executed by the
Parties.
11.6. Binding on Successors. Subject to the restrictions on Transfers set forth in Article VI,
this Agreement shall bind and inure to the benefit of the Parties and their respective permitted
successors and assigns. Any reference in this Agreement to a specifically named party shall be
deemed to apply to any permitted successor and assign of such party who has acquired an interest in
compliance with this Agreement or under law.
11.7. Construction. The section headings and captions used herein are solely for
convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this
Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties
agree, that since all of the Parties have participated in the negotiation and drafting of this Agreement,
this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its
fair meaning as a whole, as if all Parties had prepared it.
11.8. Action or Approval. Except as may be otherwise specifically provided in this
Agreement, whenever any approval, notice, direction, finding, consent, request, waiver, or other
action by the City is required or permitted under this Agreement, such action may be given, made, or
taken by the City Manager, or by any person who shall have been designated in writing by the City,
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without further approval by the City Council. Any such action shall be in writing. The Developer
acknowledges that nothing in this Agreement (including any approval by the City Manager in
accordance with this Agreement) shall limit, waive, or otherwise impair the authority and discretion
of: (i) the City's Community Development Department, in connection with the review and approval
of the proposed construction plans for the Development (or any change to such plans), or any use, or
proposed use, of the Property, (ii) the City's issuance of a building permit, or (iii) any other office or
department of the City acting in its capacity as a governmental regulatory authority with jurisdiction
over the development, use, or operation of the Development.
11.9. Entire Agreement. This Agreement, including the exhibits listed below, which are
attached hereto and incorporated herein by this reference, together with the other City Documents,
contains the entire agreement between the Parties with respect to the subject matter hereof, and
supersedes all prior written or oral agreements, understandings, representations or statements
between the Parties with respect to the subject matter hereof.
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Legal Description of the Property
Preliminary Financing Plan
City Predevelopment Loan Promissory Note
City Predevelopment Loan Deed of Trust
City Construction/Permanent Loan Promissory Note
City Construction/Permanent Loan Deed of Trust
Schedule of Performance
Scope of Development
City Regulatory Agreement
Certificate of Completion
City Insurance Requirements
11.10. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be an original and all of which taken together shall constitute one instrument. The
signature page of any counterpart may be detached therefrom without impairing the legal effect of
the signature(s) thereon provided such signature page is attached to any other counterpart identical
thereto having additional signature pages executed by the other Parties. Any executed counterpart of
this Amendment may be delivered to the other Parties by facsimile and shall be deemed as binding
as if an originally signed counterpart was delivered.
11.11. Severability. If any term, provision, or condition of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall
continue in full force and effect unless an essential purpose of this Agreement is defeated by such
invalidity or unenforceability.
11.12. No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or
shall be deemed to confer upon any person, other than the Parties and their respective successors and
assigns, any rights or remedies hereunder.
11.13. 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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11.14. Non -Liability of Officials, Employees and Agents. No officer, official, employee or
agent of City shall be personally liable to Developer or its successors in interest in the event of any
default or breach by City or for any amount which may become due to Developer or its successors in
interest pursuant to this Agreement.
11.15. Time of the Essence: Calculation of Time Periods. Time is of the essence for each
condition, term, obligation and provision of this Agreement. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the act or event after which
the designated period of time begins to run is not to be included and the last day of the period so
computed is to be included, unless such last day is not a business day, in which event the period shall
run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m.,
local time at the Property. For purposes of this Agreement, a "business day" means a day that is not
a Saturday, Sunday, a federal holiday or a state holiday under the laws of California.
11.16. Governing Law: Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles of conflicts of laws.
Any action to enforce or interpret this Agreement shall be filed in the Superior Court of Alameda
County, California or in the Federal District Court for the Northern District of California.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the
date first written above.
DEVELOPER: CITY:
CORONA/ELY RANCH, INC., a
California nonprofit public benefit
corporation
CITY OF DUBLIN, a California
corporation
AA4re.. OsTod.
By: By:
Linda Smith, City Manager
ATTEST:
By:
Marsha Moore, City Clerk
APPROVED AS TO FORM:
By:
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John Bakker, City Attorney
190
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Alameda, City of Dublin, State of California, and
is described as follows:
Parcel One:
Parcel 2 of Parcel Map No. 1920, filed December 1, 1976 in Book 94 of Parcel Maps, Pages 11
and 12, Alameda County Records.
Excepting therefrom:
That portion of land conveyed to the City of Dublin by Grant Deed Dated March 15, 2021,
Recorded 03-26-21, as Instrument No. 2021123184, more particularly described as follows:
Real property, situate in the incorporated territory of the City of Dublin, County of Alameda,
State of California, described as follows:
Being a portion of Parcel 2, as said Parcel 2 is shown and so designated on Parcel Map 1920,
filed for record on December 1, 1976 in Book 94 of Parcel Maps, at Page 11, in the Office of the
County Recorder of Alameda County, more particularly described as follows:
Beginning at the Northwestern corner of said Parcel 2;
Thence from said point of beginning, along the Northerly line of said Parcel 2, North 69° 08' 15"
East 31.11 feet;
Thence leaving said Northerly line, along the arc of a non -tangent 40.00 foot radius curve to
the left, from which the center of said curve bears South 33° 42' 04 East, through a central
angle of 77° 09' 41" an arc distance of 53.87 feet, to the Westerly line of said Parcel 2;
Thence along said Westerly line, North 20° 51' 45" West 39.00 feet to said point of beginning.
Parcel Two:
An Access Easement, not to be exclusive, together with the right of ingress and egress therefor,
in, over, along and across that certain land situated in the Township of Pleasanton, County of
Alameda, State of California, described as follows:
Beginning at the most Western corner of the parcel of land described in the Deed from Amfac
Merchandising Corporation, a California corporation to Baydale, Inc., a Delaware corporation,
recorded December 28, 1971, Reel 3026, Image 888, Recorder's Series No. 71-169856,
Alameda County Records; thence through a portion of the last named parcel of land and along
the Northwestern boundary line thereof, North 69° 08' 15" East, 329.29 feet; thence at right
angles to the last named line South 20° 51' 45" East, 71.00 feet to the Northeastern corner of
the parcel of land described in the Deed from Baydale, Inc., a Delaware corporation, to Amfac
Merchandising Corporation, a California corporation, recorded April 12, 1972, Reel 3104 Image
883, Recorder's Series No. 72-47311, Alameda County Records; thence along the last named
line South 69° 08' 15" West 329.29 feet to the Northeastern line of Regional Street being
the parcel of land described as Parcel One in the Deed from Motel Interstate Systems, Inc., to
the County of Alameda, recorded March 8, 1971, Reel 2802 Image 404, Recorder's Series No.
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191
71-26256, Alameda County Records; thence along the last named line North 20° 51' 45" West,
71.00 feet to the point of beginning.
Assessor's Parcel No. 941-1500-025-2 (Affects this and other property)
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EXHIBIT B
PRELIMINARY FINANCING PLAN
Project Sources and Uses
The following table illustrates the initial funding sources of funding by stage.
Construction Permanent Financing Stage Perm Sources by
Financing Stage Unit
Construction Loan $57,294,564.00
Alameda County Al $5,048,319.00 $5,048,319.00 $44,675.39
City Local Housing $3,333,333.00 $3,333,333.00
Trust Fund
$29,498.52
Land Donation $8,400,000.00 $8,400,000.00 $74,336.28
Permanent Mortgage $2,472,983.00 $21,884.81
HCD — NPLH $9,776,465.00 $86,517.39
HCD — MHP $18,337,732.00 $162,280.81
Deferred Developer $1,300,000.00 $11,504.42
Fee
Investor Capital $3,238,669.00 $32,386,693.00
Contribution
Deferred Cost Until $3,740,640.00
Conversion
TOTAL SOURCES $81,055,525.00 $81,055,525.00
$286,607.90
The table below itemizes the preliminary total development costs by stage.
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Total Acquisition
Cost
Hard Cost
Soft Cost
Construction
Interest and Fees
Permanent
Financing
Costs
Attorney Costs
Reserves and
Appraisal
Cost
Construction
Contingency
Other Costs
Developer Costs
Syndication Costs
Cost Deferred
Until
Conversion
TOTAL DEV
COSTS
Construction Financing Permanent Financing Stage
Stage
$8,505,150.00 $8,505,150.00
$50,788,250.00
$1,800,000.00
$4,248,769.00
$915,747.00
$40,000.00
10,000.00
$2,543,170
$7,521,799.00
$800,000.00
$142,000.00
$3,740,640.00
$81,055,525.00
$50,788,250.00
$1,800,000.00
$4,248,769.00
$950,747.00
$40,000.00
1,015,640.00
$2,543,170.00
$7,521,799.00
$3,500,000.00
$142,000.00
$81,055,525.00
Uses by Unit
$75,266.81
$449,453.53
$15,929.20
$37,599.72
$8,413.69
$353.98
$8,987.96
$22,505.93
$66,564.59
$30,973.45
$1,256.64
$33,103.01
32,481.14
$717,305.53
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EXHIBIT C
CITY PREDEVELOPMENT LOAN PROMISSORY NOTE
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195
PROMISSORY NOTE
(Regional Street Apartments)
1,000,000 Dublin, California
, 202
FOR VALUE RECEIVED, the undersigned Corona/Ely Ranch, Inc., a California
nonprofit public benefit corporation ("Borrower"), hereby promises to pay to the order of the
City of Dublin, a California municipal corporation ("Holder"), 100 Civic Plaza, Dublin,
California, 94568, Attn: , the principal amount of One Million Dollars
($1,000,000), plus interest thereon pursuant to Section 2 below (the "City Predevelopment
Loan").
1. Borrower's Obligation. This promissory note (the "Note") evidences
Borrower's obligation to pay Holder the principal amount of One Million Dollars ($1,000,000)
with interest for the funds loaned to Borrower by Holder pursuant to the Affordable Housing
Assistance Agreement between Borrower and Holder dated , 2023 (the "Loan
Agreement"). All capitalized terms not otherwise defined in this Note shall have the meanings
set forth in the Loan Agreement.
2. Interest. The City Predevelopment Loan bears interest from the date of
this Note at three percent (3%) interest, until full repayment of the outstanding balance of the
City Predevelopment Loan.
3. Term and Repayment Requirements. All outstanding principal and
interest under this Note shall be paid in full on the earliest to occur of (i) a Developer Event of
Default under the Loan Agreement for which the Holder exercises its right to cause the City
Predevelopment Loan to become immediately due and payable, and (ii) the Construction Loan
Closing (as those terms are defined in the Loan Agreement).
4. Disbursements. All disbursements shall be in accordance with the terms
of the Loan Agreement.
5. Prepayment. Borrower may prepay the City Predevelopment Loan at any
time without penalty or fee.
6. Assumption. This Note shall not be assumable by the successors and
assigns of Borrower without the prior written consent of Holder unless the assignment complies
with Section 6.3 of the Loan Agreement. Holder may assign its interest in the Note to any
person or entity in Holder's sole discretion.
7. Security. This Note shall be secured by the Deed of Trust on the Property,
wherein Borrower is the trustor and Holder is the beneficiary. The terms of the Deed of Trust
are hereby incorporated into this Note and made a part hereof. This Note is nonrecourse to
Borrower and the general and limited partners of the Borrower, and the sole recourse of Holder
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with respect to the payment of the principal of, and interest on this Note shall be to the Property
and the Improvements and any other collateral held by Holder as security for this Note; provided
however, nothing contained herein is intended to relieve the Borrower of liability to the extent of
any loss for fraud or intentional misrepresentation, or bad faith, waste, willful misrepresentation
by the Borrower; or the failure to pay taxes, assessments or other charges which may create liens
on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust
(to the full extent of such taxes, assessments or other charges); or be deemed in any way to limit
the rights of the Holder to obtain specific performance by the Borrower of its covenants under
the City Documents, other than the covenants to pay the Holder principal and interest due under
this Note.
8. Terms of Payment.
(a) All payments due under this Note shall be paid in currency of the
United States of America, which at the time of payment is lawful for the payment of public and
private debts.
(b) All payments on this Note shall be paid to Holder at the address set
forth in the first paragraph of this Note, or to such other place as Holder of this Note may from
time to time designate.
(c) All payments on this Note shall be without expense to Holder, and
Borrower agrees to pay all costs and expenses, including reconveyance fees and reasonable
attorney's fees of Holder, incurred in connection with the payment of this Note and the release of
any security hereof.
(d) Notwithstanding any other provision of this Note, or any
instrument securing the obligations of Borrower under this Note, if, for any reason whatsoever,
the payment of any sums by Borrower pursuant to the terms of this Note would result in the
payment of interest which would exceed the amount that Holder may legally charge under the
laws of the State of California, then the amount by which payments exceed the lawful interest
rate shall automatically be deducted from the principal balance owing on this Note, so that in no
event shall Borrower be obligated under the terms of this Note to pay any interest which would
exceed the lawful rate.
9. Default.
(a) Any of the following shall constitute an event of default under this
Note:
(i) Any failure to pay, in full, any payment required under this
Note when due following written notice by the Holder of such failure and ten (10) days
opportunity to cure;
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197
(ii) Any failure in the performance by Borrower of any term,
condition, provision or covenant set forth in this Note subject to the notice and cure period set
forth in Section 9.1 of the Loan Agreement; and
(iii) The occurrence of any Borrower event of default under the
Loan Agreement, the Deed of Trust, the Regulatory Agreement, or other instrument securing the
obligations of Borrower under this Note or under any other promissory notes hereafter issued by
Borrower to Holder pursuant to the Loan Agreement or the Deed of Trust (the "City Loan
Documents"), subject to notice and cure periods, if any, set forth therein.
(b) Upon the occurrence of one or more of the foregoing events of
default, the entire unpaid principal balance, together with all interest thereon, and together with
all other sums then payable under this Note and the Deed of Trust shall at the option of Holder
become immediately due and payable upon written notice by Holder to Borrower without further
demand.
(c) Holder's failure to exercise the remedy set forth in Subsection 9(b)
above or any other remedy provided by law upon the occurrence of one or more of the foregoing
events of default shall not constitute a waiver of the right to exercise any remedy at any
subsequent time in respect to the same or any other default. The acceptance by Holder hereof of
any payment which is less than the total of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or
options at that time or at any subsequent time, or nullify any prior exercise of any such remedy
or option, without the express consent of Holder, except as and to the extent otherwise provided
by law.
(d) Notwithstanding anything herein to the contrary, Holder hereby
agrees that any cure of any default made or tendered by one or more of Borrower's limited
partners shall be deemed a cure by Borrower and shall be accepted or rejected on the same basis
as if made or tendered by Borrower. Copies of all notices which are sent hereunder to Borrower
shall be sent to Borrower's limited partners at the address provided pursuant to Section 11.3 of
the Loan Agreement.
10. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and
demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment
of this Note. Borrower expressly agrees that this Note or any payment hereunder may be
extended from time to time, and that Holder may accept further security or release any security
for this Note, all without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment
hereof made by agreement of Holder with any person now or hereafter liable for payment of this
Note shall not operate to release, discharge, modify, change or affect the original liability of
Borrower under this Note, either in whole or in part.
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(c) The obligations of Borrower under this Note shall be absolute and
Borrower waives any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
11. Miscellaneous Provisions.
(a) All notices to Holder or Borrower shall be given in the manner and
at the addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower
may therein designate.
(b) Borrower promises to pay all costs and expenses, including
reasonable attorney's fees, incurred by Holder in the enforcement of the provisions of this Note,
regardless of whether suit is filed to seek enforcement.
(c) This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change, modification or
discharge is sought.
(d) This Note shall be governed by and construed in accordance with
the laws of the State of California.
(e) The times for the performance of any obligations hereunder shall
be strictly construed, time being of the essence.
(f) This document, together with the City Loan Documents, contains
the entire agreement between the parties as to the City Predevelopment Loan. It may not be
modified except upon written consent of the parties.
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IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the date
first above written.
