AGENDA
ITEM
11 CALEXIS AGENDA
CALEXICO California ITEM
"A COUNTY CATE WHERE CALIFORNIA AND MEXICO MEET
CITY COUNCIL
AGENDA STAFF REPORT
DATE: February 18, 2025
TO: Mayor and City Council
APPROVED BY: Benjamin Martinez, City Manager
REVIEWED BY: Karla Chaparro, Finance Director
PREPARED BY: Benjamin Martinez, City Manager
SUBJECT: Approve and Authorize City Manager to Sign the Revised Loan Repayment and Modification Agreement between the City of Calexico and De Anza Hotel Limited Partnership and other necessary documents, and negotiate modifications to documents
Recommendation:
It is the recommendation of the City Manager that the City Council authorize the City Manager to execute the Revised Loan Repayment and Modification Agreement between the City of Calexico and De Anza Hotel Limited Partnership, as well as any other documents required in furtherance of this agreement including Subordination Agreements, and any additional or revised City loan documents in forms approved by the City Manager and City Attorney. The City Manager also recommends that the City Manager be given authority to approve changes to the Loan Repayment and Modification Agreement requested by third parties that are consistent with City Council approvals, including extension of timelines therein. This item was previously approved by City Council on November 19, 2025.
Background:
Construction for the renovation of the De Anza Hotel was expected to start at the end of December 2025 with a one-year duration. The residents and local businesses will benefit from the upgrades and fresh appearance. The rehabilitation requires a relocation plan that has been reviewed and approved by the State. The start of construction has been delayed and is now scheduled to start by the end of March 2026. The delays resulted in changes to the Loan Modification Agreement to modify the dates referenced therein.
Discussion and Analysis:
Construction for the renovation of the De Anza Hotel was expected to start at the end of December 2025 with a one-year duration but has been delayed. Construction is expected to commence by the end of March 2026 and is anticipated to have a one-year duration.
The PRP loan will have a 55-year term. A key requirement of the loan is that all existing loans have terms that are extended past the PRP loan, and the funds cannot be used to pay off existing debt on the property. Another key requirement of the PRP loan is that all other debt is subordinate to the loan. When the City CDBG loan for the Project originally closed in 2010, the City did not record the Deed of Trust that secured the loan. Therefore, to properly subordinate the City CDBG loan to the PRP loan, a new deed of trust will be recorded. The City will also record a new Regulatory Agreement relating to the CDBG loan.
Fiscal Impact:
As part of the Loan Repayment and Modification Agreement, the De Anza Hotel partnership will pay the principal portions of the loans from the Community Redevelopment Agency of the City of Calexico ("CRA") in the amount of $628,684 by the closing of the construction loan which is expected to be by the end of March 2026. The Deeds of Trust for both loans from the CRA will be reconveyed while the CDBG deed of trust will be recorded and subordinated to the construction and PRP Loans as well as extended for 55 years. The entire accrued interest for the CRA loans in the estimated amount of $498,017 will be paid as a condition of receiving final certificate of occupancy of the rehabilitation. The final certificate of occupancy is expected to be 12 months after the closing of the construction loan or April 1, 2027.
Coordinated With:
City Manager
Planning and Building Director
Finance Director
Attachments):
1. Amended Loan Repayment and Modification Agreement between the City of Calexico and De Anza Hotel Limited Partnership.
2. Amended Loan Agreement
3. CDBG Deed of Trust
4. CDBG Regulatory Agreement
2 ATTACHMENT NO. 1
LOAN REPAYMENT AND MODIFICATION AGREEMENT
This LOAN REPAYMENT AND MODIFICATION AGREEMENT
("Agreement"), dated as of November 2025 February_18 2026 ("Effective Date"), is made by and between the CITY OF CALEXICO, a California municipal corporation ("City") and DE ANZA HOTEL LIMITED PARTNERSHIP, a California limited partnership (the "Developer").
RECITALS
This Agreement is made and entered into on the basis of the following facts and understandings of the parties hereto:
A. The Developer is the owner of De Anza Hotel Apartments, an affordable rental housing project (the "Project") located at 233 East Fourth Street in Calexico, California (the "Property").
B. The Community Redevelopment Agency of the City of Calexico made a loan to Developer in the amount of $457,130 to finance the original development and rehabilitation of the Project ("RDA Loan") which was evidenced by that certain Owner Participation Agreement between the City and the Developer, dated September 10, 1996 ("OPA"), and that certain Agency Promissory Note, dated September 10, 1996, and is secured by that certain Deed of Trust with Assignment of Rents, dated July 19, 2012, and recorded on July 24, 2012 as Instrument No. 2012016611 in the Official Records of Imperial County (the "RDA Deed of Trust") and that certain Declaration of Conditions, Covenants and Restrictions, dated September 10, 1996, and recorded on October 2, 1996 as Instrument No. 96-23246 in the Official Records of Imperial County, as assigned to the City pursuant to that certain Assignment of Covenants, Conditions and Restrictions, dated February 28, 2012, and recorded on March 19, 2012 as Instrument No. 2012- 006010 in the Official Records of Imperial County, and as amended by that certain Amendment to Covenants, Conditions and Restrictions, dated March 19, 2012, and recorded on March 19, 2012 as Instrument No. 2012-006011 in the Official Records of Imperial County (as assigned and amended, the "City Regulatory Agreement"). As of the Closing Date, the RDA Loan shall have an outstanding principal balance of $423,982 and accrued interest in the amount of $366,295.
C. The Community Redevelopment Agency of the City of Calexico made a loan of Economic Development Block Grant funds to Developer in the amount of $277,500 to finance the development of the Project ("EDBG Loan") which was evidenced by that certain Loan Agreement between the City and the Developer, dated January 5, 1998 ("Loan Agreement"), and that certain Reimbursement Promissory Note, dated January 5, 1998, and is secured by that certain Deed of Trust with Assignment of Rents, dated January 5, 1998, and recorded on March 9, 1998 as Instrument No. 98005129 in the Official Records of Imperial County (the "EDBG Deed of Trust"). As of the Closing Date, the EDBG Loan shall have an outstanding principal balance of $204,702 and accrued interest in the amount of $103,920.
D. The City made a loan of Community Development Block Grant ("CDBG") funds to Borrower in the amount of $760,000 to finance the rehabilitation and repair of the Project after sustaining earthquake damage ("CDBG Loan") which was evidenced by that certain Loan Agreement between the City and the Developer dated September 21, 2010 ("CDBG Loan Agreement") and that certain Promissory Note Secured by Deed of Trust, dated September 21, 2010. The CDBG Loan was secured by an unrecorded Project Deed of Trust, dated September 10, 2010, and the parties intend to record a substitute Project Deed of Trust concurrently with the Closing (as defined below) hereunder to create a valid lien on the Property (the "CDBG Deed of Trust"). The City will also record a Regulatory Agreement in connection with the CDBG Loan to restrict the use and occupancy of the Project in accordance with CDBG program requirements (the "CDBG Regulatory Agreement"). The CDBG Loan matures on March 30, 2040.
E. Pacific Southwest Community Development Corporation, the managing general partner of the Developer (the "MGP") received an award of Portfolio Reinvestment Program funds from the Department of Housing and Community Development ("HCD") in the amount of $13,398,499 (the "PRP Loan") to finance capital improvements to the Project. HCD shall make a permanent loan of the PRP funds to the Developer which shall be evidenced by that certain Standard Agreement (24-PRP-18603) between the Developer, MGP, and HCD, and a Promissory Note Secured by Deed of Trust by Borrower in favor of HCD, and shall be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (Permanent Financing) in favor of HCD (the "PRP Deed of Trust") and that certain Regulatory Agreement for the benefit of HCD (the "PRP Regulatory Agreement").
F. The Developer is also obtaining a construction loan from Century Housing Corporation in the amount of $13,398,499 (the "Century Loan") to partially finance the rehabilitation of the Project.
G. The City is the successor agency to the Community Redevelopment Agency of the City of Calexico.
H. In order to obtain the PRP Loan and the Century Loan, Developer has requested that the City: (1) reconvey the RDA Loan, (2) reconvey the EDBG Loan, (3) subordinate the CDBG Loan to the PRP Loan and the Century Loan, (4) record the CDBG Deed of Trust, and (4(5) record the CDBG Regulatory Agreement, and (6) extend the maturity date of the CDBG Loan (collectively, the "City Obligations"), in exchange for the City Payments (as defined in Section 1.2 herein).
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby confirm that the Recitals above are true and correct and further agree as follows:
ARTICLE 1
DELIVERY AND CONSIDERATION
1.1 Escrow. The transactions contemplated by this Agreement shall be accomplished through an escrow ("Escrow") to be established at First American Title Insurance Company ("Escrow Agent") concurrently with the closing of the PRP Loan and Century Loan. The use of the term "Escrow Agent" in this Agreement does not create a general agency and does not confer -2-
on Escrow Agent any right or authority to act for the Developer or City without express written instructions, whether as set forth in this Agreement or otherwise.
1.2 Required City Payments.
1.2.1 The Developer will give the City no less than ten (10) business days' prior written notice that the PRP Loan and Century Loan are scheduled to close, which is estimated to occur on or around December 31, 2025March 10. 2026 (the "Closing Date"). As consideration for satistying the City Obligations, the Developer shall deposit in cash into Escrow with Escrow Agent no less than one (1) day prior to the Closing Date the sum of $628,684 (the "City Closing Payment") for repayment of the outstanding principal balances of the RDA Loan and the EDBG Loan.
1.2.2 As further consideration for satisfying the City Obligations, upon completion of the rehabilitation of the Project, Developer shall pay approximately $497,387 to the City for repayment of the outstanding accrued interest on the RDA Loan and the EDBG Loan, which payment shall be a condition precedent to receipt of the final Certificate of Occupancy for the Project ("City Completion Payment", and, together with the City Closing Payment, the "City Payments").
1.3 Closing Deliveries.
The City will deliver to Escrow Agent, subject to the terms of this Agreement, no less than one (1) day prior to the Closing Date original counterparts of: (a) a Substitution of Trustee and Deed of Full Reconveyance reconveying the RDA Deed of Trust, (b) a Substitution of Trustee and Deed of Full Reconveyance reconveying the EDBG Deed of Trust, (c) a Subordination Agreement in form and content acceptable to the City and HCD subordinating the CDBG Loan to the lien of the PRP Loan (the "HCD Subordination Agreement"), (d) a Subordination Agreement in form and content acceptable to the City and Century subordinating the CDBG Loan to the lien of the Century Loan (the "Century Subordination -
Agreement"), and (e(e) the CDBG Deed of Trust, (f) the CDBG Regulatory Agreement, and (g) an amendment to the CDBG Loan Documents extending the maturity date of the CDBG Loan to December 31, 20802081 (the "CDBG Amendment"), duly executed by the City, and acknowledged.
1.3.2 Developer shall deliver to Escrow Agent on or prior to the Closing Date: (i) original counterparts of: (y) the City Subordination Agreement, (yW) the Century Subordination Agreement, (x) the CDBG Deed of Trust, (y) the CDBG Regulatory Agreement, and (z) the CDBG Amendment, duly executed by the Developer, and acknowledged, and (ii) the City Closing Payment. The documents referenced in this Section 1.3 are collectively referred to herein as the "Recording Documents".
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ARTICLE 2
REPRESENTATIONS & WARRANTIES
2.1 Representations and Warranties.
2.1.1 The City represents and warrants the following as of the Effective Date and the Closing:
2.1.1.1 Due Authorization. This Agreement has been duly authorized by all requisite action, and the City has full power and authority to execute this Agreement, to undertake and consummate the transactions contemplated hereby, and to pay, perform and observe all of the conditions, covenants, agreements, and obligations contained herein.
2.1.2 The Developer represents and warrants the following as of the Effective Date and the Closing:
2.1.2.1 Duly Organized. The Developer is duly organized, validly existing and in good standing under the laws of the State of California, with full power and authority to consummate the transaction
contemplated hereby.
2.1.2.2 Due Authorization. This Agreement has been duly authorized by all requisite action, and the Developer has full power and authority to execute this Agreement, to undertake and consummate the transactions contemplated hereby, and to pay, perform and observe all of the conditions, covenants, agreements, and obligations contained herein.
ARTICLE 3
CLOSING
3.1 Closing Date. The closing of the transactions contemplated herein (the "Closing") shall occur on or before the Closing Date provided that in the event the Closing has not occurred by or before January 31April 15, 2026 (the "Outside Closing Date") the City shall have the ongoing right to terminate this Agreement so long as such failure to close by the Outside Closing Date is not due to City's default or a failure of any closing conditions set forth in Section 3.2, which are not the result of the Developer's default, by providing written notice to the Developer.
Upon the City's delivery of any such notice, this Agreement will terminate, and the parties shall have no further duty or obligation to each other.
3.2 Conditions to Closing.
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3.2.1 The City's obligation to consummate the transaction set forth herein is subject to and conditioned upon the satisfaction of each of the following conditions (unless otherwise waived in writing by the City) on or before the Closing Date, which conditions are for the sole benefit of the City:
3.2.1.1 The Developer shall deliver to Escrow Agent the documents it is required to deliver as set forth in Section 1.3 above.
3.2.1.2 The PRP Loan and the Century Loan shall be prepared to close concurrently with the Closing hereunder; this shall be a nonwaivable condition precedent to the Closing.
3.2.1.3 Each and all of the representations and warranties made by the Developer herein shall be true and correct in all material respects as of the Closing Date.
3.2.1.4 The Developer shall have fully performed all of the obligations which the Developer pursuant to the terms of this Agreement has agreed to perform on or prior to the Closing Date, and the Developer shall not be in material breach or default under this Agreement.
The Developer shall cause the conditions above to be satisfied by the Closing Date. If the conditions to the City's obligation to consummate the transaction set forth in Section 3.2.1.1,
3.2.1.2, 3.2.1.3, and 3.2.1.4 above are not satisfied (or waived by the City, except 3.2.1.2 which cannot be waived) by the Outside Closing Date, then, this Agreement shall be terminable by the City, and upon such termination, the parties shall have no further liabilities or obligations to the other. The conditions set forth in this Section 3.2.1 are for the sole benefit of the City.
3.2.2 The Developer's obligation to consummate the transaction set forth herein is subject to and conditioned upon the satisfaction of each of the following conditions (unless otherwise waived in writing by the Developer) on or before the Closing Date which conditions are for the sole benefit of the Developer :
3.2.2.1 The City shall have delivered to Escrow Agent the documents it is required to deliver as set forth in Section 1.3 above.
3.2.2.2 Each and all of the representations and warranties made by the City herein shall be true and correct in all material respects as of the Closing Date.
3.2.2.3 The City shall have fully performed all of the obligations which the City pursuant to the terms of this Agreement has agreed to perform on or prior to the Closing Date, and the City shall not be in material breach or default under this Agreement.
The City shall cause the conditions above to be satisfied by the Closing Date. If the conditions to the Developer's obligation to consummate the transaction set forth in Section 3.2.2.1,
3.2.2.2, and 3.2.2.3 are not satisfied (or waived by the Developer ) by the Outside Closing Date, then, this Agreement shall be terminable by the Developer, and upon such termination, the parties -5-
shall have no further liabilities or obligations to the other. The conditions set forth in this Section
3.2.2 are for the sole benefit of the Developer.
