1 EXCLUSIVENEGOTIATINGAGREEMENT
Mary Avenue
THIS EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement") is enteredinto as of thedatethis Agreementis executed, asshownonthesignaturepagehereof (the "Effective Date"), betweentheCity of Cupertino, aGeneralLawCity ("City"), andthefollowing California nonprofitpublicbenefitcorporations: CupertinoRotaryHousingCorporation, Housing ChoicesCoalitionfor Personswith DevelopmentalDisabilities, Inc., andCharitiesHousing DevelopmentCorporationof SantaClaraCounty (collectively, the “Developer” andtogether with theCity, the “Parties”) on thebasisof thefollowing purposes, intentions, andfacts:
RECITALS
A. TheCity is theownerof thatcertainpropertylocatedat APN 326-27-053, Cupertino, California (the "Property"). TheCity hasdeterminedthatthePropertycanbeusedto providehousingaffordableto extremelylow andvery low-incomepersonsandfamiliesearning 30%-50% of AreaMedianIncome.
B. TheCity issuedaRequestfor Proposals ("RFP") for qualifieddevelopersto leasefrom theCity thePropertyin accordancewith thetermsof a long-termgroundlease, with atermof at least99 years, andto developandoperateonthePropertythemostaffordable housingunitspossible, in themostexpedientmanner.
C. TheDevelopersubmittedaproposalto leaseanddevelopthePropertydated October18, 2022 (the "Proposal"), acopyof whichis onfile with theCity. TheProposal includesthedevelopmentof 40unitsof housingof which 100% is proposedto beaffordableto personsandfamiliesearning30%-50% of AreaMedianIncome, with 45% of theunitsintended for theintellectuallyanddevelopmentallydisabled (“IDD”) population (the "Project").
D. On thebasisof theProposal, theCity hasselectedtheDeveloperastheentity with whichto negotiatea mutuallyacceptableLeaseDispositionandDevelopmentAgreement LDDA") which will include, butnot belimited to, termsandconditionson (i) theleaseof the Propertyfrom theCity to theDeveloper; (ii) theDeveloper's developmentof theProjectonthe Property; and (iii) affordabilityandoccupancyrestrictionsthatwill applyto theProject. The LDDA will includeasanexhibita groundlease ("GroundLease") to beenteredinto by the Partiesin accordancewith thetermsof theLDDA.
E. Thepurposeof this Agreementis to establishproceduresandstandardsfor the negotiationby theCity andtheDeveloperof theLDDA andtheGroundLease. As morefully setforth in Section3.1, thepartiesacknowledgeandagreethatthis Agreementin itself doesnot granttheDevelopertheright to acquiretheProperty, nordoesit obligatetheDeveloper 2 to anyactivitiesor coststo acquiretheProperty, otherthantheactivitiesandcostsreasonably necessaryto dischargetheDeveloper'sobligationsunderthisAgreementincludingtheobligation to negotiatein goodfaith ascontemplatedby this Agreement.
NOW, THEREFORE, THE CITY AND THE DEVELOPERHEREBYAGREEAS FOLLOWS:
ARTICLE 1
EXCLUSIVENEGOTIATIONS
Section1.1 GoodFaithNegotiations. TheCity andtheDeveloper, acknowledging thattimeis of theessence, agreefor theNegotiationPeriodsetforth in Section1.2 to negotiate diligently andin goodfaith to prepareandexecuteaLDDA, includinga form of GroundLease, in themannersetforth in this Agreement. Forpurposesof this Agreementalackof diligent, goodfaith negotiationson thepartof theDeveloperwill includetheDeveloper's failureto meet thePerformanceBenchmarkssetforth in thePerformanceSchedule, subjectto forcemajeure delays.
TheLDDA andGroundLeaseshallcontaintermsacceptableto theCity andthe Developer, in therespectiveexerciseby eachof its solediscretion. TheLDDA shallinclude, withoutlimitation, theconditionsprecedentto theCity andtheDeveloperenteringinto the GroundLease, physicalandlandtitle conditionsof thePropertyat theconveyanceof the leaseholdinterest, includingenvironmentalconditions, theproposeddevelopmentschedulefor theProjectandothermattersthatmaybeidentifiedby eitherpartyduringthecourseof completingthenegotiationsof theLDDA. TheGroundLeaseshallinclude, withoutlimitation, thetermof theGroundLease, thegroundrentandanyongoingobligationswith regardsto the developmentandoperationof theProperty. TheRFPandtheProposalshallserveastheguidein thenegotiationof theLDDA andtheGroundLease, althoughthepartiesrecognizethatreviewof additionalinformationandfurtherdiscussionmayleadto refinementof theissuesandconcepts setforth in theRFPandtheProposal. Prior to thenegotiationof theLDDA andtheGround Lease, theCity andtheDevelopershallnegotiatea non-bindingtermsheet ("TermSheet") settingforth theprincipaltermsto beincludedin theLDDA andtheGroundLeaseasmorefully describedbelow. DuringtheNegotiationPeriod, theCity will negotiatesolelywith the Developerwith respectto leaseanddevelopmentof theProperty.
