Menlo Park City Council
October 10, 2023

Facility Unauthorized FS- FS- Are ingress and egress points Yes. Accela Security Persons 05 05.1 such as service areas and other leverages SOC 2 Entry points where unauthorized controls from
personnel may enter the authorized third
premises monitored, controlled parties.
and isolated from data storage
and
process?
Facility Offsite FS- FS- Do you provide Yes. Accela
Security Authorization 06 06.1 ( describe/explain/attach/embed enforces policies associated documents) tenants and standards
with documentation that that comply
describes scenarios where data SSAE 16 SOC 2
may data center be moved from one
entities. physical location to another?
(ex. Offsite backups, business
continuity failovers,
CC Rev 20181005
Page J-6.50
36 replication)
Facility Offsite equipment
Security
Facility Asset Management
Security
Facility
Security
Human Resources Security
Human Background
Resources Screening
Security
Employment
Agreements
FS- FS- Do you provide
07 07.1 (describe/explain/attach/embed
associated documents) tenants
with documentation describing
your policies and procedures
governing asset management
and repurposing
of equipment?
FS- FS- Do you maintain a complete
08 08.1 inventory of all of your critical
assets, which includes
ownership of the
asset?
FS- Do you maintain a

08.2 complete inventory of all
of your critical supplier
relationships?
HR- HR- Pursuant to local laws,
01 01.1 regulations, ethics and
contractual constraints are all
employment candidates,
contractors and third parties
subject to background
verification? What is checked
during the background
verification?
HR- HR- Do you specifically train your
02 02.1 employees regarding their
role vs.

Yes..Accela
enforces
policies and
standards that
comply with
with SOC 2
Type 2 for
physical
securit .

Yes All critical
assets are
maintained in the
Configuration
Management
Database (CMDB)
and updated
through the use of
Accela's Change
Management
process.

Yes. Our contract
management
function maintains
this list.

Yes. Per
Accela
Background
Check policy,
background
checks are
conducted on
all permanent
em lo ees.

Yes. All Accela
employees are
required to
participate in
required,
annual
Security and
Com liance
CC Rev 20181005
Page J-6.51
37 Human
Resources
Security
Human
Resources
Security
Employment
Termination
Information Sec_urity
Information Management
Security Program
Information Management
Security Support/
Involvement
HR02.2
HR- HR03 03.1
IS- IS01 01.1
IS- IS02 02.1
the tenant's role in
providing information
securi controls?
Do you document employee
acknowledgment of training
they have completed?
Are Roles and responsibilities
for following performing
employment termination or
change in employment
procedures assigned,
documented and
communicated?
Do you provide
( describe/explain/attach/embed
associated documents) tenants
with documentation describing
your Information Security
Management Program (ISMP)?
Are policies
( describe/explain/attach/embed
associated documents) in place
to ensure executive and line
management take formal action
to support information security
through clear documented
direction, commitment, explicit
assignment and
verification of assignment
execution?
awareness
classes.

Yes. This is
systematically
captrured in our
centralized training
system.

Yes.

Yes. Various
security and
compliance
artifacts, SSAE
16 soc 2
reports.

Yes. Accela
publishes and
maintains and
Information
Technology and
Security
Standards
documentation
that is distributed
to all applicable
team members.

Executive
management
reviews and
approves security
and com liance
CC Rev 20181005
Page J-6.52
38 roadmaps and
risks.

Information Policy IS- IS- Do your information security Yes. Thety are Security 03 03.1 and privacy policies align with aligned with NIST particular 800-53, PCI and
SSAE 16 controls.
industry standards (ISO-27001,
ISO- 22307, CoBIT, etc.)?
IS03.2 Do you have
( describe/explain/attach/embed
associated documents)
agreements, which ensure your
providers adhere to your
Yes. Accela has
Agreements in place,
and reviews security
and compliance
information security and
privacy policies?
contracts on an
annual basis of
service provides
involved in delivery.

IS03.3
Can you provide
(describe/explain/attach/embed
associated documents)
evidence of due diligence
Yes. SSAE 16 SOC
2 reports and PCI
DSS SAQ-A-EP.
mapping of your controls,
architecture and processes
to regulations and/or standards?
Information Baseline IS- IS- Do you have Yes. Baselines Security Requirements 04 04.1 (describe/explain/ attach/embed are associated documents) documented for
documented information critical
security baselines for every components.
component of your These
infrastructure (ex. Hypervisors, baselines are
operating systems, routers, reviewed and
DNS potentially
servers, etc.)? adjusted
annually.

Information IS- Do you have Yes. Accela's
Security 04.2 ( describe/explain/attach/embed internal audit associated documents) a function regularly
capability to continuously monitor audits security
and report the compliance of controls
your infrastructure against your
information security
baselines?
CC Rev 20181005
Page J-6.53
39 Information IS- Do you allow No.

Security 04.3 ( describe/explain/attach/embed
associated documents) your
clients to provide their own
trusted virtual machine image
to ensure conformance to their
own internal
standards?
Information Policy Reviews IS- IS- Do you notify your tenants when No. However, Security 05 05.1 you make material changes to Accela's security your information security and/or and compliance
privacy status are available
policies? for client review
under NOA.

Information Policy IS- IS- Is a formal disciplinary or sanction Yes. This is specifically Security Enforcement 06 06.1 policy established for employees managed Human who have violated security Resources and the
policies and resource manager.
procedures?
Information IS- Are employees made aware of
Security 06.2 what action might be taken in the Yes.
event of a violation and stated as
such in the policies and
procedures?
Information User Access IS- IS- Do you have Yes. Accela enforces Security Policy 07 07.1 ( describe/exp lain/attach/embed policies and associated documents) standards that
controls in place ensuring comply with SSAE 16
timely removal of systems SOC 2 Controls.
access, which is no longer
required for business purposes?
Information IS- Do you provide
Security 07.2 ( describe/explain/attach/embed
associated documents) metrics Yes. Timely deactivation of that track the speed with which accounts is governed by you are able to remove systems policy.
access which is no longer
required for business purposes?
CC Rev 20181005
Page J-6.54
40 Information User Access IS- ISSecurity Restriction I 08 08.1 Authorization
Information ISSecurity 08.2
Information User IS- ISSecurity Access 09 09.1
Revocation
Information ISSecurity 09.2
Do you document how you grant Internal access
and approve access to tenant requests from
data? Accela team
members is
reviewed
through the
use of the
change
management
process and
explicit
approval is
Do you have
(describe/explain/attach/embed
associated documents) a
required by the
Change
Management
Review Board
method of aligning provider
and tenant data classification
methodologies for access
control purposes?
(CMRB). All
change
management
activity is
recorded using
an enterprise
change
management
tool.

Yes. Accela adhered
to a data classification
methodoloav.

Is timely de-provisioning, Yes. Timely
revocation or modification of deactivation of
user access to the accounts is governed
organizations systems, by policy.
information assets and data
implemented upon any change
in status of employees,
contractors, customers,
business
partners or third parties?
Is any change in status Yes. Status
intended to include termination changes requiring
of employment, contract or access review
agreement, change of include termination,
employment or transfer within role change or
the organization? department transfer.

CC Rev 20181005
Page J-6.55
41 Information User Access IS- IS- Do you require at least Yes. Accela Security Reviews 10 10.1 annual certification of adheres to bientitlements for all system users and administrators
annual and annual
policy, procedure
and standards
review, which
includes
entitlements.
(exclusive of users
maintained by your
tenants)? Yes. The incident and
Information
Security
IS10.2 If users are found to have
inappropriate entitlements, are
change management
processes are used.
all remediation and certification
actions
Information ISrecorded?
Will you share user entitlement Yes.

Security 10.3 remediation and certification
reports with your tenants, if
inappropriate access may have
been allowed to
tenant data?
Information Training/ IS- IS- Do you provide Yes. All Accela Security Awareness 11 11.1 ( describe/explain/attach/embed employees are associated documents) or make required to
available a formal security participate in
awareness training program for required, annual
cloud-related access and data Security and
management issues (i.e., multi- Compliance
tenancy, nationality, cloud awareness
delivery model segregation of classes.
duties implications, and conflicts
of interest) for all persons with
access to tenant
data?
Information IS- Are administrators and data
Security 11.2 stewards properly educated on
their legal responsibilities with
regard to
security and data integrity? - Information Industry Knowledge IS- IS- Do you participate in industry Yes. Some of the Security / Benchmarking 12 12.1 groups and professional groups Accela is associations related associated with are
to information security? ISACA, (ISC)2,
IS- Do you benchmark your NIST, US-Cert.

12.2 security controls against
industry standards? Yes. SSAE 16 soc
2 (TSP 101) and
PCI are reviewed
on a continuous
basis by our
internal audit team
for compliance.

CC Rev 20181005
Page J-6.56
42 External audits are
conducted
annually.

Information Roles/ IS- IS- Do you provide Yes.

Security Responsibilities 13 13.1 ( describe/explain/attach/embed associated documents) tenants
with a role definition document
clarifying your administrative
responsibilities vs. those of the
tenant?
lnformatio Managemen IS IS- Are Managers responsible Yes. Security n Security t Oversight - 14. for maintaining awareness of policies and 14 1 and complying with security procedures are
policies, procedures and reviewed annually
standards that are relevant with managers.
to their area of Managers are
responsibility? expected to
disseminate
relevant
information to
staff.
lnformatio Segregation IS IS- Do you provide Yes. Information is n Security of Duties - 15. ( describe/explain/attach/embe available upon 15 1 d associated documents) request.
tenants with documentation on
how you maintain segregation
of duties within your cloud
service offerinQ?
lnformatio User Responsibility IS IS- How are users made aware of n Security - 16. their responsibilities for Accela uses the 16 1 maintaining awareness and Security and
compliance with published Compliance
security policies, procedures, awareness program
standards and applicable to achieve this goal.
reQulatorv requirements? Additionally,
lnformatio IS- How are users made aware of meetings are help on n Security 16. their responsibilities for as needed basis to 2 maintaining a safe review policies with
and secure working stakeholders,
environment? especially if material
lnformatio IS- How are users made aware changes have been n Security 16. of their responsibilities for made to these 3 leaving unattended documents.
equipment in a secure
manner? Accela uses the
Security and
Compliance
awareness
program to
achieve this
aoal.

CC Rev 20181005
Page J-6.57
43 lnformatio Workspace IS ISn Security - 17.
17 1
lnformatio ISn Security 17.
2 lnformatio ISn Security 17.
3 Accela
communicates
these requirements
through the onboarding process
and is governed by
securitv policies.

Do your data management Although this is not
policies and procedures explicitly addressed
address tenant and within our policies,
service level conflicts of however, Accela is
interests? committed to
Do your data management remediating any
policies and procedures SLA/service conflicts
include a tamper audit or with our clients. To
software integrity function for date, this has not
unauthorized access to been an area of
tenant contention or conflict
data? with our clients.

Does the virtual machine
management infrastructure Yes. Data
include a tamper audit or integrity
software integrity algorithms are
function to detect changes to enforced. Log
the activity is also
monitored on a
periodic basis.

Yes. Baselines
are defined and
used to detect
changes to the
build/configuratio
n of the VM's
build/configuration of the
virtual machine?
lnformatio
n Security
Encryption IS
-
IS18.

Do you have
( describe/explain/attach/embe
Encryption keys are not
unique per tenant.
1 1 d associated documents) a
8 capability to allow creation of
unique encryption
keys per tenant?
CC Rev 20181005
Page J-6.58
44 lnformatio IS- Do you support
n Security 18. (describe/explain/attach/embe No. This is not practical in 2 d associated documents) a multi-tenant environment
tenant generated encryption with shared data stores.
keys or permit tenants to
encrypt data to an identity
without access to a public key
certificate. (E.g. Identity based
encryption)?
lnformatio Encryption IS IS- Do you encrypt tenant data Yes. n Security Key - 19. at rest (on disk/storage)
Manageme 1 1 within your
nt 9 environment? Data at
lnformatio IS- Do you leverage encryption
n Security 19. to protect data and virtual
2 machine images during rest
transport across and
between networks and
hypervisor and in
instances?
lnformatio
n Security
IS19. Do you have
(describe/explain/attach/embe transit
3 d associated documents) a
capability to manage
encryption keys on behalf of are
tenants?
Information
Security
IS19.4 Do you maintain key
management encypt
procedures?
ed.

Yes.

Yes.

Yes. This is integrated
into Accela Information
Technology and
Security Standards.
lnformatio Vulnerability / IS IS- Do you conduct Yes. This is conducted on a n Security Patch - 21. (describe/explain/attach/embe quarterly basis. Management 2 1 d associated documents) 0 network-layer vulnerability
scans regularly as prescribed
by industry best
practices?
CC Rev 20181005
Page J-6.59
45 lnformatio IS- Do you conduct
n Security 20. (describe/explain/attach/em Yes. This is conducted on 2 bed associated documents) an annual basis or as
application- deemed necessary due to
layer vulnerability scans significant changes.
reQularly as
prescribed by industry
best practices?
Information
Security
IS20.3 Do you conduct
( describe/exp lain/attach/embed
associated documents) local
operating system-layer
Yes. This is
conducted on a
quarterly basis.
vulnerability scans regularly as
prescribed by
industry best practices?
Information
Security
IS20.4 Will you make the results of
vulnerability scans available
to
High-level
summary of
Information
Security
Information
Security
IS20.5
IS20.6
tenants at their request?
Do you have
( describe/explain/attach/embed
associated documents) a capability
to rapidly patch vulnerabilities
across all of your computing
devices,
applications, and systems?
Will you provide your risk-based
systems patching timeframes to
your tenants upon request?
findings, along with
general
remediation plans
may be made
available to
tenants upon
request. Detailed
vulnerability scan
and penetration
test results are
general not
available due to
the sensitive
nature of this
information.

Yes. This is
systematically
performed on a
regular basis.

Yes.

Information Antivirus / IS- IS- Do you have Yes. These
Security Malicious Software 21 21 .1 ( describe/explain/attach/embed programs are associated documents) anti- updated on a
malware programs installed on all
systems that support your cloud regular basis.
service
offerings?
CC Rev 201 81005
Page J-6.60
46 Information IS- Do you ensure that security
Security 21.2 threat detection systems that
use signatures, fists, or
behavioral patterns are updated Accefa has IDS
across all infrastructure capabilities
components within industry deployed in a
accepted timeframes? limited fashion.

Accela's IDS
capabilities is
currently under
review. The goal
is to define an
enterprise
strategy across
all data centers
Information Incident IS- IS- Do you have Yes. Accela
Security Management 22 22.1 ( describe/explain/attach/embed enforces associated documents) a policies and
documented security incident
response plan?
standards
that align with
NIST 800-53.