Closing. Upon Escrow Agent's receipt of the documents and funds described in Sections 1.2 and 1.3 above, on the Closing Date the Escrow Agent shall: (a) record the Recording Documents in the Official Records of Imperial County, California, along with any other documents required to be recorded pursuant to any escrow instructions, (b) deliver conformed copies of the recorded Recording Documents to each of the City and the Developer, and (c) deliver the City Closing Payment to the City.
ARTICLE 4
DEFAULT; REMEDIES
4.1 Default and Remedies. If either party shall breach this Agreement by materially defaulting in the performance of any of its covenants or obligations under this Agreement, and such breach shall continue unremedied for a period of thirty (30) days after written notice thereof from the non-defaulting party to the defaulting party (an "Event of Default"), the non-defaulting party may then exercise one or more of the following rights and remedies, provided, however, if the Event of Default is of such a nature that it cannot reasonably be cured within the 30-day period, and the defaulting party has commenced to cure each Event of Default within the 30-day period, the defaulting party shall have an additional sixty (60) days in which to cure said Event of Default provided it acts in good faith and with due diligence to cure the same (all of which shall be cumulative), and the non-defaulting party may pursue a remedy only if the defaulting party has not cured the Event of Default by the end of such extended cure period.
Terminate this Agreement.
(ii) Enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by the defaulting party, of the provisions of this Agreement, including court costs, reasonable attorneys' fees and other expenses incurred in the enforcement of the obligations hereunder.
(iii) Exercise any and all rights and remedies which the non-defaulting party may have under applicable laws.
City and Developer each hereby waives any claims for speculative damages, lost profits, or punitive damages, whether based on common law, statute, equity or otherwise. In no event shall a direct or indirect member, partner, shareholder, owner, officer, director, employee, agent development manager or consultant of Developer or City or any affiliate or controlling person thereof have any liability for any contractual claim or action or other contractual liability arising out of or relating to this Agreement and Developer and City hereby agrees to look solely to the other as otherwise provided herein.
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Escrow Cancellation Charges Due to a Default If Escrow fails to close the Developer shall pay any Escrow cancellation charges. "Escrow cancellation charges" means all fees, charges and expenses incurred by Escrow Agent.
ARTICLE 5
MISCELLANEOUS
5.1 Time of Essence. Time is of the essence of this Agreement.
5.2 Attorneys' Fees. In the event of any controversy, claim, dispute, arbitration, or litigation between the parties hereto to enforce or interpret any of the provisions of this Agreement or any right of either party hereto, the non-prevailing party to such controversy, claim, dispute, arbitration or litigation agrees to pay to the prevailing party all costs and expenses, including reasonable attorneys' fees and costs, court or dispute resolution costs, arbitrator's, mediator's, consultant's and expert witness' fees and costs incurred by the prevailing party, including, without limitation, fees incurred during trial or resolution of any action or dispute and any fees incurred as a result of an appeal from a judgment entered in any such matter. A prevailing party shall include without limitation (a) a party who dismisses an action in exchange for sums due, or (b) the party determined to be the prevailing party by a court of law.
5.3 Notices. Any notice given under this Agreement shall be in writing and shall be deemed to have been given upon (i) hand delivery, (ii) one business day after being deposited with Federal Express or another reliable overnight courier service for next day delivery, (ili) upon electronic mail transmission (except that if the date of such transmission is not a business day, then such notice shall be deemed to be given on the first business day following such transmission), or (iv) two business days after being deposited in the United States mail, registered or certified mail, postage prepaid, return receipt required, and addressed as follows:
If to the Developer: De Anza Hotel Limited Partnership
6339 Paseo del Lago
Carlsbad, CA 92011
Attention: Cheri Hoffman
([email protected])
and a copy to: Odu & Associates, PC
31805 Temecula Parkway #720
Temecula, CA 92592
Attention: Nkechi C. Odu, Esq.
([email protected])
If to the City:
City of Calexico
608 Heber Avenue
Calexico, CA 92231
-7-
Attention: Benjamin Martinez,
([email protected])
With a copy to: Best, Best & Kreiger LLP
300 South Grand Ave., 25'" Floor
Los Angeles, CA 90071
Attention: Seth Merewitz., Esq.
([email protected])
or such other address as any Party may from time to time specify in writing to the other.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without reference to the conflict of law principles of any other state. Agreement.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but any number of which, taken together, shall be deemed to constitute one and the same instrument. This Agreement may be validly executed and delivered by facsimile transfer/e-mail and/or portable document format (collectively, "Electronic Copy"). Any signer who executes this document and transmits this document by Electronic Copy intends that the Electronic Copy of their signature is to be deemed an original signature for all purposes. Any such Electronic Copy printout and any complete photocopy of such Electronic Copy printout is deemed to be an original counterpart of this document.
Entire Agreement. This Agreement contains the entire agreement between the City and the Developer relating to the transaction contemplated hereby and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are superseded by this Agreement.
[Signatures appear on the following page]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
DEVELOPER:
DE ANZA HOTEL LIMITED PARTNERSHIP,
a California limited partnership
By: Chelsea Asset Corporation,
a California corporation,
its Co-General Partner
By:
Charles Schmid
Authorized Representative
By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation,
its Managing General Partner
By:
Robert W. Laing
Executive Director/President
CITY:
CITY OF CALEXICO
By:
Benjamin Martinez, City Manager
Approved as to form:
By:
City Attorney
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ATTACHMENT NO. 2
AMENDMENT TO AND TERMINATION OF LOAN DOCUMENTS
(City of Calexico CDBG Loan)
THIS AMENDMENT TO AND TERMINATION OF LOAN DOCUMENTS (the "AMERED PA i entered in a a rebried paro, hip and beer and the Ho CALEXICO, a California municipal corporation ("Lender") with reference to the following facts:
RECITALS
WHEREAS, the Lender has made a loan to Borrower in the original principal amount of $760,000 (the "Loan") to finance the repair and rehabilitation of De Anza Hotel, a senior affordable housing community located at 233 East Fourth Street, in Calexico, California (the "Project").
WHERAS, Borrower and Lender entered into that certain Loan Agreement, dated September 21, 2010, in connection with the Loan (the "Loan Agreement"), and Borrower executed a Promissory Note Secured by Deed of Trust, dated as of September 21, 2010, in favor of the Lender to evidence the Loan (the "Note").
C. The Loan was secured by an unrecorded Deed of Trust, dated September 10, 2010, (the "Original Deed of Trust"), and the parties intend to record a substitute Deed of Trust concurrently herewith (the "Replacement Deed of Trust") to create a valid lien on the Project property that shall be consistent with this Amendment. The City will also record a Regulatory Agreement in connection with the CDBG Loan to restrict the use and occupancy of the Project in accordance with CDBG program requirements.
C. WHEREAS, Lender and Borrower desire to amend the Loan Agreement and Note to extend the term of the Loan, and to terminate the Original Deed of Trust as set forth herein.
NOW, THEREFORE, with reference to the foregoing Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties mutually agree as follows:
Amendments.
(a) The term of the Loan is hereby extended to December 31, 2081. (b) All references in the Loan Agreement and Note to the maturity date of the Loan are hereby revised to be references to December 31, 2081. (c) All references in the Loan Agreement and Note to the Deed of Trust are hereby revised to be references to the Replacement Deed of Trust, when recorded.
De Anza - Amendment to CDBG Loan Documents
2 Termination. The Original Deed of Trust is hereby terminated and of no further force and effect concurrently with the recordation of the Replacement Deed of Trust in the Official Records of Imperial County.
Governing Law. The Agreement shall be interpreted under and be governed by the laws of the State of California.
3.4. _ Counterparts. This Amendment may be executed in counterparts by the parties hereto, each of which shall be deemed to be an original, and all such counterparts shall constitute but one and the same instrument.
4.5. Full Force and Effect. Except as amended hereby, the Loan Agreement and Note remain in full force and effect. All provisions of the Loan Agreement and Note, as modified by this Amendment, are hereby reaffirmed by the Lender's and Borrower's signatures below [SIGNATURE PAGES FOLLOWI
De Anza -- Amendment to CDBG Loan Documents
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
BORROWER:
DE ANZA HOTEL LIMITED PARTNERSHIP,
a California limited partnership
By: Chelsea Asset Corporation,
a California corporation,
its Co-General Partner
By:
Charles Schmid
Authorized Representative
By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation,
its Managing General Partner
By:
Robert W. Laing
Executive Director/President
LENDER:
CITY OF CALEXICO
By:
Benjamin Martinez, City Manager
Approved as to form:
By:
City Attorney
3 De Anza - Amendment to CDBG Loan Documents
ATTACHMENT NO. 3
CITY DRAFT
SUBJECT TO CHANGE
1/13/2026
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
CITY OF CALEXICO
608 Heber Avenue
Calexico, CA 92231
Attn.: City Clerk
Space above line for Recorder's use only
Exempt from Recording Fees pursuant to Govt. Code § 27383
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as it may be amended and modified from time to time, the "Deed of Trust") is made as of [February _ 2026], by DE ANZA HOTEL LIMITED PARTNERSHIP, a California limited partnership, whose mailing address is 6339 Pasco del Lago, Carlsbad, California 92011 ( "Trustor") in favor of ("Trustee"), and for the benefit of CITY OF CALEXICO, a California municipal corporation ("Beneficiary"), whose mailing address is 608 Heber Avenue, Calexico, California 92231.
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, all of Trustor's right, title and interest in, to and under the following property: (a) that certain real property located in the City of Calexico, County of Imperial, State of California, more particularly described on Exhibit A attached hereto and incorporated herein by this reference (the "Premises"); (b) in any and all buildings and other improvements now or hereafter erected on the Premises including, without limitation, fixtures, attachments, appliances, equipment, machinery, and other personal property attached to such buildings and other improvements (the "Improvements"), all of which shall be deemed and construed to be a part of the real property; (c) all interests, estates or other claims, both in law and in equity, which Trustor now has or may hereafter acquire in the Premises or the Improvements including but not limited to all current and future air rights, development rights, zoning rights and other similar rights or interests, easements, roads, streets, alleys, sewer rights, and appurtenances related to or benefiting the Premises and/or the Improvements or TOGETHER WITH Trustor's interest in all rents, issues, profits, damages, royalties, income and other benefits now or hereafter derived from the Premises and the Improvements (collectively the "Rents"), subject to the terms and provisions of Article IV of this Deed of Trust with respect to all leases and subleases of the Premises or Improvements now or hereafter existing or entered into, or portions thereof, granted by Trustor, and further subject to the right, power and authority hereinafter given to Trustor to collect and apply such Rents; TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Premises or the Improvements or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder including, without limitation, all rights of Trustor against guarantors thereof, all cash or security deposits, advance rentals, and deposits or payments of similar nature (collectively, the "Leases");
TOGETHER WITH all right, title, and interest of Trustor in (i) the property and interests in property described on Exhibit B attached hereto and incorporated herein by reference, (i) all other personal property now or hereafter owned by Trustor that is now or hereafter located on or used in connection with the Premises or the 1 81211.00100\44574452.2
CITY DRAFT
SUBJECT TO CHANGE
1/13/2026
Improvements or acquired for use on the Premises, including construction materials, wherever located, (ill) all other rights and interests of Trustor now or hereafter held in personal property that is now or hereafter located on or used in connection with the Premises or the Improvements, (iv) all personal property and rights and interests in personal property of similar type or kind hereafter acquired by Trustor, and (v) all proceeds thereof (such personal property and proceeds are referred to herein collectively as the "Personal Property"); TOGETHER WITH all the estate, interest, right, title, other claim or demand, both in law and in equity (including, without limitation, claims or demands with respect to the proceeds of insurance in effect with respect thereto) that Trustor now has or may hereafter acquire in the Premises, the Improvements, the Personal Property, or any other part of the Trust Estate (as defined below), and any and all awards made for the taking by eminent domain, or by any proceeding of purchase in lieu thereof, of the whole or any part of the Trust Estate (including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages); and TOGETHER WITH all proceeds of the foregoing.
The entire estate, property, right, title and interest hereby conveyed to Trustee may hereafter be collectively referred to as the "Trust Estate."
FOR THE PURPOSE OF SECURING (in such order of priority as Beneficiary may elect) the following (the "Obligations"): (a) payment of indebtedness in the total principal amount of up to SEVEN HUNDRED SIXTY THOUSAND and No/100 Dollars ($760,000.00) ("Loan"), with interest thereon, evidenced by that certain Promissory Note Secured by Deed of Trust, dated as of September 21, 2010, executed by Trustor as maker (the "Note"), as amended by that certain Amendment to Loan Documents of even date herewith, made by and between Trustor and Beneficiary providing for the extension of the maturity date of the Loan (the "Loan Amendment") and as may be further amended, modified, extended, and renewed from time to time, which Note was originally secured by an unrecorded Project Deed of Trust, dated September 10, 2010 (the "Original DoT") and the parties hereby agree that this Deed of Trust supersede and replace the Original DoT; (b) payment of all sums advanced by Beneficiary to protect the Trust Estate, with interest thereon equal to the interest rate provided in the Note; (c) performance of every obligation of Trustor contained in this Deed of Trust; the Note; that certain Loan Agreement, dated September 21, 2010, made by and between Trustor and Beneficiary (the "Loan Agreement"), as amended by the Loan Amendment and as may be further amended, modified, extended, and renewed from time to time; and in any other deeds of trust, mortgages, agreements, guaranties or other instruments given to evidence or further secure the payment and performance of any or all of the Obligations, as the foregoing may be amended, modified, extended, or renewed from time to time (collectively, the "Loan Documents"); and (d) performance of every obligation of Trustor contained in any agreement, document, or instrument now or hereafter executed by Trustor reciting that the obligations thereunder are secured by this Deed of Trust.
Furthermore, TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
ARTICLE I.
COVENANTS AND AGREEMENTS OF TRUSTOR
1.01 Payment and Performance of Secured Obligations. Trustor shall pay when due and/or perform each of the Obligations.
1.02 Maintenance, Repair, Alterations. Trustor shall keep the Trust Estate in good condition and repair.
Except as provided herein, Trustor shall not remove, demolish, or substantially alter any of the Improvements, except with the prior written consent of Beneficiary, which consent shall not be unreasonably withheld; provided, however, that Trustor may remove items in the ordinary course of operations, provided that such items are replaced with items similar in quality and value to the original condition of the items so removed and Beneficiary continues to have a perfected security interest therein. Trustor shall complete promptly and in a good and workmanlike manner any not suffer to occur or exist any violation of any Requirement. Trustor shall not commit or permit any waste or deterioration of the Trust Estate, and, to the extent allowed by law, shall keep and maintain abutting grounds, 2 81211.00100\44574452.2
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sidewalks, roads, parking and landscape areas in good and neat order and repair. Trustor shall perform its obligations under each Lease. "Requirement" and "Requirements" mean, respectively, each and all obligations and requirements now or hereafter in effect by which Trustor or the Trust Estate are bound or which are otherwise applicable to the Trust Estate, construction of any Improvements on the Trust Estate, or operation, occupancy or use of the Trust Estate (including, without limitation, (i) such obligations and requirements imposed by common law or any law, statute, ordinance, regulation, or rule (federal, state, or local), and (ii) such obligations and requirements of, in, or in respect of (A) any consent, authorization, license, permit, or approval relating to the Trust Estate, (B) any condition, covenant, restriction, easement, or right-of-way reservation applicable to the Trust Estate, (C) any Lien or Encumbrance (hereinafter defined), (D) any other agreement, document, or instrument to which Trustor is a party or by which Trustor or the Trust Estate is bound or affected, and (E) any order, writ, judgment, injunction, decree, determination, or award of any arbitrator, other private adjudicator, court, government, or governmental authority (federal, state, or local) to which Trustor is a party or by which Trustor or the Trust Estate is bound or affected).