Section1.2 NegotiationPeriod. Thenegotiatingperiod (the "NegotiationPeriod") shallcommenceontheEffectiveDateandshallexpireone (1) yearthereafter. TheCity Managermay, in hersolediscretion, agreeto extendtheNegotiationPeriodif theCity Manager determinesthattheDeveloperhasmetall of its obligationspursuantto thisAgreementandthat thePartiesaremakingsufficientprogresstowardthenegotiationof amutuallyacceptableLDDA andGroundLease. An extensionshallbeeffectiveonly if evidencedby anamendmentexecuted by authorizedrepresentativesof theCity andtheDeveloper. 3 TheDeveloperacknowledgesthattimeis of theessenceto theCity in negotiationof a LDDA andtheGroundLease. Accordingly, it is essentialto theCity thatthepartiesnegotiatein goodfaith and, if thepartiesdo notsucceedin timely negotiatinga TermSheet, LDDA and GroundLease, thatthis Agreementexpireasspecifiedherein.
Section1.3 Identityof Developer. Thelegalstatusof theDeveloper, its office address, anddesignatedrepresentativesto negotiatetheLDDA andGroundLeaseareassetforth in Exhibit B attachedto this Agreementandincorporatedhereinby this reference.
ARTICLE 2
NEGOTIATIONPROCESSAND RESPONSIBILITIES
Section2.1 GeneralProcess.
a) NegotiationsBasedonProposal. Thenegotiationshereundershallbebasedon a developmentconceptgenerallyassetforth in theRFPandtheProposal. DuringtheNegotiation Period, theDevelopermaycontinueto developtheconceptualdesignandarchitectureof the Project, maycontinueto conductmarketingandfeasibility analysis, andshallperformsuchother tasksasarereasonablynecessaryandappropriateto fulfill its obligationto negotiatein good faith with theCity towardinitially amutuallyacceptableTermSheetandultimatelyanLDDA andGroundLease.
b) Reports, Studies, and RelatedDocuments. The Developershall provide the City with copiesof all reports, studies, analyses, and similar documentsin draft form, but excluding confidential information and communicationswith the Developer's legal counsel, preparedor commissionedby the Developerwith respectto this Agreementand the leaseand developmentof theProperty, promptlyupontheircompletion. TheDevelopershallnotbedeemed to makeany representationto the City regardingthe accuracy, completeness, methodologyor currentstatusof anysuchreports, studiesor analysis, norshalltheDeveloperassumeanyliability with respectto anymatteror informationreferredto or containedin suchreports, norshalltheCity haveanyclaimagainsttheDeveloperor anyconsultantof theDeveloperarisingoutof thecontents of suchreports.
While desiringto preserveits rightswith respectto treatmentof certaininformationona confidentialbasis, theDeveloperacknowledgesthattheCity will needsufficient, detailed informationabouttheproposedleaseanddevelopmentof theProperty (including, without limitation, financialinformation) to makeinformeddecisionsaboutthecontentandapprovalof theLDDA andGroundLease.
TheDeveloperacknowledgesthattheCity is subjectto theCaliforniaPublicRecords Act ("Act"). TheAct generallyprovidesthatwritten documentsretainedby theCity aresubject to disclosureupontherequestof anythird partyexceptfor specificlimited exceptionsprovided for in theAct. TheDeveloperacknowledgesthattheCity will makeinformationregardingthe Project, theProperty, theProposalandthisAgreementavailableto thepublicuponrequestas requiredby theAct. In orderto successfullynegotiatetheLDDA andtheGroundLease, the 4 partiesbelievethattherewill bespecificdocumentsthatmaybesensitiveor containproprietary informationthattheywill wantto exchangein orderto reviewandunderstandthetransaction.
TheDevelopershalldesignateas "Confidential" anyinformationwhich theDeveloperprovides to theCity which theDeveloperdesiresto keepconfidentialanda statementasto why the requestis consistentwith theprovisionsof theAct. TheCity shallnotbeboundby the Developer's designationof recordsas "Confidential" or thereasoningthereforeprovidedby the Developer, exceptascontainedhereinwith respectfor theprocedurefor theDeveloperfiling a reverse-PublicRecordsAct action.
If a requestfor disclosureof anyinformationdesignatedas "Confidential" by the Developeris madeundertheAct, theCity shalltimely notify theDeveloperin writing of the requestto permittheDeveloperatits discretionandsolecostto file areverse-PublicRecordsAct action. If theDeveloperdecidesto file a reverse-PublicRecordsAct action, it shallinform the City in writing of this intentionwithin 10daysof thedateof therequestfor disclosureof the specificConfidentialdocumentsthatwill bethesubjectof theaction, andthedateby whichit shallfile theaction. TheCity shallwithholdanysuchConfidentialdocumentsidentifiedby the Developeruntil thedateidentifiedin writing by theDeveloper, anduponthefiling of the Developer’sactionshallcontinueto withholdthoseConfidentialdocumentsuntil afinal decision is madeby theCourtwith respectto disclosure, or theactionis abandoned. If theDeveloper doesnot timely inform theCity of its intentionto file areverse-PublicRecordsAct action, does not file thereverse-PublicRecordsAct actionby thedateindicatedin its writtennoticeto the City, or abandonsthereverse-PublicRecordsAct actionprior to judgment, theCity shallbefree to disclosetheConfidentialdocumentsat issuein accordancewith its obligationsundertheAct, andshallbeheldharmlessfrom anyclaimsfrom theDeveloperregardingsaiddisclosure. If a legalactionis filed againsttheCity seekingto compeldisclosureof anyinformationthatthe Developerhasrequestedremainconfidential, theCity shallgivepromptnoticeof thefiling of suchactionto theDeveloperandtheDevelopershalldefendandindemnifytheCity from all costsandexpensesof suchdefense, includingreasonableattorneys' feesof theCity or attorneys' feesawardedby a courtarisingout of suchactionexceptto theextentliability arisessolelyout of theCity's exerciseof its solediscretionto discloseor notdiscloserecordsand/or theCity’s willful misconduct.