Corona/E1y Ranch, Inc.,
a California nonprofit
public benefit corporation
By:
Name:
5365400.3
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EXHIBIT D
CITY PREDEVELOPMENT LOAN DEED OF TRUST
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201
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Manager
No fee for recording pursuant to
Government Code Section 27383 and 27388.1
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
(Regional Street Apartments)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of ,
202, by and among Corona/Ely Ranch, Inc., a California nonprofit public benefit corporation
("Trustor"), Title Company ("Trustee"), and the City of Dublin, a California
municipal corporation ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's interest in the property located in the County of Alameda, State of
California, that is described in the attached Exhibit A, incorporated herein by this reference (the
"Property");
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights -of -way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
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adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the "Secured
Obligations"):
(a) Payment to Beneficiary of all sums at any time owing under or in connection with
the Note (defined in Section 1.3 below) until paid or cancelled and any other amounts owing
under the Loan Documents (defined in Section 1.2 below). Said principal and other payments
shall be due and payable as provided in the Note or other Loan Documents, as applicable. The
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Note and all its terms are incorporated herein by reference, and this conveyance shall secure any
and all extensions thereof, however evidenced;
(b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
(c) Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents; and
(d) All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a different rate of
interest, or (ii) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
Section 1.1 The term "Loan Agreement" means that certain Affordable Housing
Assistance Agreement between Trustor and Beneficiary, dated , 2023. The Loan
Agreement requires Beneficiary to make a predevelopment loan to Trustor in the amount of One
Million Dollars ($1,000,000).
Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, the Regulatory Agreement, and any other debt, loan or security instruments between
Trustor and the Beneficiary relating to the Property.
Section 1.3 The term "Note" means the promissory note in the principal amount of
One Million Dollars ($1,000,000), of even date herewith, executed by Trustor in favor of the
Beneficiary, as it may be amended or restated, the payment of which is secured by this Deed of
Trust. (A copy of the Note is on file with the Beneficiary and terms and provisions of the Note
are incorporated herein by reference.)
Note.
Section 1.4 The term "Principal" means the amount required to be paid under the
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Section 1.5 The term "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants of even date herewith by and between the Beneficiary and
the Trustor.
ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE
PROPERTY AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment and performance of the Secured
Obligations, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the
Security or cause the Security to be maintained and preserved in good condition, reasonable wear
and tear excepted. The Trustor will from time to time make or cause to be made all repairs,
replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no
responsibility in any of these matters or for the making of improvements or additions to the
Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent of Trustor
only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those
actions as hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons
who have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Alameda County, a surety bond in an amount 1 and 1/2 times the amount of such
claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights -of -way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
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limitation, water, gas, electricity, sewer, telephone and telegraph, or those otherwise required by
law, and as approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and
revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents
and revenues so collected to the Secured Obligations with the balance, so long as no such breach
has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this
assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Loan Documents, and without the necessity of
Beneficiary entering upon and taking and maintaining full control of the Property in person, by
agent or by a court -appointed receiver, Beneficiary shall immediately be entitled to possession of
all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due
and payable, including but not limited to rents then due and unpaid, and all such rents shall
immediately upon delivery of such notice be held by Trustor as trustee for the benefit of
Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor shall contain a statement that Beneficiary exercises its rights to such rents.
Trustor agrees that commencing upon delivery of such written notice of Trustor's breach by
Beneficiary to Trustor, each tenant of the Property shall make such rents payable to and pay such
rents to Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant
therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental
unit, without any liability on the part of said tenant to inquire further as to the existence of a
default by Trustor.
Trustor hereby covenants that Trustor has not executed any prior assignment of said
rents, that Trustor has not performed, and will not perform, any acts or has not executed and will
not execute, any instrument which would prevent Beneficiary from exercising its rights under
this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no
anticipation or prepayment of any of the rents of the Property for more than two (2) months prior
to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept
payment of any rents of the Property more than two (2) months prior to the due dates of such
rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Property as Beneficiary may from time to time request.
Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court -appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
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perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver shall be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents shall be applied first to the costs, if any, of taking control of and managing the
Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees,
premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies,
taxes, assessments and other charges on the Property, and the costs of discharging any obligation
or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this
deed of Trust. Beneficiary or the receiver shall have access to the books and records used in the
operation and maintenance of the Property and shall be liable to account only for those rents
actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through
Trustor or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Property are not sufficient to meet the costs, if any, of taking control of
and managing the Property and collecting the rents, any funds expended by Beneficiary for such
purposes shall become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless
Beneficiary and Trustor agree in writing to other terms of payment, such amounts shall be
payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear
interest from the date of disbursement at the rate stated in Section 3.3.
Any entering upon and taking and maintaining of control of the Property by Beneficiary
or the receiver and any application of rents as provided herein shall not cure or waive any default
hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property shall terminate at such time as this
Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company which are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor
shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a)
the legality thereof shall be promptly and actively contested in good faith and by appropriate
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proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section 3.1. With respect to taxes, special assessments or other similar governmental
charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any
part of the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 3.1 shall not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
In the event that Trustor shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the maximum rate permitted by law, shall become part of the Secured Obligations secured
hereby, and Trustor agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid and all Secured Obligations
secured hereunder fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time
prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Trustor, may (but shall be under no
obligation to) take out the required policies of insurance and pay the premiums on the same or
may make such repairs or replacements as are necessary and provide for payment thereof; and all
amounts so advanced therefor by the Beneficiary shall become part of the Secured Obligations
(together with interest as set forth below) and shall be secured hereby, which amounts the
Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall bear interest
from the date of the advance at the lesser of ten percent (10%) per annum or the maximum rate
permitted by law.
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ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
All judgments, awards of damages, settlements and compensation made in connection
with or in lieu of (1) taking of all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (2) any damage to or destruction of the Property or in
any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the
Property (collectively, the "Funds") shall be used to repair or restore the Property, but if the
property cannot be repaired or restored such Funds are hereby assigned to and shall be paid to
the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and
empowered (but not required) to collect and receive any Funds and is authorized to apply them in
whole or in part upon any indebtedness or obligation secured hereby, in such order and manner
as the Beneficiary shall determine at its sole option. The Beneficiary shall be entitled to settle
and adjust all claims under insurance policies provided under this Deed of Trust and may deduct
and retain from the proceeds of such insurance the amount of all expenses incurred by it in
connection with any such settlement or adjustment. All or any part of the amounts so collected
and recovered by the Beneficiary may be released to Trustor upon such conditions as the
Beneficiary may impose for its disposition. Application of all or any part of the Funds collected
and received by the Beneficiary or the release thereof shall not cure or waive any default under
this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights
of any senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to
reconstruct the improvements on the Property provided that Beneficiary reasonably determines
that Trustor (taking into account the Funds) has sufficient funds to rebuild the improvements in
substantially the form they existed prior to the casualty or condemnation.
ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or
the enforcement of performance or observance of an obligation or agreement on the part of the
Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the Secured
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Obligations, and shall bear interest from the date such expenses are incurred at the lesser of ten
percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixtures filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement
under the California Commercial Code.
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees
to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary
to maintain such valid perfected security interest in the Security in order to secure the payment of
the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order
to protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall
have the right, without payment of charges or fees, to inspect the Security.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor
itself or any person claiming under or through it establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use or
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occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing
covenants shall run with the land.
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of any federal, state or local laws, ordinances or regulations
relating to industrial hygiene or to the environmental conditions ("Environmental Laws") on,
under or about the Property including, but not limited to, soil and ground water conditions.
Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property
or transport to or from the Property any flammable explosives, radioactive materials, hazardous
wastes, toxic substances or related materials, including without limitation, any substances
defined as or included in the definition of "hazardous substances," hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or state laws or
regulations (collectively referred to hereinafter as "Hazardous Materials") except (a) as permitted
under Environmental Laws; or (b) such of the foregoing as may be customarily used in
construction or operation of a multi -family residential development.
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Trustor or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); and (ii) all claims made or threatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims").
Beneficiary shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims.
Beneficiary shall have its reasonable attorneys' fees in connection therewith paid by Trustor,
provided Trustor has failed, based on reasonable evidence produced by Beneficiary, to
adequately defend such Hazardous Materials Claims. Trustor shall indemnify, defend, and hold
harmless Beneficiary and its councilmembers, supervisors, directors, officers, employees, agents,
successors and assigns from and against any loss, damage, cost, expense or liability directly or
indirectly arising out of or attributable to the use, generation, storage, release, threatened release,
discharge, disposal, or presence of Hazardous Materials on, under, or about the Property,
including without limitation: (a) all foreseeable consequential damages; (b) the costs of any
required or necessary repair, cleanup or detoxification of the Property and the preparation and
implementation of any closure, remedial or other required plans; and (c) all reasonable costs and
expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not
limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether
or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability,
and expenses covered by this indemnification provision include, but are not limited to: (1) losses
attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable
space on the Property; (3) adverse effect on the marketing of any rental space on the Property;
and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by
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any regulatory agency (including but not limited to the costs of any required testing, remediation,
repair, removal, cleanup or detoxification of the Property and surrounding properties).
Without Beneficiary's prior written consent, which shall not be unreasonably delayed or
withheld, Trustor shall not take any Environmental Measure or other remedial action in response
to the presence of any Hazardous Materials on, under or about the Property, nor enter into any
settlement agreement, consent decree, or other compromise in respect to any Hazardous Material
Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's
reasonable judgement, impair the value of the Beneficiary's security hereunder; provided,
however, that Beneficiary's prior consent shall not be necessary in the event that the presence of
Hazardous Materials on, under, or about the Property either poses an immediate threat to the
health, safety or welfare of any individual or is of such a nature that an immediate remedial
response is necessary and it is not reasonably possible to obtain Beneficiary's consent before
taking such action, provided that in such event Trustor shall notify Beneficiary as soon as
practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such
consent is required hereunder, if (i) a particular remedial action is ordered by a court of
competent jurisdiction, (ii) Trustor will or may be subjected to civil or criminal sanctions or
penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction
of Beneficiary that there is no reasonable alternative to such remedial action which would result
in less impairment of Beneficiary's security hereunder; or (iv) the action has been agreed to by
Beneficiary.
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section
726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of hazardous materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Trustor knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
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threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred
by the Beneficiary in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Property is environmentally impaired, plus interest thereon at the default rate
specified in the Loan Agreement until paid, shall be added to the indebtedness secured by this
Deed of Trust and shall be due and payable to the Beneficiary upon its demand made at any time
following the conclusion of such action.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following shall constitute events of default ("Events of Default") following the
expiration of any applicable notice and cure periods: (1) failure to make any payment to be paid
by Trustor under the Loan Documents; (2) failure to observe or perform any of Trustor's other
covenants, agreements or obligations under the Loan Documents, including, without limitation,
the provisions concerning discrimination; (3) failure to make any payment or observe or perform
any of Trustor's other covenants, agreements, or obligations under any other debt instrument or
regulatory agreement secured by the Property, which default shall not be cured within the times
and in the manner provided therein; or (4) a default is declared under the Approved Financing by
the lender of such Approved Financing. Notwithstanding anything to the contrary contained
herein, Beneficiary hereby agrees that any cure of any default made or tendered by one or more
of Trustor's limited partners shall be deemed a cure by the Trustor and shall be accepted or
rejected on the same basis as if made or tendered by Trustor. Copies of all notices which are sent
to Trustor hereunder shall be sent to Investor Limited Partner at the address set forth in the Loan
Agreement, and the Investor Limited Partner shall have the right, but not the obligation to cure
an Event of Default hereunder, and Beneficiary will accept tender of such cure as if delivered by
Trustor.
Section 7.2 Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations shall immediately become due and payable, upon written notice by the Beneficiary
to the Trustor (or automatically where so specified in the Loan Documents), and no omission on
the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a
waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Security and take possession thereof (or any part thereof) and of any of
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the Security, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable to preserve the value or marketability of the Property, or part thereof or
interest therein, increase the income therefrom or protect the security thereof. The entering upon
and taking possession of the Security shall not cure or waive any Event of Default or Notice of
Sale (as defined below) hereunder or invalidate any act done in response to such Event of
Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in possession of
the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed of
Trust, or by law upon occurrence of any Event of Default, including the right to exercise the
power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of Alameda County; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with
Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to
constitute evidence that the Secured Obligations are immediately due and payable), and such
receipts and evidence of any expenditures made that are additionally secured hereby as Trustee
may require.
(a) Upon receipt of the Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as then required by
law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Sale having been
given as required by law, sell the Security, at the time and place of sale fixed by it in the Notice
of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem
expedient and in such order as it may determine unless specified otherwise by the Trustor
according to California Civil Code Section 2924g(b), at public auction to the highest bidder, for
cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to
such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the
property so sold, but without any covenant or warranty, express or implied. The recitals in such
deed or any matters of facts shall be conclusive proof of the truthfulness thereof. Any person,
including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
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of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured
hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may 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, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver.
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any such right, power or
remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder shall not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary
of its right hereunder or impair any rights, power or remedies consequent on any Event of
Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment or performance of any Secured Obligation, (ii) takes other or additional security or the
payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the
Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
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otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents,
(v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or
consents to any agreement subordinating the lien hereof, any such act or omission shall not
release, discharge, modify, change or affect the original liability under this Deed of Trust, or any
other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or
any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor shall any
such act or omission preclude the Beneficiary from exercising any right, power or privilege
herein granted or intended to be granted in any Event of Default then made or of any subsequent
Event of Default, nor, except as otherwise expressly provided in an instrument or instruments
executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary shall have power to (a) institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount which may become due and payable
by the Trustor hereunder after such date.
Section 7.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any Secured Obligations or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
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ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendments.
This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only
by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and all obligations under the Loan Documents have been performed in full, and
upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment
by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the
person or persons legally entitled thereto.
Section 8.3 Notices.
Formal notices, demands, and communications between the Parties shall be sufficiently given if
and shall not be deemed given unless (a) dispatched by registered or certified mail, postage
prepaid, return receipt requested, (b) delivered by express delivery service, return receipt
requested, (c) delivered personally, or (d) sent by electronic mail, provided that any notice sent
by electronic mail must be followed by notice delivered under either (a), (b), or (c) within 2
business days. All such notices shall be delivered to the principal office of the Parties as follows:
Borrower: Corona/Ely Ranch, Inc.
22645 Grand Street
Hayward, CA 94541
Attention: Chief Executive Officer
City: City of Dublin
37101 Dublin Blvd.
Dublin, CA 94560
Attn: Community Development Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable) except that any
electronic mail received after 5:00 p.m. shall be deemed to have been received on the next
business day.
Section 8.4 Successors and Joint Trustors.
Where an obligation created herein is binding upon Trustor, the obligation shall also
apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust
have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be
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deemed to be a joint and several obligation of the Trustor and such transferee. Where Trustor is
more than one entity or person, all obligations of Trustor shall be deemed to be a joint and
several obligation of each and every entity and person comprising Trustor.
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 8.10 Actions.
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
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substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, shall be conclusive proof of proper
appointment of the successor trustee.
Section 8.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 8.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
Notwithstanding anything to the contrary contained herein or in any documents secured
by this Deed of Trust or contained in any subordination agreement, the Beneficiary
acknowledges and agrees that in the event of a foreclosure or deed -in -lieu of foreclosure
(collectively, "Foreclosure") with respect to the Security encumbered by this Deed of Trust, the
following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986 (26
USC 42 (h)(6)(E)(ii)), as amended, shall apply:
For a period of three (3) years from the date of Foreclosure, with respect to any unit that
had been regulated by a Regulatory Agreement with the California Tax Credit Allocation
Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be
evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Code.
[SIGNATURES TO FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
CORONA/ELY RANCH, INC.,
a California nonprofit public benefit corporation
By:
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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
)
)
)
On , before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER 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.
Name:
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Alameda, City of Dublin, State of California, and
is described as follows:
Parcel One:
Parcel 2 of Parcel Map No. 1920, filed December 1, 1976 in Book 94 of Parcel Maps, Pages 11
and 12, Alameda County Records.