Required Insurance. Trustor shall at all times provide, maintain and keep in force or cause to be provided, maintained and kept in force with respect to the Trust Estate, at no expense to Trustee or Beneticiary, policies of insurance in forms and amounts and issued by companies reasonably satisfactory to Beneficiary to fully insure the Trust Estate against loss or damage from such casualties, risks, perils, liabilities and other hazards as Beneficiary shall from time to time require. All insurance required shall comply with the terms of the Loan Agreement. In the event Trustor fails to obtain, maintain, or deliver to Beneficiary the policies of insurance with respect to the Trust Estate required by this Deed of Trust, Beneficiary may, at Beneficiary's election, but without any obligation so to do, procure such insurance or single-interest insurance for such risks covering Beneficiary's interest in the Trust Estate, and Trustor must pay all premiums thereon promptly upon demand by Beneficiary.
Casualties; Insurance Proceeds. Upon becoming aware of the casualty, Trustor shall give prompt written notice thereof to Beneficiary after the happening of any casualty to or in connection with the Trust Estate or any part thereof, whether or not covered by insurance. Without limiting Beneficiary's security interest in any insurance proceeds, Trustor shall be authorized, so long as no Event of Default is continuing, to settle, adjust, collect and receive all proceeds of insurance ("Casualty Proceeds") with respect to any casualty involving damage to the Trust Estate which is less than the Casualty Threshold (a "Minor Casualty"), and if Beneficiary receives the same under the above-described circumstances, Beneficiary shall pay the same, less any third party costs incurred by Beneficiary in connection with receiving the same, to Trustor. Beneficiary is authorized, at its option upon written notice to Trustor, to settle and adjust any claim with respect to any casualty damage to the Trust Estate equal to or greater than the Casualty Threshold (a "Major Casualty") or, if an Event of Default is continuing, any Minor Casualty. Beneficiary is authorized to collect and receive all Casualty Proceeds with respect to any Major Casualty, or, if an Event of Default is continuing, any Minor Casualty, and Trustor hereby authorizes and directs any affected insurance company to make payment of such Casualty Proceeds directly to Beneficiary. Trustor shall promptly pay over to Beneficiary any Casualty Proceeds received by Trustor relating to a Major Casualty or, if an Event of Default is continuing, a Minor Casualty. Trustor agrees to execute and deliver to Beneficiary, within ten (10) days after Beneficiary's request, such further assignments of any Casualty Proceeds as Beneficiary may reasonably require. As used herein, "Casualty Threshold" shall mean Ten Thousand Dollars ($10,000.00). If Beneficiary receives any Casualty Proceeds, such Casualty Proceeds shall thereafter be made available to Trustor for use in repairing the Trust Estate under such terms and conditions as Beneficiary shall determine. In the event that an Event of Default is continuing, Beneficiary shall have the option to apply any proceeds of insurance as payment of the Obligations in such order as Beneficiary shall determine, with any excess proceeds following Beneficiary's payment of the Obligations to be remitted to Trustor.
Indemnification. IF BENEFICIARY IS MADE A PARTY TO OR IS THREATENED WITH
ANY LITIGATION CONCERNING ANY OF THE LOAN DOCUMENTS, THE TRUST ESTATE OR ANY
PART THEREOF OR INTEREST THEREIN, OR THE OCCUPANCY OF THE TRUST ESTATE BY TRUSTOR,
THEN TRUSTOR SHALL INDEMNIFY, DEFEND AND HOLD BENEFICIARY, ITS SUCCESSORS AND
ASSIGNS, THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES HARMLESS
FOR, FROM AND AGAINST ALL LIABILITY BY REASON OF SAID THREAT AND/OR LITIGATION,
INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES INCURRED BY BENEFICIARY, ITS
SUCCESSORS AND ASSIGNS, THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND
REPRESENTATIVES AS A RESULT OF ANY SUCH THREAT AND/OR LITIGATION, WHETHER OR NOT ANY SUCH THREAT AND/OR LITIGATION IS PROSECUTED TO JUDGMENT. Beneficiary may employ an 3 81211.00100\44574452.2
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attorney or attorneys to protect its rights hereunder, and in the event of such employment following any breach of the foregoing obligation by Trustor, Trustor shall pay Beneficiary reasonable attorneys' fees and expenses incurred by Beneficiary, whether or not an action is actually commenced against Trustor by reason of its breach. TRUSTOR
WAIVES ANY AND ALL RIGHT TO CLAIM OR RECOVER AGAINST BENEFICIARY, ITS SUCCESSORS
AND ASSIGNS, THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES, FOR
LOSS OF OR DAMAGE TO TRUSTOR, THE TRUST ESTATE, TRUSTOR'S PROPERTY OR THE PROPERTY
OF OTHERS UNDER TRUSTOR'S CONTROL FROM ANY CAUSE INSURED AGAINST OR REQUIRED TO BE INSURED AGAINST BY THIS DEED OF TRUST.
Impositions. Trustor shall pay, or cause to be paid, at least ten (10) days prior to delinquency, all real property taxes and assessments, general and special, and all other taxes and assessments of any kind or nature whatsoever, (including, without limitation, non-governmental levies or assessments such as maintenance charges, levies, or charges resulting from covenants, conditions and restrictions affecting the Trust Estate) that are assessed or imposed upon the Trust Estate or become due and payable and that create, may create, or appear to create a lien upon the Trust Estate (the above are sometimes referred to herein individually as an "Imposition" and collectively as "Impositions").
Actions By Trustee or Beneficiary. If Trustor fails to make any payment or to do any act as and in the manner provided in any of the Loan Documents, after the giving of any required notice under the Loan Documents and the expiration of any applicable cure periods, Beneficiary and/or Trustee, cach in its absolute and sole discretion, without obligation so to do, without releasing Trustor from any obligation, may make or do the same in such manner and to such extent as either may deem necessary or appropriate.
1.08 Transfer of Trust Estate by Trustor. In order to induce Beneficiary to make the loan, Trustor agrees that, in the event of any Transfer (as hereinafter defined), without the prior written consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such Transfer shall be subject to this Deed of Trust, and such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor or any maker or guarantor (if any) of the Note from any liability thereunder without the prior written consent of Beneficiary. As used herein, "Transfer" shall mean: (a) Except as permitted in the Loan Agreement, any sale, transfer, conveyance, assignment, hypothecation, mortgage, encumbrance, lease, or vesting of the Trust Estate or any part thereof or interest therein to or in any person, firm or entity, whether voluntary, involuntary, by operation of law, or otherwise; (b) any merger, consolidation or dissolution of Trustor; (c) any sale or transfer of substantially all of the assets of Trustor; (d) any sale, transfer, conveyance or assignment (at one time or over any period of time) of twenty five percent (25%) or more of the ownership interests (direct or indirect) of Trustor; and (e) the execution of any agreements to do any of the foregoing.
1.09 Eminent Domain. In the event that any proceeding or action be commenced for the taking of the Trust Estate, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, condemnation (including, without limitation, inverse condemnation) or otherwise (hereinafter collectively referred to as a "Taking"), or if the same be taken or damaged by reason of any public improvement or Taking, or should Trustor receive any notice or other information regarding such Taking or damage, Trustor shall give prompt written notice thereof to Beneficiary. All compensation, awards, damages, rights of action and proceeds awarded to Trustor by reason of any such Taking or damage or received by Trustor as the result of a transfer in lieu of a Taking (the "Condemnation Proceeds") are hereby assigned to Beneficiary, and Trustor agrees to execute such further assignments of the Condemnation Proceeds as Beneficiary or Trustee may require. If Trustor receives any Condemnation Proceeds, Trustor shall promptly pay over such proceeds to Beneficiary. Beneficiary is hereby authorized and empowered by Trustor, at Beneficiary's option and in Beneficiary's sole discretion, as attorney-in-fact for Trustor, to settle, adjust, or compromise any claim for loss or damage in connection with any Taking or proposed Taking and, without regard to the adequacy of its security, to commence, appear in and prosecute in its own name and/or on behalf of Trustor any such action or proceeding arising out of or relating to a Taking or proposed Taking; provided, however, that so long as no Event of Default is continuing, Trustor shall be entitled to reasonably participate in any action, proceeding or settlement relating to such Taking. 4 81211.00100\44574452.2
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1.10 Appointment of Successor Trustee. Beneficiary may, from time to time, by a written instrument executed and acknowledged by Beneficiary, mailed to Trustor and recorded in the county in which the Trust Estate is located and by otherwise complying with the provisions of applicable law, substitute a successor or successors to any Trustee named herein or acting hereunder, and such successors) shall, without conveyance from the Trustee predecessor, succeed to all title, estate, rights, powers and duties of such predecessor.
Ownership and Liens and Encumbrances. Trustor is and as to any portion of the Trust Estate acquired hereafter will upon such acquisition(s) be and shall remain the owner of the Trust Estate free and clear of any Liens and Encumbrances. Trustor shall not grant, shall not suffer to exist, and shall pay and promptly discharge, at Trustor's cost and expense, all Liens and Encumbrances and any claims thereof upon the Trust Estate, or any part thereof or interest therein. Upon becoming aware thereof, Trustor shall notify Beneficiary promptly in writing of any Lien or Encumbrance or claim thereof. Trustor shall have the right to contest in good faith the validity of any involuntary Lien or Encumbrance, provided Trustor shall first deposit with Beneficiary a bond or other security satisfactory to Beneficiary in such amount as Beneficiary shall reasonably require. "Lien or Encumbrance" and "Liens and Encumbrances" mean, respectively, each and all of the following in respect of the Trust Estate: leases (except as expressly permitted by the Loan Documents), other rights to occupy or use, mortgages, deeds of trust, pledges, security agreements, assignments, assignments as security, conditional sales, title retention arrangements or agreements, conditions, covenants, restrictions, and other charges, liens, encumbrances, or adverse interests, whether voluntarily or involuntarily created and regardless of whether prior or subordinate to any estate, right, title, or interest granted to Trustee or Beneficiary in this Deed of Trust, excluding, subject to the prior approval of Beneficiary, any Liens and Encumbrances set forth on Beneficiary's title insurance policy relating to the Loan.
1.12 Trustee's Powers. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and without affecting the personal liability of any person for payment of the Obligations or the effect of this Deed of Trust upon the remainder of said Trust Estate, Trustee may (a) reconvey any part of said Trust Estate, (b) consent in writing to the making of any map or plat thereof, (c) join in granting any easement thereon, or (d) join in any extension agreement or any agreement subordinating or affecting the priority of the lien or charge hereof. Upon payment of all amounts due under the Obligations and after receipt of written request from Trustor, Trustee and Beneficiary shall execute and provide Trustor with a release and reconveyance of this Deed of Trust in recordable form.
Beneficiary's Powers. Without affecting the liability of any Person liable for the payment of the Obligations herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Trust Estate not then or theretofore released as security for the Obligations, Beneficiary may, from time to time and without notice (a) release any person so liable, (b) extend the Obligations, (c) grant other indulgences, (d) release or reconvey, or cause to be released or reconveyed, at any time at Beneficiary's option any parcel, portion or all of the Trust Estate, (e) take or release any other or additional security or any guaranty for any Obligation herein mentioned, or (f) make compositions or other arrangements with debtors in relation thereto.
ARTICLE II.
ASSIGNMENT OF RENTS
2.01 Assignment of Rents. Trustor hereby absolutely and irrevocably assigns and transfers to Beneficiary all the Rents of the Trust Estate, and hereby gives to and confers upon Beneficiary the right, power and authority to collect the Rents. Trustor irrevocably appoints Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in the name of Trustor or Beneficiary, for all Rents and apply the same to the payment of the Obligations in such order as Beneficiary shall determine.
Collection. During the continuance of an Event of Default, Beneficiary may, at any time without notice, either in person, by agent or by a receiver appointed by a court, and without regard to the adequacy of any security for the Obligations, enter upon and take possession of the Trust Estate, or any part thereof, and, with or without such entry or taking possession, in its own name sue for or otherwise collect the Rents (including, without limitation, those past due and unpaid and apply the same, less costs and expenses of operation and collection (including, without limitation, attorneys' fees) upon payment of the Obligations in such order as Beneficiary may 5 81211.00100\44574452.2
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2.03 Indemnity. EXCEPT FOR MATTERS ARISING SOLELY AND DIRECTLY FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BENEFICIARY, TRUSTOR HEREBY AGREES
TO INDEMNIFY AND HOLD HARMLESS BENEFICIARY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS AND REPRESENTATIVES FOR, FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES,
OBLIGATIONS, CLAIMS, DEMANDS, DAMAGES, PENALTIES, JUDGMENTS, COSTS, AND EXPENSES,
INCLUDING LEGAL FEES AND EXPENSES, HOWSOEVER AND BY WHOMSOEVER ASSERTED, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS ASSIGNMENT; AND ALL SUCH LOSSES,
LIABILITIES, OBLIGATIONS, CLAIMS, DEMANDS, DAMAGES, PENALTIES, JUDGMENTS, COSTS AND
EXPENSES SHALL BE DEEMED ADDED TO THE INDEBTEDNESS SECURED HEREBY AND SHALL BE SECURED BY ANY AND ALL OTHER INSTRUMENTS SECURING SAID INDEBTEDNESS.
Assignment of Leases. Trustor hereby absolutely and irrevocably assigns and transters to Beneficiary all of Trustor's rights, title and interest in and to all present and future leases, subleases, licenses, concessions, or grants or other possessory interests now or hereafter in force.
ARTICLE III.
SECURITY AGREEMENT
Grant of Security Interest. Trustor also grants to Beneficiary a security interest in all of Trustor's right, title, and interest now owned or later acquired to the Improvements and/or the Personal Property. The security interest also includes the following (collectively, the "Collateral"): all additions to, substitutions for, changes in, or replacements of the whole or any part of these articles of property, together with all contract rights of Trustor in construction contracts, bonds, agreements for purchase and sale of the Premises, all policies of insurance arising out of the improvement or ownership of the Premises, and all accounts, contract rights, chattel paper, instruments, general intangibles, and other obligations of any kind now or later existing, arising out of, or in connection with the operation or development of the Premises; all rights of Trustor now or later existing in all security agreements, leases, and other contracts securing or otherwise relating to any accounts, contract rights, chattel paper, instruments, general intangibles, or obligations; all causes of action and recoveries now or later existing for any loss or diminution in value of the Premises; all proceeds of any of the collateral for the security interest; and, to the extent not otherwise included, all payments under insurance (whether Beneficiary is the loss payee), or any indemnity, warranty, or guaranty payable by reason of loss or damage to or otherwise with respect to any of the collateral for the security interest (collectively, the "Collateral").