c) QuarterlyReports. TheDevelopershallprepareandsubmitto theCity nolater thanthefirst dayof eachquarterduringtheNegotiationPeriodameaningfulsummaryof activitiesundertakenduringthepreviousquarterto achieveeachPerformanceBenchmarkset forth in thePerformanceScheduleattachedasExhibit C. Thefirst quarterlyreportshallbefor theperiodfrom April 1, 2024to June30, 2024andall subsequentreportswill includethethree monthssincethelastreport.
Section2.3 DeveloperDueDiligence.
DuringtheNegotiationPeriodtheDevelopershallundertakesuchduediligenceasis necessaryto determinethesuitability of thePropertyfor theProjectassetforth belowandwithin thetimessetforth in thePerformanceScheduleattachedasExhibit C:
5 a) DueDiligence. DuringtheNegotiationPeriodandwithin thetime setforth in the PerformanceSchedule, theDevelopershallconductduediligenceactivitiesit deemsnecessaryto providetheDeveloperwith sufficientinformationto determinethefeasibility of developinga Projecton theProperty. TheDeveloper's duediligenceactivitiesmayincludebut arenotlimited to aphysicalsurveyof theProperty. TheCity shallprovidetheDeveloperall requested informationregardingthePropertyin theCity's possessionin a timely fashion. TheDeveloper shallberesponsiblefor thecostsof all suchstudies, surveysandinvestigations. If theDeveloper fails to providenoticeto theCity thatit is infeasibleto developtheProjecton thePropertyor thatthePropertyis physicallyinadequatefor thedevelopmentof theProjectby thedatesetforth in thePerformanceSchedule, this conditionshallbedeemedsatisfiedandthis Agreementwill remainin effect.
Developeracknowledgesandrecognizesthatregardlessof theresultsof Developer's investigationsof theProperty, thePropertywill beleasedto theDeveloper "As Is, WhereIs, And With All Faults."
b) Title AdequacyDetermination. TheCity hasprovidedtheDeveloperwith a PreliminaryTitle ReportdatedMarch15, 2024, OrderNo. 2276956 (the “Title Report”) on the Property. If theDeveloperobjectsto anyexceptionappearingon theTitle Reportor shouldany title exceptionariseafterthedateof theTitle Report, theDevelopermayobjectto such exception, providedsuchobjectionis madeto theCity in writing onor before5 P.M. on the thirtieth (30th) dayfollowing theEffectiveDate, or if theexceptionis a newexceptionarising afterthedateof theTitle Report, within fifteen (15) daysof receiptof noticeof suchnew exception. If theDeveloperobjectsto anyexceptionto title, theCity, within fifteen (15) daysof receiptof the Developer’sobjectionshallnotify theDeveloperin writing whethertheCity electsto (i) causetheexceptionto beremovedof record, (ii) obtainacommitmentfrom thetitle companyfor anappropriateendorsementto thepolicy of title insuranceto beissuedto the Developer, insuringagainsttheobjectionableexception, or (iii) terminatethis Agreementunlessthe Developerelectsto taketitle subjectto suchexception. If theCity fails to respondto the Developer, suchfailureshallconstitutetheCity’s electionto terminatethis Agreementunlessthe Developeraffirmatively electsto taketitle subjectto suchexception. If theCity's electsnotto removeanyexceptionobjectedto by theDeveloper, theDevelopermay, within fifteen (15) days of receiptof theCity'snotice, electto terminatethis Agreement. If anyPartyelectsto terminate this Agreementpursuantto this Section2.3(b), noPartyshallthereafterhaveanyobligationsto or rightsagainsttheothershereunder. If theDeveloperfails to provideanynotificationto the City regardingthis matterprior to expirationof thetimeperiodsetforth herein, theconditionset forth in this Section2.3(b) shallbedeemedsatisfied, this Agreementshallcontinuein effect, andtheconditionof title at closingunderanyexecutedLDDA shallbeassetforth in theTitle Report.
Section2.4 DeveloperObligations.