Excepting therefrom:
That portion of land conveyed to the City of Dublin by Grant Deed Dated March 15, 2021,
Recorded 03-26-21, as Instrument No. 2021123184, more particularly described as follows:
Real property, situate in the incorporated territory of the City of Dublin, County of Alameda,
State of California, described as follows:
Being a portion of Parcel 2, as said Parcel 2 is shown and so designated on Parcel Map 1920,
filed for record on December 1, 1976 in Book 94 of Parcel Maps, at Page 11, in the Office of the
County Recorder of Alameda County, more particularly described as follows:
Beginning at the Northwestern corner of said Parcel 2;
Thence from said point of beginning, along the Northerly line of said Parcel 2, North 69° 08' 15"
East 31.11 feet;
Thence leaving said Northerly line, along the arc of a non -tangent 40.00 foot radius curve to
the left, from which the center of said curve bears South 33° 42' 04 East, through a central
angle of 77° 09' 41" an arc distance of 53.87 feet, to the Westerly line of said Parcel 2;
Thence along said Westerly line, North 20° 51' 45" West 39.00 feet to said point of beginning.
Parcel Two:
An Access Easement, not to be exclusive, together with the right of ingress and egress therefor,
in, over, along and across that certain land situated in the Township of Pleasanton, County of
Alameda, State of California, described as follows:
Beginning at the most Western corner of the parcel of land described in the Deed from Amfac
Merchandising Corporation, a California corporation to Baydale, Inc., a Delaware corporation,
recorded December 28, 1971, Reel 3026, Image 888, Recorder's Series No. 71-169856,
Alameda County Records; thence through a portion of the last named parcel of land and along
the Northwestern boundary line thereof, North 69° 08' 15" East, 329.29 feet; thence at right
angles to the last named line South 20° 51' 45" East, 71.00 feet to the Northeastern corner of
the parcel of land described in the Deed from Baydale, Inc., a Delaware corporation, to Amfac
Merchandising Corporation, a California corporation, recorded April 12, 1972, Reel 3104 Image
883, Recorder's Series No. 72-47311, Alameda County Records; thence along the last named
line South 69° 08' 15" West 329.29 feet to the Northeastern line of Regional Street being
the parcel of land described as Parcel One in the Deed from Motel Interstate Systems, Inc., to
the County of Alameda, recorded March 8, 1971, Reel 2802 Image 404, Recorder's Series No.
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71-26256, Alameda County Records; thence along the last named line North 20° 51' 45" West,
71.00 feet to the point of beginning
Assessor's Parcel No. 941-1500-025-2 (Affects this and other property)
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EXHIBIT E
CITY CONSTRUCTION/PERMANENT LOAN PROMISSORY NOTE
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PROMISSORY NOTE
(Regional Street Apartments)
$3,333,333 Dublin, California
, 202
FOR VALUE RECEIVED, the undersigned
("Borrower"), hereby promises to pay to the order of the City of Dublin, a California municipal
corporation ("Holder"), 100 Civic Plaza, Dublin, California, 94568, Attn:
, the principal amount of Three Million Three Hundred Thirty -Three
Thousand Three Hundred Thirty -Three Dollars ($3,333,333), plus interest thereon pursuant to
Section 2 below (the "City Construction/Permanent Loan").
1. Borrower's Obligation. This promissory note (the "Note") evidences
Borrower's obligation to pay Holder the principal amount of the City Construction/Permanent
Loan loaned to Borrower by Holder pursuant to the Affordable Housing Assistance Agreement
between Borrower and Corona/Ely Ranch, Inc. dated , 2023 (the "AHAA").
All capitalized terms not otherwise defined in this Note shall have the meanings set forth in the
AHAA.
2. Interest. The City Construction/Permanent Loan bears interest from the
date of this Note at three percent (3%) interest, until full repayment of the outstanding balance of
the City Construction/Permanent Loan.
3. Term and Repayment Requirements. Principal and interest under this
Note in the amount of the City Pro rata Percentage of Fifty Percent (50%) of the Residual
Receipts is due and payable as set forth in Section 4.9 of the AHAA. The unpaid principal
balance hereunder, together with accrued interest thereon, is due and payable no later than the
date that is the fifty-fifth (55th) anniversary of the date that a final certificate of occupancy is
issued by the City of Dublin to certify that the construction of the Development is complete and
the Development may be legally occupied (the "Completion Date").
4. Disbursements. All disbursements shall be in accordance with the terms
of the AHAA.
5. Prepayment. Borrower may prepay the City Construction/Permanent
Loan at any time without penalty or fee.
6. Assumption. This Note shall not be assumable by the successors and
assigns of Borrower without the prior written consent of Holder unless the assignment complies
with Section 6.3 of the AHAA. Holder may assign its interest in the Note to any person or entity
in Holder's sole discretion.
7. Security. This Note shall be secured by the Deed of Trust on the Property,
wherein Borrower is the trustor and Holder is the beneficiary. The terms of the Deed of Trust
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are hereby incorporated into this Note and made a part hereof. This Note is nonrecourse to
Borrower and the general and limited partners of the Borrower, and the sole recourse of Holder
with respect to the payment of the principal of, and interest on this Note shall be to the Property
and the Improvements and any other collateral held by Holder as security for this Note; provided
however, nothing contained herein is intended to relieve the Borrower of liability to the extent of
any loss for fraud or intentional misrepresentation, or bad faith, waste, willful misrepresentation
by the Borrower; or the failure to pay taxes, assessments or other charges which may create liens
on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust
(to the full extent of such taxes, assessments or other charges); or be deemed in any way to limit
the rights of the Holder to obtain specific performance by the Borrower of its covenants under
the City Documents, other than the covenants to pay the Holder principal and interest due under
this Note.
8. Terms of Payment.
(a) All payments due under this Note shall be paid in currency of the
United States of America, which at the time of payment is lawful for the payment of public and
private debts.
(b) All payments on this Note shall be paid to Holder at the address set
forth in the first paragraph of this Note, or to such other place as Holder of this Note may from
time to time designate.
(c) All payments on this Note shall be without expense to Holder, and
Borrower agrees to pay all costs and expenses, including reconveyance fees and reasonable
attorney's fees of Holder, incurred in connection with the payment of this Note and the release of
any security hereof.
(d) Notwithstanding any other provision of this Note, or any
instrument securing the obligations of Borrower under this Note, if, for any reason whatsoever,
the payment of any sums by Borrower pursuant to the terms of this Note would result in the
payment of interest which would exceed the amount that Holder may legally charge under the
laws of the State of California, then the amount by which payments exceed the lawful interest
rate shall automatically be deducted from the principal balance owing on this Note, so that in no
event shall Borrower be obligated under the terms of this Note to pay any interest which would
exceed the lawful rate.
9. Default.
(a) Any of the following shall constitute an event of default under this
Note:
(i) Any failure to pay, in full, any payment required under this
Note when due following written notice by the Holder of such failure and ten (10) days
opportunity to cure;
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(ii) Any failure in the performance by Borrower of any term,
condition, provision or covenant set forth in this Note subject to the notice and cure period set
forth in Section 9.1 of the AHAA; and
(iii) The occurrence of any Borrower event of default under the
AHAA, the City Construction/Permanent Loan Deed of Trust, the Regulatory Agreement, or
other instrument securing the obligations of Borrower under this Note or under any other
promissory notes hereafter issued by Borrower to Holder pursuant to the AHAA or the City
Construction/Permanent Loan Deed of Trust (the "City Loan Documents"), subject to notice and
cure periods, if any, set forth therein.
(b) Upon the occurrence of one or more of the foregoing events of
default, the entire unpaid principal balance, together with all interest thereon, and together with
all other sums then payable under this Note and the Deed of Trust shall at the option of Holder
become immediately due and payable upon written notice by Holder to Borrower without further
demand.
(c) Holder's failure to exercise the remedy set forth in Subsection 9(b)
above or any other remedy provided by law upon the occurrence of one or more of the foregoing
events of default shall not constitute a waiver of the right to exercise any remedy at any
subsequent time in respect to the same or any other default. The acceptance by Holder hereof of
any payment which is less than the total of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or
options at that time or at any subsequent time, or nullify any prior exercise of any such remedy
or option, without the express consent of Holder, except as and to the extent otherwise provided
by law.
(d) Notwithstanding anything herein to the contrary, Holder hereby
agrees that any cure of any default made or tendered by one or more of Borrower's limited
partners shall be deemed a cure by Borrower and shall be accepted or rejected on the same basis
as if made or tendered by Borrower. Copies of all notices which are sent hereunder to Borrower
shall be sent to Borrower's limited partners at the address provided pursuant to Section 11.3 of
the AHAA.
10. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and
demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment
of this Note. Borrower expressly agrees that this Note or any payment hereunder may be
extended from time to time, and that Holder may accept further security or release any security
for this Note, all without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment
hereof made by agreement of Holder with any person now or hereafter liable for payment of this
Note shall not operate to release, discharge, modify, change or affect the original liability of
Borrower under this Note, either in whole or in part.
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(c) The obligations of Borrower under this Note shall be absolute and
Borrower waives any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
11. Miscellaneous Provisions.
(a) All notices to Holder or Borrower shall be given in the manner and
at the addresses set forth in the AHAA, or to such addresses as Holder and Borrower may therein
designate.
(b) Borrower promises to pay all costs and expenses, including
reasonable attorney's fees, incurred by Holder in the enforcement of the provisions of this Note,
regardless of whether suit is filed to seek enforcement.
(c) This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change, modification or
discharge is sought.
(d) This Note shall be governed by and construed in accordance with
the laws of the State of California.
(e) The times for the performance of any obligations hereunder shall
be strictly construed, time being of the essence.
(0 This document, together with the City Loan Documents, contains
the entire agreement between the parties as to the City Construction/Permanent Loan. It may not
be modified except upon written consent of the parties.
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IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the date
first above written.
By:
Name:
5379382.1
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EXHIBIT F
CITY CONSTRUCTION/PERMANENT LOAN DEED OF TRUST
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Manager
No fee for recording pursuant to
Government Code Section 27383 and 27388.1
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
(Regional Street Apartments)
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of ,
202_, by and among ("Trustor"), Title
Company ("Trustee"), and the City of Dublin, a California municipal corporation
("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's interest in the property located in the County of Alameda, State of
California, that is described in the attached Exhibit A, incorporated herein by this reference (the
"Property");
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights -of -way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
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adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
now or hereafter attached to or used in and about the building or buildings now erected or
hereafter to be erected on the Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the "Secured
Obligations"):
(a) Payment to Beneficiary of all sums at any time owing under or in connection with
the Note (defined in Section 1.3 below) until paid or cancelled and any other amounts owing
under the Loan Documents (defined in Section 1.2 below). Said principal and other payments
shall be due and payable as provided in the Note or other Loan Documents, as applicable. The
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Note and all its terms are incorporated herein by reference, and this conveyance shall secure any
and all extensions thereof, however evidenced;
(b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
(c) Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Loan Documents; and
(d) All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a different rate of
interest, or (ii) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1
DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall
have the following meanings in this Deed of Trust:
Section 1.1 The term "Loan Agreement" means that certain Affordable Housing
Assistance Agreement between Trustor and Beneficiary, dated , 2023.
Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, the Regulatory Agreement, and any other debt, loan or security instruments between
Trustor and the Beneficiary relating to the Property.
Section 1.3 The term "Note" means the promissory note in the principal amount of
Three Million Three Hundred Thirty -Three Thousand Three Hundred Thirty -Three Dollars
($3,333,333), of even date herewith, executed by Trustor in favor of the Beneficiary, as it may be
amended or restated, the payment of which is secured by this Deed of Trust. (A copy of the Note
is on file with the Beneficiary and terms and provisions of the Note are incorporated herein by
reference.)
Section 1.4 The term "Principal" means the amount required to be paid under the
Note.
Section 1.5 The term "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants of even date herewith by and between the Beneficiary and
the Trustor.
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ARTICLE 2
MAINTENANCE AND MODIFICATION OF THE
PROPERTY AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
The Trustor agrees that at all times prior to full payment and performance of the Secured
Obligations, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the
Security or cause the Security to be maintained and preserved in good condition, reasonable wear
and tear excepted. The Trustor will from time to time make or cause to be made all repairs,
replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no
responsibility in any of these matters or for the making of improvements or additions to the
Security.
Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all
claims for labor done and for material and services furnished in connection with the Security,
diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation
of labor on the work or construction on the Security for a continuous period of thirty (30) days or
more, and to take all other reasonable steps to forestall the assertion of claims of lien against the
Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary
as its agent (said agency being coupled with an interest) with the authority, but without any
obligation, to file for record any notices of completion or cessation of labor or any other notice
that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the
Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent of Trustor
only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those
actions as hereinbefore provided.
Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or
claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons
who have furnished or claim to have furnished labor, services or materials in connection with the
Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or
services which Trustor in good faith disputes and is diligently contesting provided that Trustor
shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the
Recorder of Alameda County, a surety bond in an amount 1 and 1/2 times the amount of such
claim item to protect against a claim of lien.
Section 2.2 Granting of Easements.
Trustor may not grant easements, licenses, rights -of -way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those otherwise required by
law, and as approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
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As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and
revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents
and revenues so collected to the Secured Obligations with the balance, so long as no such breach
has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this
assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Loan Documents, and without the necessity of
Beneficiary entering upon and taking and maintaining full control of the Property in person, by
agent or by a court -appointed receiver, Beneficiary shall immediately be entitled to possession of
all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due
and payable, including but not limited to rents then due and unpaid, and all such rents shall
immediately upon delivery of such notice be held by Trustor as trustee for the benefit of
Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor shall contain a statement that Beneficiary exercises its rights to such rents.
Trustor agrees that commencing upon delivery of such written notice of Trustor's breach by
Beneficiary to Trustor, each tenant of the Property shall make such rents payable to and pay such
rents to Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant
therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental
unit, without any liability on the part of said tenant to inquire further as to the existence of a
default by Trustor.
Trustor hereby covenants that Trustor has not executed any prior assignment of said
rents, that Trustor has not performed, and will not perform, any acts or has not executed and will
not execute, any instrument which would prevent Beneficiary from exercising its rights under
this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no
anticipation or prepayment of any of the rents of the Property for more than two (2) months prior
to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept
payment of any rents of the Property more than two (2) months prior to the due dates of such
rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further
assignments of rents and revenues of the Property as Beneficiary may from time to time request.
Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents,
Beneficiary may in person, by agent or by a court -appointed receiver, regardless of the adequacy
of Beneficiary's security, enter upon and take and maintain full control of the Property in order to
perform all acts necessary and appropriate for the operation and maintenance thereof including,
but not limited to, the execution, cancellation or modification of leases, the collection of all rents
and revenues of the Property, the making of repairs to the Property and the execution or
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termination of contracts providing for the management or maintenance of the Property, all on
such terms as are deemed best to protect the security of this Deed of Trust. In the event
Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of
any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to
the appointment of such receiver. Beneficiary or the receiver shall be entitled to receive a
reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice by Beneficiary
to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan
Documents shall be applied first to the costs, if any, of taking control of and managing the
Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees,
premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies,
taxes, assessments and other charges on the Property, and the costs of discharging any obligation
or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this
deed of Trust. Beneficiary or the receiver shall have access to the books and records used in the
operation and maintenance of the Property and shall be liable to account only for those rents
actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through
Trustor or anyone having an interest in the Property by reason of anything done or left undone by
Beneficiary under this Section 2.3.
If the rents of the Property are not sufficient to meet the costs, if any, of taking control of
and managing the Property and collecting the rents, any funds expended by Beneficiary for such
purposes shall become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless
Beneficiary and Trustor agree in writing to other terms of payment, such amounts shall be
payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear
interest from the date of disbursement at the rate stated in Section 3.3.
Any entering upon and taking and maintaining of control of the Property by Beneficiary
or the receiver and any application of rents as provided herein shall not cure or waive any default
hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property shall terminate at such time as this
Deed of Trust ceases to secure the Secured Obligations.
ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes,
assessments, charges and levies imposed by any public authority or utility company which are or
may become a lien affecting the Security or any part thereof; provided, however, that Trustor
shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a)
the legality thereof shall be promptly and actively contested in good faith and by appropriate
proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section 3.1. With respect to taxes, special assessments or other similar governmental
charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any
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part of the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (b) of the first
sentence of this paragraph, the provisions of this Section 3.1 shall not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
In the event that Trustor shall fail to pay any of the foregoing items required by this
Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the maximum rate permitted by law, shall become part of the Secured Obligations secured
hereby, and Trustor agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
Trustor agrees to provide insurance conforming in all respects to that required under the
Loan Documents during the course of construction and following completion, and at all times
until all amounts secured by this Deed of Trust have been paid and all Secured Obligations
secured hereunder fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be maintained at Trustor's sole cost and
expense. Certificates of insurance for all of the above insurance policies, showing the same to be
in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time
prior to Trustor's satisfaction of the Secured Obligations.