Information IS- Do you integrate Accela is committed to continuous Security 22.2 customized tenant improvement of the IR processes requirements into and welcomes client feedback
your security that may be incorporated as
incident response enterprise standards.
plans?
Information IS- Do you publish a Tenant responsibilities are not Security 22.3 roles and included yet. This will be
responsibilities considered in the roles and
document specifying responsibif ities section of a fut ire what you vs. your version of the IR policy.
tenants are
responsible for during
security incidents?
Information Incident IS- IS- Does your security Yes. Bl tools are used against the Security Reporting 23 23.1 information and event merged results to conduct management (SIEM) analysis and generate trending
system merge data data.
sources (app logs,
firewall logs, IDS logs,
physical access logs,
etc.) for granular
analysis and Yes.
alerting?
Information IS- Does your logging
Security 23.2 and monitoring
framework allow
isolation of an
incident to specific
tenants?
CC Rev 20181005
Page J-6.61
47 Information Incident IS- IS- Does your incident Yes. Accela enforces policies Security Response 24 24.1 response plan and standards that align with Legal comply with industry NIST 800-53, Incident
Preparation standards for legally Response (IR) security admissible chain-of- controls.
custody
management
processes & controls? Yes.

Information IS- Does your incident
Security 24.2 response capability
include the use of
legally admissible Yes. Point in time archives may be
forensic data completed for this purpose.
collection
and analysis
techniques?
Information IS- Are you capable of
Security 24.3 supporting litigation Yes. Tenant data separation is holds (freeze of data accomplished through the use of
from a specific point in logical controls.
time) for a specific
tenant without freezing
other tenant
data?
Information IS- Do you enforce and
Security 24.4 attest to tenant data
separation when
producing data
in response to legal
subpoenas?
Information Incident IS- IS- Do you monitor and Yes. The IR lifecycle includes, Security Response 25 25.1 quantify the types, identification, validation, impact Metrics volumes, and analysis and after-incident
impacts on all debriefs.
information security
incidents? Yes.

Information IS- Will you share
Security 25.2 statistical information
security incident data
with your
tenants upon request?
Information Acceptable Use IS- IS- Do you provide Yes. Accela Security 26 26.1 (describe/explain/attach/embed discloses how it associated documents) uses tenant data.
documentation regarding how Tenant data is
you may utilize or access tenant not sold or
data shared with
and/or metadata? external entities
Information IS- Do you collect or create metadata unless required Security 26.2 about tenant data usage through by law.
the use of inspection technologies
(search engines, etc.)?
CC Rev 20181005
Page J-6.62
48 Information IS- Do you allow
Security 26.3 ( describe/explain/attach/embed
associated documents) tenants Yes. This is mainly
to opt-out of having their done to help with
data/metadata accessed via product and feature
inspection technologies? road maps.

No, since this is
performed
strictly for
Accela-internal
use and to help
improve the
product.

Information Asset Returns IS- IS- Are systems in place to monitor Yes.

Security 27 27.1 for privacy breaches and notify
tenants expeditiously if a privacy
event may
have affected their data? Yes. Nist 800-53
Information IS- Is your Privacy Policy aligned security controls.

Security 27.2 with industry standards? What
standards are they aligned to?
Information e-commerce IS- IS- Do you provide Yes.

Security Transactions 28 28.1 ( describe/explain/attach/embed associated documents) open
encryption methodologies
(3.4ES, AES , etc.) to tenants in
order for them to protect their
data if it is required to traverse
public
networks? (ex. the Internet)
Information IS- Do you utilize open encryption Yes.

Security 28.2 methodologies any time your
infrastructure components
need to communicate to each
other over public networks (ex.

Internet-based replication of
data from one environment to
another)?
CC Rev 20181005
Page J-6.63
49 Information Audit Tools Access IS- IS- Do you restrict, log, and Yes. Only select roles Security 29 29.1 monitor access to your are granted access to information security these components.
management systems? (Ex.

Hypervisors, firewalls,
vulnerability scanners, network
sniffers, APls, etc.)
Information Diagnostic / IS- IS- Do you utilize dedicated Yes.

Security Configuration 30 30.1 secure networks to provide Ports Access management access to your
cloud service infrastructure?
Information Network/ IS- IS- Do you collect capacity and Yes.

Security Infrastructure 31 31 .1 utilization data for all relevant Services components of your cloud
service
offering? Capacity planning and
Information IS- Do you provide utilization reports are
Security 31.2 (describe/explain/attach/embed internally monitored to associated documents) tenants provide clients with
with capacity planning and adequate support and
utilization reports? resources. This
information may be
made available upon
request.

Information Portable/ IS- IS- Are policies Yes. Accela enforces Security Mobile 32 32.1 ( describe/explain/attach/embed policies and Devices associated documents) and standards that align
procedures established and with NIST 800-53.
measures implemented to
strictly limit access to sensitive
data from portable and mobile
devices, such as laptops, cell
phones, and personal digital
assistants (PDAs), which are
generally higher-risk than nonportable devices (e.g., desktop computers at the provider
organization's facilities)?
CC Rev 20181005
Page J-6.64
50 Information
Security
Information
Security
Information
Security
Information
Security
Information
Security
Legal
Source Code
Access
Restriction
Utility
Programs
Access
IS- IS- Are controls in place to prevent
33 33.1 unauthorized access to your
application, program or object
source code, and assure it is
restricted to
f------l-----...,__ authorized ersonnel ____onl _L__----{ ? IS- Are controls in place to prevent

33.2 unauthorized access to tenant
application, program or object
source code, and assure it is
restricted to authorized
personnel only?
IS- IS- Are utilities that can
34 34.1 significantly manage virtualized
partitions (ex. shutdown, clone,
etc.) appropriately
restricted and monitored?
>------+------- --- - ----{
IS- Do you have

34.2 ( describe/explain/attach/embed
associated documents) a
capability to detect attacks
which target the virtual
infrastructure directly (ex.
shimming, Blue Pill, Hyper
jumping,
etc.)?
IS- Are attacks that target the

34.3 virtual infrastructure prevented Yes.
with technical controls?
Yes. Access control
is role based and
carefully monitored.

Access rights are
audited on a periodic
basis.

Yes. Access control
is role based and
carefully monitored.

Access rights are
audited on a periodic
basis.

Yes. Access control
is role based and
carefully monitored.

Access rights are
audited on a periodic
basis.

The virtual infrastructure is
not a component of the
presentation layer.

ESXi firewalls are in
place with limited open
ports. ESXi 6
hardening methods
are generally used
which serve as
preventative measures
against threats such
as "blue ill".

CC Rev20181005
Page J-6.65
51 Legal
Legal
Legal
Legal
Nondisclosure
Agreements
Third Party
Agreements
Operations Policy
Management
LG- LG- 01 01.1
LG- LG- 02 02.1
Are requirements for nondisclosure or confidentiality
agreements reflecting the
organization's needs for the
protection of data and operational
details identified, documented and
reviewed at planned intervals?
Do you select and monitor
outsourced providers to verify that
they comply with laws in the
country where the data is
processed and stored and
transmitted? t-----+--------------------j
------j
LG- Do you select and monitor

02.2 outsourced providers in compliance
with laws in the country where the
data
ori inates? t-----+-~~- -----
LG- 02.3
OP- OP01 01.1
Does legal counsel review all
third party agreements?
Are policies
(describe/explain/attach/embed
associated documents) and
procedures established and
made available for all
personnel to adequately
support services operations
roles?
Yes, these items
are documented
and reviewed on
planned intervals.

Legal places
requirements
in contracts
that are
passed
through for
these types of
data issues,
and our
provides
comply.

Yes, we
address for
Canada and
the United
States. The
Mideast and
SOPAC are
managed
separately.

Yes. Policies and
standards are
periodically
reviewed with
personnel and are
also made
available postreview.

CC Rev20181005
Page J-6.66
--
52 Operations Documentation OP- OP- Are Information system Yes. System Management 02 02.1 documentation (e.g., documentation is administrator and user guides, periodically
architecture diagrams, etc.) reviewed with
made available to authorized personnel and are
personnel to ensure also made available
configuring, installing, and post-review. Security
operating the information baselines have been
system is completed established and
and performed correctly? incorporated into
Information
Technology and
Securitv standards.

Operations Capacity I OP- OP- Do you provide No.

Management Resource 03 03.1 ( describe/explain/attach/embed Planning associated documents)
documentation regarding what
levels of system (network,
storage, memory, 1/0, etc.)
oversubscription you maintain
and under what
circumstances/scenarios? Yes, however, these
Operations OP- Do you restrict use of the limits are usually not Management 03.2 memory oversubscription reached.
capabilities present in the
hypervisor?
Operations Equipment OP- OP- If using virtual infrastructure, Yes.

Management Maintenance 04 04.1 does your cloud solution include hardware independent restore
and recovery
capabilities? Tenant data may be
Operations OP- If using virtual infrastructure, restored to particular Management 04.2 Do you provide point in time.
(describe/explain/attach/embed
associated documents) tenants
with a capability to restore a
Virtual
Machine to a previous state in
time? No. This is shared
Operations OP- If using virtual infrastructure, environment with Management 04.3 Do you allow multiple tenants.
(describe/explain/attach/embed
associated documents) virtual
CC Rev 20181005
Page J-6.67
53 machine images to
be downloaded and
ported to a new
cloud rovider? No.

Operations OP- If using virtual
Management 04.4 infrastructure, are
machine images
made available to the
customer in a way Yes.
that would allow the
customer to replicate
those images in their
own off-site storage
location?
Operations OP- Does your cloud
Management 04.5 solution include
software I
provider
independent
restore and
Management by a 3rd
Risk >---
Rlr losses? ---+-'-___,,'--- -------I
Do your
We do provide downtime credits
for unplanned unavailability for
Management 01.2 organization's Subscription/Hosting per those service level standard agreements.
agreements
provide tenant
remuneration for
losses they may
incur due to
outages or losses
experienced within
your infrastructure?
Risk Assessments Rl- Rl- Are formal risk Yes. Risk assessments are Management 02 02.1 assessments aligned conducted in tandem with internal, with the enterprise­ external audits.
wide framework and
performed at least
annually, or at
planned intervals,
determining the
likelihood and impact Yes, but not using formal methods. of all identified risks,
using qualitative and
uantitative methods?
CC Rev 20181005
Page J-6.68
54 Risk RI- Is the likelihood and
Management 02.2 impact associated
with inherent and
residual risk
determined
independently,
considering all risk
categories (e.g., audit
results, threat and
vulnerability
analysis, and
regulatory
compliance)?
Risk Mitigation / RI- RI- Are risks mitigated to acceptable Yes. In areas Management Acceptance 03 03.1 levels based on company- where established criteria in accordance company-wide
with reasonable resolution time criteria is not
frames? pre-defined,
management
RI- RI- Is remediation conducted at reviews risks
03 03.2 acceptable levels based on on an ascompany- established criteria in needed basis. accordance with reasonable time
frames?
Yes. In areas
where
company-wide
criteria is not
pre-defined,
management
reviews
remediation
plans and
residual risk on
an as- needed
basis.

Risk Business/ RI- RI- Do risk assessment results Risk assessments Management Policy Change 04 04.1 include updates to security are evaluation and Impacts policies, procedures, standards consequently, a and controls to ensure they remediation plan
remain relevant and effective? is developed and
managed to
completion.

Annual reviews
are conducted to
maintain
relevance with
policies and
standards.

CC Rev 20181005
Page J-6.69
55 Risk Third Party Access RI- RI- Do you provide Yes this is included Management 05 05.1 (describe/explain/attach/embed in Accela's associated documents) multi- Business Continuity
failure Plan (BCP).
disaster recovery capability?
RI- Do you monitor service continuity

05.2 with upstream providers in the
event of provider Accela works failure?
RI- Do closely with you have
service 05.3 (describe/explain/attach/embed providers during associated documents) more and post than one provider for each
incident activity. service you
depend on?
RI- Do you provide Yes for 05.4 (describe/explain/attach/embed infrastructure, associated documents) access critical components to operational redundancy and
and services. continuity summaries that
include
the services on which you depend?
RI- Do you provide

05.5 (describe/explain/attach/embed Yes, upon request. associated documents) the tenant
the ability to declare a disaster?
No, however, the
client may be a
key stakeholder
to validate a
declaration of a
disaster
depending the
extent, location
and impact of
such an event.

RI- Do you provide No. Failover options are

05.6 ( describe/explain/attach/embed managed by Accela
associated documents) a personnel.
tenant
triggered failover option?
RI- Do you share your business Yes upon request.

05.7 continuity and redundancy
plans with your tenants?
CC Rev 20181005
Page J-6.70
56 Release Management
Release New RM- RMManagement Development 01 01.1
/ Acquisition
Release Production RM- RMChanges
Management 02 02.1
Release Quality Testing RM- RMManagement 03 03.1
Release Outsourced RM- RMManagement Development 04 04 .1 Are policies
( describe/explain/attach/embed
associated documents) and
procedures established for
management authorization for
development or acquisition of
new applications, systems,
databases, infrastructure,
services, operations, and
facilities?
Do you provide
( describe/explain/attach/embed
associated documents) tenants with
documentation which describes your
production change management
procedures and their
roles/rights/responsibilities within it?
Do you provide
( describe/exp lain/attach/embed
associated documents) your
tenants with documentation which
describes your quality assurance
process?
Do you have
( describe/explain/attach/embed
associated documents) controls in
place to ensure that standards of
quality are being met for all
software development?
Yes. Accela
enforces policies
and standards
that align with
NIST 800-53.

Yes, upon request
Yes, upon request.

Yes. They are
available for review
upon request.

CC Rev 20181005
Page J-6.71
57 Release RM- Do you have Yes. Detailed
Management 04.2 (describe/explain/attach/embed code walkassociated documents) th roughs, controls in place to detect Veracode
source code security defects scanning and
for any outsourced software internal
development activities? scanning are
part of our
security review
rocess.

Release Unauthorized RM- RM- Do you have Yes. This is
Management Software 05 05.1 ( describe/explain/attach/embed governed by policy.

Installations associated documents) controls Additionally, in place to restrict and monitor periodic review of
the installation of unauthorized software and
software onto your systems? system
configurations (biannual and annual,
depending on the
sub·ect area .

Resiliency Management RS- RS- Are Policy, process and Yes. Accela Program 01 01.1 procedures defining business leverages
continuity and disaster recovery database realin place to minimize the impact time replication of a realized risk event and and automated
properly communicated to deployment
tenants? abilities that
allow us to
recover in a
timely fashion.

This allows us
to recreate an
environment in
case of a
disaster.

Documented
RTO and RPO
are to be
finalized by Apr
2019.