Remedies Upon an Event of Default. In addition to the remedies provided in Section 4.02 hereof, during the continuance of an Event of Default hereunder, Beneficiary may, at its option, do any one or more of the following: (i) Either personally, or by means of a court appointed receiver, take possession of all or any of the Collateral and exclude therefrom Trustor and all others claiming under Trustor, and thereafter hold, store, use, operate, manage, maintain and control, make repairs, replacements, alterations, additions, and improvements to and exercise all rights and powers of Trustor with respect to the Collateral or any part thereof. In the event Beneficiary demands, or attempts to take possession of the Collateral in the exercise of any rights under this Deed of Trust, Trustor agrees to promptly turn over and deliver possession thereof to Beneficiary; (ii) Without notice to or demand upon Trustor, make such payments and do such acts as Beneficiary may reasonably deem necessary to protect its security interest in the Collateral (including, without limitation, paying, purchasing, contesting or compromising any Lien or Encumbrance, whether superior or inferior to such security interest) and in exercising any such powers or authority to pay all expenses (including, without limitation, litigation costs and reasonable attorneys' fees) incurred in connection therewith; and (iii) Exercise any remedies of a secured party under the Uniform Commercial Code or any other applicable law. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Beneficiary shall give Trustor at least ten (10) days' prior written notice of the time and place of any public sale of the Collateral or other intended disposition thereof to be made. Beneficiary shall have the right to enforce one or more remedies hereunder, successively or concurrently, and such action shall not operate to estop or prevent Beneficiary from pursuing any further remedy that it may have. Any repossession or retaking or sale of the Collateral pursuant to the terms hereof shall not operate to release Trustor until full payment of any deficiency has been made in cash.
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3.03 Security Agreement. This Deed of Trust constitutes and shall be deemed to be a "security agreement" for all purposes of the Uniform Commercial Code and Beneficiary shall be entitled to all the rights and remedies of a "secured party" under such Uniform Commercial Code.
Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of the county in which the Premises is located with respect to all fixtures included within the term "Trust Estate" as used in this Deed of Trust and with respect to any goods, Collateral, or other personal property that may now be or later become fixtures. This filing shall remain in effect as a fixture filing until this Deed of Trust is released or satisfied of record or its effectiveness otherwise terminates as to the Trust Estate. Address of the "Debtor" and of the "Secured Party" as that of the "Trustor" and "Beneficiary", respectively, as set forth in the first paragraph of this Deed of Trust.
3.05 Assignment of Agreements. As partial security for the Loan, Trustor sells, assigns, transfers, sets over, and delivers to Beneficiary all of Trustor's right, title, and interest in all agreements, permits, and contracts pertaining to the use or operation of the Premises, including, but not limited to, environmental impact reports; negative declarations; map approvals; grading and construction permits; conditional use permits; applications for all permits; management agreements; all development rights in the Premises that Trustor may now or later acquire (including, without limitation, development rights arising in connection with any action by a governmental entity, including, by way of illustration, but not of limitation, inducement resolutions of county, municipal, or other governmental entities); agreements with architects, contractors, engineers, suppliers, and construction managers; and agreements pertaining to the transfer of development rights or permitted floor area under applicable laws or ordinances (collectively, the "Agreements"), as they may be amended or otherwise modified from time to time.
However, so long as no Event of Default has occurred and is continuing, Trustor will have the right under a license granted to collect and retain all sums that may become payable to Trustor under the Agreements and the right to exercise all rights under the Agreements.
ARTICLE IV.
REMEDIES UPON DEFAULT
4.01 Events of Default. Each of the following shall constitute an event of default ("Event of Default"):
(a) Failure by Trustor to pay any monetary amount when due under any Loan Document; (b) A breach or default under any Loan Document, subject to applicable notice and cure periods, shall be an "Event of Default" hereunder; and
The failure of Trustor to perform any of the terms, provisions, and obligations under any other agreement between Trustor and Beneficiary, which failure is not remedied within any cure period provided therein. including without limitation any agreement concerning indebtedness or other obligation of Trustor to Beneficiary.
4.02 Acceleration Upon Default; Additional Remedies. If one or more Event of Default occurs and is continuing, then Beneficiary may declare all the Obligations to be due and the Obligations shall become due without any further presentment, demand, protest, or notice of any kind, and Beneficiary may:
(a) in person, by agent, or by a receiver, and without regard to the adequacy of security, the solvency of Trustor, or the existence of waste, enter on and take possession of the Trust Estate or any part of it in its own name or in the name of Trustee, sue for or otherwise collect the rents, issues, and profits, and apply them, less costs and expenses of operation and collection, including reasonable attorney fees, upon the Obligations, all in any order that Beneficiary may determine. The entering on and taking possession of the Trust Estate, the collection of rents, issues, and profits, and the application of them shall not cure or waive any default or notice of default or invalidate any act done pursuant to the notice; (b) commence an action to foreclose this Deed of Trust in the manner provided by law for the foreclosure of mortgages of real property;
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deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause the Trust Estate to be sold, which notice Trustee or Beneficiary will cause to be filed for record;
with respect to any Personal Property, proceed as to both the real and personal property in accordance with Beneficiary's rights and remedies in respect of the Premises, or proceed to sell the Personal Property separately and without regard to the Premises in accordance with Beneficiary's rights and remedies; or
(e) exercise any of these remedies in combination or any other remedy at law or in equity.
Power of Sale. Exercise of Power of Sale. If Beneficiary elects to foreclose by exercise of the power of sale in this Deed of Trust:
Beneficiary will deposit with Trustee this Deed of Trust, the Note and any receipts and evidence of expenditures made and secured as Trustee may reasonably require. If notice of default has been given as then required by law, and after lapse of the time that may then be required by law, after recordation of the notice of default, Trustee, without demand on Trustor, shall, after notice of sale having been given as required by law, sell the Trust Estate at the time and place of sale fixed by it in the notice of sale, either as a whole or in separate parcels as Trustee determines, and in any order that it may determine, at public auction to the highest bidder. Trustee may postpone sale of all or any portion of the Trust Estate by public announcement at the time and place of sale, and from time to time after that may postpone the sale by public announcement at the time fixed by the preceding postponement, and without further notice make the sale at the time fixed by the last postponement; or Trustee may, in its discretion, give a new notice of sale. Beneficiary may rescind any notice of default at any time before Trustee's sale by executing a notice of rescission and recording it. The recordation of the notice shall constitute a cancellation of any prior declaration of default and demand for sale and of any acceleration of maturity of Obligations affected by any prior declaration or notice of default. The exercise by Beneficiary of the right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to execute other declarations of default and demand for sale, or notices of default and of election to cause the Trust Estate to be sold, nor otherwise affect the Note or this Deed of Trust, or any of the rights, obligations, or remedies of Beneficiary or Trustee. After sale, Trustee shall deliver to the purchaser its deed conveying the property sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts will be conclusive proof of their truthfulness. Any Person, including Trustor, Trustee, or Beneficiary, may purchase at that sale. If allowed by law, Beneficiary may credit bid (as determined by Beneficiary in its sole discretion) all or any portion of the Obligations. Trustor expressly waives any right of redemption after sale that Trustor may have at the time of sale or that may apply to the sale.
Trustee, upon the sale, shall make (without any covenant or warranty, express or implied), execute and, after due payment made, deliver to a purchaser and its heirs or assigns a deed or other record of interest, as the case may be, to the Trust Estate sold, which shall convey to the purchaser all the title and interest of Trustor in the Trust Estate and shall apply the proceeds of the sale in payment first, of the expenses of the sale together with the expenses of the trust, including, without limitation, attorney fees, that will become due on any default made by Trustor, and also any sums that Trustee or Beneficiary have paid for procuring a search of the title to the Premises subsequent to the execution of this Deed of Trust; and
second, of the Obligations then remaining unpaid, and the amount of all other monies with interest in this Deed of Trust agreed or provided to be paid by Trustor.
Trustee shall pay the balance or surplus of the proceeds of sale to Trustor and its successors or assigns as its interests may appear.
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interests in accordance with the provisions of this Deed of Trust and its rights and remedies in respect to real property, and treat both real and personal property interests as one parcel or package of security.
4.05 Appointment of Receiver. If an Event of Default occurs and is continuing, Beneficiary, as a matter of strict right and without notice to Trustor or anyone claiming under Trustor and without regard to the then value of the Trust Estate, shall have the right to apply ex parte to any court having jurisdiction to appoint a Receiver of the Trust Estate, and Trustor waives notice of any application for that, provided a hearing to confirm the appointment with notice a tutoris et within fourten clahe powers the diptes of Benefir in case of conty as pro this Deed of Trust and shall continue as such and exercise all those powers until the date of confirmation of sale, unless the receivership is terminated sooner. For purposes of this Deed of Trust, "Receiver" shall include any trustee, receiver, custodian, fiscal agent, liquidator, or similar officer.
Curing of Defaults. If Trustor at any time fails to perform or comply with any of the terms, covenants, and conditions required on Trustor's part to be performed and complied with under this Deed of Trust, the Note, any of the other Loan Documents, or any other agreement that, under the terms of this Deed of Trust, Trustor is required to perform, after the giving of any required notice and the expiration of applicable cure periods (or without notice if Beneficiary determines that an emergency exists) and without waiving or releasing Trustor from any of the Obligations, Beneficiary may, subject to the provisions of any of the agreements, make from the Loan or its own funds any payments payable by Trustor and take out, pay for, and maintain any of the insurance policies provided for; and perform any other acts on the part of Trustor to be performed and enter on the Trust Estate for that purpose. The making by Beneficiary of payments out of Beneficiary's own funds shall not, however, be deemed to cure the default by Trustor, and it shall not be cured unless and until Trustor reimburses Beneficiary for the payments. All sums paid and all reasonable costs and expenses incurred by Beneficiary in connection with the performance of any such act, together with interest on unpaid balances at the Default Rate from the respective dates of Beneficiary's making of each payment, shall be added to the principal of the Obligations, shall be secured by the Deed of Trust, and shall be payable by Trustor to Beneficiary on demand.
Waive Lien. Beneficiary or its agents, representatives, and employees may waive its lien against the Trust Estate or any portion of it, including the Improvements and the Personal Property, to the extent that the Trust Estate is found to be environmentally impaired in accordance with the laws of the State of California, and to exercise all rights and remedies of an unsecured creditor against Trustor and all of Trustor's assets and property for the recovery of any deficiency, including, but not limited to, seeking an attachment order under applicable laws of the State of California.
4.08 Right to Complete Construction. If Trustor abandons or fails to proceed diligently with the work, in accordance with the requirements of the Loan Documents, or during the continuance of any Event of Default, agreements, and other documents to which Beneficiary is a party or for the benefit of Beneficiary and which relate in either case to the Work. Any contracts entered into or indebtedness incurred on the exercise of that right may be in the name of Trustor, and Trustor irrevocably appoints Beneficiary as Trustor's attorney in fact (the appointment being coupled with an interest) to enter into the contracts, incur obligations, enforce any contracts or agreements made by or on behalf of trustor, employ attorneys to defend against attempts to interfere with the exercise of the powers granted, and do any things necessary or proper to complete the Work, including the signing of Trustor's name to any contracts and documents that may be reasonably deemed necessary by Beneficiary. In no event shall Beneficiary be required to expend its own funds to complete the Improvements if the funds remaining to be disbursed from the Loan are insufficient, but Beneficiary may advance those funds. Any advanced funds shall be considered advances under the Note as Beneficiary may determine, and shall be secured by the Loan Documents, even though the advances may cause the total amount advanced to exceed the amount committed to be advanced pursuant to the Loan Agreement, and the amounts shall be payable to Beneficiary by Trustor on demand, together with interest, until paid at the Default Rate.
4.09 Stoppage of Construction by Beneficiary. On: (a) the continuation of any Event of Default, (b) the appearance of substantial deviations from the Plans and Specifications without the prior written approval of 9 81211.00100\44574452.2
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Beneficiary (where such consent is required under the Loan Agreement) or the use of defective or unworkmanlike materials or labor in the Work (as determined in the reasonable good faith judgment of Beneficiary after consultation with the Inspector), or (c) receipt of knowledge by Beneficiary of encroachments to which Beneficiary has not consented in writing, Beneficiary may order stoppage of construction of the work affected and demand that the condition be corrected. Trustor shall comply with that order or demand. After issuance of an order in writing, no further work shall be done on the affected Improvements (except as may be necessary to correct said condition) without the prior written consent of Beneficiary unless and until all Events of Default and conditions have been fully cured and corrected
Remedies Not Exclusive. Trustee and Beneficiary, and each of them, shall be entitled to enforce payment and performance of any and all of the Obligations and to exercise all rights and powers under the Loan Documents and under the law now or hereafter in effect, notwithstanding some or all of the Obligations may now or hereafter be otherwise secured or guaranteed. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing under the law. Every power or remedy given by any of the Loan Documents or by law to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and, to the extent permitted by law, either of them may pursue inconsistent remedies.
Request for Notice. Trustor hereby requests a copy of any notice of default and that any notice of sale hereunder be mailed to it at the address set forth in Section 5.04.
ARTICLE V.
MISCELLANEOUS
Change, Discharge, Termination, or Waiver. No provision of this Deed of Trust may be changed, discharged, terminated, or waived except in a writing signed by the party against whom enforcement of the change, discharge, termination, or waiver is sought. No failure on the part of Beneficiary to exercise and no delay by Beneficiary in exercising any right or remedy under the Loan Documents or under the law shall operate as a waiver thereof.
5.02 Trustor Waivers of Rights. Trustor waives, to the extent permitted by law, (a) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Trust Estate, and (b) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the Obligations and marshaling in the event of foreclosure of the liens hereby created, and (c) all rights and remedies that Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties. Trustor, for itself and for all parties claiming through or under Trustor, and for all parties who may acquire a lien on or interest in the Trust Estate, waives all rights to have the Trust Estate or any other property that now or later may be security for any Obligation ("Other Property") marshaled on any foreclosure of this Deed of Trust or on a foreclosure of any other security for any of the Obligations. Beneficiary shall have the right to sell, and any court in which foreclosure proceedings may be brought shall have the right to order a sale of, the Trust Estate and any of the Other Property as a whole or in separate parcels, in any order that Beneficiary may designate.
Reconveyance by Trustee. Upon written request of Beneficiary stating that all Obligations have been paid in full, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention (all of which Beneficiary shall promptly do upon satisfaction in full of all Obligations) and upon payment by Trustor of Trustee's fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Trust Estate then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or persons legally entitled thereto."