Section 3.3 Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Loan Documents, the
Beneficiary, after at least seven (7) days prior notice to Trustor, may (but shall be under no
obligation to) take out the required policies of insurance and pay the premiums on the same or
may make such repairs or replacements as are necessary and provide for payment thereof; and all
amounts so advanced therefor by the Beneficiary shall become part of the Secured Obligations
(together with interest as set forth below) and shall be secured hereby, which amounts the
Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall bear interest
from the date of the advance at the lesser of ten percent (10%) per annum or the maximum rate
permitted by law.
ARTICLE 4
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.
All judgments, awards of damages, settlements and compensation made in connection
with or in lieu of (1) taking of all or any part of or any interest in the Property by or under
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assertion of the power of eminent domain, (2) any damage to or destruction of the Property or in
any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the
Property (collectively, the "Funds") shall be used to repair or restore the Property, but if the
property cannot be repaired or restored such Funds are hereby assigned to and shall be paid to
the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and
empowered (but not required) to collect and receive any Funds and is authorized to apply them in
whole or in part upon any indebtedness or obligation secured hereby, in such order and manner
as the Beneficiary shall determine at its sole option. The Beneficiary shall be entitled to settle
and adjust all claims under insurance policies provided under this Deed of Trust and may deduct
and retain from the proceeds of such insurance the amount of all expenses incurred by it in
connection with any such settlement or adjustment. All or any part of the amounts so collected
and recovered by the Beneficiary may be released to Trustor upon such conditions as the
Beneficiary may impose for its disposition. Application of all or any part of the Funds collected
and received by the Beneficiary or the release thereof shall not cure or waive any default under
this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights
of any senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to
reconstruct the improvements on the Property provided that Beneficiary reasonably determines
that Trustor (taking into account the Funds) has sufficient funds to rebuild the improvements in
substantially the form they existed prior to the casualty or condemnation.
ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.
The Trustor shall duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under the Loan Documents and any other agreement of any nature
whatsoever now or hereafter involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the
Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or
the enforcement of performance or observance of an obligation or agreement on the part of the
Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the Secured
Obligations, and shall bear interest from the date such expenses are incurred at the lesser of ten
percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
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Section 5.4 Personal Property.
To the maximum extent permitted by law, the personal property subject to this Deed of
Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall
constitute a fixtures filing under the California Commercial Code. As to any personal property
not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement
under the California Commercial Code.
Section 5.5 Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees
to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary
to maintain such valid perfected security interest in the Security in order to secure the payment of
the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order
to protect the security interest established pursuant to this instrument.
Section 5.6 Operation of the Security.
The Trustor shall operate the Security (and, in case of a transfer of a portion of the
Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in
full compliance with the Loan Documents.
Section 5.7 Inspection of the Security.
At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and
its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall
have the right, without payment of charges or fees, to inspect the Security.
Section 5.8 Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor
itself or any person claiming under or through it 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 Security. The foregoing
covenants shall run with the land.
ARTICLE 6
HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of any federal, state or local laws, ordinances or regulations
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relating to industrial hygiene or to the environmental conditions ("Environmental Laws") on,
under or about the Property including, but not limited to, soil and ground water conditions.
Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property
or transport to or from the Property any flammable explosives, radioactive materials, hazardous
wastes, toxic substances or related materials, including without limitation, any substances
defined as or included in the definition of "hazardous substances," hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or state laws or
regulations (collectively referred to hereinafter as "Hazardous Materials") except (a) as permitted
under Environmental Laws; or (b) such of the foregoing as may be customarily used in
construction or operation of a multi -family residential development.
Trustor shall immediately advise Beneficiary in writing if at any time it receives written
notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Trustor or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, ("Hazardous Materials Law"); and (ii) all claims made or threatened by any third party
against Trustor or the Property relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii)
above are hereinafter referred to as "Hazardous Materials Claims").
Beneficiary shall have the right to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated in connection with any Hazardous Materials Claims.
Beneficiary shall have its reasonable attorneys' fees in connection therewith paid by Trustor,
provided Trustor has failed, based on reasonable evidence produced by Beneficiary, to
adequately defend such Hazardous Materials Claims. Trustor shall indemnify, defend, and hold
harmless Beneficiary and its councilmembers, supervisors, directors, officers, employees, agents,
successors and assigns from and against any loss, damage, cost, expense or liability directly or
indirectly arising out of or attributable to the use, generation, storage, release, threatened release,
discharge, disposal, or presence of Hazardous Materials on, under, or about the Property,
including without limitation: (a) all foreseeable consequential damages; (b) the costs of any
required or necessary repair, cleanup or detoxification of the Property and the preparation and
implementation of any closure, remedial or other required plans; and (c) all reasonable costs and
expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not
limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether
or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability,
and expenses covered by this indemnification provision include, but are not limited to: (1) losses
attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable
space on the Property; (3) adverse effect on the marketing of any rental space on the Property;
and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by
any regulatory agency (including but not limited to the costs of any required testing, remediation,
repair, removal, cleanup or detoxification of the Property and surrounding properties).
Without Beneficiary's prior written consent, which shall not be unreasonably delayed or
withheld, Trustor shall not take any Environmental Measure or other remedial action in response
to the presence of any Hazardous Materials on, under or about the Property, nor enter into any
settlement agreement, consent decree, or other compromise in respect to any Hazardous Material
Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's
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reasonable judgement, impair the value of the Beneficiary's security hereunder; provided,
however, that Beneficiary's prior consent shall not be necessary in the event that the presence of
Hazardous Materials on, under, or about the Property either poses an immediate threat to the
health, safety or welfare of any individual or is of such a nature that an immediate remedial
response is necessary and it is not reasonably possible to obtain Beneficiary's consent before
taking such action, provided that in such event Trustor shall notify Beneficiary as soon as
practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such
consent is required hereunder, if (i) a particular remedial action is ordered by a court of
competent jurisdiction, (ii) Trustor will or may be subjected to civil or criminal sanctions or
penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction
of Beneficiary that there is no reasonable alternative to such remedial action which would result
in less impairment of Beneficiary's security hereunder; or (iv) the action has been agreed to by
Beneficiary.
The Trustor hereby acknowledges and agrees that (i) this Article is intended as the
Beneficiary's written request for information (and the Trustor's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other
Loan Documents (together with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the property is intended by the
Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code
of Civil Procedure Section 736.
In the event that any portion of the Property is determined to be "environmentally
impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or
to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section
726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the
Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its
rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such
environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and
remedies of an unsecured creditor, including reduction of its claim against the Trustor to
judgment, and (b) any other rights and remedies permitted by law. For purposes of determining
the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or
acquiesced in a release or threatened release of hazardous materials, within the meaning of
California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant, or user of any portion of the Property and the Trustor knew or should have known of
the activity by such lessee, occupant, or user which caused or contributed to the release or
threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred
by the Beneficiary in connection with any action commenced under this paragraph, including any
action required by California Code of Civil Procedure Section 726.5(b) to determine the degree
to which the Property is environmentally impaired, plus interest thereon at the default rate
specified in the Loan Agreement until paid, shall be added to the indebtedness secured by this
Deed of Trust and shall be due and payable to the Beneficiary upon its demand made at any time
following the conclusion of such action.
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ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
The following shall constitute events of default ("Events of Default") following the
expiration of any applicable notice and cure periods: (1) failure to make any payment to be paid
by Trustor under the Loan Documents; (2) failure to observe or perform any of Trustor's other
covenants, agreements or obligations under the Loan Documents, including, without limitation,
the provisions concerning discrimination; (3) failure to make any payment or observe or perform
any of Trustor's other covenants, agreements, or obligations under any other debt instrument or
regulatory agreement secured by the Property, which default shall not be cured within the times
and in the manner provided therein; or (4) a default is declared under the Approved Financing by
the lender of such Approved Financing. Notwithstanding anything to the contrary contained
herein, Beneficiary hereby agrees that any cure of any default made or tendered by one or more
of Trustor's limited partners shall be deemed a cure by the Trustor and shall be accepted or
rejected on the same basis as if made or tendered by Trustor. Copies of all notices which are sent
to Trustor hereunder shall be sent to Investor Limited Partner at the address set forth in the Loan
Agreement, and the Investor Limited Partner shall have the right, but not the obligation to cure
an Event of Default hereunder, and Beneficiary will accept tender of such cure as if delivered by
Trustor.
Section 7.2 Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured
Obligations shall immediately become due and payable, upon written notice by the Beneficiary
to the Trustor (or automatically where so specified in the Loan Documents), and no omission on
the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a
waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession.
If an Event of Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Security and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable to preserve the value or marketability of the Property, or part thereof or
interest therein, increase the income therefrom or protect the security thereof. The entering upon
and taking possession of the Security shall not cure or waive any Event of Default or Notice of
Sale (as defined below) hereunder or invalidate any act done in response to such Event of
Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in possession of
the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed of
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Trust, or by law upon occurrence of any Event of Default, including the right to exercise the
power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of Alameda County; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with
Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to
constitute evidence that the Secured Obligations are immediately due and payable), and such
receipts and evidence of any expenditures made that are additionally secured hereby as Trustee
may require.
(a) Upon receipt of the Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as then required by
law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Sale having been
given as required by law, sell the Security, at the time and place of sale fixed by it in the Notice
of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem
expedient and in such order as it may determine unless specified otherwise by the Trustor
according to California Civil Code Section 2924g(b), at public auction to the highest bidder, for
cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to
such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the
property so sold, but without any covenant or warranty, express or implied. The recitals in such
deed or any matters of facts shall be conclusive proof of the truthfulness thereof. Any person,
including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured
Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured
hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may 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, and without
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further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver.
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any such right, power or
remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder shall not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary
of its right hereunder or impair any rights, power or remedies consequent on any Event of
Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the
payment or performance of any Secured Obligation, (ii) takes other or additional security or the
payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the
Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents,
(v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or
consents to any agreement subordinating the lien hereof, any such act or omission shall not
release, discharge, modify, change or affect the original liability under this Deed of Trust, or any
other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or
any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor shall any
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such act or omission preclude the Beneficiary from exercising any right, power or privilege
herein granted or intended to be granted in any Event of Default then made or of any subsequent
Event of Default, nor, except as otherwise expressly provided in an instrument or instruments
executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security.
The Beneficiary shall have power to (a) institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Security and the rights of the
Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its
interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment,
rule or order would impair the Security thereunder or be prejudicial to the interest of the
Beneficiary.
Section 7.9 Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of the Beneficiary
allowed in such proceedings and for any additional amount which may become due and payable
by the Trustor hereunder after such date.
Section 7.10 Waiver.
The Trustor waives presentment, demand for payment, notice of dishonor, notice of
protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in
taking any action to collect any Secured Obligations or in proceedings against the Security, in
connection with the delivery, acceptance, performance, default, endorsement or guaranty of this
Deed of Trust.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendments.
This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only
by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee.
Upon written request of Beneficiary stating that all Secured Obligations have been paid
or forgiven, and all obligations under the Loan Documents have been performed in full, and
upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment
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by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the
person or persons legally entitled thereto.
Section 8.3 Notices.
Formal notices, demands, and communications between the Parties shall be sufficiently given if
and shall not be deemed given unless (a) dispatched by registered or certified mail, postage
prepaid, return receipt requested, (b) delivered by express delivery service, return receipt
requested, (c) delivered personally, or (d) sent by electronic mail, provided that any notice sent
by electronic mail must be followed by notice delivered under either (a), (b), or (c) within 2
business days. All such notices shall be delivered to the principal office of the Parties as follows:
Borrower:
22645 Grand Street
Hayward, CA 94541
Attention: Chief Executive Officer
City: City of Dublin
37101 Dublin Blvd.
Dublin, CA 94560
Attn: Community Development Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable) except that any
electronic mail received after 5:00 p.m. shall be deemed to have been received on the next
business day.
Section 8.4 Successors and Joint Trustors.
Where an obligation created herein is binding upon Trustor, the obligation shall also
apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust
have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be
deemed to be a joint and several obligation of the Trustor and such transferee. Where Trustor is
more than one entity or person, all obligations of Trustor shall be deemed to be a joint and
several obligation of each and every entity and person comprising Trustor.
Section 8.5 Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any term
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
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the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
Section 8.8 Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
Section 8.10 Actions.
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
Section 8.11 Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
county or counties in which the Property is situated, shall be conclusive proof of proper
appointment of the successor trustee.
Section 8.12 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law.
Section 8.13 Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
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obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
Notwithstanding anything to the contrary contained herein or in any documents secured
by this Deed of Trust or contained in any subordination agreement, the Beneficiary
acknowledges and agrees that in the event of a foreclosure or deed -in -lieu of foreclosure
(collectively, "Foreclosure") with respect to the Security encumbered by this Deed of Trust, the
following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986 (26
USC 42 (h)(6)(E)(ii)), as amended, shall apply:
For a period of three (3) years from the date of Foreclosure, with respect to any unit that
had been regulated by a Regulatory Agreement with the California Tax Credit Allocation
Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be
evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Code.
[SIGNATURES TO FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
By:
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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
)
)
)
On , before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER 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.
Name:
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Alameda, City of Dublin, State of California, and
is described as follows:
Parcel One:
Parcel 2 of Parcel Map No. 1920, filed December 1, 1976 in Book 94 of Parcel Maps, Pages 11
and 12, Alameda County Records.
Excepting therefrom:
That portion of land conveyed to the City of Dublin by Grant Deed Dated March 15, 2021,
Recorded 03-26-21, as Instrument No. 2021123184, more particularly described as follows:
Real property, situate in the incorporated territory of the City of Dublin, County of Alameda,
State of California, described as follows:
Being a portion of Parcel 2, as said Parcel 2 is shown and so designated on Parcel Map 1920,
filed for record on December 1, 1976 in Book 94 of Parcel Maps, at Page 11, in the Office of the
County Recorder of Alameda County, more particularly described as follows:
Beginning at the Northwestern corner of said Parcel 2;
Thence from said point of beginning, along the Northerly line of said Parcel 2, North 69° 08' 15"
East 31.11 feet;
Thence leaving said Northerly line, along the arc of a non -tangent 40.00 foot radius curve to
the left, from which the center of said curve bears South 33° 42' 04 East, through a central
angle of 77° 09' 41" an arc distance of 53.87 feet, to the Westerly line of said Parcel 2;
Thence along said Westerly line, North 20° 51' 45" West 39.00 feet to said point of beginning.
Parcel Two:
An Access Easement, not to be exclusive, together with the right of ingress and egress therefor,
in, over, along and across that certain land situated in the Township of Pleasanton, County of
Alameda, State of California, described as follows:
Beginning at the most Western corner of the parcel of land described in the Deed from Amfac
Merchandising Corporation, a California corporation to Baydale, Inc., a Delaware corporation,
recorded December 28, 1971, Reel 3026, Image 888, Recorder's Series No. 71-169856,
Alameda County Records; thence through a portion of the last named parcel of land and along
the Northwestern boundary line thereof, North 69° 08' 15" East, 329.29 feet; thence at right
angles to the last named line South 20° 51' 45" East, 71.00 feet to the Northeastern corner of
the parcel of land described in the Deed from Baydale, Inc., a Delaware corporation, to Amfac
Merchandising Corporation, a California corporation, recorded April 12, 1972, Reel 3104 Image
883, Recorder's Series No. 72-47311, Alameda County Records; thence along the last named
line South 69° 08' 15" West 329.29 feet to the Northeastern line of Regional Street being
the parcel of land described as Parcel One in the Deed from Motel Interstate Systems, Inc., to
the County of Alameda, recorded March 8, 1971, Reel 2802 Image 404, Recorder's Series No.
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71-26256, Alameda County Records; thence along the last named line North 20° 51' 45" West,
71.00 feet to the point of beginning
Assessor's Parcel No. 941-1500-025-2 (Affects this and other property)
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EXHIBIT G
SCHEDULE OF PERFORMANCE
Performance Milestones Milestone Completion Date
Developer satisfaction of Conditions Not later than June 30, 2025
Precedent to Disbursement of City
Predevelopment Loan.