Resiliency Impact Analysis RS- RS- Do you provide Yes. This is 02 02.1 (describe/explain/attach/embed available upon
associated documents) tenants request.
with ongoing visibility and
reporting into your operational
Service Level
A reement (SLA) performance?
Resiliency RS- Do you make standards02.2 based information security This capability is metrics (CSA, CAMM, etc.) currently under
available to your development.
tenants?
CC Rev 20181005
Page J-6.72
58 Resiliency RS- Do you provide Yes. This is available upon

02.3 (describe/explain/attach/embed request.
associated documents)
customers with ongoing
visibility and reporting into your
SLA performance?
Resiliency Business RS- RS- Do you provide Yes. Accela has Continuity 03 03.1 ( describe/explain/attach/embed established a DR plan that Planning associated documents) tenants includes a geographically, with geographically resilient separate DR data center.
hosting
options?
Resiliency RS- Do you provide

03.2 ( describe/explain/attach/embed Accela manages all associated documents) tenants infrastructure failover
with infrastructure service capabilities, including
failover capability to other ones associated with
providers? services provided by
other i:!roviders. - ~ Resiliency Business RS- RS- Are business continuity plans Yes. Accela tests a Continuity 04 04.1 subject to test at planned variety of plans on an Testing intervals or upon significant annual basis, including organizational or environmental Incident Response and
changes to ensure related plans such as
continuing effectiveness? BCP and DR.

Resiliency Environmental RS- RS- Is physical protection against Yes. This is incorporated in Risks 05 05.1 damage from natural causes and Accela's Business Continuity disasters as well as deliberate Plan (BCP).
attacks anticipated, designed
and countermeasures applied?
Resiliency Equipment RS- RS- Are any of your datacenters No. Accela has taken great Location 06 06.1 located in places which have a care in selecting high probability/occurrence of production and disaster
high- impact environmental recovery data centers.
risks (floods, tornadoes,
earthquakes, hurricanes, etc.)?
CC Rev 20181005
Page J-6.73
59 Resiliency Equipment Power RS- RS- Are Security mechanisms and Yes.

Failures 07 07.1 redundancies implemented to Comprehensive protect equipment from utility power
service outages (e.g., power redundancy is in
failures, place.
network disru tions, etc. ?
Resiliency Power I RS- RS- Do you provide Not usually,
Telecommunications 08 08.1 (describe/explain/attach/embed however, this is associated documents) tenants an area that
with documentation showing the may be
transport route of their data revisited
between your systems? especially I the
Resiliency RS08.2
Can Tenants define how their
data is transported and through
which legal
jurisdiction?
context of a
related
incident. All
network traffic
is constrained
to continental
United States.

No. All networ
traffic is
constrained to
continental United
States.

Security Architecture
Security Customer SA- SA- Are all identified security, Yes.

Architecture Access 01 01.1 contractual and regulatory
Requirements requirements for customer access
contractually addressed and
remediated prior to granting
customers access to data, assets
and information s stems?
Security User ID Credentials SA- SA- Do you support Not at the Architecture 02 02.1 ( describe/explain/attach/embed moment, associated documents) use of, or however, this is
integration with, existing actively being
customer- based Single Sign On pursued and it is
(SSO) solutions on the product
to our service? roadmap.

Security SA- Do you use open standards to
Architecture 02.2 delegate authentication
capabilities
to our tenants?
Security SA- Do you support Yes. Architecture 02.3 ( describe/explain/attach/embed associated documents) identity
federation standards (SAML, Not at the
SPML, WS-Federation, etc.) as moment,
a means of however, this is
authenticating/authorizin users?
CC Rev20181005
Page J-6.74
60 Security SA- Do you have actively being
Architecture 02.4 ( describe/exp lain/attach/embed pursued and it is associated documents) a on the product
Policy Enforcement Point roadmap.
capability (ex.

Accela uses
Active Directory
(AD).

XACML) to enforce regional legal Although role-based
and policy constraints on user identity management
access? is in place, it is not
done systematically,
yet.

Not at the moment,
however, this is actively
being pursued and it is
on the product
roadmap.

Security SA- Do you have
Architecture 02.5 (describe/explain/attach/embed Agency administrators associated documents) an identity can restrict users in the management system in place system to groups which
which enables both role-based have different levels of
and context- based entitlement to functionality and
data (enables access.
classification of data for a tenant)?
Security SA- Do you provide
Architecture 02.6 ( describe/explain/attach/embed Not in the hosted associated documents) tenants environment.
with strong (multifactor)
authentication options (digital
certs, tokens,
biometric, etc.) for user access?
Security SA- Do you allow We don't have any in the
Architecture 02.7 (describe/explain/attach/embed
associated documents) tenants
to use third party identity
assurance
hosted environment
using this. SSO adapters
in an on-premise setting
may provide that
services? depending on the use
case.

CC Rev 20181005
Page J-6.75
61 Security Data SA- SA- Is your Data Security Architecture We are working Architecture Security 03 03.1 designed using an industry towards a FISMA (NIST I standard? (ex. CDSA, 800-53) compliancy
Integrity MULITSAFE, CSA Trusted audit date 10/16.

Cloud Architectural
Standard, FedRAMP

CAESARS)
Security Application Security SA- SA- Do you utilize industry Accela is working Architecture 04 04.1 standards (Build Security in towards OWASP Maturity Model [BSIMM] ASVS and
Benchmarks, Open Group leveraging
ACS Trusted Technology Veracode and
Provider Framework, NIST, OWASP scanning
etc.) to build-in security for in our build
your Systems/Software processes.

Development Lifecycle
(SDLC)?
Security SA- Do you utilize an automated
Architecture 04.2 source- code analysis tool to
detect code
security defects prior to
production? Veracode is
Security SA- Do you verify that all of your used during the Architecture 04.3 software suppliers adhere to development industry standards for process to
Systems/Software Development detect issues.

Lifecycle (SDLC) security?
Security Data Integrity SA- SA- Are data input and output There is basic Architecture 05 05.1 integrity routines (i.e., data input reconciliation and edit checks) validation.
implemented for application
interfaces and databases to
Additionally,
administrators
prevent manual or systematic
processing errors or corruption
of data?
can create
custom
expressions for
other types of
extended
validation.

Security Production / SA- SA- For your Saas or PaaS Yes, each tenant Architecture Nonproduction 06 06.1 offering, Do you provide gets two other Environments ( describe/explain/attach/embed environments associated documents) tenants (support, test)
with separate environments for along with
production and test processes? production.

CC Rev 20181005
Page J-6.76
62 Security SA- For your laaS offering, Do you
Architecture 06.2 provide
( describe/explain/attach/embed
associated documents) tenants
with guidance on how to create Yes, our Customer
suitable Support and Services
production and test teams can help with
environments? these.

Security Remote User SA SA- Is multi-factor authentication Yes Architectur Multifactor - 07. required for all remote user e Authenticatio 07 1 access?
n
Security Network Security SA SA- For your laaS offering, Do you We can Architectur - 08. provide provide
e 08 1 (describe/explain/attach/embe information on
d associated documents) network
customers with guidance on communicatio
n for all how to create a layered endpoints security architecture such that the equivalence using your architecture virtualized solution? can be built.

Security Segmentation SA SA- Are system and network Yes Architectur - 09. environments logically
e 09 1 separated to ensure Business
and customer
security requirements?
Security SA- Are system and network Yes
Architectur 09. environments logically
e 2 separated to ensure
compliance with legislative,
regulatory, and contractual
requirements?
Security SA- Are system and network
Architectur 09. environments logically Yes, production
e 3 separated to ensure separation and nonof production and production non-production environments? environments
use their own
independent
resources.

CC Rev 20181005
Page J-6.77
63 Security SA- Are system and network
Architecture 09.4 environments logically Yes
separated to ensure protection
and isolation of sensitive data?
Security Wireless SA- SA- Are policies Yes
Architecture Security 10 10.1 ( describe/explain/attach/embed associated documents),
procedures established, and
mechanisms implemented to
protect network environment
perimeter and configured to
restrict unauthorized
traffic? Yes
Security SA- Are policies
Architecture 10.2 ( describe/explain/attach/embed
associated documents) and
procedures established and
mechanisms implemented to
ensure proper security settings
enabled with strong encryption
for authentication and
transmission, replacing vendor
default settings? (e.g., encryption
keys, passwords, SNMP Yes
community
strings, etc.)
Security SA- Are policies
Architecture 10.3 (describe/explain/attach/embed
associated documents) and
procedures established and
mechanisms implemented to
protect network environments
and detect
the presence of unauthorized
(rogue)
network devices for a
timely disconnect from
the network?
CC Rev 20181005
Page J-6.78
64 Security Shared Networks SA- SA- Is access to systems with Yes Architecture 11 11.1 shared network infrastructure
restricted to authorized
personnel in accordance with
security policies, procedures
and standards? Networks
shared with external entities
shall have a documented plan
detailing the compensating
controls used to separate
network traffic between
organizations. Provide
information
about your plan.

Security Clock SA- SA- Do you utilize a synchronized Yes Architecture Synchronization 12 12.1 time- service protocol (ex.

NTP) to ensure all systems
have a common time
reference?
Security Equipment SA- SA- Is automated equipment No, equipment is not Architecture Identification 13 13.1 identification used as a method identified in an of connection authentication to automated fashion.
validate connection
authentication integrity based
on known equipment location?
Security Audit Logging / SA- SA- Are file integrity (host) and Yes Architecture Intrusion Detection 14 14.1 network intrusion detection (IDS) tools implemented to
help facilitate timely detection,
investigation by root cause
analysis and response to
incidents?
Security SA- Is Physical and logical user Yes
Architecture 14.2 access to audit logs restricted
to authorized
personnel?
Security SA- Can you provide Yes, Third party
Architecture 14.3 ( describe/explain/attach/embed audited SSAE associated documents) 16 soc 2
evidence that due diligence reports to be
mapping of regulations provided under
and standards to your NOA annuallv.
co ntro Is/ arch itectu re/processes
has been done?
CC Rev 20181005
Page J-6.79
65 Security Mobile SA- SA- ls mobile code authorized before Architecture Code 15 15.1 its installation and use? Is the Yes code configuration checked to
ensure that the authorized
mobile code operates according
to a clearly defined
security policy? Yes
Security SA- Is all unauthorized mobile code
Architecture 15.2 prevented from executing?
CC Rev20181005
Page J-6.80
66 Exhibit G
Signed Order Form
CC Rev 20181005
Page J-6.81
Proposed by: Ron Schlitzkus
Contact Phone: (503) 820-6287 ~Accela Contact Emall: [email protected] Valid Through: 11/16/2018
2633 Camino Ramon, Suite 500 Currency: USD
San Ramon, CA 94583
Order Form
-Address Information
Bill To:

City of Menlo Park
701 Laurel St.

Menlo Park, CA 94025
Billing Contact: Gene Garces
Billing Phone: (650) 330-6657
Billing Email Address: [email protected]
Services
Setvlce
Accela Civic Platform Sliver•
Subseription User
Accela Civic Platform Silver •
SubKription U)er
Accela Civic Platform Silver •
Subscription User
Accela Citizen Acce,s • Subscri,ition
Population Population 1.Jnder 50K
Total
Service
Accela Civic Platform Sl iver •
Subsuiption User
Acee la Citizen Actess • Subscription
Population Population Under !",Ok
Total
Start Date
ll/16/ 2018
2/16/2019
5/16/2019
11/16/ 2018
St.irt o.te
11/16/2019
11/16/2019
Ship To:

City of Menlo Park
701 Laurel St.

Menlo Part, CA 94025
End Date OrclerTerm Unit Price QuantitY Total Price
(month$)
11/15/2019 12 $197.10 10 $23,6S2.00
11/15/2019 9 $197.10 1S $26,608.50
11/ 15/2019 6 $197.10 15 $17,719.00
..
11/1S/2019 12 $0.00 l $0.00
$67,999.50
End Date Order Term Unit Price QuantilY Total Price
(month~}
11/15/ 2020 12 $203.01 40 $97,444.80 ...
11/ 15/2020 12 $0.00 l $0.00
$97,444.80
Accela Quote 10; Q-17608
Page J-6.82
Service Start Date
Attela Civic Platform Silver - 11/16/2020 Submlption User Accela Clti2en Access• Subscription ll/16/2020 Fopulation Population Under SOI( Tot~
Service Start Oate
Accela Civic Platform Silver - 11/16/2021 Subscription User A.ccela Citizen Ac:ceu - S ubscrl ption 11/16/2021 Population Population Under SOK Total
service Start Date
Accela Civic Platform Silver - 11/16/2022 Subxriptlon User Acula Citizen Acces, • Subscription 11/16/2022 Pooulation Pooulatlon Under SOK Total
Annual Pricing Summary
Fees
11/16/2018 - 11/15/2019
U/16/2019 - 11/15/2020
11/16/2020 - 11/15/2021
11/16/2021 - 11/15/2022
11/16/2020 - 11/15/2021
Total
End Date
ll/lS/2021
11/15/2021
End Date
11/lS/2022
ll/lS/2022
End Date
11/15/2023
11/15/2023
Order Term
(months)
12 12
Order Term
{months}
12 12
Order Term
(months)
12 12
Unit Price
$209.10
so.oo
Unit Pr ice
S21S.37
$0.00
Unit Price
$221.83
$0.00
Quantity Totaf Price
40 S100,368.00
1 $0.00
$100,368.00
Quantity Total Price
40 $ 103,377.60
l so.oo
... ...J.1~77.60
Quantity Total Pri c.e
40 $106,478.40
1 $0.00
S106,47MO
Total Price
$67,999.50
$97,444.80
$100,368.00
$103,377.60
$106,478.40
$475,668.30
Accela Quote 10: Q-17608
Page J-6.83
Additional Terms

1. No additional or conflicting terms or conditions stated In Customer's order documentation, including purchase orders, will be incorporated into or form any part of this Order Form or the governing agreement, and all such terms or conditions will be null.

2. AU Software Licenses, Maintenance, and Subsc.riptlon purchases are non-cancelable ,md nonrefundable.

3. If this Order Form Is executed and/or returned to Accela by Customer after the Order State Date above, Accela may adjust the Order Start Date and Order End Date without increasing the total price based on the date Accela activates the products and provided that the total term length does not change.

Of ('I/( l\,/(. '. i
Customer: _____ (Name)
Name
Business Title
Date
I •
I
Accela Quote 10: Q-17606
Page J-6.84

,.

MENLO PARK
AGENDA ITEM J-7
Community Development

STAFF REPORT
City Council
Meeting Date: 10/10/2023
Staff Report Number: 23-233-CC
Consent Calendar: Approve the resolution to authorize the city manager to execute all documents necessary to
complete the acquisition of 975 Florence Ln., Unit 8,
Menlo Park, CA 94025 and approve the
appropriation of below market rate housing funds
not to exceed $408,949 to purchase and retain the
property in the below market rate housing program
Recommendation
Staff recommends the City Council;

1. Approve the resolution (Attachment A) authorizing the city manager to execute a Purchase and Sale Agreement (PSA) with Florence Lane Ventures LLC for acquisition of 975 Florence Ln., Unit 8, Menlo Park, CA 94025 (Attachment B) and authorize the city manager and city attorney to make modifications to the PSA to conclude negotiations and finalize the sale of the residential unit.

2. Approve the appropriation of below market rate (BMR) housing funds not to exceed $408,949 to purchase and retain 975 Florence Ln., Unit 8, a condominium unit, and thereafter sell the unit to an income-qualifying household.