DuringtheNegotiationPeriod, theDevelopershallberesponsiblefor completingthe following taskswithin thetime setforth in thePerformanceScheduleattachedasExhibit C:
6 a) CommunityEngagementPlan. Within thetime setforth in thePerformance ScheduletheDevelopershallsubmitto theCity for its approval, acommunityengagementplan CommunityEngagementPlan") thatincludestheDeveloper's proposedplanfor conducting outreachto communitygroupsandstakeholdersin thevicinity of theProjectto educatethe public with respectto theProjectandseekinputfrom thepublic with respectto theProject. The City shallapproveor disapprovetheCommunityEngagementPlanwithin thirty 30) daysof receipt. If theCity disapprovestheCommunityEngagementPlantheCity shall providespecificreasonsfor its disapproval. If theCity disapprovestheCommunity EngagementPlan, theDevelopershallsubmitarevisedCommunityEngagementPlanto the City within thirty (30) daysof suchdisapprovalandthesubmissionandapprovalsperiodsset forth hereinshallcontinueuntil theCity approvestheCommunityEngagementPlan, provided, however, if theCity fails to approvea CommunityEngagementPlanafterthesecond resubmission, theCity may, in its discretion, electto terminatethisAgreement. Oncethe CommunityEngagementPlanis approved, theDevelopershallberesponsiblefor implementing theCommunityEngagementPlanduringtheNegotiationPeriod.
b) FinancingPlan. Within thetimesetforth in thePerformanceSchedule, the Developershallprovideto theCity for its approvala financingplan (“FinancingPlan”) for the proposeddevelopmenton thePropertythatwill includeproposedfinancingfor all components of thedevelopment, identificationof all proposedsourcesof subsidiesfor thehousing affordableto extremelylow andverylow-incomehouseholds, anyproposedpublic financing andananalysisof theproposeddevelopment's competitivenessfor suchsubsidysources. The FinancingPlanshallalsoincludeanoperatingproformaincludingcashflows for all componentsof theProjectandshowingtheDeveloper's proposedgroundrentwith sufficient detailfor theCity to evaluatethegroundrentproposal. TheDevelopershallupdatethe FinancingPlanperiodicallyto reflectchangesto theProjectduringtheentitlementprocess, informationfrom theDeveloper's duediligencereviewof theProperty, theresultsof market studiesandotherinformation. TheCity shallapproveor disapprovetheFinancingPlanwithin thirty (30) daysof receipt. If theCity disapprovestheFinancingPlantheCity shallprovidea detailedexplanationof thereasonsfor suchdisapproval.
c) Entitlements. DuringtheNegotiationPeriodandwithin thetimesetforth in the PerformanceSchedule, theDeveloper, atits solecost, shallberesponsiblefor obtainingall land useentitlementsandothergovernmentalapprovalsfrom theCity andotherentitiesasmaybe necessaryfor theDeveloper's contemplateddevelopmentontheProperty. TheCity shall cooperatewith theDeveloper's effortsto obtainsuchentitlementandshallsignnecessary applicationsor otherconsentsto applications, providedhowever, theCity shallnotbeobligated to incuranycostsassociatedwith suchcooperation.
Priorto submittinganyapplicationsto theCity or othergovernmentalentities, the Developershallsubmitto theCity thedesignandarchitectureof theProject, includingthe conceptualplans, elevations, theexteriordesignandlayoutandanyotherinformationthatthe Developerintendsto submitaspartof its entitlementapplication. In theexerciseof its reasonablediscretion, theCity shallrespondto theDeveloper'swrittenrequestfor approvalof conceptualplanswithin thirty (30) businessdaysof theDeveloper's requestthereforor the 7 itemssubmittedfor approvalshallbedeemedapproved. If theCity disapprovesof theitems submitted, it shallspecificallystatethereasonsfor suchdisapproval. TheDevelopershallnot submitanyapplicationsfor entitlementsuntil theCity hasapprovedtheconceptualplansand applicationmaterials.
d) EnvironmentalDocuments. TheDevelopershallberesponsible, atits solecost, for preparationof anyenvironmentaldocumentsrequiredundertheCaliforniaEnvironmental Quality Act for (i) City approvalof theLDDA andGroundLeaseand (ii) approvalof the Project. TheCity shalldeterminetheappropriateenvironmentalreviewrequiredfor approvalof theProjectandshallcooperatewith theDeveloperin preparingenvironmentaldocumentsfor whichtheDeveloperis responsible (if any) by supplyingavailabletechnicaldataandother availableinformationconcerningtheProperty. TheDevelopershallbesolelyresponsiblefor all costsassociatedwith preparinganyenvironmentaldocumentsnecessaryfor theCity's approval of theProject, inclusiveof theLDDA andGroundLease. Thedeterminationof theadequacyof theenvironmentalreviewshallbein thesolediscretionof theCity.
2.5 TermSheet. Developershallprovidea drafttermsheetconcurrentlywith City Councilconsiderationof this Agreementfor City Councilreview. DuringtheNegotiation Periodandwithin thetimesetforth in thePerformanceSchedule, theDeveloperandtheCity will negotiatetheTermSheetfor theProjectthatis consistentwith theDeveloper'sProposalas suchProposalis refinedin accordancewith this Agreement. TheTermSheetshallincludethe fundamentaltermsthatwill serveasa basisfor thenegotiationof theLDDA andtheGround Lease, including, butnot limited to, thetermof theGroundLease, theproposedgroundrent, the basicelementsof theProject, thecommunitybenefitsto beprovidedby theProjectandaviable financialplanfor theProject. If following goodfaith negotiations, thePartiesfail to agreeon a mutuallyacceptableTermSheet, eitherPartymayterminatethis Agreement, in whicheventno Partyshallthereafterhaveanyobligationsto or rightsagainsttheothershereunder, exceptfor thoseprovisionsthatsurvivetermination.