5.04 Notices. All notices, requests and demands to be made hercunder to the parties hereto shall be in writing and shall be delivered by hand or sent by registered or certified mail, return receipt requested, through the United States Postal Service, or by overnight delivery by a nationally recognized delivery service (e.g., Federal Express) requiring a receipt, to the addresses shown below or such other address which the parties may provide to 10 81211.00100\44574452.2
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one another in accordance herewith. Such notices, requests and demands, if sent by mail, shall be deemed given three (3) Business Days after deposit in the United States mail, one (1) Business Day after the date of sending via overnigh delivery, and if delivered by hand, shall be deemed given when delivered:
If to TRUSTOR: DE ANZA HOTEL LIMITED PARTNERSHIP
6339 Paseo del Lago
Carlsbad, CA 92011
Attention: Cheri Hoffman
If to BENEFICIARY: City of Calexico
608 Heber Avenue
Calexico, CA 92231
Attention: Benjamin Martinez
Acceptance by. Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.
5.06 Captions and References. The headings at the beginning of cach section of this Deed of Trust are solely for convenience and are not part of this Deed of Trust. Unless otherwise indicated, each reference in this Deed of Trust to a section or an exhibit is a reference to the respective section herein or exhibit hereto.
5.07 Invalidity of Certain Provisions. If any provision of this Deed of Trust is unenforceable, the enforceability of the other provisions shall not be affected and they shall remain in full force and effect. 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 Trust Estate, the unsecured or partially secured portion of the debt shall be completely paid prior to the payment of the remaining and secured 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 on and applied to the full payment of that portion of the debt which is not secured or fully secured by the
5.08 Attorneys' Fees. If any or all of the Obligations are not paid when due or if an Event of Default occurs, Trustor agrees to pay all costs of enforcement and collection and preparation therefore (including, without limitation, reasonable attorneys' fees) whether or not any action or proceeding is brought (including, without limitation, all such costs incurred in connection with any bankruptcy, receivership, or other court proceedings (whether at the trial or appellate level)), together with interest therein from the date of demand at the rate of ten percent (10%) per annum.
Governing Law. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT
ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF CALIFORNIA AND SHALL IN ALL
RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. All rights, powers and remedies provided in this instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will not render this instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. If any term of this instrument or any application thereof shall be invalid or unenforceable, the remainder of this instrument and any other application of the term shall not be affected thereby.
Liability for Acts or Omissions. Beneficiary shall not be liable or responsible for its acts or omissions under this Deed of Trust, except for Beneficiary's own gross negligence or willful misconduct, or be liable or responsible for any acts or omissions of any agent, attorney, or employee of Beneficiary, if selected with reasonable care.
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Joint and Several Obligations. If this Deed of Trust is signed by more than one party as Trustor, all obligations of Trustor herein shall be the joint and several obligations of each party executing this Deed of Trust as Number and Gender. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter gender and vice versa, if the context so requires.
5.13 Counterparts. This document may be executed and acknowledged in counterparts, all of which executed and acknowledged counterparts shall together constitute a single document. Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this document to form physically one document, which may be recorded.
5.14 Status of Title. Trustor represents and warrants that it is the lawful owner of the Trust Estate free and clear of all Liens and Encumbrances and holds a fee simple estate in the Premises and Improvements, subject only to the Permitted Exceptions and that Trustor has full right, power and authority to convey and mortgage the same and to execute this Deed of Trust.
and Beneficiary and supersode al prior presents no, win the co, apte unds adine and a great of , alo negotiations.
Binding Effect. The Loan Documents shall be binding upon, and inure to the benefit of, Trustor, Trustee and Beneficiary and their respective successors and assigns. Trustor may not assign its obligations under the Loan Documents.
Time of the Essence. Time is of the essence with regard to each provision of the Loan Documents as to which time is a factor.
Survival. The representations, warranties,
hall survive the execution and delivery of the Loan Documents ancovenants of the Trustor and the Loan Documenis Construction Deed of Trust. This Deed of Trust secures an obligation incurred for the construction of improvements on land.
Definitions. Capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Loan Agreement.
Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY LAW, TRUSTOR AGREES THAT
THIS DEED OF TRUST ALSO CONSTITUTES A WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY PURSUANT TO THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 631, AND
THE TRUSTOR APPOINTS BENEFICIARY ITS ATTORNEY-IN-FACT, WHICH APPOINTMENT IS
COUPLED WITH AN INTEREST, AND TRUSTOR AUTHORIZES BENEFICIARY IN THE NAME, PLACE,
AND STEAD OF TRUSTOR TO FILE THIS DEED OF TRUST WITH THE CLERK OR JUDGE OF ANY
COURT OF COMPETENT JURISDICTION AS STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.
[Signature on Following 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"
DE ANZA HOTEL LIMITED PARTNERSHIP,
a California limited partnership
By: Chelsea Asset Corporation,
a California corporation,
its Co-General Partner
By:
Charles Schmid
Authorized Representative
By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation,
its Managing General Partner
By:
Robert W. Laing
Executive Director/President
Signature Page to Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing 81211.00100\44574452.2
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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
→ Notary Public, personally
→ who proved to me on the basis of satisfactory evidence to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:_ (seal)
Signature Page to Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing 81211.00100\44574452.2
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EXHIBIT A
LEGAL DESCRIPTION
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EXHIBIT B
Description of Personal Property
(a) All personal property (including, without limitation, all goods, supplies, equipment, furniture, furnishings, fixtures, machinery, inventory, and construction materials) in which Trustor now or hereafter acquires an interest or right, which is now or hereafter located on or affixed to the Premises or the Improvements or wherever located if intended for use on the Premises or as part of the Improvements and used or useful in the operation, use, or occupancy thereof or the construction of any Improvements thereon, together with any interest of Trustor in and to personal property which is leased or subject to any superior security interest, and all books, records, leases and other agreements, documents, and instruments of whatever kind or character, relating to the Premises, Improvements, or such personal property; All fees, income, rents, issues, profits, earnings, receipts, royalties, and revenues which, after the date hereof and while any portion of the Obligations remains unpaid or unperformed, may accrue from such personal property or any part thereof or from the Premises, the Improvements or any other part of the Trust Estate, or which may be received or receivable by Trustor from any hiring, using, letting, leasing, subhiring, subletting, subleasing, occupancy, operation, or use thereof; All of Trustor's present and future rights to receive payments of money, services, or property, including, without limitation, rights to all deposits from tenants of the Premises or Improvements, rights to rights, instruments, general intangibles, payment intangibles, and principal, interest and payments due on account of goods sold or leased, services rendered, loans made or credit extended, together with title to or interest in all agreements, documents, and instruments, evidencing, securing or guarantying the same; All of Trustor's present and future rights to receive equity payments, capital contributions, distributions, or subscriptions from Trustor's shareholder(s) and/or partners and/or members. (e) All other intangible property and rights relating to the Premises, the Improvements, the personal property described in Paragraph (a) above or the operation, occupancy, or use thereof, including, without limitation, all governmental and non-governmental permits, licenses, and approvals relating to construction on or operation, occupancy, or use of the Premises or Improvements, all names under or by which the Premises or Improvements may at any time be operated or known, all rights to carry on business under any such names, or any variant thereof, all trade names and trademarks relating in any way to the Premises or the Improvements, and all good will in any way relating to the Premises or the Improvements; Trustor's rights under all insurance policies covering the Premises, the Improvements, the Personal Property, and the other parts of the Trust Estate and any and all proceeds, loss payments, and premium refunds payable regarding the same;
All reserves, deferred payments, deposits, refunds, cost savings, and payments of any kind relating to the construction of any Improvements on the Premises; (h) All water stock relating to the Premises;
All causes of action, claims, compensation, and recoveries for any damage to, destruction of, or condemnation or taking of the Premises, the Improvements, the Personal Property, or any other part of the Trust Estate, or for any conveyance in lieu thereof, whether direct or consequential, or for any damage or injury to the Premises, the Improvements, the Personal Property, or any other part of the Trust Estate, or 81211.00100\44574452.2
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for any loss or diminution in value of the Premises, the Improvements, the Personal Property, or any other part of the Trust Estate;
All architectural, structural, mechanical, and engineering plans and specifications prepared for construction of Improvements or extraction of minerals or gravel from the Premises and all studies, data, and drawings related thereto; and also all contracts and agreements of the Trustor relating to the aforesaid plans and specifications or to the aforesaid studies, data, and drawings or to the construction of Improvements on or extraction of minerals or gravel from the Premises; All assets of the Trustor located on and used in connection with the operation or maintenance of the Premises;
All proceeds of the aforesaid collateral;
(m) All Trustor's rights in proceeds of the loan evidenced by the Note; and, As used in this Exhibit B the terms "Obligations", "Note", "Trust Estate", "Premises", "Improvements", and "Personal Property" shall have the meanings set forth in the Deed of Trust to which this Exhibit B is attached.
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FREE RECORDING REQUESTED
PURSUANT TO GOVERNMENT
CODE SECTION 27383 AND 27388.1(a)(2)(D)
Recording Requested by and
When Recorded Please Return To:
City of Calexico
608 Heber Avenue
Calexico, CA 92231
Attn: City Manager
APN(s):
(Space above this line for Recorder's Use)
AFFORDABLE HOUSING REGULATORY AGREEMENT
(CDBG)
This Affordable Housing Regulatory Agreement (this "Regulatory Agreement") Is made this [February 18 , 2026] (the "Effective Date"), by De Anza Hotel Limited Partnership, a California limited partnership ("Owner"), hereby given to and on behalf of the City of Calexico, a California municipal corporation (the "City").
RECITALS
1. Owner is the owner of that certain real property located at 233 East Fourth Street, Calexico, California 92231, APN 058-442-007-000, as more particularly described in the Legal Description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property")
Pursuant to the terms of that certain Loan Agreement, dated September 21, 2010, made by and between Owner and the City, as amended by that certain Amendment to Loan Documents of even date herewith made by and between Owner and the City providing for the extension of the maturity date of the Loan (the "Loan Agreement"), the City provided Owner with a loan of Community Development Block Grant program ("CDBG) funds in an amount not to exceed $760,000.00 (the "Loan") to finance certain costs of the repair and rehabilitation of the De Anza Hotel, a senior affordable housing community located on the Property (the "Project").
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3. To ensure the construction, repair, and rehabilitation and continued operation of the Project and as consideration for the Loan, Owner agreed to enter into this Regulatory Agreement to restrict the development, use and occupancy of the Project as provided herein.
NOW, THEREFORE, Owner, in consideration of the Loan made by City to Owner and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner hereby covenants, agrees, and declares that the Property and the Project shall be owned, held, used, maintained, and transferred pursuant to the terms hereof and shall be binding upon all of Owner's successors, assigns and transferees to the Property or Project, and all leases, tenants, contractors, agents, and all persons claiming an interest in the Property or Project, or claiming an interest by and through any of the foregoing.
COVENANTS
Use and Income Restrictions. Owner, for itself and its successors and assigns, hereby declares and covenants that the Property and Project are restricted to use as a senior affordable housing community and related amenities during the term of this Regulatory Agreement. Owner shall, at its sole cost and expense, at all times during the term of this Regulatory Agreement, comply with all laws, statutes, ordinances, rules, and regulations of the United States of America, the U.S. Department of Housing and Urban Development ("HUD), the California Department of Housing & Community Development ("HCD"), the State of California, the county or counties in which any part of the Property is located, the City, or any agency, department, commission, bureau, or instrumentality of any of them, applicable to Owner, the Project, or the Property, as currently in effect or as amended during the term of this Regulatory Agreement, including, without limitation, to the extent applicable to Owner, the Project, and the Property, the CDBG regulations under 24 CFR Part 570 (including as described in Exhibit "B", attached hereto and incorporated herein for all purposes) in connection with the Loan for the Project made by the City to Owner.
a. In accordance with CDBG requirements (including the regulations at 24 CFR Part 570), at least fifty-one percent (51%) of the units in the Project shall be rent restricted (the "Affordable Units") and reserved for occupancy by households whose annual income (as calculated under 24 CFR 5.609, as amended from time to time) does not exceed 80% of the Area Median Income (defined below), adjusted for family size ("Eligible Households"). "Area Median Income" means the median household income (adjusted for family size appropriate to the unit) of the Metropolitan Statistical Area in which the City is located, as determined by HUD or, if approved by HUD, as established in accordance with section 50093 of the California Health and Safety Code. The income of all persons residing in an Affordable Unit shall be considered for purposes of calculating the applicable income in accordance with 24 CFR 5.609.
The Affordable Units shall be rented to Eligible Households at a rental rate that does not exceed the lower of an annual or monthly amount, as applicable, equal to thirty percent (30%) of the adjusted income of a family whose annual income equals eighty percent (80%) of the Area Median Income, with adjustments for number of bedrooms in the unit, as established annually by HUD. This rental rate 2 81211.00100\44574780.2
limit applies to the rental amount plus the utility allowance determined by either the HUD Utility Schedule Model (HUSM) or a project-specific methodology approved by HUD. Affordable Units may continue to qualify as affordable housing despite a temporary noncompliance caused by increases in the incomes of existing tenants if actions satisfactory to City and HUD are being taken to ensure that all vacancies are filled in accordance with this Regulatory Agreement until the noncompliance is corrected. Tenants of Affordable Units who no longer qualify as Eligible Households must pay as rent the lesser of (a) the amount payable by the tenant under applicable State or local law, (b) thirty percent (30%) of the family's adjusted annual income, or (c) an amount that does not exceed the market rent for comparable, unassisted units in the neighborhood.
b. All of the units in the Project shall be reserved for occupancy by senior households, which means households composed of one or more persons at least one of whom is 62 years of age or more.
Ni Income Certification; Reports. At the time the initial lease for an Affordable Unit is executed, Owner shall verify the income of all new tenants and that all tenants of the Affordable Units are Eligible Households with documentation sufficient under 24 CFR 5.609 to show that a tenant qualifies as an Eligible Household ("Tenant Documentation"), which may include, but is not limited to, copies of paychecks, Social Security and disability verification letters, interest or rental income statements, retirement income statements, child support and alimony verification, unemployment benefit letters, and similar statements. Owner shall annually thereafter verify such tenant's income with full Tenant Documentation unless (i) City, in its sole discretion, provides prior written approval for the use of a City-approved tenant self-certification form and (i) tenant self-certification of annual income is permitted under applicable CDBG requirements.
Owner shall provide City with information on rents and occupancy of Affordable Units annually, as well as information on household composition (such as race, ethnicity, etc.) in compliance with the Fair Housing Act and 25 CFR 570.506(g), or more frequently as may reasonably be requested by City, as may be required by HUD, or for compliance with the CDBG requirements.
Owner shall maintain all necessary books and records, including property, personal, and financial records, in accordance with requirements prescribed by City with respect to all matters covered by this Regulatory Agreement in compliance with the CDBG requirements, including, without limitation the requirements in 24 CFR 570.506 prescribed to City. Owner, at such time and in such forms as City may reasonably require, shall furnish to City statements, records, reports, data and information pertaining to matters covered by this Regulatory Agreement. Upon no less than 48 hours prior written request for examination by City, Owner shall make available all of its records with respect to all matters covered by this Regulatory Agreement. Developer shall permit City to audit, examine and make excerpts or transcripts from these records. All records must be retained for the period required under 24 CFR 570.502(a)(7)(ii).