Policy Issues
In order to preserve the property as a deed-restricted ownership, affordable housing unit, staff recommends the City purchase the property located at 975 Florence Ln., Unit 8. The BMR program was created to facilitate affordable housing opportunities for extremely low, very low and moderate-income households.

BMR ownership units are especially important since they provide a long-term housing solution in a safe and affordable unit, and the opportunity to build equity, and stability in the community.

Background
On July 16, 2019, the City Council approved a project at 975 Florence Ln.to develop eight condominium units with the requirement that one unit be set aside as a BMR unit. The BMR unit is a one bedroom, one bathroom unit designated for a moderate-income household. The BMR agreement was executed Nov. 25, 2019, designating Unit 8 as the BMR unit. The property owner acknowledged the sales price of $408,949 for the BMR unit established by the City in a letter dated Oct. 24, 2022. City staff certified Unit 8 as meeting the provisions of the BMR agreement and Guidelines in a letter to the owner dated Feb. 17.

Per the City’s BMR Guidelines, the City must obtain a qualified buyer or offer to purchase the BMR Unit within six months from the date of the Certifying letter (Aug. 17). Before initiating the sales process, the city attorney’s office sent a letter to the owner outlining the BMR sales process and timeline. Shortly after, HouseKeys, Inc., the City’s BMR administrator at the time, began marketing the unit. Through the buyer selection process, a qualified homebuyer was identified. In July 2023, a purchase agreement was extended to the buyer. Concurrently, understanding that the six-month deadline was nearing, the city attorney’s office City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov Page J-7.1

Staff Report #: 23-233-CC
requested a 30-day extension to Sept. 18, which was approved by the owner’s attorney. A revised purchase agreement was circulated Aug. 16 and signed by the buyer Aug. 23. That same day, the city attorney’s office requested another extension to the six month deadline to Oct. 18. This extension was also approved by the owner’s attorney.

On Aug. 31, the owner signed the purchase agreement but with two additional amendments. The first amendment increased the deposit amount and the other amendment was to require that the loan close by Sept. 18, negating the previously agreed upon Oct. 18 deadline. The buyer agreed to the first amendment, however meeting Sept. 18 deadline was problematic. Typically, it takes about four weeks to close a loan and to close a loan in less than three weeks is challenging. On Sept. 7, because of the uncertainties of the closing date, the owner decided to terminate negotiations and elected to have the City purchase the BMR unit, as outlined in the BMR agreement.

The City Council met in closed session Sept. 12 to discuss the potential purchase of the unit.

Analysis
Menlo Park’s BMR Guidelines provide that within 180 days of the sales price for an ownership BMR unit being set, the sale of such BMR unit shall close (See Guidelines, sec. 11.2.) The Guidelines further provide that the property owner “shall be free to sell a BMR unit without restriction as to price or qualification of buyer if all of the following criteria are met, unless the BMR applicant’s lender has a loan condition that a specific number of units in the development must be sold before the loan can be approved: (1) the City and the developer are unable to obtain a qualified buyer within six months after the City has provided written notice both certifying that the unit is available for purchase and setting the price for the BMR unit, (2) the City or its designee does not offer to purchase the BMR unit within said six months period, and complete said purchase within no more than 60 days following the end of the six month period, (3) the developer has exercised reasonable good faith efforts to obtain a qualified buyer.” (See Guidelines, sec. 9.1.16.) In order to ensure the Property remains deed restricted affordable, the City has offered to purchase the property for the established sales price of $408,949. The BMR housing fund would be used to purchase the unit. Upon sale of the BMR unit to an eligible buyer, the BMR housing fund would be reimbursed. The PSA (Attachment B) before the City Council reflects the City’s purchase offer and is based on the California Association of Realtor’s Purchase Agreement and Joint Escrow Instructions. The PSA incorporates a BMR Housing Agreement which deed restricts the Property. Staff recommends the City Council authorize the city manager and city attorney to modify the PSA in order to conclude negotiations with property owner.

Impact on City Resources
Funds to purchase the BMR unit for $408,949 would come from the BMR Housing Fund. The City will recoup these funds in the future as it will sell the unit to a qualified BMR household minus any closing and transactional costs of the sale. Those costs will be paid from the BMR Housing Fund.

Environmental Review
This action is not a project within the meaning of the California Environmental Quality Act (CEQA) Guidelines §§ 15378 and 15061(b)(3) as it will not result in any direct or indirect physical change in the environment.

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov Page J-7.2

Staff Report #: 23-233-CC
Public Notice
Public notification was achieved by posting the agenda, with the agenda items being listed, at least 72 hours prior to the meeting.

Attachments
A. Resolution No. XXXX
B. PSA for 975 Florence Ln., Unit 8
a. Exhibit A: Grant Deed
b. Exhibit B: Performance Deed of Trust
c. Exhibit C: BMR Housing Agreement
i. Exhibit A: Property Description
ii. Exhibit B: Property (Unit 8) Location
iii. Exhibit C: Insurance Requirements
iv. Exhibit D: Resale Restriction Agreement
Report prepared by:

Tim Wong, Housing Manager
Report reviewed by:

Nira Doherty, City Attorney
Deanna Chow, Assistant Community Development Director
City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov Page J-7.3

ATTACHMENT A
RESOLUTION NO. XXXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MENLO PARK

AUTHORIZING THE CITY MANAGER TO ACCEPT THE GRANT DEED
FOR 975 FLORENCE LANE, UNIT 8, EXECUTE ALL DOCUMENTS

NECESSARY TO COMPLETE THE PURCHASE AND APPROVE THE
APPROPRIATION OF UP TO $408,949 FROM THE BELOW MARKET

RATE (BMR) HOUSING FUND TO PURCHASE AND RETAIN THE

PROPERTY IN THE BMR HOUSING PROGRAM
WHEREAS, on October 10, 2023 the City Council for the City of Menlo Park allocates BMR housing funds not to exceed $408,949 to purchase and retain 975 Florence Lane, Unit 8 [APN 118-090-080] (hereinafter the “Property);
WHEREAS, on August 6, 2002 the City entered into a below market rate (BMR) agreement and deed restriction regarding resale controls (hereinafter the “Agreement”) with a qualified BMR homeowner (hereinafter the “Owner”), which provides that prior to a sale of the Property the Owner shall issue to the City a notice of intent to transfer the property and the City shall have 60 days to exercise a right of first refusal to accept Owner’s offer to sell the Property; WHEREAS, on the September 7, 2023 the Owner provided City a notice that it was his desire to have the City exercise its right of first refusal and purchase the property; WHEREAS, the need to facilitate affordable homeownership opportunities for low and moderate-income households remains a policy and priority in Menlo Park; and WHEREAS, the BMR Program Guidelines allows the City of Menlo Park to purchase and preserve real estate property as an eligible use of the BMR Housing Fund; and WHEREAS, the City of Menlo Park affirms the City’s commitment to providing affordable homeownership units to lower income households;
WHEREAS, in order to ensure the Property remains within the City’s BMR unit inventory, the City wishes to exercise its right of first refusal and acquire the Property from Owner.

NOW, THEREFORE, BE IT RESOLVED, by the Menlo Park City Council that: (a) authorizes the City Manager to exercise a right of first refusal on behalf of the City and accept the grant deed for 975 Florence Lane, Unit 8 and to execute all documents necessary to complete the purchase, including but not limited to a real estate purchase contract, escrow instructions and closing documents; and (b) approve the appropriation of below market rate (BMR) housing funds not to exceed $408,949 to purchase and retain 975 Florence Lane, Unit 8, a condominium unit, and thereafter sell the unit to an income-qualifying household in accordance with Menlo Park Municipal Code Ch. 16.96 and the City’s BMR Program Guidelines, and //
//
//
//
//
Page J-7.4

Resolution No. XXXX

I, Judi A. Herren, City Clerk of Menlo Park, do hereby certify that the above and foregoing City Council Resolution was duly and regularly passed and adopted at a meeting by said City Council on the tenth day of October, 2023, by the following votes:

AYES
NOES:

ABSENT:

ABSTAIN:

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of said City on this __ day of October, 2023.

Judi A. Herren, City Clerk
Page J-7.5

ATTACHMENT B

RESIDENTIAL PURCHASE AGREEMENT

AND ESCROW INSTRUCTIONS
(Condominium Project)

FLORENCE LANE
4888-9991-5906 v3
03/19/21 -1-
T:\WPWIN60\PROJECTS\Florence Lane\Purchase Agreement[03 19 21].doc Initials:

Buyer _____ _____
Seller _____
Page J-7.6

RESIDENTIAL PURCHASE AGREEMENT

AND ESCROW INSTRUCTIONS

FLORENCE LANE
This Purchase Agreement and Escrow Instructions (the "Agreement") is entered into on the ____ day of ___________________, 2023, by and between the following parties and with regard to the Property herein described, which Property is part of a condominium Common Interest Development, at times referred to herein as the "Project."

1. Parties; Property Description:

Buyer(s): City of Menlo Park
Buyer(s) Address: 701 Laurel Street
Menlo Park, CA 94025
Buyer(s) Tel. No(s): (650) 330-6600
Seller: Florence Lane Ventures, LLC,
a California limited liability company
Seller(s) Address: 152 Nevada Street
Redwood City, CA 94062-2134
Seller(s) Tel. No(s): (650) 533-5800
Seller shall sell to Buyer and Buyer shall buy from Seller the following property (the "Property") with a street address of 975 Florence Lane, Menlo Park, CA, the legal description of which is the following: A condominium consisting of Unit 8 (the “Unit”), as shown on that certain Condominium Plan ("Plan"), attached as Exhibit "A" to the Declaration entitled "Florence Lane Enabling Declaration Establishing A Plan For Condominium Ownership" recorded in the Official Records of San Mateo County, State of California, on the 5th day of October 2020, Instrument No. 2020- 106317, as amended by “First Amendment to Florence Lane Enabling Declaration Establishing a Plan for Condominium Ownership” recorded in the Official Records of San Mateo County, State of California, on the 10th day of August 2023, Series No. 2023-038500("Declaration"). Title shall include 1/8th interest in the Common Area as described in the Plan and Declaration, subject to all easements, dedications, and rights of way of record. The Property is situated within the real property more particularly described in the Subdivision Map entitled: “975 Florence Lane”, recorded on the 17th day of July 2020, Book 142 of Maps, pages 83-84, San Mateo County Records (“Map”). The Unit shall include the following exclusive use common areas as described in the Declaration and in the Plan as an appurtenance to said Unit:

Parking Space shown on the Plan as “P-5”;
Deck designated “D-8” on the Plan.

2. Seller Representations and Warranties. Seller represents and warrants that:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of California. Seller has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and the execution, delivery and performance of this Agreement on the part of Seller have been duly authorized and no other action by Seller is requisite to the valid and binding execution, delivery and performance of this Agreement by Seller.
(b) The entry by Seller into this Agreement and the performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreement relating to the Property to which Seller is a party or by which it is bound. (c) There are no agreements affecting the right to possession of the Property.

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(d) Neither Seller nor any entity or person that owns or controls Seller is bankrupt or insolvent under any applicable Federal or state standard, has filed for protection or relief under any applicable bankruptcy or creditor protection statute, or has been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute.

No general assignment for the benefit of creditors has been made by Seller and no trustee or receiver of Seller's property has been appointed. Seller is not entering into the transactions described in this Agreement intending to defraud any creditor or to prefer the rights of one creditor to any other.

3. Buyer Representations and Warranties:
(a) Buyer has the capacity and full power and authority to enter into and carry out the agreements contained in, and the transactions contemplated by, this Agreement, and this Agreement has been duly authorized and executed by Buyer and, upon delivery to and execution by Seller, shall be a valid and binding Agreement of Buyer. (b) Buyer represents and warrants that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in any breach of the terms of, conditions of, or constitute a default under, any instrument or obligation by which Buyer is bound, or violate any order, writ, injunction or decree of any court in any litigation to which Buyer is a party.
(c) Buyer represents and warrants that each person executing this Agreement is legally competent and is duly authorized so as to fully and legally bind Buyer.

4. Purchase Price: The Purchase Price of the Property, with all improvements to be installed or constructed thereon by Seller shall be $408,949.00. The Purchase Price will be paid as follows:
(a) Initial Deposit: $12,268.47
(b) Price of Optional Extras or Upgrades: $0.00
(as of the execution date)
(c) Loan Proceeds (if applicable) ____________
(d) Remaining Cash Down Payment Due at Closing $396,680.53 TOTAL: $408,949.00

5. Deposits: Buyer hereby delivers to Seller the Initial Deposit indicated in paragraph 4(a), which shall be deposited with Fidelity National Title Group ("Escrow Holder"). In the event Seller does not execute its acceptance of this Agreement, Seller shall immediately return to Buyer the Initial Deposit or instruct the Escrow Holder to return the Initial Deposit to Buyer. In the event the Initial Deposit is given to Seller or Escrow Holder in the form of a check, it shall not be considered delivered and any written acceptance by Seller of this Agreement shall not be effective and Escrow shall not be considered open, until such check has cleared and such funds are available on an unrestricted basis.
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6. Financing:
(a) Verification of Cash Payment Sources: Buyer represents to Seller that Buyer has sufficient funds to make the cash payments of the Purchase Price required to close the Escrow. No later than seven (7) days after the date of the acceptance of this Agreement, Buyer shall deliver to Seller satisfactory documentation that Buyer has funds available in sufficient amounts to enable Buyer to pay the cash to close the Escrow. Such documentation may include financial statements, federal income tax returns, bank statements, and/or other appropriate documentation that confirms Buyer's unconditional access to the necessary funds to acquire the Property. If Buyer fails to provide such verification within the time required, or if Seller, in the exercise of its reasonable judgement, determines that verification is inadequate, Seller may elect in writing to terminate this Agreement, in which case neither party shall have any further rights or duties, and Buyer's Initial Deposit shall be refunded to Buyer. From time to time after the submittal of the initial documentation and prior to Close of Escrow, Seller may require Buyer to resubmit satisfactory documentation that Buyer has retained sufficient funds to enable Buyer to deliver the cash needed at Close of Escrow. The evidence shall be submitted to Seller no later than seven (7) days after Seller requests the documentation. Buyer's failure to provide such documentation within the time required shall be a breach of this Agreement, and Seller may elect to terminate this Agreement and recover liquidated damages as described in paragraph 17 (if both parties have initialed the liquidated damages provision).
(b) Loan Requirements:
(i) Loan Contingency: Buyer's obligations under this Agreement are contingent on Buyer obtaining loan approval as described in paragraph 6(b)(iii). This contingency must be satisfied or waived, or the Agreement shall terminate, all as described in paragraph 6(b)(iii). (ii) Loan Application Deadline: No later than seven (7) days after the date of the acceptance of this Agreement Buyer shall deliver to Seller satisfactory evidence that Buyer has submitted a completed loan application to at least one institutional lender ("Lender").