Notwithstandinganythingto thecontrarycontainedherein, includingexecutionof theLDDA with theform of GroundLeaseattachedthereto, thePartiesacknowledgeandagreethatthe Projectfinancingpartnersmayhaveadditionalcommentsto theGroundLeaseandtheCity and Developershallwork in goodfaith prior to theexecutionof suchGroundLeaseto incorporate anysuchreasonablecomments.
2.6 Right of Entry.
DuringtheNegotiationPeriod, theCity grantsto theDeveloperandtheDeveloper's agentsthe right to enterupontheProperty, subjectto thetermsandconditionsof this Section2.6, for the soleandexclusivepurposeof conductingstudiesandinvestigationsthatwill assistthe Developerin negotiatingaLDDA andGroundLeaseandperformingits obligationshereunder.
TheDevelopershallnotinterferewith anyexistingCity operationsor departmentsoccupying thePropertyduringanyinspectionor investigationof theProperty. TheDevelopershallbe responsiblefor obtaininganypermitsnecessaryfor anystudiesor investigationsto be conducted. Priorto conductinganydestructivetestingor anyenvironmentaltestinginvolving drilling or borings, theDevelopershallprovidetheCity'sAuthorizedRepresentativewith 8 writtennotificationof thescopeof suchtestingfor theCity's AuthorizedRepresentative's approvalin his reasonablediscretion. TheDevelopershallbearall costsof suchstudiesand investigationsandshallberesponsiblefor restoringthePropertyto its originalconditionafter completionof suchstudiesandinvestigations. TheDevelopershallberesponsiblefor repairing anydamageto thePropertycausedby suchinvestigations.
Priorto exerciseof theright of entrygrantedin this Section2.6, theDevelopershall providetheCity with satisfactoryevidence, in theform of a certificateof insurance, thatthe Developer's agentswho obtainaccessto thePropertyareinsuredundercomprehensivegeneral liability andautomobileliability insurancepolicy or policiesterminableonly afterten (10) days' advancewrittennoticeto theCity, eachpolicy to bein anamountof not lessthanTwo Million Dollars ($2,000,000) combinedsinglelimit peroccurrencefor bodily injury andproperty damage. Eachinsurancepolicy shallnametheCity asanadditionalinsuredandshallcontaina waiverof anyright of subrogationagainsttheCity.
TheDevelopershallprotect, indemnifyanddefend (with counselreasonablyacceptable to theCity) andhold harmlesstheCity, andits respectiveCouncilmembers, officers, employees, andagents (collectivelythe "IndemnifiedParties") against, andholdtheIndemnified PartiesandthePropertyharmlessfrom andagainst, anyandall costs, expenses (including, without limitation, reasonableattorneys' fees), damages, claims, liabilities, liens (including, without limitation, mechanicsliens) encumbrancesandchargesarisingout of or in anyway relatedto anyentryby theDeveloperor theDeveloper's agentsupontheProperty, unlesssuch mattersarisefrom thesoleandactivenegligenceor willful misconductof theCity or other IndemnifiedParty. Theforegoingobligationof theDevelopershallsurvivetheexpirationof this Agreement.
Theprovisionsof thisSection2.6 to thecontrarynotwithstanding, theDevelopershall not conductanybiologicalinvestigationsor studiesor anyinvasiveinvestigation, inspection, or test onthePropertywithoutpriorwrittennoticeto theCity'sAuthorizedRepresentativeof theproposed investigation, study, inspectionor test (including, with respectto any hazardoussubstances invasive testing, a written plan for such testing) and the City’s Authorized Representative's approvalthereof, which will not be unreasonablywithheld, conditionedor delayedandwill be deemedgiven if the City's AuthorizedRepresentativehasnot given its approvalor reasonable disapprovalin writing within twenty (20) businessdaysafterreceiptof theDeveloper’s noticeof theproposedinvestigation, study, inspectionor test (andanyrequiredwrittenplan). Additionally, theDevelopershall provideto theCity for theCity’s reviewandapproval (which approvalwill notbeunreasonablywithheld, conditioned, or delayed) copiesof draftsof anyreportspreparedin connectionwith any suchactivities prior to the reportsbecomingfinal and submittedto third parties (including governmentalagencies). The City's failure to disapproveof any draft report within twenty (20) businessdaysof theCity'sreceiptwill conclusivelybedeemedapprovalby the City of thedraftreportin question.