3. Use, Repair, and Maintenance. Owner agrees, at its sole cost and expense:
a. To keep the Property and Project in a decent, safe, sanitary, rentable, tenantable condition and repair, and permit no waste thereof;
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Not to construct any buildings or improvements on the Property, other than the buildings and improvements contemplated as part of the Project as approved by City or add to, remove, demolish or structurally alter any buildings and improvements now or hereinafter located on the Property without the City's prior written consent;
C. To repair, restore or rebuild promptly any buildings or improvements on the Property that may become damaged or be destroyed while subject to this Regulatory Agreement;
d. To comply with all applicable laws, ordinances, and governmental regulations affecting the Property or Project or requiring any alteration or improvement thereof, and not to suffer or permit any violations of any such law, ordinance or governmental regulation, nor of any covenant, condition or restriction affecting the Property or Project;
e. Not to initiate or acquiesce in any change in any zoning or other land use or legal classification which affects any of the Property or Project without the City's prior written consent; and
f. Not to alter the use of all or any part of the Property without prior written consent of the City.
The City shall have no responsibility or liability for the construction, repair, rehabilitation, installation, management, operation, or any maintenance of the Property or the Project.
4. Nondiscrimination. Owner must comply with the statutes and regulations prohibiting excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, religion, national origin, sex, disability, or age, including, but not limited to, Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) (24 CFR Part 1); Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794) (24 CFR Part 8); The Fair Housing Act, Title VIlI of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.); Title II of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.); the Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.) (24 CFR Part 146); Executive Order 11063, as amended by Executive Order 12259 ("Nondiscrimination and Equal Opportunity in Housing under Executive Order 11063") (24 CFR Part 107); Section 109 of Title I of the Housing and Community Development Act of 1974 (42 USC § 5309) (24 CFR Part 6); and 24 CFR 570.601- 602.
5. Restrictions on Sale, Encumbrance, and Other Acts. Except with the City's prior written approval, Owner shall not make any sale, encumbrance, hypothecation, assignment, refinancing, pledge, conveyance, or transfer in any other form of the Property or the Project or of any of its interest in either of them.
6. Charges; Liens. Owner shall pay all taxes, assessments and other charges, fines, and impositions attributable to the Property or to the Project, if any, by Owner making payment, when due, directly to the payee thereof. Upon request from City, Owner shall promptly furnish to City all notices of amounts due under this paragraph, and in the event Owner shall make payment 4 81211.00100\44574780.2
directly, Owner shall promptly furnish to City receipts evidencing such payments. Owner shall pay when due all encumbrances, charges, and liens, on the Property or to the Project, any portion thereof and payments on notes or other obligations secured by an interest in the Property or Project, any portion thereof, with interest in accordance with the terms thereof. Owner shall have the right to contest in good faith any claim or lien, or payment due thereunder, provided that Owner does so diligently and without prejudice to City.
7. Hazard and Liability Insurance. Owner shall at all times keep the Property and the Project insured against loss by fire and such other hazards, casualties, liabilities and contingencies, and in such amounts and for such periods as required by the City. All insurance policies and renewals thereof shall be issued by a carrier and in form acceptable to the City.
8. Covenants Run with the Land. The Property is held and hereafter shall be held, conveyed, hypothecated, encumbered, leased, rented, used, and occupied subject to these covenants, conditions, restrictions and limitations. All of the herein-stated covenants, conditions, restrictions and limitations are intended to constitute both equitable servitudes and covenants running with the land. Owner expressly acknowledges and agrees that these covenants, conditions, restrictions and limitations are reasonable restraints on Owner's right to own, use, maintain, and transfer the Property and any estate or interest therein and are not and shall not be construed to be an unreasonable restraint on alienation. Each and every contract, deed, or other instrument hereafter executed covering or conveying the Property or any portion thereof, shall be held conclusively to have been executed, delivered, and accepted subject to such covenants, conditions, restrictions and limitations, regardless of whether such covenants, conditions, restrictions and limitations are set forth in such contract, deed or other instrument.
9. Binding Effect. All of the covenants, restrictions, conditions, limitations, and other provisions set forth in this Regulatory Agreement shall be binding upon and specifically enforceable by the City against Owner and its successors and assigns, and all parties claiming by, through, or under Owner, including, but not limited to, all subsequent owners of the Property or Project, each of whom shall be obligated and bound to observe the covenants, restrictions, conditions, limitations, and other provisions set forth in this Regulatory Agreement. Any purchaser of all or any portion of or interest in the Property or Project, by the acceptance of a deed or other instrument therefor, whether from Owner or from any subsequent owner of the Property or Project, or by the signing of a contract or agreement to purchase the Property or Project, shall by the acceptance of such deed or by the signing of such contract or agreement be deemed to have consented to and accepted the covenants, restrictions, conditions, limitations, and other provisions set forth in this Regulatory Agreement.
10. Term of Regulatory Agreement. This Regulatory Agreement shall be binding, effective and enforceable commencing upon the Effective Date of this Regulatory Agreement and shall continue in full force and effect for a period of fifty-five (55) years from September 21, 2010.
11. Default. The following shall constitute a default of this and shall entitle the City to all of the remedies contained herein.
Any failure to perform under this Regulatory Agreement, which failure remains uncured for sixty (60) days following written notice to Owner thereof or, if the 5 81211.00100\44574780.2
default cannot reasonably be cured within sixty (60) days, Owner has failed to commence to cure such event of default within sixty (60) days and thereafter diligently pursue such cure and complete such cure within one hundred and eighty (180) days.
12. Remedies. The City and its successors and assigns may use any or all of the following provisions in the event of a default or breach of this Regulatory Agreement. The failure by the City to exercise any specific right or remedy shall not preclude the City from exercising any other right or remedy, or from maintaining any action to which it may otherwise be entitled at law or in equity:
a. Specific Performance. The use of the Property and Project in accordance with this Regulatory Agreement is of a special and unique kind and character, so that a breach of any material provision of this Regulatory Agreement by Owner, its successors, assigns or transferees, would not have an adequate remedy at law.
Therefore, the City's rights may be enforced by an action for specific performance and such other equitable relief as is provided by the laws of the State of California. b. Injunctive Relief. In pursuing specific performance of this Regulatory Agreement, the City shall be entitled to petition the court for injunctive relief to preserve the City's interests in the Property and Project and rights under this Regulatory Agreement. Such injunctive relief may include, but is not limited to, an order of the court restraining any development of the Property and Project inconsistent with this Regulatory Agreement.
13. City Review and Inspection.
a. At any time during the term of this Regulatory Agreement and upon prior written notice of at least three business days, the City or its designee may enter and inspect the Property and inspect all accounting records pertaining to compliance with this Regulatory Agreement. Upon request by the City, the Owner shall notify occupants of upcoming inspections of their units in accordance with state law. b. At the City's request, the Owner shall provide, at Owner's expense, a special audit of the Project certified by an independent certified public accountant, as may be required by HUD, HCD, or other state or governmental agency.
C. The City may request any other information that it deems reasonably necessary to monitor compliance with this Regulatory Agreement. The Owner shall provide such information within 14 days from the City's written request for such information or such later date as specified in the request.
d. The Owner agrees to regular monitoring of the housing development by the City or such designee the City may name at any time during the term of this Regulatory Agreement, to verify compliance with the requirements of this Regulatory Agreement. The Owner, or designee, shall submit annual reports as required by the City on forms approved or provided by the City, detailing components of the on-going operations of the housing development, as noted in this subsection. The 6 81211.00100\44574780.2
components of annual operations for which reporting is required, which the City retains the right to inspect, or cause to be inspected, include, and are not limited to:
(1) The Project, including interior of units, common areas, and exterior of the development;
(2) Tenant files, demonstrating compliance with affordability standards under this Regulatory Agreement;
(3) Financial records, including the right to request a certified financial audit of the revenue, expenses, and operations of the housing development; and (4) Insurance records to ensure continuous insurance coverage in accordance with City and Program requirements.
14. Owner Representations. Owner represents and warrants to the City that: (1) Owner has sufficient interest in the Property to own, develop, construct and operate the Project in accordance with this Regulatory Agreement, (2) to Owner's actual knowledge and belief, there are no agreements, contracts, covenants, conditions, or exclusions to which Owner (or its predecessor in interest) is a party that would, if enforced, prohibit or restrict the use of the Property in accordance with the terms of this Regulatory Agreement, (3) Owner has the full right and authority to enter into this Regulatory Agreement, (4) this Regulatory Agreement constitutes a valid and legally binding obligation on Owner, enforceable in accordance with its terms, and (5) Owner is duly organized and authorized to do business in the State of California.
15. INDEMNITY. OWNER AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD
HARMLESS THE CITY, ITS OFFICERS, OFFICIALS, CONTRACTORS, VOLUNTEERS,
REPRESENTATIVES, AGENTS, AND EMPLOYEES AGAINST ANY AND ALL CLAIVIS,
LAWSUITS, JUDGMENTS, COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDING
DEATH), PROPERTY DAMAGE OR OTHER HARM FOR WHICH RECOVERY OF DAMAGES
IS SOUGHT, SUFFERED BY ANY PERSON OR PERSONS, THAT MAY ARISE OUT OF OR
BE OCCASIONED BY OWNER'S BREACH OF ANY OF THE COVENANTS, RESTRICTIONS,
CONDITIONS, AND OTHER PROVISIONS SET FORTH IN THIS REGULATORY
AGREEMENT, OR BY ANY NEGLIGENT OR STRICTLY LIABLE ACT OR OMISSION OF
OWNER IN THE PERFORMANCE OF OR IN CONNECTION WITH THIS REGULATORY AGREEMENT; EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH
SHALL NOT APPLY TO ANY LIABILITY DIRECTLY RESULTING FROM THE SOLE GROSS
NEGLIGENCE OF OR WILLFUL MISCONDUCT OF THE CITY, ITS OFFICERS, AGENTS,
EMPLOYEES, OR SEPARATE CONTRACTORS, WITHOUT WAIVING ANY
GOVERNMENTAL IMMUNITY AVAILABLE TO THE CITY UNDER STATE LAW AND WITHOUT WAIVING ANY DEFENSES OF THE PARTIES UNDER STATE LAW. THE
PROVISIONS OF THIS PARAGRAPH ARE SOLELY FOR THE BENEFIT OF THE PARTIES
HERETO AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY.
16. Governing Law. This Regulatory Agreement shall be interpreted and be governed by the laws of the State of California.
7 81211.00100\44574780.2
17. Severability. Every provision of this Regulatory Agreement is intended to be severable.
If any provision of this Regulatory 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.
18. Counterparts. This Regulatory Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement.
Signature page follows]
81211.00100\44574780.2
IN WITNESS WHEREOF, the Owner has caused this Regulatory Agreement to be signed by its duly authorized representative, as of the Effective Date.
OWNER:
DE ANZA HOTEL LIMITED PARTNERSHIP,
a California limited partnership
By: Chelsea Asset Corporation,
a California corporation,
its Co-General Partner
By:
Charles Schmid
Authorized Representative
By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation,
its Managing General Partner
By:
Robert W. Laing
Executive Director/President
CITY:
CITY OF CALEXICO
By:
Benjamin Martinez, City Manager
Approved as to form:
By:
City Attorney
81211.00100\44574780.2
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 → 20 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.
Signature: (seal)
81211.00100\44574780.2
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 _ 20_ 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.
Signature: (seal)
81211.00100\44574780.2
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Calexico, County of Imperial, State of California, described as follows:
Lots 8 through 14, inclusive, Block 6, BANTA'S SUBDIVISION of Block 28 of the Townsite of Calexico, in the City of Calexico, county of Imperial, State of California, according to Map No. 1040 on file in Book 1, Page 22 of official maps, in the office of the county recorder of San Diego County, a copy of said map being on file in the office of the county recorder of Imperial County.
APN: 058-442-007-000
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EXHIBIT B
FEDERAL REQUIREMENTS - CDBG
De Anza Hotel Limited Partnership, a California limited partnership ("Obligated Party") acknowledges the Loan (as defined in the agreement (the "Contract") to which this exhibit (this "Exhibit") is attached) for the Project (as defined in the Contract) is funded in whole or in part with funds awarded to the City of Calexico, California (the "Pass-Through Entity") by U.S.
Department of Housing and Urban Development's ("HUD) under the Community Development Block Grant program ("CDBG"), established by Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. § 5301 et seq.). Applicable CDBG program regulations include Title 24 of the Code of Federal Regulations ("CFR"), Part 570.1 In connection with the Loan for the Project made by the Pass-Through Entity to Obligated Party, to the extent applicable, Obligated Party must comply and cause its contractors and subcontractors to comply with the applicable requirements of all federal statutes, regulations, and executive orders, and the requirements of the Contract and this Exhibit, including without limitation, the requirements, incorporated herein by reference, of the Unique Entity Identifier and System for Award Management (SAM), 2 CFR Part 25 (including the Award Term set forth in 2 CFR Part 25, Appendix A); Recipient Integrity and Performance Matters (including the Award Term and Condition for Recipient Integrity and Performance Matters set forth in 2 CFR Part 200, Appendix XII); and Reporting Subaward and Executive Compensation Information in 2 CFR Part 170 (including the Award Term set forth in 2 CFR Part 170, Appendix A).
CDBG requirements generally include, without limitation, the following, as applicable:
• National Objectives under 24 CFR 570.208;
• Eligible activities and costs under 24 CFR 570.201-.2072; • Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards under 2 CFR 200 (as modified by 24 CFR 570.502), including the requirements of the Single Audit Act Amendments of 1996 (31 U.S.C. § 7501-7507) under 2 CFR Part 200, Subpart F;
• Grant administration requirements? under 24 CFR 570 Subpart J, including, without limitation, requirements for:
• Records submission and maintenance;
• Program Income reporting;
• Reversion of assets;
• Debarment, suspension, and remedies;
• Other federal program requirements under 24 CFR 570 Subpart K, including, without limitation, the following;
' CDBG regulations applicable to all CDBG programs include 24 CFR Part 570, Subparts A, C, J, K, and O. 24 CFR Subparts D, E, F, G, and I are applicable to activities funded under entitlement grants, special purpose grants, Small Cities and Insular Areas programs, Urban Development Action Grants, and State CDBG programs. 24 CFR Subparts M and N are applicable to certain loan guarantees and Urban Renewal provisions.
2 Ineligible activities are listed under 24 CFR. 570.207. 24 CFR 570.209-.210 may be applicable to economic development projects and employment relocation activities.