Application to HCD Multifamily Housing Not later than July 31, 2023
Program
Application to Tax Credit Allocation Not later than August 31, 2024
Committee
Close of escrow for Construction Financing Not later than June 30, 2025
Commencement of construction and Within 30 days after Construction Loan
development work on Development Closing, and not later than: July 31, 2025
Completion of construction and development Not later than December 31, 2027
work on Development
Commencement of occupancy of apartment Not later than December 31, 2027
units
Full occupancy of apartment units Not later than June 30, 2028
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EXHIBIT H
SCOPE OF DEVELOPMENT
The project site is located within the Downtown Dublin Specific Plan (amended on July 21,
2020). The site is conveniently located within walking distance to retail, amenities, and major
transit stops including the BART West Dublin / Pleasanton Station. Consistent with the goals
of the Specific Plan, Eden Housing is proposing to develop Regional Street to support 113
units of critically needed affordable housing that will serve low and extremely low -Income
seniors (age 62+) in the City of Dublin. The project was developed consistent with the guiding
principles for the Transit -Oriented District. No additional CEQA approval was required.
Eden's 113-unit senior community at 6543 Regional Street will include 55 studios, 57 one -
bedrooms, and one unrestricted two -bedroom manager's unit. The studios and one -bedroom
units will be restricted to senior households earning between 20 to 50 percent of Alameda
County Area Median Income, as adjusted for family size. Eden currently owns and operates
4 properties in the City of Dublin, 3 of which are senior properties, including Valor Crossing,
which is located within walking distance of the Regional Street site. Regional Street is
anticipated to include open terraces on each residential floor, a community garden, and a pet
relief area. Ground floor units facing St. Patrick's Way will include outdoor patios and create
visual connections to the street for residents. Each floor will also contain outdoor terraces for
a distinctly residential feel for all residents to utilize. Other on -site amenities will include a
laundry room and a community room with a kitchen. The building is designed to have a
community room and lobby on the ground floor.
Regional Street residents in a PSH unit will also receive service and support on behalf of the
Alameda County Health Care Services Agency for services including access to mental health,
substance treatments, and medical services, as well as assists with applying for SSI and other
benefits. This site is also conveniently located next to various public transportation options
including BART West Dublin/Pleasanton Station.
The project has secured financing through Alameda County's Al program and the state's
Local Housing Trust Fund. Development staff applied for HCD No Place Like Home
("NPLH") funds in 2022. If awarded, thirty-four units will be set aside as permanent
supportive housing ("PSH") for chronically homeless seniors with severe mental illnesses.
Development staff will apply for 4% credits and tax-exempt bonds.
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EXHIBIT I
REGULATORY AGREEMENT
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Recording Requested by
and when Recorded, return to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN: 941-1500-025
Space above this line for Recorder's use.
AFFORDABLE HOUSING REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants
(this "Agreement") is dated as of , 2023, by and between the City of Dublin, a
municipal corporation ("City") and Corona/Ely Ranch, Inc., a California nonprofit public benefit
corporation ("Owner"). City and Owner are hereinafter collectively referred to as the "Parties."
This Agreement shall be effective as of the date this Agreement is recorded
("Effective Date").
RECITALS
A. Owner has acquired certain property located at 6541-6543 Regional Street in the
City of Dublin, California, more particularly described as Exhibit A (the "Property").
B. City and Owner have entered into a Community Benefit Program Agreement
dated December 7, 2021, as amended June 7, 2023, with respect to the proposed development of
a multifamily rental housing development on the Property for seniors and/or persons with special
needs, with not less than one hundred thirteen (113) apartment units (the "Development"). The
Community Benefit Program Agreement provides for Owner to construct the Development and
to restrict the rental of all of the apartment units in the Development to lower income persons at
an affordable rent. The Community Benefit Program Agreement further provides for the City to
grant the Development one hundred thirteen (113) Residential Allocations from the Downtown
Dublin Specific Plan.
C. The Owner intends to develop, construct, own, and operate the Development on
the Property consisting of approximately one hundred thirteen (113) housing units primarily for
Extremely Low and Low Income Households and related improvements. The Development will
include a manager's unit that will not be subject to affordability restrictions.
D. The City and the Owner have entered into an Affordable Housing Assistance
Agreement (the "Loan Agreement") pursuant to which the City make a predevelopment loan to
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Owner in the amount of One Million Dollars ($1,000,000), and a construction/permanent loan to
Owner to Owner in the amount of Three Million Three Hundred Thirty -Three Thousand Three
Hundred Thirty -Three Dollars ($3,333,333) (the "City Loans"). The City Loans will be used for
certain predevelopment and construction expenses of the Development and will make the
Development more competitive for the other affordable housing funding sources.
E. The Parties have agreed to enter into and record this Agreement in order to satisfy
the conditions described in the foregoing Recitals. The Parties intend the covenants set forth in
this Agreement to run with the land and to be binding upon Owner and Owner's successors and
assigns for a period of not less than fifty-five (55) years from the date a Certificate of Occupancy
is issued for the Development.
NOW THEREFORE, in consideration of the foregoing, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows.
1. Definitions. The following terms have the meanings set forth in this Section wherever
used in this Agreement or the attached exhibits.
"Actual Household Size" means the actual number of persons in the applicable
household.
"Adjusted for Family Size Appropriate to the Unit" shall be determined consistent
with Section 50052.5(h) of the California Health and Safety Code, except as provided under
Section 2.3(d) hereof.
"Adjusted Income" means the total anticipated annual income of all persons in a
household, as calculated in accordance with 25 California Code of Regulations Section 6914 or
pursuant to a successor State housing program that utilizes a reasonably similar method of
calculation of adjusted income. In the event that no such program exists, the City shall provide
the Owner with a reasonably similar method of calculation of adjusted income as provided in
said Section 6914.
"Affordable Rent" means that the maximum rents as specified in Section 2.3 hereof.
"Area Median Income" or "AMI" means the median gross yearly income adjusted for
Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as
applicable, in the County of Alameda, California, as published from time to time by HCD,
except as provided under Section 2.3(d) hereof. In the event that such income determinations are
no longer published, or are not updated for a period of at least eighteen (18) months, the City
shall provide the Owner with other income determinations which are reasonably similar with
respect to methods of calculation to those previously published by HCD.
"Assumed Household Size" means the household size "adjusted for family size
appropriate to the unit" in accordance with California Health and Safety Code Section 50053,
except as provided under Section 2.3(d) hereof. The definition is utilized to calculate Affordable
Rent and is not intended to be a limit on the number of persons occupying a unit.
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"City" shall mean the City of Dublin, a California municipal corporation.
"Claims" is defined in Section 10.
"Completion Date" means the date a final certificate of occupancy is issued by the City
to certify that the construction of the Development is complete and the Development may be
legally occupied.
"Development" shall mean the Property and the one hundred thirteen (113) units to be
developed on the Property, and any additional improvements and all landscaping, roads and
parking spaces existing thereon, as the same may from time to time exist
"Eligible Household" means a household (i) for which gross household income upon
initial occupancy does not exceed the applicable maximum income level for a Restricted Unit as
specified in Section 2.1, and (ii) which consists of one or more Qualifying Residents, Qualified
Permanent Residents, and/or Permitted Health Care Residents pursuant to California Civil Code
Section 51.3.
"Extremely Low Income Household" shall mean a household with an Adjusted Income
that does not exceed thirty percent (30%) of Area Median Income, adjusted for Actual
Household Size, as established and amended from time to time pursuant to Section 8 of the
United States Housing Act of 1937, and as published by HCD, except as provided under Section
2.3(d) hereof.
"Extremely Low Income Rent" shall mean the rent permitted to be charged for an
Extremely Low Income Unit pursuant to Section 2.1(b) below, except as provided under Section
2.3(d) hereof.
"Extremely Low Income Units" shall mean the Units, which, pursuant to Section 2.1(b)
below, are required to be occupied by Extremely Low Income Households.
"Fifteen Year Compliance Period" means the fifteen (15) year compliance period as
described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended.
"Indemnitees" is defined in Section 10.
"HCD" means the California Department of Housing and Community Development.
"Investor Limited Partner" means the limited partner or partners of the Owner.
"Low Income Household" shall mean a household with an Adjusted Income that does
not exceed sixty percent (60%) of Area Median Income, as established and amended from time
to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by
HCD, except as provided under Section 2.3(d) hereof.
"Low Income Rent" means the rent allowed to be charged on the Low Income Units
pursuant to Section 2.1(a) below, except as provided under Section 2.3(d) hereof.
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"Low Income Units" mean the Units that, pursuant to Section 2.1(a) below, are required
to be occupied by Low Income Households.
"Management and Marketing Plan" is defined in Section 6.4.
"Owner" shall mean Corona/Ely Ranch, Inc., a California nonprofit public benefit
corporation, and its successors and assigns to the Development.
"Property" shall mean the real property described in Exhibit A attached hereto and
incorporated herein.
"Regulations" means Title 25 of the California Code of Regulations.
"Rent" means the total of monthly payments by the residents of a Unit (other than the
manager's Unit) for the following: (1) use and occupancy of the Unit and land and related
improvements, including parking; (2) any separately charged fees or service charges assessed by
the Owner which are required of all Tenants, other than security deposits; (3) the cost of an
adequate level of service for utilities paid by the Tenant, including garbage collection, sewer,
water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service,
cable service or any other utility or service permitted to be excluded from the calculation of Rent
pursuant to the terms of 25 California Code of Regulations Section 6918; and (4) any other
interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public
or private entity other than the Owner, and paid by the Tenant. Utility allowances may be
determined by use of the utility allowance published by the local public housing authority or the
California Utility Allowance Calculator ("CUAC") model allowed by the California Tax Credit
Allocation Committee regulations, if the Property qualifies.
"Restricted Unit" means a dwelling unit which is reserved for occupancy at an
Affordable Rent by a household of not more than a specified household income in accordance
with and as set forth in Section 2.1.
"Senior Household" shall mean a household consisting of Senior Citizens, Qualified
Permanent Residents and/or Permitted Health Care Residents as defined in Civil Code Section
51.3(b).
"Tenant" shall mean an Eligible Household occupying a Unit.
"Term" means the term of this Regulatory Agreement, which commences as of the date
of this Regulatory Agreement and shall remain in effect until the fifty-fifth (55th) anniversary of
the Completion Date.
2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its
successors and assigns, that the Property shall be used solely for the operation of an affordable
residential rental development which qualifies as a Senior Citizen Housing Development
pursuant to California Civil Code Section 51.3, consisting of the Development and related
improvements, in compliance with the Loan Agreement and the requirements set forth herein.
Owner represents and warrants that it has not entered into any agreement that would restrict or
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259
compromise its ability to comply with the occupancy and affordability restrictions set forth in
this Agreement, and Owner covenants that it shall not enter into any agreement that is
inconsistent with such restrictions without the express written consent of City.
2.1 Affordability Requirements.
For the Term of fifty-five (55) years commencing upon the Completion Date, the
following residential units in the Development will be restricted for occupancy by Extremely
Low and Low Income Households as set forth below (the "Restricted Units"). The City and the
Owner acknowledge that other financing sources for the Development may impose additional
affordability restrictions on the Development.
(a) Seventy -Eight (78) of the Restricted Units shall be rented to and occupied
by or, if vacant, available for occupancy by Low Income Households; and
(b) Thirty -Four (34) of the Restricted Units shall be rented to and occupied
by, or if vacant, available for occupancy by Extremely Low Income Households.
(c) One (1) Unit shall be reserved for an on -site manager and shall not be
subject to affordability or occupancy restrictions
In the event that recertification of Tenant incomes indicates that the number of Restricted
Units in the Development actually occupied by Eligible Households falls below the number
reserved for each income group as specified in this Section 2.1, Owner shall rectify the condition
by renting the next available dwelling unit(s) in the Development to Eligible Household(s) until
the required income mix is achieved.
2.2 [Intentionally Deleted]
2.3 Rents for Restricted Units.
(a) Low Income Rent. Subject to Section 2.3(d) below, the Rent charged to
Residents of the Low Income Units shall not exceed one -twelfth (1/12th) of thirty percent (30%)
of sixty percent (60%) of Area Median Income, adjusted for Assumed Household Size.
(b) Extremely Low Income Rent. Subject to Section 2.3(d) below, the Rent
charged to Residents of the Low Income Units shall not exceed one -twelfth (1/12th) of thirty
percent (30%) of thirty percent (30%) of Area Median Income, adjusted for Assumed Household
Size.
(c) Rent Increases. The Rent may only be increased one time per year (unless
otherwise approved in writing by the City) and the Rent level following an increase, or upon a
new occupancy, shall not exceed the Rent level set forth in subsection a above, as applicable.
Households occupying Units shall be given at least thirty (30) days written notice prior to any
increase in the Rent.
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(d) Compliance with TCAC Requirements. In the event the Development
receives a reservation of low income housing tax credits by the California Tax Credit Allocation
Committee ("TCAC"), Owner may use the occupancy standards, assumed household sizes,
income limits, rent levels and rent increases that are permitted by TCAC in place of such
requirements imposed by this Agreement. During the term of any TCAC regulatory agreement
recorded with respect to the Development (the "TCAC Regulatory Agreement"), compliance
with the TCAC Regulatory Agreement as it pertains to occupancy standards, assumed household
sizes, income limits, rent levels and rent increases shall be deemed compliance with such
requirements of this Agreement. Notwithstanding the foregoing, however, Owner shall comply
with the requirements of City Municipal Code Section 8.68 with respect to occupancy standards,
assumed household sizes, income limits, rent levels and rent increases for the required number of
inclusionary housing units as provided in that section.
(e) Loss of Rental Subsidies. In the event that the Development receives
Project -Based Section 8 or other rental subsidy payments (collectively referred to as the "Rental
Subsidies") as a source of financing in accordance with the Revised Financing Plan approved by
City in accordance with the Loan Agreement, and during the Term any change in federal law
occurs or any action (or inaction) by Congress or any federal or State agency, which results in a
reduction, termination or nonrenewal of the Rental Subsidies through no fault of the Owner
("Federal or State Action"), such that the Rental Subsidy projected on the approved Revised
Financing Plan is no longer available, the City shall allow the Developer to increase the rents on
one or more of the Extremely Low Income Units to Low Income Rents only if and to the extent
that the Developer has demonstrated to the satisfaction of the City Manager that such a rent
increase is necessary to maintain the financial stability of the Development. The Developer shall
provide the City Manager with a projected operating budget for the Development showing the
impact of the loss or reduction of the Rental Subsidy as well as the last two full years of audited
financial statements for the Development showing actual costs and expenses of operating the
Development at the time Developer requests an increase in the rents. The City Manager shall
have authority to approve an increase in the rents on a sufficient number of Extremely Low
Income Units to a rent not exceeding the Low Income Rent in order to ensure that the
Development generates sufficient income to cover its operating costs and debt service as shown
on the submitted operating budget, provided, however, any such rent increase shall only be
allowed pursuant to a transition plan mutually agreed upon by the City and Developer consistent
with TCAC regulations and only to the extent not otherwise prohibited under the TCAC
Regulatory Agreement or any other regulatory agreement recorded on the
Development. Developer shall make all commercially reasonable efforts to obtain alternative
sources of rental subsidies and shall provide the City with annual progress reports on efforts to
obtain alternative sources of rental subsidies that would allow the rents on the Extremely Low
Income Units to be reduced to the Extremely Low Income Rents. Upon receipt of any
alternative Rental Subsidies, the Developer shall reduce the rents on the units subject to the rent
increase to the Extremely Low Income Rents to the greatest extent possible.
(f) Compliance with Stricter Requirements. Notwithstanding anything to the
contrary contained in this Agreement, if the other lenders, tax credit investor, or regulatory
agencies require stricter household income eligibility or affordability requirements than those
imposed hereby, the requirements of such other lenders, tax credit investor, or regulatory
agencies shall prevail. In meeting all such income and affordability requirements, the Owner
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may count each unit at a specific income eligibility level as meeting the same specific income
eligibility level requirement in each of the lender, tax credit, or regulatory agency regulatory
agreements.