Buyer's failure to provide evidence within the time required is a breach of this Agreement, and Seller may elect to terminate this Agreement and recover liquidated damages as described in paragraph 17 (if both parties have initialed the liquidated damages provision).

Buyer must cooperate with the lender in providing the lender with all required documentation in a timely manner to enable lender to grant or deny the loan approval within the loan approval period described in paragraph 6(b)(iii). Buyer's failure to so cooperate shall be a breach of this Agreement and Seller may elect to terminate this Agreement and recover liquidated damages as described in paragraph 17 (if both parties have initialed the liquidated damages provision).
(iii) Loan Approval Deadline: Within thirty (30) days after the date of the acceptance of this Agreement (the "Loan Approval Period"), Buyer shall deliver to Seller written verification of loan approval in the full amount necessary to complete the purchase of the Property. Loan approval means the lender's written approval of the loan to the Buyer in the amount set forth in paragraph 4, above, subject only to such conditions as may be acceptable to Seller.

If loan approval is obtained within the time required, it shall be presumed conclusively that Buyer's loan contingency has been permanently satisfied and that Buyer is obligated to 4888-9991-5906 v3
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purchase the Property. The loan contingency shall remain satisfied even if the lender's subsequent appraised value of the Property is less than the Purchase Price. If lender's subsequent appraised value is less than the Purchase Price, the provisions of paragraph 6(b)(v) shall apply. If loan approval is not obtained within the Loan Approval Period, either party may elect to terminate this Agreement within five (5) days after the Loan Approval Period. If neither party elects to terminate this Agreement in writing within thirty-five (35) days after the date of the acceptance of this Agreement, it shall be presumed conclusively that Buyer's loan contingency has been permanently waived and that Buyer is obligated to purchase the Property.
(iv) Loan Terms: Buyer understands that the interest rate and loan fees prevailing at the time of Close of Escrow might be different from the rate or loan fees or costs quoted by the lender at time of loan approval. Buyer is required to purchase the Property in accordance with this Agreement on the terms available from the lender at Close of Escrow. Buyer may not change lenders after receiving loan approval without Seller's written approval. Seller will not withhold such approval unreasonably, but Buyer agrees that Seller is not obligated to grant such approval if it could delay Close of Escrow.
(v) Appraisal: Buyer acknowledges that Seller has no obligation to adjust the Purchase Price or otherwise compensate Buyer if the appraised value of the Property does not equal or exceed the Purchase Price. If the appraised value results in a reduction in the loan amount described in paragraph 4, Buyer shall be obligated to pay the difference in cash at the Close of Escrow.

7. Construction/Failure to Complete:
(a) Models and Specifications: Seller represents that the Residence has been constructed in substantial conformity with the plans and specifications therefore which are on file with the City or the County in which the Property is located. Seller did not build the Residence specifically for Buyer, nor to the precise specifications or design of any model home, plan or brochure. Any model home is displayed for illustrative purposes only and such display shall not constitute an agreement or commitment on the part of Seller to deliver the Property in exact accordance with any such model home. Buyer is purchasing a completed Residence, and Seller is not acting as Buyer's general contractor. Consultation with Buyer with respect to the specifications of the Residence to be built shall not, in any case, be deemed a waiver of Seller's rights to make any such changes or substitutions as Seller in its sole discretion deemed necessary. During the course of construction, Seller may substitute, eliminate or modify materials, appliances and fixtures in the Property from those used in the models or shown in the plans and specifications, provided that such modifications meet with the approval of the appropriate governmental entity or agency having jurisdiction over the construction of the Residence and that the substitute materials, appliances and fixtures are of approximately equal or better quality. None of the appurtenances, furnishings and finishes shown in any model home is included in the Residence unless Buyer and Seller specifically agree in writing that the same are included in the total Purchase Price or added 4888-9991-5906 v3
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as an Optional Item pursuant to paragraph 9. Any changes requested by Buyer will not be made unless Seller agrees in writing.
(b) Landscaping: All grading, fill, planting and/or removal of trees and shrubs, and control of water flow on the Property will be performed in a lawful manner, and consistent with Seller's plans approved by the City, but otherwise will be completed at Seller's sole discretion. As of the Close of Escrow, except as expressly provided in Seller's Limited Warranty, and except as required by California Civil Code Section 896, Seller's responsibility for maintenance of landscaping on the Property, including, without limitation, erosion control, drainage, soil conditions, and conditions of any landscaping and irrigation materials, shall terminate.
(c) Completion: Buyer agrees that recordation of a Notice of Completion and/or the issuance of a Certificate of Occupancy for the Property by the appropriate City or County, or department or agency, shall constitute conclusive evidence of Seller having completed construction of the Property.

8. Insulation Disclosure: Insulation will be installed in the Residence in accordance with applicable governmental requirements. Insulation to be installed will be as follows:

Manufacturer R- Area Insulated Type of Insulation Thickness Value of Insulation Garage Ceilings and Fiberglass NA NA Floor
Exterior Walls of
Living Area (excluding Fiberglass 3.5” R13
garage)
Common Walls (if Fiberglass 3.5” R13 applicable)
Interior Walls Fiberglass NA NA (optional)
Roofs Fiberglass 5.5” R30
Roofs in all areas
where ceiling is Fiberglass 5.5” R30
vaulted
Other areas of the Residence may contain insulation type materials; however, these materials have no influence on the thermal effectiveness of the Residence. Buyer acknowledges and agrees that, notwithstanding the general specifications set forth above, insulation may be of lesser thickness and R-value than indicated in certain areas where the design and/or construction of the Residence do not permit greater thickness. Examples of such locations where the thickness and R-value may vary include locations where the studs are placed in the walls, at corners, and windows where the roof trusses attach to outside walls. These R-values are based upon the 4888-9991-5906 v3
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information provided by the manufacturer and/or installer of the insulation and Seller does not warrant or represent that the R-Values are correct.

9. Options/Upgrades: Seller may offer Buyer various color selections, upgrades, and/or extras on items that may be installed in the Property (collectively the "Optional Items"). Buyer shall notify Seller of Buyer's decision regarding the Optional Items no later than five (5) days after the Optional Items are presented to Buyer. If Buyer fails to notify Seller within the time required, Buyer conclusively shall be considered to have authorized Seller to select the colors, to have accepted the standard items, and to have elected no Optional Items. If Buyer selects any Optional Items as offered by Seller, Buyer immediately shall increase the deposit by the cost of the Optional Items, and Seller shall have no obligation to install Optional Items until this increase has been deposited in Escrow. Buyer may select its own upgrades or extras from third parties but under no circumstances shall any third party perform any labor or deliver or install any goods on the Property prior to the Close of Escrow without the prior written consent of Seller. In granting its consent, Seller may impose such conditions as Seller, in its sole discretion, considers necessary to protect the Property from liens or other rights or remedies of the party performing the labor or providing the goods. Any upgrades or extras that may be installed by third parties are limited to the types of Optional Items offered by Seller. Deposits to Escrow for upgrades or extras shall be paid to Seller at closing. If Buyer defaults, said deposit shall be retained in Escrow.

10. Escrow:
(a) Opening of Escrow: An escrow (the "Escrow") shall be opened by Seller with Escrow Holder to consummate the purchase and sale of the Property, within five (5) business days of the acceptance of this Agreement by Seller. The parties agree to execute supplemental or additional Escrow Instructions consistent with this Agreement as may be reasonably required by Escrow Holder. Buyer shall execute promptly all documents and make all Deposits required by Seller, Escrow Holder, Lender or governmental agency having jurisdiction over matters in question. If Buyer fails to perform under this provision, Buyer shall be in material default hereunder, and Seller shall be entitled to terminate this Agreement and the Escrow and retain Buyer's deposit as liquidated damages as provided in paragraph 17 hereof (if both parties have initialed the liquidated damages provision). (b) Prorations/Costs: As of the Close of Escrow, the following shall be pro-rated: cost of any fire and extended coverage insurance paid by Seller, if applicable; and current Homeowners Association assessment, if any. The portion of current property taxes which would otherwise be allocable to the period after the close of Escrow shall not be allocated, as Buyer is exempt from payment of property taxes. Accordingly, Escrow Agent shall pay and charge Seller for that portion of current property taxes and assessments and any penalties and interest thereon allocable to the period prior to the close of Escrow. Escrow Agent shall pay and charge Seller for any unpaid delinquent property taxes and/or penalties and interest thereon, and for any delinquent assessments or bonds against the Property.

Seller shall have the sole right, after Close of Escrow, to apply to the San Mateo County Tax Collector for a refund of any excess property taxes which have been paid by Seller with 4888-9991-5906 v3
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respect to the Property. This refund would apply to the period after Buyer's acquisition of the Property, pursuant to Revenue and Taxation Code Section 5096.7.

The following items shall be paid by Buyer at the Close of Escrow: Title insurance fees; recording costs, Escrow fees, transfer taxes, loan fees, inspection fees. (c) Delay Due to Buyer: In the event Escrow does not close upon the Closing Date provided for in paragraph 10(e) due to Buyer's failure to timely perform its obligations under this Agreement, Buyer acknowledges that Seller will be materially harmed due to additional expenses that will be incurred by Seller as carrying costs for the Property (which include, without limitation, loan interest charges, property taxes and insurance costs). Therefore, in such event, Seller shall have the right to terminate this Agreement and retain Buyer's Deposit as liquidated damages under paragraph 17 (if both parties have initialed the liquidated damages provision); provided, however, Buyer may make a written request to extend the Closing Date by paying Seller's daily carrying costs applicable to the Property during the period of such delay in the amount of $200 per day ("Extension Payment"), which request may be approved or denied by Seller in its sole and absolute discretion, by written notice to Buyer. In the event Seller approves such request for extension, Buyer shall deposit into Escrow the applicable Extension Payment and shall execute any additional liquidated damages agreement and any extension Escrow Instructions required by Escrow Holder. The payment of such Extension Payment will not constitute a waiver by Seller of any default or breach of the Agreement by Buyer in failing to timely perform its obligations to close the Escrow by the extended Closing Date, and Seller's right to damages set forth in paragraph 17 (if both parties have initialed the liquidated damages provision) shall not be limited by the terms of this paragraph 10(c). Any such Extension Payment made by Buyer shall not be applicable to the Purchase Price and shall be separate consideration to Seller for Seller's agreement to extend the Closing Date. (d) Title Insurance: Buyer shall receive a CLTA policy of title insurance effective as of the Closing Date, insuring title to the Property in Buyer's name free and clear from liens and encumbrances (except those created by Buyer) and subject to the lien of current taxes (not delinquent), the recorded Declaration, and any other easements, reservations, rights, and rights of way of record. To the extent that Buyer is not exempt, all bonds and assessments for the period from and after the Closing Date which are part of or paid with the Property tax bill will be assumed by Buyer. Buyer and Seller agree that if Buyer does not desire that the title insurance be obtained from the title company represented by Escrow Holder, Buyer may designate any other responsible title insurance company, and, if such other insurance company is acceptable to Seller, and to Buyer's lender, such insurance policy will be obtained from the company designated by Buyer. If Buyer fails to so designate an alternate insurance company within five (5) days after Buyer's execution of this Agreement, such failure shall constitute an irrevocable waiver of Buyer's right to designate an alternate insurance company. Buyer's designation of an alternate insurance company shall not affect Seller's right to designate the Escrow Holder, or result in the transfer of the Escrow to some other escrow holder.
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(e) Close of Escrow: Escrow shall close on or before sixty (60) days after Escrow opens (the "Closing Date"), unless Buyer and Seller agree to an extension. If Escrow does not close on the Closing Date (or any extended Closing Date) for reasons other than Buyer's default, Seller shall instruct Escrow Holder to return all Deposits to Buyer within fifteen (15) days thereafter and then this Agreement shall be terminated. As used herein the term "Close of Escrow," "Closing Date" or "Closing" shall mean the date the grant deed in the form attached as Exhibit “A” (“Grant Deed”) conveying the Property to Buyer is recorded in the Office of the Recorder in the county in which the Property is located.

The foregoing notwithstanding, the Closing shall not occur until the following events have occurred:
(i) All blanket encumbrances affecting the Property, if any, as defined in Section 11013 of the Business and Professions Code, have been fully released and reconveyed; or the holder of the deed of trust has executed a release agreement per Regulation 2791.1(b)(2)(A), which agreement has been deposited with Escrow Holder, and Buyer has been provided with a policy of title insurance insuring against loss by reason of the deed of trust, and until legal title, or leasehold interest, as applicable, is conveyed to the Buyer;
(ii) Seller has recorded a Notice of Completion, as defined in Section 8182 of the Civil Code, for the construction of all structures, landscaping and other improvements on the Property, as applicable, to be constructed or installed pursuant to this Agreement or any addenda hereto;
(iii) The residential structure in which the Buyer’s Unit is located has been completed, and the statutory period for recording of any mechanics’ liens against the Property (including Buyer’s separate interest and undivided interest in the entire Project, as defined in the Declaration) has expired, or Buyer is provided with a policy of title insurance and endorsement insuring Buyer against unrecorded mechanics’ liens affecting the Buyer’s separate and undivided interests in the entire Project. Such policy of Title Insurance shall be in an amount not less than the cost of the completed improvements or the purchase price of the Property; and, (iv) The statutory period for recording of any mechanic's liens against the Property has expired, or Buyer is provided with a policy of title insurance and endorsement insuring Buyer against unrecorded mechanics' liens.
(v) Buyer has delivered to Escrow Holder a Performance Deed of Trust and Security Agreement, in the form attached hereto as Exhibit “B”, signed by Buyer; and (vi) Buyer has delivered to Escrow Holder an Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property, in the form attached hereto as Exhibit “C”, signed by Buyer and City of Menlo Park.

11. Title: Seller shall provide Buyer a copy of the preliminary title report for the Property for review and approval within five (5) days. If Buyer does not notify Escrow Holder in writing on or before thirty (30) days after receipt of the report that Buyer disapproves of the preliminary title report, the 4888-9991-5906 v3
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preliminary title report will be deemed approved. Unless otherwise designated by Buyer to Escrow Holder prior to the Close of Escrow, title shall vest in Buyer as follows: City of Menlo Park, a municipal corporation.

12. Buyer’s Investigation of the Property:
(a) Buyer’s Inspection Contingency. For a period of thirty (30) days commencing on Seller’s acceptance of this Agreement (“Inspection Period”), Buyer shall have the right, at Buyer’s expense, to conduct inspections, investigations, tests, surveys and other studies of the Property (“Buyer Investigations”). Buyer’s Investigations may include, but shall not be limited to, a general home inspection of the Unit, an inspection of the Unit for lead-based paint and other lead-based paint hazards, an inspection of the Unit and exclusive use common areas for wood destroying pests and organisms, and any other specific inspections of the physical condition of the land and improvements that comprise the Property. On or before the expiration of the Inspection Period, Buyer shall provide Seller with notice of Buyer’s acceptance of the condition of the Property or termination of this Agreement. During the Inspection Period, Buyer shall have the right to request repairs of any component of the Property. In the vent that Seller agrees to complete the requested repairs, Seller’s completion of the repairs shall be a condition to the Close of Escrow and must be completed before the Close of Escrow.
(b) Entry Upon the Property: Buyer acknowledges that entry upon the Property during construction can be dangerous and that hazards may exist which are not observable. Buyer's entry upon the Property shall be solely at Buyer's risk. Buyer must obtain permission from Seller prior to entering the Property and must be accompanied by an authorized representative of Seller, and, if required, wear a hard hat and comply with all safety procedures established by Seller.