3 Additional state law requirements may also apply.
81211.00100\44574780.2
• Fair Housing Act and title VI of the Civil Rights Act under 24 CFR 570.601; • Equal Employment Opportunity and Section 3 under 24 CFR 570.607; Non-discrimination under 24 CFR 570.6024;
Labor standards under 24 CFR 570.6035;
Environmental Standards under 24 CFR Part 58 under 24 CFR 570.604°; National Flood Insurance Program under 24 CFR 570.605;
Relocation assistance under 24 CFR 570.6067;
Lead-based paint under 24 CFR 570.6088;
• Prohibition on use of debarred, suspended, or ineligible contractors or subrecipients under 24 CFR 570.609;
• Conflicts of interest under 24 CR 570.611;
• Architectural Barriers Act of 1968 and Americans with Disabilities Act of 1990 (28 CFR Parts 35-36) under 24 CFR 570.614; and
Closeout procedures under 2 CFR 200.344 and as established by HUD for the applicable funding programs).
Terms not otherwise defined in this Exhibit shall have the meaning assigned to them in the Contract unless context requires otherwise. To the extent the provisions in this Exhibit conflict with the Contract, the stricter of the provisions shall apply, unless and to the extent specifically set forth in the Contract; provided, however, that the parties intend this Exhibit to be interpreted consistently with all applicable federal laws, rules, regulations, interpretive guidance and other materials of the federal agency providing funding to the Pass-Through Entity for the Contract.
National Objectives. Obligated Party covenants and agrees the purpose of the Project is to meet one or more of the "National Objectives" and other requirements set forth in 24 CFR 570.208 and certifies all activities carried out under the Contract shall be in furtherance of at least one such National Objective.
General Procurement Standards (2 CFR 200.318-.327). Obligated Party, when applicable, must procure property or services in connection with the Project in accordance with the requirements of 2 CFR 200, including the procurement standards set forth in 2 CFR 200.318- .327. Obligated Party must maintain oversight to ensure its contractors perform in accordance with the terms, conditions, and specifications of their contracts.
Internal Controls (2 CFR 200.303). Obligated Party must establish and maintain effective internal control over the federal funds that provides reasonable assurance that federal funds are managed in compliance with all applicable Federal, State, and local laws, regulations, and the * Includes requirements of the Housing and Community Development Act of 1974, as amended, particularly Section 109, and Section 504 of the Rehabilitation Act of 1973. Eligibility restrictions for certain resident aliens may apply to beneficiaries under 24 CFR 570.613.
" Includes section 110(a) of the Housing and Community Development Act of 1974, as amended; the Davis-Bacon Act, as amended (40 U.S.C. 3141-3148); the Copeland "Anti-Kickback" Act (40 U.S.C. 3145); and the Contract Work Hours and Safety Standards Act, as supplemented by Department of Labor Regulations under 29 CFR Parts 1, 3, 5, 6 and 7 and under 24 CFR Part 70 for volunteers.
" Initiating the environmental review process under 24 CFR Part 58 is the responsibility of the Pass-Through Entity. However, other environmental requirements may apply to the Contract as described in 24 CFR Part 58. Subject to 24 CFR 570.503, 570.509, and 570.604, as applicable.
" Includes requirements under 49 CFR Part 24, as applicable. 8 Includes requirements of the Lead-Based Paint Poisoning Prevention Ac (42 U.S.C. § 4801 et seq.); the Residential Lead- Based Paint Hazard Reduction Act of 1992; and 24 CFR Part 35, as applicable. 81211.00100\44574780.2
terms and conditions of the Federal award. Obligated Party must take reasonable measures to safeguard protected personally identifiable information and other information considered to be sensitive consistent with applicable Federal, State, and local laws regarding privacy and responsibility over confidentiality.
Labor Standards (24 CFR 570.603). Obligated Party must comply with section 110(a) of the Housing and Community Development Act of 1974, the Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), and the Contract Work Hours and Safety Standard Act (40 U.S.C. 327 et seq.), as now or hereafter amended, and the supplementing regulations under 29 CFR Parts 1, 3, 5, 6, and 7 (and under 24 CFR Part 70 for volunteers), which regulate wage, hour, and other employment practices that govern the use of funds provided and the employment of personnel under the Contract. Obligated Party will pay all its workers all monies earned by its workers including, but not limited to, regular wages, any overtime compensation, or any additional payments pursuant to the Fair Labor Standards Act; the Contract Work Hours and Safety Standard Act; 24 CFR Part 70; the Equal Pay Act; and Title VIl of the Civil Rights Act of 1964.
National Flood Insurance Program (24 CFR 570.605). If applicable, Obligated Party shall comply with the requirements of the Flood Disaster Protection Act of 1973 (P.L. 93-234; 42 U.S.C. § 4001 et seq.) (44 CFR Parts 59 through 79) for areas identified by HUD as having special flood hazards. The use of any funds provided for acquisition or construction in identified areas shall be subject to the Mandatory Purchase of Flood Insurance requirements of section 102(a) of said act.
Displacement, Relocation, Acquisition, and Replacement of Housing (24 CFR 570.606). If the Project or any work provided in accordance with the Contract will result in the displacement of persons, Obligated Party covenants and agrees to comply with the requirements of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601- 4655) and implementing regulations at 49 CFR Part 24 and 24 CFR Part 42.
Equal Protection of the Laws for Faith-Based Community Organizations (24 CFR 570.607).
Obligated Party shall comply with the requirements of Executive Order 13279 and 24 CFR 5.109 to ensure the equal participation of faith-based organizations in all activities under this Contract.
Lead-Based Paint (24 CFR 570.608). Obligated Party shall comply, as applicable, with the requirements of the Lead-Based Paint Poisoning Prevention Act (43 U.S.C. 4821-4846) and implementing regulations at 24 CFR Part 35, the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. §§ 4851-4856), and the implementing regulations at 24 CFR Part 35, Subparts A, B, J, K and R and 40 CFR part 745, including, without limitation, taking appropriate actions to protect occupants of residential dwellings from the hazards associated with lead-based paint abatement procedures.
Eligibility Restrictions for Certain Resident Aliens and Noncitizens (24 CFR 570.613 and 24 CFR Part 5, Subpart E). Obligated Party shall comply with the applicable restrictions on the provision of benefits to newly legalized aliens under 24 CFR 570.613 and to noncitizens under 24 CFR Part 5, Subpart E.
81211.00100\44574780.2
Housing Counseling (24 CFR 570.615). If Obligated Party provides housing counseling, as defined in 24 CFR 5.100, under the Contract, the housing counseling must be carried out in accordance with 24 CFR 5.111.
Whistleblower Protections (2 CFR 200.217). In accordance with 41 U.S.C. § 4712, Obligated Party may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant.
The list of persons and entities referenced in the paragraph above includes the following:
i. A member of Congress or a representative of a committee of Congress; ii. An Inspector General;
ili. The Government Accountability Office;
iv. A Federal employee responsible for contract or grant oversight or management; V. An authorized official of the Department of Justice or other law enforcement agency; A court or grand jury; or
vi. A management official or other employee of Obligated Party, contractor, or subcontractor who has the responsibility to investigate, discover, or address misconduct.
Obligated Party shall inform its employees in writing of the rights and remedies provided under this provision in the predominant native language of the workforce.
Conflicts of Interest (2 CFR 200.318(c) and 24 CFR 570.611). In accordance with 2 CFR 200.318(c), Obligated Party must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts, as well as for disciplinary actions to be applied for violations of such standards. Such standards shall, at a minimum, provide that no employee, officer, or agent of Obligated Party may participate in the selection, award, or administration of the Contract or any other contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the Obligated Party may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. Obligated Party and its parent, affiliate, or subsidiary organizations must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or 81211.00100\44574780.2
appears to be unable to be impartial in conducting a procurement action involving a related organization.
In accordance with 24 CFR 570.611, in all cases other than the procurement of supplies, equipment, construction, and services, no employee, agent, consultant, officer, or elected official or appointed official of the Obligated Party who exercises or has exercised any functions or responsibilities with respect to or in connection with the Contract and related activities, or who are in a position to participate in a decision making process or gain inside information with regard to the Contract and related activities, may obtain a financial interest or benefit from the Contract or related activities, or have a financial interest in any contract, subcontract, or agreement with respect to the Contract or related activities, or with respect to the proceeds of the Contract or related activities, either for themselves or those with whom they have business or immediate family ties, during their tenure or for one year thereafter. HUD may grant an exception to this exclusion as provided in 24 CFR 570.611(d).
REQUIRED CONTRACT PROVISIONS
Obligated Party shall comply with all of the following contract provisions. Obligated Party shall further insert in any contracts and subcontracts the provisions set forth in this exhibit, to the extent applicable, and a clause requiring contractors (and subcontractors when indicated) to include these provisions in any lower tier contracts or subcontracts. Failure to comply by Obligated Party or by any contractor or subcontractor may be grounds for termination of the Contract and for debarment as a contractor or subcontractor.
NO OBLIGATION OF THE FEDERAL GOVERNMENT
The Federal Government is not a party to this Contract and is not subject to any obligations or liabilities to the non- Federal entity, Obligated Party, or any other party pertaining to any matter resulting from the Contract.
SECTION 3 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1968 Obligated Party acknowledges that any work to be performed under the Contract is on a project assisted all or in part under a HUD program providing more than $200,000 in federal financial assistance and, pursuant to 24 CFR 570.607, is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, (12 U.S.C. § 1701u) and implementing regulations under 24 CFR Part 75 ("Section 3"). Section 3 requires that, to the greatest extent feasible, opportunities for training and employment be given to lower income residents located in the area of the project and that contracts for work in connection with the project be awarded to business concerns that are owned in substantial part by lower income persons and provide economic opportunities to lower income residents located in the area of the project in accordance with 24 CFR 75.19. Obligated Party shall comply with the requirements of Section 3 and all applicable rules and orders of HUD issued thereunder as of or prior to the Contract.
° Defined under 24 CFR 75.3(a)(2) as "the site or sites together with any building(s) and improvements located on the site(s) that are under common ownership, management, and financing." 81211.00100\44574780.2
Obligated Party shall include a Section 3 clause in every contract and subcontract in connection with the Contract. At the direction of the Pass-Through Entity, Obligated Party shall take appropriate action pursuant to the contract or subcontract upon a finding that the contractor or subcontractor is in violation of any Section 3 requirements. Obligated Party shall not contract or subcontract with any party where Obligated Party has notice or knowledge that such party has been found in violation of any Section 3 requirements and shall not let any contract or subcontract unless the contractor or subcontractor has first provided Obligated Party with a preliminary statement of ability to comply with the requirements of said regulations.
DISCRIMINATION
Obligated Party must comply with the statutes and regulations prohibiting excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, religion, national origin, sex, disability, or age, including, but not limited to, Title Vi of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) (24 CFR Part 1); Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794) (24 CFR Part 8); The Fair Housing Act, as amended (42 U.S.C. 3601 et seq.) (24 CFR Parts 100 and 107); Title VIll of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.); Title II of the Americans with Disabilities Act of 1990(42 U.S.C. 12101 et seq.); the Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.) (24 CFR Part 146); Executive Order 11063, as amended by Executive Order 12259 ("Nondiscrimination and Equal Opportunity in Housing under Executive Order 11063") (24 CFR Part 107); Section 109 of Title I of the Housing and Community Development Act of 1974 (42 USC § 5309) (24 CFR Part 6); and 24 CFR 5.105 and 24 CFR 570.601-602. Obligated Party must include a provision prohibiting such discrimination in any contracts or subcontracts for activities to which these requirements apply or could apply, and all contractors and subcontractors must comply with the applicable provision.
DISABILITIES
Obligated Party acknowledges the Contract is subject to all laws and regulations that prohibit recipients of federal funding from discriminating against individuals with disabilities, including, but not limited to, the following: Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794) (24 CFR Part 8); The Americans with Disabilities Act of 1990(42 U.S.C. Sections 12101 et seq.) (28 CFR Parts 35-36); the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et seq.); the Uniform Federal Accessibility Standards in Title 24, U.S.C. and associated regulations (24 CFR Part 40); and 24 CFR 5.105 and 24 CFR 570.614. Obligated Party must include a provision prohibiting such discrimination in any contracts or subcontracts for activities to which these requirements apply or could apply, and all contractors and subcontractors must comply with the applicable provision.
81211.00100\44574780.2
BUY AMERICA PREFERENCES FOR INFRASTRUCTURE PROJECTS (2 CFR Part 184) For any contracts involving construction, alteration, maintenance, or repair of any "infrastructure" as described in 2 CFR 184.4.4(d), 10, 11 Obligated Party must comply with the "Buy America Preference" of the Build America, Buy America Act, included in the Infrastructure Investment and Jobs Act at division G, title IX, subtitle A, part I, sections 70911 through 70917 (Pub. L. 117- 58), and implementing regulations at 2 CFR Part 184.12 Further, Obligated Party must include the following Buy America Preference all contracts and subcontracts under or in connection with the Contract:
"Pursuant to the Build America, Buy America Act (BABA), enacted as part of the Infrastructure Investment and Jobs Act (IIJA). Pub. L. 117-58, 41 U.S.C. § 8301 note, the Federal Financial Assistance used to fund this infrastructure project is required to apply a domestic content procurement preference (the "Buy America Preference" or "BAP") for all construction, alteration, maintenance, or repair of infrastructure, including buildings and real property, unless application of the BAP has been waived by HUD. Additional details on fulfilling the BABA requirements can be found at https://www.hud.gov/baba."
ENVIRONMENTAL LAWS
Obligated Party must comply with all applicable environmental standards that may be prescribed pursuant to the following: (a) institution of environmental quality control measures under the National Environmental Policy Act of 1969 (P.L. 91-190) and Executive Order ("EO") 11514; (b) notification of violating facilities pursuant to EO 11738; (c) protection of wetlands pursuant to EO 11990; (d) evaluation of flood hazards in floodplains in accordance with EO 11988; (e) assurance of project consistency with the approved State management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C. §§1451 et seq.); (f) conformity to State (Clean Air) implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. §§7401 et seq.), and U.S. Environmental Protection City regulations pursuant to 40 CFR Part 50, as amended; (g) protection of underground sources of drinking water under the Safe Drinking Water Act of 1974, as amended (P.L. 93-523); (h) protection of endangered species under the Endangered Species Act of 1973, as amended (P.L. 93-205); (i) Sole Source Aquifers (Environmental Protection Agency-40 CFR part 149; (k) Farmland Protection Policy Act of 1981 (7 U.S.C. § 4201, et seq.); (1) Farmland Protection Policy (Department of Agriculture-7 CFR part 658); (m) applicable criteria and standards specified in HUD environmental regulations (24 CFR Part 51) (other than the runway clear zone and clear zone notification requirement in 24 CFR 10 Pursuant to HUD Notice CPD-25-01: CPD Implementation Guidance for the Build America, Buy America Act's Buy America Preference, Pg.1 (https://www.hud.gov/sites/dfiles/OCHCO/documents/cpd-25-01.pdf), housing projects with five or more units will generally be considered "public" infrastructure projects that are subject to the Buy America Preference unless a waiver (general or project/product specific) or exemption (such as for disaster assistance described in 2 CFR 184.8) applies.