2.4 Increase in Tenant Income.
2.4.1 Increase Above Initial Qualifying Income. If upon recertification of
Tenant incomes, Owner determines that the household income of a Tenant has increased and
exceeds the income level for an Extremely Low Income Household, Low Income Household, or
other applicable income category in which the Tenant initially qualified under a regulatory
agreement required by other Development financing, then upon expiration of the Tenant's lease:
(i) such Tenant's unit shall continue to be considered as a unit in the initial applicable income
category, (ii) upon ninety (90) days' written notice to the Tenant, such Tenant's rent may be
increased to an Affordable Rent for the income category for which the Tenant qualifies, and (iii)
Owner shall rent the next available residential unit at an Affordable Rent to a household that
qualifies in the income category in which the Tenant initially qualified in order to achieve the
affordability requirements of this Agreement.
2.4.2 Non -Qualifying Household. If, upon recertification of Tenant incomes,
Owner determines that a Tenant's household income has increased to exceed 80% of the Area
Median Income, such Tenant shall be permitted to continue to occupy the unit and upon
expiration of the Tenant's lease: (i) upon 90 days' written notice, such Tenant's rent may be
increased to the lesser of one -twelfth of thirty percent (30%) of the household's actual income or
the fair market rent, (ii) the unit shall continue to be classified as satisfying the income category
for which the Tenant originally qualified, and (iii) when the Tenant vacates the unit, the unit
shall be rented at an Affordable Rent to an Eligible Household that qualifies in the income
category for which the former Tenant initially qualified in order to achieve the affordability
requirements of this Agreement.
In the event of inconsistency between the provisions of Sections 2.4.1 or 2.4.2 and the
rules applicable to the Project in connection with low-income housing tax credits, tax-exempt
bond financing, or financing or rent subsidies provided to the Project by a federal, State or other
public agency, the rules applicable pursuant to such financing or subsidy source shall prevail.
2.5 Selection of Tenants. Applications will be selected pursuant to an equitable
selection method, and in accordance with the following preferences. Preferences determine the
ranking by which applicants are selected but will not affect an applicant's eligibility. Preference
order will be determined based on a point preference system established by the City for this
Development (the "Points Preference System"). The City shall provide its point system and
preference order to the Owner for incorporation by reference and attachment as an exhibit to the
Management and Marketing Plan. The City's point system and preference order referenced in
and attached to the Management and Marketing Plan will supersede the points system in section
8.68.050 of the Dublin Municipal Code, and has been approved as an alternate means of
compliance by the City Council pursuant to Dublin Municipal Code section 8.86.040(E). The
point system and preference order shall be subject to the program requirements of Project -Based
Section 8 or other Rental Subsidies, and are subject to compliance with applicable fair housing
laws.
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In addition to the other requirements to be set forth in Management and Marketing Plan
under Section 6.4 below, the Management and Marketing Plan shall include Owner's marketing,
services, and other assistance and programs to fulfill the Owner's and City's intent to operate the
Development for Senior Households.
This Section 2.5 is subject to the requirements of applicable fair housing laws.
2.6 Manager's Unit. One (1) dwelling unit in the Development may be used as a
resident manager's unit, and shall be exempt from the occupancy and rent restrictions set forth in
this Agreement.
2.7 No Condominium Conversion. Owner shall not convert the Development to
condominium or cooperative ownership or sell condominium or cooperative rights to the
Development or any part thereof during the term of this Agreement.
2.8 Residential Use. The Development shall be operated only for residential use. No
part of the Development shall be operated as transient housing.
2.9 Section 8 Certificate Holders. The Owner shall accept as tenants, on the same
basis as all other prospective tenants, persons who are recipients of federal certificates for rent
subsidies pursuant to the existing housing program under Section 8 of the United States Housing
Act, or its successor, or similar programs. The Owner shall not apply selection criteria to holders
of Section 8 certificate or similar certificates or vouchers that is more burdensome than criteria
applied to all other prospective tenants, nor shall the Owner apply or permit the application of
management policies or lease provisions with respect to the Development which have the effect
of precluding occupancy of Units by such prospective tenants.
2.10 Lease Provisions. Owner shall include in leases for all Affordable Units
provisions which authorize Owner to immediately terminate the tenancy of any household one or
more of whose members has misrepresented any fact material to the household's qualification as
an Extremely Low Income Household or Low Income Unit. Each lease or rental agreement shall
also provide that the household is subject to annual certification in accordance with Section 3.1
below, and that, if the household's income increases above the applicable limits for an Extremely
Low Income Household or Low Income Household, as applicable, such household's Rent may be
subject to increase.
2.11 Notice of Expiration of Term.
2.11.1 At least six (6) months prior to the expiration of the Term, Owner shall
provide by first-class mail, postage prepaid, a notice to all Tenants containing (a) the anticipated
date of the expiration of the Term, (b) any anticipated increase in Rent upon the expiration of the
Term, (c) a statement that a copy of such notice will be sent to City, and (d) a statement that a
public hearing may be held by City on the issue and that the Tenant will receive notice of the
hearing at least fifteen (15) days in advance of any such hearing. The Owner shall also file a
copy of the above -described notice with City.
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2.11.2 In addition to the notice required above, Owner shall comply with the
requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such
notice requirements include: (i) a three (3) year notice to existing tenants, prospective tenants
and Affected Public Agencies (as defined in California Government Code Section 65863.10(a))
prior to the expiration of the Term, (ii) a twelve (12) month notice to existing tenants,
prospective tenants and Affected Public Agencies prior to the expiration of the Term, (iii) a six
(6) month notice requirement to existing tenants, prospective tenants and Affected Public
Agencies prior to the expiration of the Term; (iv) a notice of an offer to purchase the
Development to "qualified entities" (as defined in California Government Code Section
65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; and
(v) a notice of right of first refusal within the one hundred eighty (180) day period that qualified
entities may purchase the Development.
2.12 Non -Discrimination; Compliance with Fair Housing Laws.
2.12.1 Fair Housing. Owner shall comply with state and federal fair housing
laws in the marketing and rental of the units in the Development. Owner shall accept as Tenants,
on the same basis as all other prospective Tenants, persons who are recipients of federal
certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any
successor thereto.
2.12.2 Non -Discrimination. Owner shall not restrict the rental, sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof,
on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status,
ancestry, or national origin of any person. Owner covenants for itself and all persons claiming
under or through it, and this Agreement is made and accepted upon and subject to the condition
that 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 or part thereof, nor
shall Owner or any person claiming under or through Owner 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, of, or for the
Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and
other instruments executed by Owner, and shall enforce the same diligently and in good faith.
3. Reporting Requirements.
3.1 Tenant Certification. Owner or Owner's authorized agent shall obtain from each
household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter,
a written certificate containing all of the following in such format and with such supporting
documentation as City may reasonably require:
(a) The identity of each household member; and
(b) The total gross household income; and
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(c) The number and type of calculated preference points, if applicable.
Owner shall retain such certificates for not less than five (5) years, and upon City's
request, shall provide copies of such certificates to City and make the originals available for City
inspection.
3.2 Annual Report; Inspections. By not later than April 30 of each year during the
term of this Agreement, Owner shall submit an annual report ("Annual Report") to the City in
form satisfactory to City, together with a certification that the Development is in compliance
with the requirements of this Agreement. The Annual Report shall, at a minimum, include the
following information for each dwelling unit in the Development as of the date of the Annual
Report: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges, specifying
the amount chargeable to the Tenant; and (iv) dates of any vacancies during the previous year;
(v) number of people residing in the unit ; (vi) total gross household income of residents; (vii)
documentation of source of household income; and (viii) the information required by Section
3.1. The Annual Report shall include a site improvement and maintenance plan and shall include
a report on the current waitlist, including number of households, unit size desired, typical wait
period. Owner shall include with the Annual Report, an income recertification for each
household, documentation verifying Tenant eligibility, and such additional information as City
may reasonably request from time to time in order to demonstrate compliance with this
Agreement. The Annual Report shall conform to the format requested by City; provided
however, during such time that the Development is subject to a regulatory agreement restricting
occupancy and/or rents pursuant to requirements imposed in connection with the use of state or
federal low-income housing tax credits or tax-exempt bond financing, Owner may satisfy the
requirements of this Section by providing City with a copy of compliance reports required in
connection with such financing.
3.3 Entry and Inspection. Owner shall permit representatives of City to enter and
inspect the Property, the Development, and records, during reasonable business hours in order to
monitor compliance with this Agreement upon forty-eight (48) hours advance notice of such visit
to Owner or to Owner's management agent.
3.4 Annual Monitoring Fee. The Development shall be subject to an annual
monitoring fee, as adjusted from time to time pursuant to the City's Master Fee Schedule.
3.5 Records.
(a) Owner shall keep and maintain at the principal place of business of the Owner
set forth in Section 6.10 below, or elsewhere with the City's written consent, full, complete and
appropriate books, records and accounts relating to the Development. Owner shall cause all
books, records and accounts relating to the Development to be kept and maintained in
accordance with generally accepted accounting principles consistently applied, and to be
consistent with requirements of this Regulatory Agreement. Owner shall cause all books,
records, and accounts to be open to and available for inspection and copying by the City, its
auditors or other authorized representatives at reasonable intervals during normal business hours.
Owner shall cause copies of all tax returns and other reports that Owner may be required to
furnish to any government agency to be open for inspection by the City at all reasonable times at
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the place that the books, records and accounts of Owner are kept. Owner shall preserve such
records for a period of not less than five (5) years after their creation. If any litigation, claim,
negotiation, audit exception, monitoring, inspection or other action relating to the use of the
Development is pending at the end of the record retention period stated herein, then Owner shall
retain the records until such action and all related issues are resolved. Such records are to
include but are not limited to:
(1) Records documenting compliance with the fair housing, equal
opportunity, and affirmative fair marketing requirements;
(2) Financial records; and
(3) Records demonstrating compliance with the marketing, tenant
selection, affordability, and income requirements.
(b) The City shall notify Owner of any records it deems insufficient. Owner has
fifteen (15) calendar days after the receipt of such a notice to correct any deficiency in the
records specified by the City in such notice, or if a period longer than fifteen (15) days is
reasonably necessary to correct the deficiency, then Owner must begin to correct the deficiency
within fifteen (15) days and correct the deficiency as soon as reasonably possible.
4. Term of Agreement.
4.1 Term of Restrictions. This Agreement shall remain in effect through the 55tn
anniversary of the Completion Date, unless the term is extended by mutual agreement of the
Parties.
4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This
Agreement shall remain effective and fully binding for the full term hereof, as such may be
extended pursuant to Section 4.1. regardless of (i) any sale, assignment, transfer, or conveyance
of the Property or the Development or any part thereof or interest therein, (ii) any payment,
prepayment or extinguishment of the Loan or Note, or (iii) any reconveyance of the Deed of
Trust.
4.3 Reconvevance. Upon the termination of this Agreement, the Parties agree to
execute and record appropriate instruments to release and discharge this Agreement; provided,
however, the execution and recordation of such instruments shall not be necessary or a
prerequisite to the termination of this Agreement upon the expiration of the term as such may be
extended pursuant to Section 4.1.
5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its
interest in the Property and the Development to the covenants and restrictions set forth in this
Agreement. The City and Owner hereby declare their express intent that the covenants and
restrictions set forth herein shall be deemed covenants running with the land and shall be binding
upon and inure to the benefit of the heirs, administrators, executors, successors in interest,
transferees, and assigns of Owner and City, regardless of any sale, assignment, conveyance or
transfer of the Property, the Development or any part thereof or interest therein. Any successor -
in -interest to Owner, including without limitation any purchaser, transferee or lessee of the
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Property or the Development (other than the Tenants of the individual dwelling units within the
Development) shall be subject to all of the duties and obligations imposed hereby for the full
term of this Agreement. Each and every contract, deed, or other instrument affecting or
conveying the Property or the Development or any part thereof, shall conclusively be held to
have been executed, delivered and accepted subject to the covenants, restrictions, duties and
obligations set forth herein, regardless of whether such covenants, restrictions, duties and
obligations are set forth in such contract, deed, or other instrument. If any such contract, deed, or
other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain
and deliver to City an instrument in recordable form signed by the parties to such contract, deed,
or other instrument pursuant to which such parties acknowledge and accept this Agreement and
agree to be bound hereby.
Owner agrees for itself and for its successors that in the event that a court of competent
jurisdiction determines that the covenants herein do not run with the land, such covenants shall
be enforced as equitable servitudes against the Property and the Development in favor of City.
6. Property Management: Repair and Maintenance: Marketing.
6.1 Management Responsibilities. Owner shall be responsible for all management
functions with respect to the Property and the Development, including without limitation the
selection of Tenants, certification and recertification of household income and eligibility,
evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary
repairs, replacement of capital items, and security. City shall have no responsibility for
management or maintenance of the Property or the Development.
6.2 Management Entity. City shall have the right to review and approve the
qualifications of the management entity proposed by Owner for the Development. The
contracting of management services to a management entity shall not relieve Owner of its
primary responsibility for proper performance of management duties. City hereby approves
Eden Housing Management, Inc. (EHMI) as the initial management entity for the Development.
6.3 Repair, Maintenance and Security. Throughout the term of this Agreement,
Owner shall at its own expense, maintain the Property and the Development in good physical
condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions
in conformity with all applicable state, federal, and local laws, ordinances, codes, and
regulations. Without limiting the foregoing, Owner agrees to maintain the Development and the
Property (including without limitation, the residential units, common areas, meeting rooms,
landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance,
debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal
activity, and shall take all reasonable steps to prevent the same from occurring on the Property or
at the Development. Owner shall prevent and/or rectify any physical deterioration of the
Property and the Development and shall make all repairs, renewals and replacements necessary
to keep the Property and the improvements located thereon in good condition and repair. Owner
shall provide adequate security services for occupants of the Development. The Management
and Marketing Plan shall provide for the installation of a security camera system at initial
occupancy. Nothing in the proceeding sentence shall require the continued use of a camera
system if the parties agree upon a different or updated security system.
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6.3.1 City's Right to Perform Maintenance. In the event that Owner breaches
any of the covenants contained in Section 6.3. and such default continues for a period of ten (10)
days after written notice from City (with respect to graffiti, debris, and waste material) or thirty
(30) days after written notice from City (with respect to landscaping, building improvements and
general maintenance), then City, in addition to any other remedy it may have under this
Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the
Property and perform all acts and work necessary to protect, maintain, and preserve the
improvements and the landscaped areas on the Property. All costs expended by City in
connection with the foregoing, shall constitute an indebtedness of Owner, and shall be paid by
Owner to City upon demand. All such sums remaining unpaid thirty (30) days following
delivery of City's invoice therefor shall bear interest at the lesser of ten percent (10%) per annum
or the highest rate permitted by applicable law.
6.4 Management and Marketing Plan. Prior to the start of construction of the
Development, Owner shall submit for City review and approval, a plan for managing the
Property and marketing the Project. (the "Management and Marketing Plan"). The
Management and Marketing Plan shall be updated after two (2) years and then again every five
(5) years. The City will provide no less than 90 days' notice to Owner before each Management
and Marketing Plan is due. Updates and revisions to the Management and Marketing Plan may
be subject to prior approval of Owner's investor limited partner or other project lenders before
being implemented.
The Management and Marketing Plan shall describe the management team and shall
address how the Owner and the management entity plan to manage and maintain the Property
and the Development. The Management and Marketing Plan shall include the proposed
management agreement and the form of rental agreement that Owner proposes to enter into with
Development Tenants The Management and Marketing Plan shall address in detail how Owner
plans to market the Restricted Units to prospective Eligible Households and targeted outreach to
Senior Households in accordance with the City's Inclusionary Zoning Ordinance Regulations,
subject to any City waivers for this Development, fair housing laws and this Agreement,
Owner's Tenant selection criteria, and how Owner plans to certify the eligibility of Eligible
Households. The Management and Marketing Plan shall also address Owner's plans concerning
Senior Households set forth in Section 2.5 of this Agreement. Owner shall abide by the terms of
the Management and Marketing Plan in marketing, managing, and maintaining the Property and
the Development, and throughout the term of this Agreement, shall submit proposed
modifications to City for review and approval.