Buyer hereby waives any and all claims against Seller for injury or loss to person or property arising out of or in connection with, such entry by Buyer or any other person accompanying Buyer or entering at Buyer's direction. Buyer shall indemnify, defend and hold Seller and its officers, employees, contractors, subcontractors and agents harmless from and against any injury, loss, damage or expense to persons or property arising out of, or in connection with, any such entry or Buyer’s Investigations. Under no circumstances may any invasive or destructive Buyer Investigations (except for minimally invasive testing required to prepare a Pest Control Report, which shall not include any holes or drilling through stucco or similar material) be performed without Seller's written consent.

13. Possession and occupancy of the Property shall be delivered to Buyer at the Close of Escrow, and Buyer shall have no right to possession or occupancy prior to the Close of Escrow.

14. Destruction of the Property Prior to Close of Escrow: If the improvements on the Property are destroyed, materially damaged, or found to be materially defective as a result of such damage prior to Close of Escrow, Buyer may terminate this Agreement by written notice delivered to Seller or his or her Broker, and all Deposits will be returned. In the event Buyer does not elect to terminate this Agreement, Buyer shall either (i) be entitled to receive the Property, in its then "as-is" condition, and any insurance proceeds payable on account of the damage or destruction of the 4888-9991-5906 v3
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improvements on the Property, in which event, Buyer shall assume all responsibility for the construction of the Residence and other improvements on the Property; or (ii) complete the purchase of the Property after allowing Seller a reasonable period of time to repair or replace the damaged or destroyed improvements, and waive any and all rights to any insurance proceeds.

15. Receipt of Documents: Buyer has received and has had the opportunity to read, prior to the execution of this Agreement, the California Department of Real Estate's Final Subdivision Public Report for the Property, including the statement entitled "Common Interest Development General Information" that was included as a part of the Final Subdivision Public Report.

Buyer acknowledges receipt of the exhibits, addenda and disclosures listed below which are incorporated into this Agreement by reference herein, and Buyer agrees to be bound by all the terms and provisions set forth therein. Seller may deliver additional addenda or disclosures to Buyer in connection with the sale of the Property, the receipt of which shall be acknowledged in writing by Buyer and thereafter shall be incorporated into the terms of this Agreement:

Document Buyer's Initials
Enabling Declaration Establishing a Plan for Condominium Ownership (or other title used) (CC&Rs) ___
Articles of Incorporation of Florence Lane Condominium Association ___ Bylaws of Florence Lane Condominium Association ___
Association's Budget (approved by DRE) ___
Statement from Association regarding any outstanding
delinquent assessments and related to charges levied by the Association against the Property to be purchased (if applicable) ___ Seller's Disclosure and Information Statement. ___
Escrow Holder's General Instructions. ___
Natural Hazards Disclosure Statement. ___
Seller's Limited Warranty. ___
Buyer agrees to provide copies of all these documents to any subsequent purchasers from Buyer, prior to the transfer of title.
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Buyer's Initials _____ Buyer's Initials _____

16. Association Membership and Assessments: Buyer acknowledges that the Florence Lane Condominium Association has been established for the purpose of operating and maintaining certain portions of the Project and Buyer understands that by purchasing the Property Buyer automatically becomes a member of the Association and is bound to abide by the provisions of the Project legal documents, including those referred to in paragraph 15, and any rules and regulations that may be adopted by the Association. The monthly assessments to be paid to the Association by the Owner of each Unit in the Project are set forth in the approved Project budget. The budget is based upon Seller's best estimates. The budget shall be revised annually.

17. Liquidated Damages: If buyer fails to complete the purchase of the property by reason of a default of buyer, seller shall be released from all obligations to sell the property to buyer, and seller may pursue any remedy that seller may have in law or equity against buyer on account of the default; provided, however, that by placing their initials here (buyer ________) (seller ________) the parties agree that:
(a) $12,268.47 (The “liquidated damages amount”) representing seller's estimate of the probable cost of taking the property back into inventory, it being agreed that seller's actual damages would be difficult to compute and that said amount of liquidated damages bears a reasonable relationship to seller's probable actual damages in the event of buyer's default, shall constitute liquidated damages payable to seller in the event of a default by buyer; and (b) The payment of such liquidated damages to seller shall constitute the exclusive remedy of seller on account of the default of buyer and shall be in lieu of any other monetary relief to which seller might otherwise be entitled; and
(c) The sum stipulated as liquidated damages shall be payable to seller according to the following procedures:
(i) If escrow holder has received the deposit, at any time after the date provided herein for the close of escrow, or any extended date for closing, seller shall give written notice to escrow holder and to buyer in the manner prescribed in §116.340 of the Code of Civil Procedure for Service in a Small Claims Action, stating that the buyer is in default and demanding that the escrow holder remit to the seller the liquidated damages amount from the purchase money held by the escrow holder as liquidated damages, unless the buyer gives written objection to the escrow holder within twenty (20) days. If the amount of funds disbursed to seller is less than the agreed amount of liquidated damages, the balance shall be a debt of the buyer to the seller.

The buyer shall have twenty (20) days from the date of receipt of the seller’s notice and demand in which to give the escrow holder buyer’s written objection to disbursement of the purchase money as liquidated damages and instructions to the escrow holder not to so disburse the purchase money.
(ii) If seller is holding the deposit in accordance with Paragraph 3, at any time after the date provided herein for the close of escrow, or any extended date for closing, seller 4888-9991-5906 v3
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shall give written notice to buyer in the manner prescribed in §116.340 of the Code of Civil Procedure for Service in a Small Claims Action, stating that the buyer is in default. Seller shall concurrently transfer the deposit to the escrow holder and proceed as provided in (i) above.
(iii) If buyer gives such written objection and instructions to escrow holder, within 20 days after the receipt of seller’s notice and demand, the controversy shall be adjudicated in the superior court of the county where the property is located. (iv) If buyer fails to give to escrow holder, within twenty (20) days after receipt of seller's notice and demand, written notice of buyer's objections: (a) escrow holder shall promptly remit the liquidated damages amount to seller; and (b) seller shall be released from any obligation to sell the property to buyer. (v) Seller agrees to indemnify and hold escrow holder harmless from any claim arising out of any distributions made by escrow holder in accordance with and pursuant to the provisions of this paragraph.

Note: If both buyer and seller do not initial this paragraph in the spaces provided above, this Paragraph 17 is not operative. The balance of the agreement remains operative.

18. Notices: All notices must be in writing and delivered to the addresses set forth on page 1, above.

All notices of default must be sent by certified or registered mail, return receipt requested, or receipt of hand delivery. Notices are deemed received two (2) days after mailing or on the date shown on the receipt for hand delivery. Either party may change its address for the purposes of this paragraph by giving written notice in the manner set forth herein.

Buyer understands and acknowledges that buyer is responsible for advising seller of any change in buyer's address from the address stated in this agreement, and seller shall be entitled to rely upon the address of buyer stated in this agreement unless and until it has been changed by buyer in the manner set forth in this paragraph.

Buyer's Initials _____ Seller's Agent's Initials: _____

19. Warranties and Representations; Construction or Design Disputes:
(a) Disclaimer - Consumer within Products, Warranties Limited to Manufacturers: Buyer acknowledges that Seller makes no warranties, including, without limitation, warranties as to merchantability or fitness, either express or implied, with respect to appliances or other Consumer Products, either attached to or installed in the Residence, and Seller is not responsible for any promise or warranty made by the manufacturers of such products.

Seller shall make available to Buyer all written warranties of Consumer Products which may be installed in the Residence as the term "Consumer Products" is defined in the U.S. Code, and in the Federal Trade Commission Rules and Regulations. Buyer agrees to look solely to the manufacturers and not the Seller with respect to warranties on such Consumer Products which include, but are not limited to, the following, as applicable: Furnace; air4888-9991-5906 v3 03/19/21 -13-
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II II
conditioner; exhaust fan; thermostat; smoke detector; door chime; electric meter; water meter; gas meter; garbage disposal; water heater; dishwasher; range; oven; oven hood; washer; dryer; refrigerator; freezer; microwave oven and other similar items. (b) Limited Warranty: seller will provide buyer with a limited warranty providing: (i) limited warranty for the building components of the residence set forth in California Civil Code Section 900. (this includes the fit and finish of cabinets, mirrors, flooring, interior and exterior walls, counter tops, paint finishes, and trim); and (ii) a warranty of the "functionality standards" as set forth in California Civil Code Sections 895 through 897. Except as specifically set forth in this agreement, and in the limited warranty seller is not making or offering any warranties, express or implied, with respect to the property, the residence, or the project, including, without limitation, any warranties of merchantability, habitability, quality of construction or fitness for a particular purpose. Seller expressly disclaims any warranties other than seller's as stated herein. Notwithstanding anything to the contrary contained in this agreement, buyer acknowledges and agrees, in the event of any postclosing disputes in which it is determined that seller has breached its contractual, statutory, or common law duties to buyer, or has breached the limited warranty, that seller shall be liable only for the damages recoverable under Civil Code Section 944. Under no circumstances shall seller be liable for any other damages, whether special, consequential, indirect, incidental or punitive damages, or damages for emotional distress. (c) Customer Care Program and Homeowner/Association Maintenance: Buyer understands that Buyer is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the Buyer by Seller and by product manufacturers, as well as commonly accepted maintenance practices, as provided in Civil Code Section 907, and that failure of the Buyer to satisfy the obligations may result in invalidation of warranties and provide Seller with a defense to any claim of breach of warranty. Buyer agrees to follow the maintenance requirements set forth in and/or referred to in the covenants, conditions and restrictions, in the limited warranty as supplied by seller at the close of escrow.

Buyer agrees to provide copies of the Limited Warranty to any subsequent purchasers from Buyer, prior to the transfer of title.

Buyer's Initials ___ _____ _____ Buyer's Initials____

20. Assignments; Successors and Assigns: Buyer shall have the right to assign this Agreement to a participant in the City of Menlo Park’s Below Market Rate Housing Program with notice to Seller, in which case Seller shall agree to reasonable amendments to this Agreement to remove provisions that are only applicable to Buyer due to its status as a public entity. This Agreement shall bind the heirs, executors, administrators, and successors of the parties, and their assigns (subject to the limitations stated above).

21. Lease of Residences: Buyer understands that Seller reserves the right to lease remaining unsold Residences from time to time, pending sale and Close of Escrow of said Residences. 4888-9991-5906 v3
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22. Contingencies: Unless Buyer and Seller have executed a written Contingency Addendum, the purchase of the Property is not contingent on the prior sale of other property. Buyer acknowledges and agrees that Seller has no obligation to execute a Contingency Addendum.

23. Cooperation/Non-Interference: Buyer shall cooperate with Seller in the process of completing the construction and delivery of the Residence by meeting required deadlines and providing such cooperation as may be reasonably requested by Seller. Buyer shall not interfere with the work in progress in any manner, including, without limitation, by unauthorized visits to the construction site, by directing or attempting to direct, or advise construction personnel on methods of completion or installation, by requesting custom work (other than that agreed to by Buyer and Seller in writing) or by any other activity that would interfere with completion of the home on a timely basis.

24. Force Majeure Events: Seller is not responsible for "force majeure events," which means events which are beyond Seller's reasonable control, including, but not limited to, strikes, boycotts, unavailability of materials, labor shortages, delays in receiving materials, governmental interference in the market place, moratoriums, civil riot, insurrection, war, acts of terrorism, foreign military commitments, flood, fire, earthquake, act of God, unusually severe weather, delays or inaction of independent contractors, litigation, or delays caused by conditions imposed on the Project (or any part thereof) by any governmental entity resulting in significantly increased costs or delays.

25. Interpretation: Any rule of law (including California Civil Code Section 1654), or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purposes of the parties and this Agreement. Buyer and Seller acknowledge that changes in economic conditions during the Escrow period may cause the terms and conditions not to appear as satisfactory as when the Agreement is signed. Nonetheless, Buyer and Seller agree they are bound to such terms and conditions and agree to take all necessary and appropriate actions to cause Escrow to close in a timely fashion.

26. Modifications: All amendments or other modifications of this Agreement must be in writing and signed by the parties hereto.

27. Time: Time is of the essence of this Agreement.

28. Severability: Should any provision or portion of this Agreement be declared invalid or in conflict with any law of the jurisdiction where this Project is situated, the validity of all other provisions and portions of this Agreement shall remain unaffected and in full force and effect. The parties further agree to replace any such invalid, illegal or unenforceable portion with a valid and enforceable provision which will achieve, to the extent possible, the economic, business or other purposes of the invalid, illegal or unenforceable portion.
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29. No Waiver: The waiver by Seller of any term, condition or provision of this Agreement shall not be construed as a waiver of any other term, condition or provision of this Agreement.

30. Entire Agreement: This Agreement constitutes the sole and entire agreement between Buyer and Seller for the purchase and sale of the Property, and supersedes all prior agreements, representations or understandings, oral or written. All advertising material and/or prior statements and representations, if any, whether oral or written, are replaced and superseded by this Agreement. The terms of this Agreement may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. No addition or modification of any term or provision of this Agreement shall be effective except in a writing signed by Buyer and Seller. Buyer acknowledges and agrees that Buyer has not and will not rely upon any representation made by Seller or any of its agents, employees or representative concerning the Property or the Project, including, without limitation, the condition or use of the Property or the Project, or the rights or duties of the parties under this Agreement, except as expressly set forth in this Agreement. Any right or duty described herein that by its terms extends beyond the Close of Escrow shall survive the Close of Escrow and remain in full force and effect in accordance with its terms.

31. Buyer's Offer; Right to Rescind: Buyer has read and understood the provisions contained herein and offers and agrees to purchase the Property on these terms. Buyer further understands that this Agreement initially is an offer only and will not become a binding contract until accepted by Seller, and is subject to the possible acceptance by Seller of an offer from another Buyer. Buyer grants the undersigned agent the irrevocable right for a period of five (5) days from the date hereto to obtain an acceptance of this offer by Seller. The signature of the sales person receipting for the Initial Deposit is not an acceptance by Seller. A valid acceptance of this offer requires a signature of a representative of Seller authorized to accept Buyer's offer. Buyer has three (3) calendar days from the date Buyer signs this offer to rescind this offer, or if Seller has accepted this offer, to rescind the Agreement (the “Rescission Period”). Buyer may rescind by notifying Seller in writing of Buyer’s election to rescind on or before the termination of the Rescission Period (the “Rescission Notice”). If Buyer elects to rescind, the offer shall be rescinded; or if Seller has accepted the offer, the Agreement shall be rescinded, all deposits shall be refunded in full to Buyer and thereafter neither party shall have any further rights or duties hereunder. If Seller fails to receive the Rescission Notice within the Rescission Period, it shall be presumed conclusively that Buyer has elected not to rescind the offer or the Agreement, and that Buyer’s right of rescission has terminated. The purpose of the Rescission Period is to provide Buyer with additional time to review the sales documentation provided to Buyer by Seller or Seller’s agent and, if desired, to have this Agreement and the sales documentation reviewed by legal counsel of Buyer’s choosing.