Section2.7 City Cooperation. TheCity shallreasonablycooperatein providingthe Developerwith informationin theCity's possessionrelevantto developmentof theProperty. 9 ARTICLE 3
GENERALPROVISIONS
Section3.1 Limitation on Effectof Agreement. This Agreementshallnotobligate eithertheCity or theDeveloperto enterinto anLDDA or GroundLeaseor to enterinto any otheragreement. By executionof this Agreement, theCity is not committingitself to or agreeingto undertakedispositionof anyproperty. Executionof thisAgreementby theCity is merelyanagreementto conducta periodof exclusivenegotiationsin accordancewith theterms hereof, reservingfor subsequentCity actionthefinal discretionandapprovalregardingthe executionof anLDDA andGroundLeaseandall proceedingsanddecisionsin connection therewith. Any LDDA andGroundLeaseresultingfrom negotiationspursuantto this Agreementshallbecomeeffectiveonly if andaftersuchLDDA andGroundLeasehavebeen consideredandapprovedby theCity Councilfollowing conductof all legally required procedures. No agreementdrafts, actions, deliverablesor communicationsarisingfrom the performanceof this Agreementshallimposeanylegallybindingobligationon eitherPartyto enterinto anLDDA or GroundLease, norshallanysuchdocuments, actionsor communications constituteanyoralor implied agreementby eitherPartyto enterinto anyotheragreement. The Partiesacknowledgethatthefinal form of anyagreementgoverningthedevelopmentof the Propertymaycontainmattersnotcoveredin this Agreement, andtheprovisionshereinarenot intendedto excludeor precludeanyotherissuesthatmayariseduringnegotiations.
Section3.2 Compliancewith CEQA. Without limiting thegeneralityof Section3.1, theDeveloperexpresslyacknowledgesthatanyagreementresultingfrom thenegotiations contemplatedherebyshallbecomeeffectiveonly if theagreementis approvedby theCity Councilfollowing compliancewith all applicablenoticeandhearingrequirementsand compliancewith all otherrequirementsof law, includingwithoutlimitation, therequirements of theCaliforniaEnvironmentalQuality Act (“CEQA”). ThePartiesacknowledgethatthe Projectdescribedin theProposalis preliminaryin natureandshallbedescribedin further detailin theLDDA to benegotiatedduringtheNegotiationPeriod. Withoutlimiting the foregoing, thePartiesacknowledgethattheCity retainsdiscretionto (i) modify theproposed developmentastheCity may, in its discretion, determineto benecessaryto complywith CEQA, (ii) selectotherfeasiblealternativesand/or imposemitigationmeasuresto avoidor minimizesignificantenvironmentalimpacts; (iii) balancethebenefitsof theproposed developmentagainstanysignificantenvironmentalimpactsprior to takingfinal action, if such impactscannototherwisebeavoided; and/or (iv) determinenot to proceedwith theproposed developmentof theProperty.
Section3.3 Notices. Eachnotice, request, demand, instructionor otherdocument requiredor permittedto begivenhereunder ("Notice") shallbein writing andshallbedelivered personally (includingmessengeror courierservicewith evidenceof receipt) or sentby depositingthesamewith theUnitedStatesPostalService, certifiedor registeredmail, return receiptrequested, with properpostageprepaid, addressedto thepartiesattherespective addressessetforth belowandmarkedto thedesignatedindividual's attention. EachNoticeshall beeffectiveuponbeingsodeposited, butthetimeperiodin whicharesponseto anysuchNotice mustbegivenor anyactiontakenwith respecttheretoshallcommenceto runfrom thedateof 10 receiptof theNoticeby theaddresseethereof. Rejectionor otherrefusalby theaddresseeto acceptor theinability of anymessenger, courieror theUnitedStatesPostalServiceto deliver becauseof achangedaddressof whichno Noticewasgivenshallbedeemedto bethereceiptof theNoticesent. Eitherpartyshallhavetheright from timeto time to changetheaddressto which aNoticeto it shallbesentto anotheraddressin thecontinentalUnitedStates (butnot a postoffice box) by giving Noticeto theotherpartyof thechangedaddressatleastten (10) days prior to suchchanges.
If to theCity: City of Cupertino
10300TorreAvenue
Cupertino, CA 95014
With copiesto: GianMartire
ChristopherJensen
KirstenSquarcia
PamelaWu
If to theDeveloper: To theaddressspecifiedin Exhibit B
Section3.4 Developer's FinancialCapacity. Prior to theexecutionof theLDDA, Developershallsubmitto theCity evidenceof its ability to financedevelopmentof the Propertypursuantto theProposal. Priorto executionof theLDDA, theCity shallmakea determination, thecostof whichshallbeadvancedby Developer, thatDeveloperhascapacity to financethedevelopmentandcompletetheProject. City shallhavetheright to terminatethis Agreementif Developeris unableto establishits financialcapacityto thesatisfactionof the City. TheDevelopershallmaintainfull disclosureto theCity of its methodsof financingto be usedin thedevelopmentof theProperty, andshallpromptlyadvisetheCity of anymaterial adversechangein theDeveloper's financialstatusor ability to financedevelopmentof the Property.
Section3.5 CostsandExpenses. Eachpartyshallberesponsiblefor its own costsand expensesin connectionwith anyactivitiesandnegotiationsundertakenin connectionwith this Agreement, andtheperformanceof eachparty'sobligationsunderthisAgreement.