Land acquisition, demolition, planning, capacity building, program administration, public services, training, counseling, and short-term rental assistance projects generally will not be subject to the Buy America Preference unless materials or supplies are acquired and used for or incorporated into an infrastructure project. 11 HUD considers a "project" to include all related activities consistent with 24 CFR. Part 58. See HUD FAQ ID 4255 (https://www.hudexchange.info/faqs/4255/what-is-a-project). 12 The Buy America Preference will apply to (i) any construction materials listed in 2 CFR 184.3 for HUD awards made beginning in fiscal year 2024 and (ii) construction materials not listed in 2 CFR 184.3 and manufactured products for HUD awards made beginning in fiscal year 2025.
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51.303(a)(3); and (n) HUD Notice 79-33, Policy Guidance to Address the Problems Posed by Toxic Chemicals and Radioactive Materials, September 10, 1979. See also 24 CFR 570.604 and 24 CFR Part 58. Obligated Party shall include this requirement in all contracts and subcontracts under the Contract.
UNFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (2 CFR PART 200, INCLUDING ALL APPENDICES; 24 CFR 570.502, 570.610)
Obligated Party must comply with all requirements of 2 CFR Part 200, including Appendix II, as modified by 24 CFR 570.502, and include the applicable provisions in any contracts executed with contractors or subcontractors in connection with the Contract. All contractors and subcontractors must comply with the applicable provisions of 2 CFR Part 200, including, but not limited to, the following:
REMEDIES (2 CFR PART 200, APPENDIX I|(A))
The administrative, contractual, or legal remedies in the Contract and CDBG regulations apply when the Obligated Party defaults, violates, or breaches the Contract.
TERMINATION FOR CAUSE/CONVENIENCE (2 CFR PART 200, APPENDIX I|(B)) Federal law requires the parties to the Contract to address termination for cause and convenience, and the parties shall comply with these provisions of the Contract.
EQUAL EMPLOYMENT OPPORTUNITY (2 CFR 200, APPENDIX I|(C); 41 CFR PART 60) For any contracts entered into in connection with the Contract for construction work that meet the definition of a "federally assisted construction contract" in 41 CFR 60-1.3, Obligated Party shall comply with the requirements of 2 CFR 200, Appendix I|(C) and insert the equal opportunity clause provided under 41 CFR 60-1.4(b) into all applicable construction contracts, which is as follows:
During the performance of this contract, the contractor (or subcontractor, as applicable) agrees as follows:
1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the following:
Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. 81211.00100\44574780.2
2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.
3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.
4) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.
5) The contractor will comply with all of the rules, regulations, and relevant orders of the Secretary of Labor.
6) The contractor will furnish all information and reports required by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.
7) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts, and such other sanctions may be imposed and remedies invoked by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
8) The contractor will include the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means 81211.00100\44574780.2
of enforcing such provisions, including sanctions for noncompliance: Provided, however, that in the event a contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.
Obligated Party further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work: Provided, that if Obligated Party so participating is a State or local government, the above equal opportunity clause is not applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the Contract.
Obligated Party agrees that it will assist and cooperate actively with the administering agency and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor, that it will furnish the administering agency and the Secretary of Labor such information as they may require for the supervision of such compliance, and that it will otherwise assist the administering agency in the discharge of the agency's primary responsibility for securing compliance.
Obligated Party further agrees that it will refrain from entering into any contract or contract modification with a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, Obligated Party agrees that if it fails or refuses to comply with these undertakings, the administering agency may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the Obligated Party under the program with respect to which the failure or refund occurred until satisfactory assurance of future compliance has been received from the Obligated Party; and refer the case to the Department of Justice for appropriate legal proceedings.
DAVIS-BACON ACT (2 CFR Part 200, Appendix I|(D))
Obligated Party shall comply with the applicable requirements of the Davis-Bacon Act (40 U.S.C. 3141-3148) and the regulations at 29 CFR Parts 1, 3, 5, and 7.
Obligated Party agrees that, except with respect to the rehabilitation or construction of residential property containing fewer than eight (8) units pursuant to 24 CFR 570.603, all contractors and subcontractors engaged under contracts in excess of $2,000.00 for construction, renovation, or repair work financed in whole or in part with federal assistance provided under the Contract shall comply with the applicable requirements of the Davis-Bacon Act and regulations at 29 CFR Parts 1, 3, 5, and 7 requiring payment of wages to laborers and mechanics not less than once a week and at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor.
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Obligated Party shall insert, or cause or require to be inserted, in full in all applicable contracts a provision requiring compliance with the Davis-Bacon Act meeting the requirements of 2 CFR Part 200, Appendix I|(D). Obligated Party shall notify the Pass-Through Entity of any suspected or reported violations of these requirements. Obligated Party shall be responsible for the compliance by any contractor or subcontractor with these requirements. A breach of the contract clauses above may be grounds for termination of the Contract, and for debarment as a contractor or subcontractor as provided in 29 U.S.C. § 5.12.
COPELAND "ANTI-KICKBACK" ACT (2 CFR Part 200, Appendix I (D)) Obligated Party shall comply with the applicable requirements of the Copeland "Anti-Kickback" Act (40 U.S.C. 3145) and the requirements of 29 CFR Part 3, which prohibits Obligated Party from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled.
Obligated Party shall insert, or cause or require to be inserted, in full in all applicable contracts a provision requiring compliance with the Copeland "Anti-Kickback" Act meeting the requirements of 2 CFR Part 200, Appendix I|(D). Obligated Party shall notify the Pass-Through Entity of any suspected or reported violations of these requirements. Obligated Party shall be responsible for the compliance by any contractor or subcontractor with these requirements. A breach of the contract clauses above may be grounds for termination of the Contract, and for debarment as a contractor or subcontractor as provided in 29 U.S.C. § 5.12.
CONTRACT WORK HOURS AND SAFETY STANDARDS ACT (2 CFR Part 200, Appendix I|(E))
For any contract entered into for construction work when the contract amount exceeds $100,000 and such contract involves the employment of mechanics or laborers, Obligated Party must comply with the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708), including particularly 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR Part 5).
Obligated Party shall insert, or cause or require to be inserted, in full in all applicable contracts a provision requiring compliance with the Contract Work Hours and Safety Standards Act meeting the requirements of 2 CFR Part 200, Appendix |(E). Obligated Party, or contractor, as applicable, must compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to contracts described in this paragraph and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous.
RIGHTS TO INVENTIONS MADE UNDER A CONTRACT OR AGREEMENT (2 CFR Part 200, Appendix I|(F))
If the Federal award funding all or part of the Contract meets the definition of a "funding agreement" under 37 CFR 401.2(a) and the Obligated Party wishes to enter into a contract with 81211.00100\44574780.2
a small business firm or nonprofit organization regarding the substitution of parties, assignment, or performance of experimental, developmental, or research work under that "funding agreement," the Obligated Party must comply with the requirements of 37 CFR Part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements, ," and any implementing regulations issued by the awarding agency.
CLEAN AIR ACT and the FEDERAL WATER POLLUTION CONTROL ACT (2 CFR Part 200, Appendix II (G))
For contracts in an amount exceeding $150,000, Obligated Party must comply with all applicable provisions of the Clean Air Act (42 U.S.C. § 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended. Obligated Party agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act and the Federal Water Pollution Control Act, as amended.
Obligated Party agrees to report each violation of the Clean Air Act or Federal Water Pollution Control Act to the Pass-Through Entity and understands and agrees that the Pass-Through Entity will, in turn, report each violation as required to assure notification to the Federal Emergency Management Agency and the appropriate Environmental Protection Agency Regional Office.
DEBARMENT / SUSPENSION AND VOLUNTARY EXCLUSION (2 CFR Part 200, Appendix II (H); 2 CFR Part 180; 2 CFR Part 2424; 24 CFR Part 5; 24 CFR 570.609) Obligated Party, for itself and its principals, warrants it is eligible or otherwise not disqualified or prohibited from participation in federal or state assistance programs. Obligated Party must verify that all contractors and subcontractors performing work under the Contract are not debarred, disqualified, or otherwise prohibited from participation in accordance with the requirements above. Obligated Party further must notify the Pass-Through Entity in writing immediately if Obligated Party or its contractors or subcontractors are not in compliance with this paragraph during the term of the Contract. If it is later determined that Obligated Party did not comply with this paragraph, the Pass-Through Entity or the Federal Government may pursue any and all available remedies (which shall be cumulative and not exclusive), including, but not limited to, suspension and/or debarment of Obligated Party or its contractors or subcontractors.
BYRD ANTI-LOBBYING AMENDMENT (31 U.S.C. § 1352; 2 CFR 200.450; 2 CFR PART 200, APPENDIX I|(I); 24 CFR PART 87, APPENDIX A)
Obligated Party must comply with the applicable requirements of the Byrd Anti-Lobbying Amendment (31 U.S.C. § 1352), 2 CFR 200.450, and 24 CFR Part 87.
Pursuant to 31 U.S.C. § 1352, if at any time during the Contract term funding to such contract exceeds $100,000.00, Obligated Party shall file with the Pass-Through Entity the Federal Standard Form LLL titled "Disclosure Form to Report Lobbying" as laid out in a form available from the Pass-Through Entity upon request, which provides that Obligated Party certifies it will not and has not used Federal funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or 81211.00100\44574780.2
employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, or any other covered award.
Each contractor or subcontractor of any tier must certify to the tier above that it will not and has not used federal appropriated funds to pay any person or organization for influencing or disclose any lobbying with non-federal funds that takes place in connection with obtaining any federal award. Such disclosures shall be forwarded from tier to tier up to the Pass-Through Entity who in turn will forward the certification(s) to the awarding agency.
PROCUREMENT OF RECOVERED MATERIALS (2 CFR PART 200, APPENDIX I|(J); 2 CFR 200.323)
Obligated Party and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. 6962. The requirements of Section 6002 include procuring only items designated in the guidelines of the Environmental Protection Agency (EPA) at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.
Obligated Party should, to the greatest extent practicable and consistent with law, purchase, acquire, or use products and services that can be reused, refurbished, or recycled; contain recycled content, are biobased, or are energy and water efficient; and are sustainable. This may include purchasing compostable items and other products and services that reduce the use of single-use plastic products. See Executive Order 14057, section 101, Policy.
PROHIBITION ON CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT (2 CFR PART 200, APPENDIX I|(K); 2 CFR 200.216) Obligated Party shall not contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system funded under the Contract. As described in Public Law 115-232, section 889, covered telecommunications equipment is telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities). (1) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities). 81211.00100\44574780.2
(2) Telecommunications or video surveillance services provided by such entities or using such equipment.
(3) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.
Obligated Party shall include the substance of this section, including this paragraph, in all contracts and subcontracts.
DOMESTIC PREFERENCES FOR PROCUREMENT (2 CFR PART 200, APPENDIX I|(L); 2 CFR 200.322)
Oretend party al, hase agrees or teach products or areal pade ced e United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). The requirements of this section must be included in all contracts and subcontracts.
For purposes of this section:
(1) "Produced in the United States" means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
(2) "Manufactured products" means items and construction materials composed in whole or in part of nonferrous metals such as aluminum; plastics and polymer- based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.
To the extent the Contract is an infrastructure project, Obligated Party must implement the Buy America preferences set forth in 2 CFR Part 184.
MANDATORY DISCLOSURES (2 CFR 200.113; 41 U.S.C. § 2313) Obligated Party must disclose, and require its contractors and subcontractors to disclose, in a timely manner, in writing to the Federal awarding agency or the Pass-Through Entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations found in the civil False Claims Act (31 U.S.C 3729-3733) potentially affecting the Federal award funding all or part of the Contract. Obligated Party is also required to report matters related to recipient integrity and performance in accordance with Appendix II of 2 CFR Part 200. Failure to make required disclosures can result in any of the remedies described in 2 CFR 200.339. 81211.00100\44574780.2
CONTRACTING WITH SMALL BUSINESSES, MINORITY BUSINESSES, WOMEN'S
BUSINESS ENTERPRISES, VETERAN-OWNED BUSINESSES, AND LABOR SURPLUS AREA FIRMS (2 CFR 200.321)
Obligated Party must comply with the Small Businesses, Minority Businesses, Women's Business Enterprises, Veteran-Owned Businesses, and Labor Surplus Area Firms requirements under 2 CFR 200.321. Obligated Party should ensure that small businesses, minority businesses, women's business enterprises, veteran-owned businesses, and labor surplus area firms are considered, as set forth below:
A. These business types are included on solicitation lists; B. These business types are solicited whenever they are deemed eligible as potential sources,
C. Dividing procurement transactions into separate procurements to permit maximum participation by these business types;
D.Establishing delivery schedules (for example, the percentage of an order to be delivered by a given date of each month) that encourage participation by these business types; E. Utilizing organizations such as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and F. Requiring a contractor under a Federal award to apply this section to subcontracts.
MINIMUM BONDING REQUIREMENTS (2 CFR 200.326)
If the Contract involves construction or facility improvements in excess of the simplified acquisition threshold, as that term is defined in 2 CFR Part 200, Subpart A, Obligated Party shall maintain or cause to be maintained a performance bond for one hundred percent (100%) of the contract price to secure fulfillment of all the Contract requirements, and a payment bond for one hundred percent (100%) of the contract price to assure payments as required by law of all persons supplying labor and material in the execution of the Contract.
Record Retention and Access; Reports (2 CFR 200.332(b)(5) and 200.334-.338; 24 CFR 570.502 and 570.506-.507). Obligated Party shall maintain records and financial documents sufficient to evidence and meet, and permit the Pass-Through Entity to meet, the reporting, recordkeeping, and retention requirements of 2 CFR 200.332(b)(5) and 200.334-.338 and 24 CFR 570.502 and 570.506-507. Obligated Party agrees to prepare and submit financial, progress, monitoring, evaluation, personnel, property, and financial records and other reports as required by the Pass-Through Entity (as directed by and in the format acceptable to the Pass- Through Entity) to assure proper accounting of all Federal funds. Obligated Party shall furnish such information that, in the judgment of the Pass-Through Entity, may be relevant to questions of compliance with contractual conditions hereunder or granting agency directives, or with the effectiveness, legality, and goals of the Contract.
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Obligated Party agrees to provide the Pass-Through Entity, any Federal Agency, the Comptroller General of the United States, or any of their authorized representatives access to any books, documents, papers, and other records of Obligated Party that are pertinent to the Contract for the purposes of making audits, examinations, excerpts, and transcriptions and to allow such parties to reproduce same by any means whatsoever or to copy excerpts and transcriptions as reasonably needed. Obligated Party agrees to provide Pass-Through Entity, any Federal Agency, the Comptroller General of the United States, or any of their authorized representatives access to construction or other work sites pertaining to work being completed under the Contract.
Obligated Party acknowledges and agrees that no language in the Contract is intended to prohibit audits or internal reviews by the Federal Agency or its authorized representatives or the Comptroller General of the United States.
In accordance with 24 CFR 570.502, records shall be maintained by Obligated Party for a period of three (3) years after expiration of the Contract or submission of the final annual performance and evaluation report, whichever is later; provided, however, if any litigation, claim, negotiation, audit, monitoring, inspection, or other action or event commences before the expiration of the required record retention period, all records must be retained until completion of the action or event and full and final resolution of all issues that arise from it.
Obligated Party shall include the substance of this section in all contracts and subcontracts. 81211.00100\44574780.2