The Management and Marketing Plan shall also include the following:
(a) Establishment of a "crime free" environment by participation in the City of
Dublin's Crime Free Multi Housing Program.
(b) Description of targeted outreach to Senior Households.
(c) Plan to provide on -site programs and services for Senior Households and low-
income residents.
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6.5 Approval of Amendments. If City has not responded to any submission of the
Management and Marketing Plan, the proposed management entity, or a proposed amendment or
change to any of the foregoing within forty-five (45) days following City's receipt of such plan,
proposal or amendment, the plan, proposal or amendment shall be deemed approved by City.
6.6 Social Services. Owner shall provide a variety of social services at the
Development. Such social services are subject to the prior written approval of the City, in its
reasonable discretion. Owner shall use its best efforts to create a comprehensive social service
program that is targeted to the needs of the residents of the Development. Owner shall ensure
that all personnel providing or coordinating all social services shall be adequately trained and
counseled, including with respect to the appropriate means and methods of communicating and
interacting with residents. Any substantive decrease in the amount of social services to be
provided at the Property shall be subject to prior reasonable approval of City and approval shall
not be unreasonably withheld
6.7 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all
fees, assessments, taxes, charges, liens and levies applicable to the Property or the Development,
including without limitation possessory interest taxes, if applicable, imposed by any public
entity, and shall pay such charges prior to delinquency. However, Owner shall not be required to
pay any such charge so long as (a) Owner is contesting such charge in good faith and by
appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities,
and (c) on final determination of the proceeding or contest, Owner immediately pays or
discharges any decision or judgment rendered against it, together with all costs, charges and
interest. The Parties acknowledge that the Owner will apply for exemption from property tax
under Revenue and Taxation Code Section 214.
6.8 Insurance Coverage. Throughout the term of this Agreement Owner shall at
Owner's expense, maintain in full force and effect insurance coverage as specified in the Loan
Agreement and shall comply with all insurance requirements set forth in the Loan Agreement.
6.8 Property Damage or Destruction. If any part of the Development is damaged or
destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent
restriction requirements set forth in this Agreement. Such work shall be commenced as soon as
reasonably practicable after the damage or loss occurs and shall be completed within one year
thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to
be applied to such repairs or restoration within such period and the repair or restoration is
financially feasible. During such time that lenders or low-income housing tax credit investors
providing financing for the Development impose requirements that differ from the requirements
of this Section the requirements of such lenders and investors shall prevail.
7. Recordation: Subordination. This Agreement shall be recorded in the Official Records of
Alameda County. Owner hereby represents, warrants and covenants that with the exception of
easements of record, absent the written consent of City, this Agreement shall not be subordinated
in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or
other interest in the Property or the Development. If at the time this Agreement is recorded, any
interest, lien, or encumbrance has been recorded against the Development in position superior to
this Agreement, upon the request of City, Owner hereby covenants and agrees to promptly
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undertake all action necessary to clear such matter from title or to subordinate such interest to
this Agreement consistent with the intent of and in accordance with this Section 7, and to provide
such evidence thereof as City may reasonably request. Notwithstanding the foregoing, the City
agrees that City will not withhold consent to reasonable requests for subordination of this
Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan
(as defined in the Loan Agreement) as it may be updated with City approval, provided that the
instruments effecting such subordination include reasonable protections to the City in the event
of default, including without limitation, extended notice and cure rights.
8. Transfer and Encumbrance.
8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement,
except as permitted pursuant to the Loan Agreement or this Agreement, Owner shall not directly
or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial
sale, transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any
part of the Property, the Development, or the improvements located on the Property, without the
prior written consent of the City, which approval shall not be unreasonably withheld. In
addition, prior to the expiration of the term of this Agreement, except as expressly permitted by
this Agreement or the Loan Agreement, Owner shall not undergo any significant change of
ownership without the prior written approval of City. For purposes of this Agreement, a
"significant change of ownership" shall mean a transfer of the beneficial interest of more than
twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner,
taking all transfers into account on a cumulative basis; provided however, neither the admission
of an investor limited partner, nor the transfer by the investor limited partner to subsequent
limited partners shall be restricted by this provision.
8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the
prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of
easements or permits to facilitate development of the Property; (ii) the dedication of any property
required pursuant to the Loan Agreement; (iii) the lease of individual dwelling units to Tenants
for occupancy as their principal residence in accordance with this Agreement; (iv) assignments
creating security interests for the purpose of financing the acquisition, construction, or permanent
financing of the Development or the Property in accordance with the Loan Agreement, or
Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure
of, such a security interest; (v) a Transfer to a limited partnership in which the managing general
partner is a tax-exempt entity under the direct control of or under common control with Owner;
(vi) the admission of limited partners and any transfer of limited partnership interests in
accordance with Owner's agreement of limited partnership (the "Partnership Agreement"),
provided that the Partnership Agreement and/or the instrument of Transfer provides for
development and operation of the Property and Development in a manner consistent with the
Loan Agreement and this Agreement; (vii) the removal of the general partner by the investor
limited partner for a default under the Partnership Agreement, provided the replacement general
partner is reasonably satisfactory to City; or (viii) the transfer of the General Partner's interest to
a nonprofit entity that is or its member/manager is tax-exempt under Section 501(c)(3) of the
Internal Revenue Code of 1986 as amended, provided such replacement general partner is
reasonably satisfactory to City.
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In addition, City shall not withhold its consent to the sale, transfer or other disposition of
the Development, in whole or in part, provided that (a) the Development is and shall continue to
be operated in compliance with this Agreement; (b) the transferee expressly assumes all
obligations of Owner imposed by this Agreement; (c) the transferee executes all documents
reasonably requested by the City with respect to the assumption of the Owner's obligations under
this Agreement, and upon City's request, delivers to the City an opinion of its counsel to the
effect that such document and this Agreement are valid, binding and enforceable obligations of
such transferee; and (d) either (A) the transferee has at least three (3) years' experience in the
ownership, operation and management of low-income multifamily rental housing projects of
similar size to that of the Development, without any record of material violations of
nondiscrimination provisions or other state or federal laws or regulations applicable to such
projects, or (B) the transferee agrees to retain a property management firm with the experience
and record described in subclause (A).
Article VI of the Loan Agreement shall govern procedures applicable to requests for, and
City's approval of, proposed Transfers. Unless waived by City, Owner shall reimburse City for
all City costs, including but not limited to reasonable attorneys' fees, incurred in reviewing
instruments and other legal documents proposed to effect a Transfer under this Agreement and in
reviewing the qualifications and financial resources of a proposed successor, assignee, or
transferee within ten (10) days following City's delivery of an invoice detailing such costs.
8.3 Encumbrances. Owner agrees to use best efforts to ensure that any subordination
agreement recorded against the Property, the Development or part thereof for the benefit of a
lender other than City ("Third -Party Lender") shall contain each of the following provisions:
(i) Third -Party Lender shall provide to City a copy of any notice of default issued to Owner
concurrently with provision of such notice to Owner; (ii) City shall have the reasonable right, but
not the obligation, to cure any default by Owner within the same period of time provided to
Owner for such cure extended by an additional sixty (60) days; (iii) provided that City has cured
any default under Third -Party Lender's deed of trust and other loan documents, City shall have
the right to foreclose City's Deed of Trust and take title to the Development without acceleration
of Third -Party Lender's debt; and (iv) City shall have the right to transfer the Development
without acceleration of Third -Party Lender's debt to a nonprofit corporation or other entity
which shall own and operate the Development as an affordable rental housing project, subject to
the prior written consent of the Third -Party Lender. Owner agrees to provide to City a copy of
any notice of default Owner receives from any Third -Party Lender within three (3) business days
following Owner's receipt thereof.
8.4 Mortgagee Protection. No violation of any provision contained herein shall defeat
or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon
all or any portion of the Development or the Property, and the purchaser at any trustee's sale or
foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the
acquisition of title by such purchaser. Promptly upon determining that a violation of this
Agreement has occurred, City shall give written notice to the holders of record of any mortgages
or deeds of trust encumbering the Development or the Property that such violation has occurred.
9. Default and Remedies.
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9.1 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) The occurrence of a Transfer in violation of Section 8 hereof;
(b) Owner's failure to maintain insurance on the Property and the
Development as required hereunder, and the failure of Owner to cure such default within ten (10)
days;
(c) Subject to Owner's right to contest the following charges, Owner's failure
to pay taxes or assessments due on the Property or the Development or failure to pay any other
charge that may result in a lien on the Property or the Development, and Owner's failure to cure
such default within thirty (30) days of delinquency;
(d) A default has been declared 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;
(e) A default arises under the Loan Agreement, the Note, the Deed of Trust or
any other City Document (as defined in the Loan Agreement) and remains uncured beyond the
expiration of any applicable cure period;
(f) Owner's default in the performance of any term, provision or covenant
under this Agreement (other than an obligation enumerated in this Subsection 9.1), and unless
such provision specifies a shorter cure period for such default, the continuation of such default
for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non -
monetary default following the date upon which City shall have given written notice of the
default to Owner, or if the nature of any such non -monetary default is such that it cannot be
cured within thirty (30) days, Owner's failure to commence to cure the default within thirty (30)
days and thereafter prosecute the curing of such default with due diligence and in good faith, but
in no event longer than ninety (90) days from receipt of the notice of default or such longer
period of time as City may allow.
The limited partners of Owner shall have the right to cure any default of Owner
hereunder upon the same terms and conditions afforded to Owner. Provided that City has been
given written notice of the address for delivery of notices to the limited partners, City shall
provide any notice of default hereunder to the limited partners concurrently with the provision of
such notice to Owner, and as to the limited partners, the cure periods specified herein shall
commence upon the date of delivery of such notice in accordance with Subsection 11.3.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation
beyond any applicable cure period, City may proceed with any of the following remedies:
A. Bring an action for equitable relief seeking the specific performance of the terms
and conditions of this Agreement, and/or enjoining, abating, or preventing any
violation of such terms and conditions, and/or seeking declaratory relief;
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B. Accelerate and declare the balance of the Note and interest accrued thereon
immediately due and payable and proceed with foreclosure under the Deed of
Trust;
C. For violations of obligations with respect to rents for Restricted Units, impose as
liquidated damages a charge in an amount equal to the actual amount collected in
excess of the Affordable Rent;
D. Pursue any other remedy allowed at law or in equity.
Each of the remedies provided herein is cumulative and not exclusive. The City may
exercise from time to time any rights and remedies available to it under applicable law or in
equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this
Agreement.
10. Indemnity. Notwithstanding any other provision in the Loan Agreement or other
documents executed in connection with the City Loan, Owner shall indemnify, defend (with
counsel approved by City) and hold City and their respective elected and appointed officers,
officials, employees, agents, and representatives (collectively, the "Indemnitees") harmless from
and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs
of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty,
deficiency, fine, order, and damage (all of the foregoing collectively "Claims") arising directly
or indirectly, in whole or in part, as a result of or in connection with Owner's construction,
management, or operation of the Property and the Development or any failure to perform any
obligation as and when required by this Agreement. Owner's indemnification obligations under
this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful
misconduct of Indemnitees. It is further agreed that City does not and shall not waive any rights
against Owner that it may have by reason of this indemnity and hold harmless agreement
because of the acceptance by City, or the deposit with City by Owner, of any of the insurance
policies described in this Agreement or the Loan Agreement.
The provisions of this Section 10 shall survive the expiration or earlier termination of this
Agreement.
11. Miscellaneous.
11.1 Amendments. This Agreement may be amended or modified only by a written
instrument signed by both Parties.
11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must
be in writing. No waiver shall be implied from any delay or failure by City to take action on any
breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable
law. No failure or delay by City at any time to require strict performance by Owner of any
provision of this Agreement or to exercise any election contained herein or 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 or a relinquishment for the future of such election.
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11.3 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:
(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 upon 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
(With a copy to City Attorney)
Owner: Corona/Ely Ranch, Inc.
22645 Grand Street
Hayward, CA 94541
Attention: Project Owner
With a copy to Owner's investor limited partner at the address designated by
Owner.
11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the
other such other documents and instruments, and take such other actions, as either shall
reasonably request as may be necessary to carry out the intent of this Agreement.
11.5 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.
11.6 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
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taken by the City's City Manager or by any person who shall have been designated by the City
Manager, without further approval by the City Council.
11.7 Non -Liability of City Officials, Officers, Directors, Employees and Agents. No
member, official, employee or agent of the City shall be personally liable to Owner 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 Owner or its successor or for any obligation of City under this
Agreement. No director, officer, employee or agent of the Owner shall be personally liable to the
City or any successor in interest, in the event of any default or breach by the Owner, or for any
amount of money which may become due to the City or its successor or for any obligation of the
Owner under this Agreement.
11.8 Headings; Construction. The headings of the sections and paragraphs of this
Agreement are for convenience only and shall not be used to interpret 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.
11.9 Time is of the Essence. Time is of the essence in the performance of this
Agreement.
11.10 Governing Law. This Agreement shall be construed in accordance with the laws
of the State of California without regard to principles of conflicts of law.
11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to
interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover
all reasonable attorneys' fees and costs incurred in such action.
11.12 Severability. If any provision of this Agreement is held invalid, illegal, or
unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of
the remaining provisions shall not be affected or impaired thereby.
11.13 Entire Agreement. This Agreement, together with the Loan Agreement, the Note
and the Deed of Trust contains the entire agreement of Parties with respect to the subject matter
hereof, and supersedes all prior oral or written agreements between the Parties with respect
thereto.
11.14 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 PAGES.
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IN WITNESS WHEREOF, the Parties have executed this Affordable Housing
Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written
above.
CITY
City of Dublin, a municipal corporation
By:
Linda Smith, City Manager
Attest:
Marsha Moore, City Clerk
Approved as to form:
John Bakker, City Attorney
DEVELOPER
Corona/Ely Ranch, Inc.,
a California nonprofit public benefit corporation
By:
SIGNATURES MUST BE NOTARIZED.
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A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of
)
)
)
On , before me, , Notary
Public,
(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
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277
Exhibit A
PROPERTY
Real property in the City of Dublin, County of Alameda, State of California, described
as follows:
Parcel One:
Parcel 2 of Parcel Map No. 1920, filed December 1, 1976 in Book 94 of Parcel Maps, Pages 11 and 12,
Alameda County Records.
Excepting therefrom:
That portion of land conveyed to the City of Dublin by Grant Deed Dated March 15, 2021,
Recorded 03-26-21, as Instrument No. 2021123184, more particularly described as follows:
Real property, situate in the incorporated territory of the City of Dublin, County of Alameda,
State of California, described as follows: Being a portion of Parcel 2, as said Parcel 2 is shown
and so designated on Parcel Map 1920, filed for record on December 1, 1976 in Book 94 of
Parcel Maps, at Page 11, in the Office of the County Recorder of Alameda County, more
particularly described as follows:
Beginning at the Northwestern corner of said Parcel 2; Thence from said point of beginning,
along the Northerly line of said Parcel 2, North 69° 08' 15" East 31.11 feet; Thence leaving said
Northerly line, along the arc of a non -tangent 40.00 foot radius curve to the left, from which the
center of said curve bears South 33° 42' 04 East, through a central angle of 77° 09' 41" an arc
distance of 53.87 feet, to the Westerly line of said Parcel 2; Thence along said Westerly line,
North 20° 51' 45" West 39.00 feet to said point of beginning.
Parcel Two:
An Access Easement, not to be exclusive, together with the right of ingress and egress therefor,
in, over, along and across that certain land situated in the Township of Pleasanton, County of
Alameda, State of California, described as follows: Beginning at the most Western corner of the
parcel of land described in the Deed from Amfac Merchandising Corporation, a California
corporation to Baydale, Inc., a Delaware corporation, recorded December 28, 1971, Reel 3026,
Image 888, Recorder's Series No. 71-169856, Alameda County Records; thence through a
portion of the last named parcel of land and along the Northwestern boundary line thereof, North
69° 08' 15" East, 329.29 feet; thence at right angles to the last named line South 20° 51' 45" East,
71.00 feet to the Northeastern corner of the parcel of land described in the Deed from Baydale,
Inc., a Delaware corporation, to Amfac Merchandising Corporation, a California corporation,
recorded April 12, 1972, Reel 3104 Image 883, Recorder's Series No. 72-47311, Alameda
County Records; thence along the last named line South 69° 08' 15" West 329.29 feet to the
Northeastern line of Regional Street being the parcel of land described as Parcel One
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in the Deed from Motel Interstate Systems, Inc., to the County of Alameda, recorded March 8,
1971, Reel 2802 Image 404, Recorder's Series No. 71-26256, Alameda County Records; thence
along the last named line North 20° 51' 45" West, 71.00 feet to the point of beginning.