Section3.6 DefaultsandRemedies.
a) Default. Failureby eitherpartyto negotiatein goodfaith asprovidedin this Agreementshallconstituteaneventof defaulthereunder. In addition, thefailureof the Developerto meetanyof thePerformanceBenchmarksby thedatesetforth in thePerformance Schedule, subjectto forcemajeuredelays, shallconstituteaDevelopereventof default. The 11 non-defaultingpartyshallgive writtennoticeof a defaultto thedefaultingparty, specifyingthe natureof thedefaultandtherequiredactionto curethedefault. If adefaultremainsuncuredten 10) daysafterreceiptby thedefaultingpartyof suchnotice, thenon-defaultingpartymay exercisetheremediessetforth in subsection (b).
b) Remedies. In theeventof anuncureddefaultby theCity, theDeveloper'ssole remedyshallbeto terminatethis Agreement. Followingsuch, neitherpartyshallhaveany furtherright, remedyor obligationunderthis Agreement; provided, however, thatthe Developer's indemnificationobligationpursuantto Sections2.6 and3.5 shallsurvivesuch termination.
In theeventof anuncureddefaultby theDeveloper, theCity's soleremedyshallbeto terminatethis Agreement. Followingsuchtermination, neitherpartyshallhaveanyright, remedyor obligationunderthis Agreement; provided, however, thattheDeveloper's indemnificationobligationpursuantto Sections2.6 and3.5 shallsurvivesuchtermination.
Exceptasexpresslyprovidedabove, neitherpartyshallhaveanyliability to theotherfor damagesor otherwisefor anydefault, norshalleitherpartyhaveanyotherclaimswith respectto performanceunderthis Agreement. Eachpartyspecificallywaivesandreleasesanysuchrights or claimstheymayotherwisehaveatlaw or in equity.
Section3.7 GoverningLaw. ThisAgreementshallbegovernedby andconstruedin accordancewith thelawsof theStateof California.
Section3.8 Assignment. TheDevelopermaynottransferor assignanyor all of its rightsor obligationshereunderexceptwith theprior writtenconsentof theCity, which consentshallbegrantedor withheldin theCity'ssolediscretion, andanysuchattempted transferor assignmentwithout theprior writtenconsentof theCity shallbevoid.
Notwithstandingtheforegoing, Developermayassignits rightshereunderto a limited partnershipwhereoneor moreof theDevelopersarethemanaginggeneralpartner (or the managingmemberof themanaginggeneralpartner) thereof.
Section3.9 No Third PartyBeneficiaries. ThisAgreementis madeandenteredinto solelyfor thebenefitof theCity andtheDeveloperandnootherpersonshallhaveanyright of actionunderor by reasonof this Agreement.
Section3.10 Time. Timeis of theessenceof eachandeveryprovisionof this Agreementin whichtime is a factor.
Section3.11 No Agency, JointVentureor Partnership. TheCity andtheDeveloper herebyrenouncetheexistenceof anyform of agencyrelationship, joint ventureor partnership betweentheCity andtheDeveloperandagreethatnothingcontainedhereinor in anydocument executedin connectionherewithshallbeconstruedascreatinganysuchrelationshipbetween theCity andtheDeveloper.
12 Section3.12 Interpretationof Agreement. ThisAgreementconstitutestheentire agreementbetweenthepartiesandsupersedesall prior discussions, negotiations, andagreements whetheroral or written, exceptto theextentthattheProposalinformsthenegotiations contemplatedin this Agreement. Any amendmentto this Agreement, includinganoral modificationsupportedby newconsideration, mustbereducedto writing andsignedby both partiesbeforeit will beeffective. Bothpartieshavehadanequalopportunityto participatein the draftingof this Agreement. Theusualconstructionof anagreementasto thedraftingpartyshall not applyto this Agreement.
Section3.13 Waiverof Lis Pendens. It is expresslyunderstoodandagreedby the Partiesthatnolis pendensshallbefiled againstanyportionof thePropertywith respectto this Agreementor anydisputeor actarisingfrom it. ThisSectionshallsurvivetheexpirationor terminationof this Agreement.
Section3.14 Counterparts. ThisAgreementmaybeexecutedin counterparts, eachof which shallbedeemedanoriginalbut all of which togethershallconstituteoneandthesame agreement.
SIGNATURESCONTINUEON THE FOLLOWING PAGE
13 IN WITNESSWHEREOF, thepartiesheretohaveexecutedthisAgreementasof thedate setoppositetheirsignatures. TheEffectiveDateof this Agreementshallbethedatethis Agreementis signedby theCity.
APPROVEDAS TO FORM:
By:
ChristopherD. Jensen, CupertinoCity Attorney
ATTEST:
City Clerk
Date ________________________
City”
City of Cupertino, abodycorporateandpolitic
andasubdivisionof theState
By: ___________________________
Title: _________________________
Date: _________________________
Developer”
By: ___________________________
Title: _________________________
Date: _________________________
Mark Mikl ( Apr 9, 2024 09: 02 PDT)
Mark Mikl
Executive Director
Apr 9, 2024Directorof Community Development
Apr 9, 2024
Christopher D. Jensen ( Apr 9, 2024 09: 11 PDT)
Christopher D. Jensen
Apr 9, 2024
14 EXHIBIT A
DESCRIPTION OF PROPERTY
THE LAND REFERREDTO HEREINBELOW IS SITUATED IN THE CITY OF
CUPERTINO, COUNTY OFSANTA CLARA, STATEOFCALIFORNIA, AND IS DESCRIBEDAS FOLLOWS:
All of Parcel1, asshownonthatcertainParcelMapfiled for recordin theOffice of theRecorderof the Countyof SantaClara, Stateof California, onMay 2, 2023, in Book953of Maps, Pages53and54.