32. FIRPTA: The Foreign Investment and Real Property Tax Act (FIRPTA) requires a buyer purchasing real property from a foreign person to withhold tax from the sale proceeds unless an exemption applies. Seller agrees to provide Buyer with a certification establishing that no Federal 4888-9991-5906 v3
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income tax is required to be withheld under FIRPTA.

33. Headings; Pronouns: The headings of this Agreement are for convenience only and do not in any way limit or amplify the terms or provisions of this Agreement. All pronouns and variations thereof shall be deemed to refer to the masculine, feminine or neuter, and to the singular or plural, as the identity of the party or parties may require.

34. Calendar Days: All periods of time referred to in this Agreement shall include all Saturdays and Sundays and any holidays. In the event the day upon which any action is required to be taken under the terms of this Agreement is not a business day, the action shall be taken on the next succeeding business day.

35. Disclosures: Buyer acknowledges receipt of the Disclosure and Information Statement from Seller.

36. Notice of Your Supplemental Property Tax Bill: California property tax law requires the assessor to revalue real property at the time the ownership of the property changes. Because of this law, you may receive one or two supplemental tax bills, depending on when your loan closes. The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental tax bills directly to the tax collector. If you have any questions regarding this matter, please call your local tax collector’s office.

37. Brokers: Buyer and Seller each represent and warrant that Buyer and Seller have each engaged no broker or finder in connection with this transaction, and each agrees to defend and hold harmless the other from claims by any broker or finder consistent with this representation and warranty.

38. Megan's Law: Notice: Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender’s criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code in which he or she resides.

39. Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

40. Default by Buyer: Any of the following actions or failures to act by Buyer under this Agreement, without limitation, constitutes a default of the Buyer:
• Failure to submit a complete loan package (if applicable) on a timely basis. • Failure to make Optional Item selections on or before dates required.[Delete if no optional 4888-9991-5906 v3
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section under paragraph 7]
• Failure to comply with all requirements of lender, if any. • Failure to make any deposit due under this Agreement on a timely basis. • Any voluntary act of Buyer taken for the purpose of preventing lender from approving Buyer's loan.
• Failure of Buyer to safeguard Buyer's funds so that sufficient funds are available to make all deposits and to close Escrow.
• Any attempt by Buyer to assign its rights in violation of this Agreement, or to attempt to arrange a double escrow.
• Failure to close Escrow on time.

41. Termination: Seller may (but is not required to) terminate this Agreement within thirty (30) days of the occurrence of any of the following:
(a) Seller determines that Buyer's loan approval does not meet the requirements of this Agreement or was not obtained within the required time, or is conditional or non-binding. (b) Default by Buyer as per paragraph 40, above.

Seller will notify Buyer in writing if Seller elects to terminate the Agreement, and, if so, will direct Escrow Holder to return all Deposits to Buyer without any deduction, except for such sums (if any) as may then be subject to a claim for liquidated damages under paragraph 17 (provided both parties have initialed paragraph 17).

42. Seller’s Default. In the event the sale of the Property as contemplated hereunder is not consummated due to Seller’s default hereunder, Buyer shall be entitled, in addition to any other remedies it may have at law or equity, to enforce specific performance of Seller’s obligation to convey the Property to Buyer in accordance with the terms of this Agreement.

43. Venue. The venue for any action shall be the County of San Mateo, California.

44. SB 800 Notices:
(a) Notice of SB 800 Adoption: The California Legislature has enacted Title 7 of Division 2 of the Civil Code, commonly referred to as SB 800 (hereinafter “the Code”), which provides certain standards, requirements and procedures for claims of construction defects in new homes [first sold after January 1, 2003]. Under the Code the builder/seller (hereinafter “Seller”) shall elect whether it will adopt the standards and procedures of the Code or provide some alternative standards and procedures in compliance with the Code. Buyer acknowledges receipt of this notice that the Code provides procedures that impact the legal rights of homeowners, and that a copy of Title 7 of Division 2 has been delivered to and received by Buyer.
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Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____ (b) Notice to Buyer of Adoption of Standards and Procedures. Buyer is hereby notified that Seller has elected to adopt the standards and procedures set forth in the Code.

Chapter 2 of the Code provides certain standards regarding the functionality of the home (“Functionality Standards”) and lengths of time for these standards during which the Buyer may pursue repair/redress under the Code (Sections 896 and 897). Buyer is further notified that Seller has also elected to adopt the Pre-Litigation Procedures set forth in Chapter 4 of the Code. In the event of a claim by Buyer that falls within the parameters of the Code, Seller and Buyer mutually acknowledge and agree that Chapter 4 of the Code sets forth the process for maintaining a valid claim (Civ. Code §§ 910, et seq.).

Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____ (c) Notice Regarding Subsequent Purchasers. By initialing below, Buyer further acknowledges that the Code is binding on Buyer’s successors-in-interest pursuant to Civil Code Section 945. Therefore, Buyer acknowledges being obligated to provide the Code and a copy of all documents provided by Seller to Buyer to a subsequent purchaser of Buyer’s unit. Buyer shall indemnify Seller from any adverse effects upon Seller due to Buyer's failure to provide a subsequent purchaser with copies of all documents provided by Seller to Buyer.

Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____ (d) Claim Notification. If Buyer makes a claim for violation of the Functionality Standards pursuant to the Code, the Notice of Claim shall be served upon Seller at the address as provided on page 1, above.

In the event Seller can no longer be contacted at the address set forth above, and has not provided an alternative address for notices, Buyer shall contact the California Secretary of State to locate Seller’s agent for service of process. The Secretary of State can be contacted at: 1500 11th Street, Sacramento, California 95814, phone number 916-657- 5448 or at www.ss.ca.gov.

Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____ (e) Limited Warranty. Seller has provided a Limited Warranty in compliance with Section 900 for "fit and finish" items. The prelitigation procedures set forth in Civil Code Sections 910- 938 shall apply, and if the matter is not resolved through such prelitigation procedures, Buyer shall have the right to file an action in the Superior Court of San Mateo County. See paragraph 17(b). Seller has not elected to provide an Enhanced Protection Agreement ("EPA") pursuant to Civil Code sections 901-906, and Buyer acknowledges that nothing in the Seller's Limited Warranty or Building Standards shall be deemed to constitute the offering of an EPA to Buyer.

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(f) Disclaimer of all other Warranties. No other warranties, whether express or implied, exist beyond those set forth in the Limited Warranty. By initialing below, Buyer acknowledges receipt of the Limited Warranty.

Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____ (g) Customer Care Program and Homeowner/Association Maintenance: Buyer understands that Buyer is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the Buyer by Seller and by product manufacturers, as well as commonly accepted maintenance practices, as provided in Civil Code Section 907, and that failure of the Buyer to satisfy the obligations may result in invalidation of warranties and provide Seller with a defense to any claim of breach of warranty. Buyer agrees to follow the maintenance requirements set forth in and/or referred to in the covenants, conditions and restrictions, seller's warranty, and in the homeowners manual and maintenance guide, as supplied by seller at the close of escrow.

Buyer agrees to provide copies of the Limited Warranty and the Homeowners Manual and Maintenance Guide as furnished by Seller to any subsequent purchasers from Buyer, prior to the transfer of title.

Initials: Buyer ____ Seller's Sales Representative ____ Initials: Buyer ____

45. Anti-Terrorism Regulations: Buyer represents and warranties to Seller that: (1) Buyer is not on the prohibited parties list of the Office of Foreign Assets Control maintained pursuant to the Patriot Act and Executive Order 13224 and (2) Buyer's purchase of the Property is not designed, even in part, to conceal or disguise the "nature, the location, the source, the ownership, or the control" of proceeds of criminal activity in violation of the Money Laundering Control Act. Buyer acknowledges and agrees that Seller may be legally obligated to report any suspicious activity related to this Agreement to the Department of Treasury and/or terminate this Agreement if Seller obtains information about Buyer that would result in a violation of the Patriot Act or Money Laundering Control Act.

46. Estimates Of Square Footage: the square footage amounts that are contained in any documents received by buyer are estimates only. They were derived from plans and not actual measurements. The actual measurements may differ. Varying methods of measurement may have been used. No buyer should rely on any of these estimates of square footage in making a decision to buy a condominium.

47. Notice Regarding Gas And Hazardous Liquid Transmission Pipelines: This notice is being provided simply to inform you that information about the general location of gas and hazardous liquid transmission pipelines is available to the public via the National Pipeline Mapping System (NPMS) Internet Web site maintained by the United States Department of Transportation at http://www.npms.phmsa.dot.gov/. To seek further information about possible transmission pipelines 4888-9991-5906 v3
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I I ___________________________
near the property, you may contact your local gas utility or other pipeline operators in the area.

Contact information for pipeline operators is searchable by ZIP Code and county on the NPMS Internet Web site.

THIS IS A LEGALLY BINDING CONTRACT. READ IT CAREFULLY BEFORE SIGNING.

OFFER TO PURCHASE BY BUYER: BUYER:

Date: ______________, 2023 _____________________________ CITY OF MENLO PARK, a California
Municipal corporation
RECEIPT FOR DEPOSIT: SALES REPRESENTATIVE:

Date: ____________, 2023 [Signature is not acceptance]
ACCEPTANCE BY SELLER:

Date: ____________, 2023 FLORENCE LANE VENTURES, LLC,
a California limited liability company
By: _____________________
Its: _____________________
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Recording requested by:

CITY OF MENLO PARK
When recorded mail and
tax statements to:

City of Menlo Park
701 Laurel Street
Menlo Park, CA 94025

GRANT DEED

EXHIBIT A
The undersigned grantor(s) declare(s):

County transfer tax is $____________
City transfer tax is $ _______________
( ) computed on full value of property conveyed, or
( ) computed on full value less value of liens and
encumbrances remaining at time of sale.
( ) Unincorporated area; or (X) City of Menlo Park and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, FLORENCE LANE VENTURES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY hereby GRANTS to CITY OF MENLO PARK, a California municipal corporation, the following described real property in the City of Menlo Park, County of San Mateo, State of California:

SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF

SUBJECT TO THE FLORENCE LANE ENABLING DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP RECORDED OCTOBER 5, 2020, SERIES NO. 2020-106317, AS

AMENDED BY THE FIRST AMENDMENT TO FLORENCE LANE ENABLING DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP RECORDED AUGUST 10, 2023, SERIES NO. 2023-038500, AND ANY AMENDMENTS AND/OR ANNEXATIONS THERETO.

FLORENCE LANE VENTURES, LLC, A California
limited liability company
By: ______________________
Name: Surinder P. Goswamy
Its: Manager
Dated:_______________
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______________________________

SAMPLE FORM DEED - CONDOMINIUM
\ WPWIN60WROJECTS FLORENCE LANEkSAMPLE FORM DEED - CONDO[8.9.231DOC A notary public or other officer completing the certificate verifies only the identity of the individual who signed the document to which the certificate is attached and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA
COUNTY OF ________________
On _________________________, 202__ before me, _____________________________________________________ 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
(SEAL)
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EXHIBIT "A"
All that certain real property situated in the City of Menlo Park, County of San Mateo, State of California, described as follows:

PARCEL I: A condominium comprised of: A separate interest in Unit #8 as shown on the Condominium Plan (the "Plan") attached as Exhibit "A" to the Florence Lane Enabling Declaration Establishing a Plan for Condominium Ownership" (the "Declaration") recorded on October 5, 2020, Instrument No. 2020-106317, San Mateo County Official Records, as amended by the First Amendment to Florence Lane Enabling Declaration Establishing a Plan for Condominium Ownership recorded on August 10, 2023, Instrument No. 2023-038500, San Mateo County Official Records.

PARCEL II: An undivided 1/8th interest in the Common Area as described in the Plan and the Declaration, which condominium is located on the real property described on the Map entitled "975 Florence Lane" (the "Map") recorded on July 17, 2020, in Book 142 of Maps, pages 83-84 in San Mateo County Records.

PARCEL III: The exclusive right to use the following appurtenant "Exclusive Use Common Areas" set aside and allocated for the exclusive use of the owner of the condominium described as Parcel I above, as described in the Declaration and as shown on the Plan, as follows: Parking Space P-5 and Deck D-8.

EXCEPTING THEREFROM AND RESERVING EASEMENTS as defined in the Declaration.

FURTHER EXCEPTING THEREFROM all numbered condominium units shown on the Plan and described in the Declaration other than the unit conveyed as Parcel I above, and those portions of the "Exclusive Use Common Area" as defined in the Declaration and/or shown on the Plan which are set aside and allocated for the exclusive use of the owners of condominiums other than the condominium described herein as Parcel I.

This conveyance is made and accepted, and the real property is hereby granted, in accordance with and subject to the Declaration, and any amendments thereto, which document is, by this reference, incorporated herein and made a part hereof, as though fully set forth at length herein.

SUBJECT TO:

1. General and special real property taxes for the current fiscal year; and

2. Covenants, conditions, restrictions and easements, reservations, rights, declarations, and rights-of-way of record. 4869-1405-4274 v1
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______________________________
A notary public or other officer completing the certificate verifies only the identity of the individual who signed the document to which the certificate is attached and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA
COUNTY OF ________________
On _________________________, 202__ before me, _____________________________________________________ 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
(SEAL)
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_____________________
Recording requested by
When recorded mail to:

CITY OF MENLO PARK
c/o CITY CLERKS OFFICE
701 LAUREL STREET
MENLO PARK, CA 94025
Exempt From Recording Fees Per Gov. Code
§ 27383 And Building Homes & Jobs Trust Fund
Fee Per Gov. Code § 27388.1(A)(2)(D) (instrument
recorded on behalf of a
municipality)

EXHIBIT B
THE UNDERSIGNED TRUSTOR DECLARES: (Space Above This Line For Recorder’s Use Only) This transaction is exempt from documentary transfer tax pursuant to Revenue & Taxation Code Section §11922.

City of Menlo Park, an exempt agency, is acquiring a deed of trust by this instrument.