Assessor's Parcel No. 941-1500-025 (Affects this and other property)
5369422.4
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EXHIBIT J
CERTIFICATE OF COMPLETION
Recording requested by
and when recorded mail to:
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's use.
CERTIFICATE OF COMPLETION
This Certificate of Completion (this Certificate") is made by the City of Dublin, a California
municipal corporation ("City"), effective as of , 202_.
RECITALS
A. City and Corona/Ely Ranch, Inc., a California nonprofit public benefit corporation
("Owner"), entered into that certain Affordable Housing Assistance Agreement dated as of
, 2023 ("Loan Agreement") concerning the development of a one hundred thirteen (113)
unit affordable housing development (the "Development") on certain real property located in the
City of Dublin, California and more particularly described in Exhibit A attached hereto (the
"Property"). Capitalized terms used herein without definition shall have the meaning ascribed to
such terms in the Loan Agreement.
B. Pursuant to Section 3.12 of the Loan Agreement, the City is required to furnish the
Owner or its successors with a Certificate of Completion upon completion of construction and
development of the Development in accordance with the Loan Agreement.
C. The City has determined that the construction and development of the Development
has been satisfactorily completed in accordance with the Loan Agreement.
NOW, THEREFORE, the City hereby certifies as follows:
1. Construction and development of the Development has been satisfactorily completed
in conformance with the Loan Agreement.
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2. All use, maintenance and nondiscrimination covenants contained in the Loan
Agreement and the City Regulatory Agreement recorded in the Official Records of Alameda County
on , 2023 as Instrument No. in connection therewith shall remain
in effect and enforceable in accordance therewith. This Certificate does not constitute evidence of
Owner's compliance with those covenants in the Loan Agreement or City Regulatory Agreement
that survive the issuance of this Certificate.
3. This Certificate does not constitute evidence of compliance with or satisfaction of any
obligation of Owner to any holder of a deed of trust securing money loaned to finance the
Improvements or any part thereof (except City) and does not constitute a notice of completion under
the California Civil Code.
4. Nothing contained in this instrument shall modify any provisions of the Loan
Agreement, City Regulatory Agreement or any other document executed in connection therewith.
IN WITNESS WHEREOF, City has executed and issued this Certificate of Completion as
of the date first written above.
THE CITY OF DUBLIN
By:
Name:
[Title]
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
SIGNATURE MUST BE NOTARIZED
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EXHIBIT A TO CERTIFICATE OF COMPLETION
LEGAL DESCRIPTION OF PROPERTY
PROPERTY
Real property in the City of Dublin, County of Alameda, State of California, described
as follows:
Parcel One:
Parcel 2 of Parcel Map No. 1920, filed December 1, 1976 in Book 94 of Parcel Maps, Pages 11 and 12,
Alameda County Records.
Excepting therefrom:
That portion of land conveyed to the City of Dublin by Grant Deed Dated March 15, 2021,
Recorded 03-26-21, as Instrument No. 2021123184, more particularly described as follows:
Real property, situate in the incorporated territory of the City of Dublin, County of Alameda,
State of California, described as follows: Being a portion of Parcel 2, as said Parcel 2 is shown
and so designated on Parcel Map 1920, filed for record on December 1, 1976 in Book 94 of
Parcel Maps, at Page 11, in the Office of the County Recorder of Alameda County, more
particularly described as follows:
Beginning at the Northwestern corner of said Parcel 2; Thence from said point of beginning,
along the Northerly line of said Parcel 2, North 69° 08' 15" East 31.11 feet; Thence leaving said
Northerly line, along the arc of a non -tangent 40.00 foot radius curve to the left, from which the
center of said curve bears South 33° 42' 04 East, through a central angle of 77° 09' 41" an arc
distance of 53.87 feet, to the Westerly line of said Parcel 2; Thence along said Westerly line,
North 20° 51' 45" West 39.00 feet to said point of beginning.
Parcel Two:
An Access Easement, not to be exclusive, together with the right of ingress and egress therefor,
in, over, along and across that certain land situated in the Township of Pleasanton, County of
Alameda, State of California, described as follows: Beginning at the most Western corner of the
parcel of land described in the Deed from Amfac Merchandising Corporation, a California
corporation to Baydale, Inc., a Delaware corporation, recorded December 28, 1971, Reel 3026,
Image 888, Recorder's Series No. 71-169856, Alameda County Records; thence through a
portion of the last named parcel of land and along the Northwestern boundary line thereof, North
69° 08' 15" East, 329.29 feet; thence at right angles to the last named line South 20° 51' 45" East,
71.00 feet to the Northeastern corner of the parcel of land described in the Deed from Baydale,
Inc., a Delaware corporation, to Amfac Merchandising Corporation, a California corporation,
recorded April 12, 1972, Reel 3104 Image 883, Recorder's Series No. 72-47311, Alameda
County Records; thence along the last named line South 69° 08' 15" West 329.29 feet to the
Northeastern line of Regional Street being the parcel of land described as Parcel One
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in the Deed from Motel Interstate Systems, Inc., to the County of Alameda, recorded March 8,
1971, Reel 2802 Image 404, Recorder's Series No. 71-26256, Alameda County Records; thence
along the last named line North 20° 51' 45" West, 71.00 feet to the point of beginning.
Assessor's Parcel No. 941-1500-025 (Affects this and other property)
5369422.4
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EXHIBIT K
CITY INSURANCE REQUIREMENTS
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CITY INSURANCE REQUIREMENTS
Prior to the closing of the City Predevelopment Loan and City Construction/Permanent Loan, and
throughout the term of this Agreement thereafter, Developer shall obtain and maintain, at
Developer's expense, the following policies of insurance.
A. Property Insurance. Insurance for the risks of direct physical loss, with minimum
coverage being the perils insured under the standard Causes of Loss - Special form
(ISO Form CP 10 30) or its equivalent, covering all improvements, all fixtures,
equipment and personal property, located on or in, or constituting a part of, the
Property ("Improvements"), in an amount equal to one hundred percent (100%) of the
full replacement cost of all such property.
1. The insurance shall:
(a) Cover explosion of steam and pressure boilers and similar apparatus, if
any, located on the Property,
(b) Cover floods if the Property is in a Special Hazard Area, as determined
by the Federal Emergency Management City or as shown on a
National Flood Insurance Program flood map;
2. The insurance required hereunder shall be in amounts sufficient to prevent
Developer from becoming a co-insurer under the terms of the applicable
policies, with not more than a Ten Thousand Dollars ($10,000) deductible (or
such higher deductible approved by the City, which approval shall not be
unreasonably withheld) from the loss payable for any casualty.
3. The policies of insurance carried in accordance with this Paragraph A shall
contain a "replacement cost endorsement" and an "increased cost of
construction endorsement."
B. Liability Insurance. Commercial general liability insurance on an "occurrence basis"
covering all claims with respect to injury or damage to persons or property occurring
on, in or about the Property and the Improvements. The limits of liability under this
Paragraph B shall be not less than Two Million Dollars ($2,000,000) combined single
limit per occurrence, with a deductible no greater than Ten Thousand Dollars
($10,000) or such higher deductible as may be approved by City, which approval
shall not be unreasonably withheld. Commercial general coverage shall be at least as
broad as Insurance Services Office Commercial General Liability occurrence form
CG 0001 (most recent edition) covering comprehensive General Liability on an
"occurrence" basis. No endorsement shall be attached limiting the coverage. The
insurance shall cover on an occurrence or an accident basis, and not on a claims -made
basis.
1. The insurance shall also include coverage for:
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(a) Liability for bodily injury or property damage arising out of the use,
by or on behalf of Developer, of any owned, non -owned, leased or
hired automotive equipment in the conduct of any and all operations
conducted in connection with the Development or the Property. If a
Commercial General Liability Insurance or an Automobile Liability
form or other form with a general aggregate limit is used, either the
general aggregate limit shall apply separately to the work to be
performed under this Agreement or the general aggregate limit shall be
at least twice the required occurrence limit. Such coverage shall
include but shall not be limited to, protection against claims arising
from bodily and personal injury, including death resulting therefrom,
and damage to property resulting from activities contemplated under
this Agreement, including without limitation, blanket contractual
liability and the use of owned and non -owned automobiles.
Automobile coverage shall be at least as broad as Insurance Services
Office Automobile Liability form CA 0001, Code 1 (any auto). No
endorsement shall be attached limiting the coverage. The Insurance
shall cover on an occurrence or an accident basis, and not on a claims -
made basis.
(b) Premises and operations including, without limitation, bodily injury,
personal injury, death or property damage occurring upon, in or about
the Property or the Improvements on any elevators or any escalators
therein and on, in or about the adjoining sidewalks, streets and
passageways;
(c) Environmental liability and indemnification of City therefor;
(d) Broad form property damage liability;
(e) Additional insured and primary insured endorsements protecting the
City and its respective elected and appointed officials, officers,
employees and agents;
(f) Personal injury endorsement.
C. Worker's Compensation Insurance. Worker's compensation insurance, in the amount
required under then applicable state law, with limits of not less than One Million
Dollars per accident ($1,000,000), covering Developer's employees, if any, at work in
or upon the Property or engaged in services or operations in connection with the
Development or the Property. Developer shall require that any contract entered into
by Developer with regard to work to be undertaken on the Property include a
contractual undertaking by the contractor to provide worker's compensation
insurance for its employees in compliance with applicable state law. The Workers'
Compensation policy shall be endorsed with a waiver of subrogation in favor of the
entity for all work performed by the Developer, its employees, agents, contractors and
subcontractors.
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D. Course of Construction Insurance. Course of construction insurance in the same
amount as required in Paragraph A above for property insurance, covering all
construction activities on the Property.
E. General Insurance Provisions.
1. All policies of insurance provided for in this Exhibit shall be provided under
valid and enforceable policies, in such forms and amounts as hereinbefore
specified, issued by insurers licensed to do business in the State of California
(or approved to do business in California and listed on the California
Department of Insurance list of Eligible Surplus Lines Insurers or successor
listing) and having a rating of A-VII or better in Best Insurance Guide or, if
Best Insurance Guide is no longer in existence, a comparable rating from a
comparable rating service. Prior to closing of the City Predevelopment Loan
and City Construction/Permanent Loan, and thereafter, not less than thirty
(30) days prior to the expiration date of each policy furnished pursuant to this
Exhibit, Developer shall deliver to City certificates evidencing the insurance
required to be carried by Developer under this Exhibit, and any additional
insured endorsements, waivers of subrogation endorsements, and primary
insurance endorsements as required by this Exhibit. If requested by City,
Developer shall deliver within ten (10) days following such request, certified,
complete copies of the insurance policies required hereunder. Insurance
policies to be provided hereunder shall meet the following requirements:
2. Each policy of insurance obtained pursuant to this Agreement, other than
worker's compensation insurance, shall contain endorsements which provide:
(a) A waiver by the insurer of the right of subrogation against City,
Developer or any tenant of the Development for negligence of any
such person,
(b) A statement that the insurance shall not be invalidated should any
insured waive in writing prior to the loss any or all right of recovery
against any party for loss accruing to the property described in the
insurance policy, and
(c) A provision that no act or omission of Developer which would
otherwise result in forfeiture or reduction of the insurance therein
provided shall affect or limit the obligation of the insurance company
to pay the amount of any loss sustained.
(d) By endorsements, City, and its elected and appointed officials,
officers, volunteers, employees and agents shall be named as
additional insured under the liability insurance required to be
maintained by Developer hereunder. City shall be named as loss
payee on the property insurance policies required to be maintained
hereunder.
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3. Each policy required hereunder shall include a Notice of Cancellation or
Change in Coverage Endorsement which shall provide that such policy shall
not be cancelled or materially changed without at least thirty (30) days' prior
written notice by registered or certified mail to City.
4. All insurance policies shall provide that there shall be no exclusion from
coverage for cross liability among the listed insureds.
5. Any certificate of insurance applicable to course of construction insurance to
be maintained shall be deposited with City prior to closing of the City
Construction/Permanent Loan.
6. Each policy shall contain an endorsement that provides that the insurance
applies separately to each insured that is seeking coverage or against whom a
claim is made, except with respect to the limits of liability
7. Each policy shall be written as a primary policy not contributing with and not
in excess of coverage that City may carry.
8. Each policy shall expressly provide that City shall not be required to give
notice of accidents or claims and that City shall have no liability for
premiums.
9. No policy required by this Exhibit shall include a "wasting" policy limit (i.e.
limit that is eroded by the cost of defense).
10. Developer shall include all contractors and subcontractors as insureds under
its policies or shall furnish separate certificates and certified endorsements for
each contractor and subcontractor. All coverages for contractors and
subcontractors shall be subject to all of the requirements stated herein.
F. Blanket Policies. Any insurance provided for in this Exhibit may be placed by a
policy or policies of blanket insurance; provided, however, that such policy or
policies provide that the amount of the total insurance allocated to the Property and
the Development shall be such as to furnish protection the equivalent of separate
policies in the amounts herein required, and provided further that in all other respects
any such policy or policies shall comply with the other provisions of this Agreement
G. Waiver of Subrogation. To the extent permitted by law and the policies of insurance
required to be maintained hereunder, and without affecting such insurance coverage,
City and Developer each waive any right to recover against the other:
1. Damages for injury or death of persons,
2. Damage to property,
3. Damage to the Property or the Improvements or any part thereof, or
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4. Claims arising by reason of any of the foregoing, to the extent that such
damages and/or claims are covered (and only to the extent of such coverage)
by insurance actually carried by either City or Developer.
This provision is intended to restrict each party (as permitted by law) to recover
against insurance carriers to the extent of such coverage, and waive fully, and for the
benefit of each, any rights and/or claims which might give rise to a right of
subrogation in any insurance carrier.
H. Compliance with Policy Requirements. Developer shall observe and comply with the
requirements of all policies of public liability, fire and other policies of insurance at
any time in force with respect to the Property, and Developer shall so perform and
satisfy the requirements of the companies writing such policies that at all times
companies of good standing shall be willing to write or to continue such insurance.
I. Remedies. In addition to any other remedies City may have if Developer fails to
provide or maintain any insurance policies or policy endorsements to the extent and
within the time herein required, City may, at its sole option exercise any of the
following remedies, which are alternatives to other remedies City may have and are
not the exclusive remedy for Developer's breach:
5382807.2
(i) Obtain such insurance and Developer shall then be required to pay to City the
amount of the premiums for such insurance; and/or
(ii) Obtain such insurance and add the cost of the premiums for such insurance to
the balance of the City Predevelopment Loan and/or City Construction/Permanent
Loan.
5
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CITY OF DUBLIN
FISCAL YEAR 2022-23
BUDGET CHANGE FORM
Budget Change Reference #:
City Council's Approval Required
From Un-Appropriated Reserves
From Designated Reserves
DECREASE BUDGET AMOUNT
Attachment 3
Budget Transfer Between Funds
Other
INCREASE BUDGET AMOUNT
Account Amount Account Amount
EXP: Affordable Housing Fund/Affordable
Housing/Housing Development Loan
29018100.66102 $1,000,000
REASON FOR BUDGET CHANGE
The Fiscal Year 2022-2023 Budget Affordable Housing Fund/Affordable Housing/Housing Development Loan includes
funding for affordable housing projects. The Staff Report for June 20, 2023 includes a Predevelopment Loan for the Regional
Street Senior Affordable Housing Project, requiring a budget adjustment for this fund in the amount of $1 million.
As Presented at the City Council Meeting 6/20/2023
**********Finance Use Only**********
Posted By:
Date:
C:\Users\cathyw\Downloads\Regional_Street_Pre-Dev_Housing_Loan_6.20.2023 (1) Regional_Street_Pre-Dev_Housing_Loan_6.20.2023 (1)
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