REMAINDER OF PAGEINTENTIONALLY LEFT BLANK
15 EXHIBIT B
DEVELOPERINFORMATION
Name: CharitiesHousingDevelopmentCorporationof SantaClaraCounty LegalStatus: 501(c)(3) Non-Profit
Address: CharitiesHousingDevelopmentCorporationof SantaClaraCounty ATTN: JacobBillitteri
1400ParkmoorAvenue, STE. 190
SanJose, CA 95126
NegotiatingRepresentative(s):
Mark Mikl
KathyRobinson
MarvelAng
JacobBillitteri
Orrin Mahoney (CupertinoRotaryHousingCorporation)
Kiran Rohra (CupertinoRotaryHousingCorporation)
REMAINDER OFPAGEINTENTIONALLY LEFT BLANK
16 EXHIBIT C
PERFORMANCESCHEDULE
PerformanceBenchmark PerformanceDate
1. DeveloperDueDiligenceActivities (§2.3(a))
2. Developerdeterminestitle adequacy (§2.3(b))
3. DevelopersubmitsCommunityEngagementPlanto theCity for approval (§2.4(a))
4. TheCity approvesor disapprovestheCommunityEngagement Plan (§2.4(a)).
Within 30daysof
submission
5. DevelopersubmitsFinancingPlanto City (§2.4(b))
6. City approvesor disapprovesof theFinancingPlan (§2.4(b)) Within 30daysof submission
7. City ManagerapprovesTermSheet (§2.5)
8. Developershallsubmitconceptplanandentitlement
applicationmaterialsto theCity for its approvalprior to submittingapplicationsfor entitlements (§2.4(c))
9. City shallreviewandapproveof disapprovedesignand
architectureplans (§2.4(c))
Within 30businessdays
of submission
10. Developerobtainsentitlementsandfinal CEQA reviewfor the Project (§2.4(c))
ExclusiveNegotiatingAgreement (MaryAve) -
Final
Final Audit Report 2024-04-09
Created: 2024-04-05
By: Robert Dacanay ([email protected])
Status: Signed
Transaction ID: CBJCHBCAABAA-hq_sfQ5x81yG5MEmfazyHXX9lXzg0QT ExclusiveNegotiatingAgreement (Mary Ave) - Final" History Documentcreatedby RobertDacanay ([email protected]) 2024-04-05 - 3:34:56 PM GMT- IP address: 73.222.117.251 Documentemailedto [email protected] approval
2024-04-05 - 3:39:46 PM GMT
Email viewed by [email protected]
2024-04-05 - 5:14:47 PM GMT- IP address: 104.47.73.254
[email protected] signingas MichaelWoo 2024-04-05 - 5:35:10 PM GMT- IP address: 174.160.227.130 Documentapprovedby MichaelWoo ([email protected])
Approval Date: 2024-04-05 - 5:35:12 PM GMT - Time Source: server- IP address: 174.160.227.130 Documentemailedto MarkMikl ([email protected]) for signature 2024-04-05 - 5:35:13 PM GMT
Emailviewedby MarkMikl ([email protected])
2024-04-07 - 9:31:24 PM GMT- IP address: 104.47.51.126
Documente-signedby MarkMikl ([email protected]) Signature Date: 2024-04-09 - 4:02:24 PM GMT - Time Source: server- IP address: 66.91.33.56 Document emailed to Benjamin Fu ([email protected]) for signature 2024-04-09 - 4:02:25 PM GMT
Documente-signedby BenjaminFu ([email protected]) E-signatureobtainedusingURLretrievedthroughtheAdobeAcrobatSignAPI Signature Date: 2024-04-09 - 4:03:21 PM GMT - Time Source: server- IP address: 108.184.90.127 Document emailed to [email protected] for signature 2024-04-09 - 4:03:23 PM GMT
Emailviewedby [email protected]
2024-04-09 - 4:11:00 PM GMT- IP address: 104.47.73.254
[email protected] signingas ChristopherD. Jensen 2024-04-09 - 4:11:24 PM GMT- IP address: 136.24.22.194
Documente-signedby ChristopherD. Jensen ([email protected]) Signature Date: 2024-04-09 - 4:11:26 PM GMT - Time Source: server- IP address: 136.24.22.194 Documentemailedto KirstenSquarcia ([email protected]) for signature 2024-04-09 - 4:11:27 PM GMT
Emailviewedby KirstenSquarcia ([email protected])
2024-04-09 - 4:19:15 PM GMT- IP address: 104.47.73.254
Document e-signed by Kirsten Squarcia ([email protected]) Signature Date: 2024-04-09 - 4:19:26 PM GMT - Time Source: server- IP address: 64.165.34.3 Agreementcompleted.
2024-04-09 - 4:19:26 PM GMT