Signature of Declarant

PERFORMANCE DEED OF TRUST AND SECURITY AGREEMENT

THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY ENCUMBERED BY THIS DEED OF TRUST. EXCEPT FOR A TRANSFER TO THE CITY OF MENLO PARK (THE “CITY”) OR CITY’S ASSIGNEE FOLLOWING CITY’S EXERCISE OF ITS

OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN INCOME QUALIFYING PURCHASER ON THE CITY’S WAITING LIST AT A SALES PRICE ESTABLISHED BY THE CITY. THE AGREEMENT AND DEED RESTRICTIONS

REGARDING RESALE CONTROLS FOR BELOW MARKET RATE PROPERTY

ALSO RESTRICTS THE EXTENT TO WHICH THIS PROPERTY MAY BE ENCUMBERED BY JUNIOR FINANCING AND LIMITS TRUSTOR’S RIGHTS TO REFINANCE EXISTING MORTGAGES.

This PERFORMANCE DEED OF TRUST (“Deed of Trust”) is made as of _________________, 202_ (“Effective Date”) by ______________ (“Trustor”) whose address is __________ in favor of City of Menlo Park (“Trustee”), for the benefit of the City of Menlo Park (referred to variously as “City” or “Beneficiary”) whose address is 701 Laurel Street, Menlo Park, CA 94025, as Beneficiary.

IRV #4863-2767-7995 v1
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RECITALS
A. Trustor is the owner of the real property located at 975 Florence Lane, Unit 8, Menlo Park, CA 94025 and more particularly described in the attached Exhibit A, (the “Property”).

B. The Trustor’s predecessor in interest developed the Property pursuant to the City’s Below Market Rate Program (“BMR”) codified in Menlo Park Municipal Code Chapters 15.36 and 16.96 and BMR Housing Program Guidelines (collectively “BMR Program”), which require developers of rental and ownership housing to construct within their projects units that are affordable to very low-, low-, and moderate-income households and which regulations require the Property to be subjected to restrictions on resale that ensure that the Property remains affordable.

C. In connection with the BMR Program, Beneficiary and Trustor entered into an Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property dated as of the Effective Date and recorded in the Official Records of San Mateo County substantially concurrently herewith (the “Resale Restriction Agreement”) (capitalized terms used without definition herein have the meaning ascribed to such terms in the Resale Restriction Agreement); and D. Pursuant to the Resale Restriction Agreement, Trustor is obligated, among other requirements, to sell the Property only to the City or to income qualifying purchasers at a price designated by the City; and
E. The Resale Restriction Agreement also provides (among other provisions) that:
(i) Trustor is obligated to notify Beneficiary of Trustor’s intent to sell the Property in order to enable Beneficiary to exercise its option to purchase the Property at a restricted price; (ii) Beneficiary has an option to purchase the Property if Trustor defaults under the Resale Restriction Agreement; and (iii) there are restrictions on Trustor’s ability to encumber the Property and to refinance the existing loans secured by the Property.

AGREEMENT
NOW, THEREFORE, to secure the full and timely performance by Trustor of the Secured Obligation, it is agreed as follows:

1. Incorporation by Reference. The recitals and the Resale Restriction Agreement are incorporated herein by this reference.

2. Grant in Trust. Trustor, in consideration of the promises herein recited and the trust herein created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale, all estate, right title and interest which Trustor now has or may later acquire in and to that certain real property located in the City of Menlo Park, County of San Mateo, State of California, described in the attached Exhibit A and commonly known as:

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975 Florence Lane, Unit 8, Menlo Park, CA 94025 (the “Property”) together with all of the following:
(i) all improvements now or hereafter located or constructed on the Property and all replacements and additions thereto (“Improvements”); (ii) all easements, rights of way, appurtenances and other rights used in connection with the Property or as a means of access thereto (“Appurtenances”);
(iii) all fixtures now or hereafter attached to or used in and about the Property or the improvements located thereon or hereafter located or constructed on the Property, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the improvements in any manner (“Fixtures and Equipment”); and (iv) all leases, subleases, licenses and other agreements relating to use or occupancy of the Property (“Leases”) and all rents or other payments which may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor (“Rents”) (whether or not such Leases and Rents are permitted by the Resale Restriction Agreement).

All of the above-referenced Property, Improvements, Appurtenance, Fixtures and Equipment, Leases and Rents are herein referred to collectively as the “Security”.

3. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and/or performance of the following (the “Secured Obligations”): (i) all present and future obligations of Trustor set forth in this Deed of Trust or in the Resale Restriction Agreement (including without limitation, Trustor’s obligation to convey the Property only to income qualifying purchasers on the City’s BMR Waiting List at a purchase price determined by the City, as described in the City’s BMR Housing Guidelines); (ii) all additional present and future obligations of Trustor, to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iii) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced by new or additional documents; and (iv) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust.

4. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Except to the extent that the lease or rental of the Property is prohibited by the Resale Restriction Agreement, Beneficiary hereby confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or IRV #4863-2767-7995 v1
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demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and unless due solely to the willful misconduct or gross negligence of Beneficiary, shall not be responsible for any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property.

5. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of San Mateo County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the “debtor” and Beneficiary shall be deemed to be the “secured party” for all purposes under the UCC. The full name of Trustor and the mailing address of Trustor are set forth in Section 10.2 of this Deed of Trust.

6. Trustor’s Representations, Warranties and Covenants.

5.1 Trustor’s Estate. Trustor represents and warrants that Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by: (a) that deed of trust executed by Trustor in connection with a loan IRV #4863-2767-7995 v1
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made to Trustor by Guild Mortgage Company LLC, a California limited liability company (the “First Lender”), securing a promissory note executed by Trustor in favor of the First Lender (“First Lender Note”), to assist in the purchase of the Property (the “First Lender Deed of Trust”) and (b) the Resale Restriction Agreement. Trustor agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City’s interest in the Security. (As used in this Deed of Trust, the term “First Lender” shall include all successors and assigns of the First Lender.)

5.2 Repayment of Sums Owed under Resale Restriction Agreement. Trustor will promptly pay to the City all sums due under the Resale Restriction Agreement.

5.3 Resale Restriction Agreement. Trustor will observe and perform all of the covenants and agreements of the Resale Restriction Agreement.

5.4 First Lender Loan. Trustor will observe and perform all of the covenants and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender loan documents.

5.5 Charges; Liens. Trustor will pay prior to delinquency, all taxes, assessments and other charges, fines and impositions affecting the Security directly to the payee thereof. Upon request by the City, Trustor will promptly furnish to the City all notices of such amounts due. Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to discharge the lien of the First Lender Deed of Trust or pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings which will operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof.

5.6 Hazard Insurance.
(a) Trustor will keep the Security insured by a standard all risk property insurance policy equal to the replacement value of the Security (adjusted every five (5) years by appraisal, if requested by the City).

If the Security is located in a flood plain, Trustor shall also obtain flood insurance. In no event shall the amount of insurance be less than the amount necessary to prevent Trustor from becoming a coinsurer under the terms of the policy.

The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by Trustor subject to approval by the City.

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All insurance policies and renewals thereof will be in a form acceptable to the City, and will include a standard mortgagee clause with standard lender’s endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by Trustor. The City shall receive thirty (30) days advance notice of cancellation of any insurance policies required under this section.

Unless otherwise permitted by the City in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged. If permitted by City, and subject to the rights of the First Lender, the insurance proceeds shall be used to repay any amounts due under the Resale Restriction Agreement, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized to collect and apply the insurance proceeds at the City’s option either to restoration or repair of the Security or to pay amounts due under the Resale Restriction Agreement.

If the Security is acquired by the City, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediate prior to such sale or acquisition, subject to the rights of the First Lender.
(b) During the course of any rehabilitation of the improvements located on the Property, Trustor shall hire only licensed contractors who maintain the following forms of insurance:
(i) Liability Insurance. Comprehensive general liability insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Property. The limits of such insurance shall be not less than One Million Dollars ($1,000,000) combined single limit for bodily injury and property damage.

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(ii) Worker’s Compensation Insurance. Worker’s compensation insurance covering all persons employed in connection with any work on the Property.

5.7 Preservation and Maintenance of Security. Trustor will keep the Security in good repair and in a neat, clean, and orderly condition and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this Section, and if the Trustor has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing.

5.8 Protection of the City’s Security. If Trustor fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the City’s interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City’s option, without releasing Trustor from any obligation hereunder, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City’s interest, including but not limited to, disbursement of reasonable attorneys’ fees and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and City agree to other terms of payment, such amount will be payable upon notice from the City to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the lesser of (i) ten percent (10%); or (ii) the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder.

5.9 Inspection. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided that the City will give Trustor reasonable notice of inspection.

5.10 Hazardous Substances. Trustor shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances in, on, under, about, or from the Property. Trustor shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property when used and disposed of in accordance with Environmental Law.
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Environmental Law, and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials.
“Environmental Law” means all federal, state or local statutes, ordinances, regulations, orders, decrees and judgments that relate to health, safety or environmental protection including without limitation the regulation of the use, disposal, manufacture, or release of Hazardous Substances.

Trustor shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Trustor has actual knowledge. If Trustor learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Trustor shall promptly take all necessary remedial actions in accordance with Environmental Law.

7. Nonliability for Negligence, Loss, or Damage; No Joint Venture. Trustor acknowledges, understands and agrees that the relationship between Trustor and the City is solely that of a borrower and lender, and that the City does not undertake or assume any responsibility for or duty to Trustor to select, review, inspect, supervise, pass judgment on, or inform Trustor of the quality, adequacy or suitability of the Security or any other matter. The City owes no duty of care to protect Trustor against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Trustor agrees that neither Trustor, or Trustor’s heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. Nothing contained herein or in Note or the Resale Restriction Agreement shall be deemed to create or construed to create a partnership, joint venture or any relationship other than that of a borrower and lender.

8. Indemnity. Trustor agrees to defend, indemnify, and hold the City of Menlo Park and its elected and appointed officials, officers, employees, and agents (“Indemnitees”) harmless from and against all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney’s fees that the Indemnitees may incur as a direct or indirect consequence of:
(i) Trustor’s failure to perform any obligations as and when required by the Resale Restriction Agreement and this Deed of Trust; or (ii) the failure at any time of any of Trustor’s representations or warranties to be true and correct.

9. Acceleration; Remedies. Upon Trustor’s breach of any covenant or agreement of Trustor in the Resale Restriction Agreement or this Deed of Trust, including, but IRV #4863-2767-7995 v1
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not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to acceleration, will mail by express delivery with delivery receipt, notice to Trustor specifying; (1) the breach; (2) the action required to cure such breach; (3) a date, not less than thirty (30) days from the date the notice is received by Trustor (unless the Resale Restriction Agreement provides for shorter or no notice) as shown on the return receipt, by which such breach is to be cured; and (4) if the breach is curable, that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Trustor of Trustor’s right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date specified in the notice, the City, at the City’s option, may:
(a) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law;
(b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924 et seq., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law.

The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys’ fees.

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10. Trustor’s Right to Reinstate. Notwithstanding the City’s acceleration of the sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays City all sums which would be then due under this Deed of Trust if there were no acceleration under this Deed of Trust or the Resale Restriction Agreement; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in the Resale Restriction Agreement or this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by City and Trustee in enforcing the covenants and agreements of Trustor contained in the Resale Restriction Agreement or this Deed of Trust, and in enforcing the City’s and Trustee’s remedies, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City’s interest in the Security and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred.

11. Reconveyance. Upon the expiration of the term of the Resale Restriction Agreement if the Trustor owns and occupies the Property and is not in violation of any provisions of this Deed of Trust or the Resale Restriction Agreement, the City will request Trustee to reconvey the Security and will surrender this Deed of Trust and the Resale Restriction Agreement to Trustee. Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any.

12. Substitute Trustee. The City, at the City’s option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law.

13. Superiority of First Lender Documents. Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in compliance with the requirements of the Resale Restriction Agreement.

Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender’s assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Trustor. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of IRV #4863-2767-7995 v1
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foreclosure, this Deed of Trust shall automatically terminate upon such acquisition of title, provided that (i) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60)-day cure period and (ii) the City shall not have cured or commenced to cure the default within such sixty (60)-day period or commenced to cure and given its firm commitment to complete the cure in form and substance acceptable to the First Lender.

14. Request for Notice. City requests that copies of the notice of default and notice of sale be sent to City at the address set forth in Section 15.5.

15. Miscellaneous.

15.1 Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City’s right to require satisfaction of any obligations secured by this Deed of Trust.

15.2 Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively.

15.3 Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and Trustor subject to the provisions of this Deed of Trust.

15.4 Joint and Several Liability. If this Deed of Trust is executed by more than one person as Trustor, the obligations of each shall be joint and several.

15.5 Notices. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this Deed of Trust will be given by certified mail, return receipt requested, express delivery with delivery receipt or personal delivery with delivery receipt, addressed to Trustor at the address shown in the first paragraph of this Deed of Trust or such other address as Trustor may designate by notice to the City as provided herein, and (b) any notice to the City will be given by certified mail, return receipt requested, express delivery with delivery receipt or personal delivery with delivery receipt, to the City of Menlo Park, 701 Laurel Street, Menlo Park, CA 94025 Attn: Community Development Director or to such other address as the City may designate by notice to Trustor as provided above. Notice shall be effective as of the date received by City as shown on the return receipt.

15.6 Entire Agreement. This Deed of Trust, together with the Resale Restriction Agreement , sets forth the entire understanding between Trustor and the City with respect to the subject matter hereof. Any previous representations, warranties, agreements, and understandings among the IRV #4863-2767-7995 v1
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parties regarding the subject matter of the Resale Restriction Agreement and this Deed of Trust whether written or oral, are superseded by the terms of the Resale Restriction Agreement and this Deed of Trust. This Deed of Trust shall not be amended except by a written instrument duly executed by Trustor and City and recorded in the Official Records of San Mateo County.

15.7 Time of the Essence. Time is of the essence with regard to all matters contained in this Deed of Trust.

15.8 Governing Law. This Deed of Trust shall be governed by the laws of the State of California, without regard to principles of conflicts of law. This Deed of Trust was entered into and is to be performed in the County of San Mateo, which is the exclusive venue for any action or dispute arising out of this Deed of Trust.

15.9 Severability. In the event that any provision or clause of this Deed of Trust or the Resale Restriction Agreement conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Resale Restriction Agreement which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Resale Restriction Agreement are declared to be severable.

15.10 Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof.

15.11 Nondiscrimination. Trustor covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Trustor or any person claiming under or through Trustor establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land.

Signatures on following page
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.

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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 SAN MATEO )
On ____________________, before me, ____________________________, Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature:
(SEAL)
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EXHIBIT "A"
Legal Description

ALL THAT REAL PROPERTY SITUATED IN THE CITY OF MENLO

PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA,
DESCRIBED AS FOLLOWS:

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF MENLO

PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

PARCEL I:

A CONDOMINIUM COMPRISED OF: A SEPARATE INTEREST IN UNIT 8 AS SHOWN ON THE
CONDOMINIUM PLAN (THE "PLAN") ATTACHED AS EXHIBIT "A" TO THE "FLORENCE LANE ENABLING DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP" RECORDED IN THE OFFICIAL RECORDS OF SAN MATEO COUNTY, STATE OF CALIFORNIA, ON THE 5TH DAY OF OCTOBER 2020, INSTRUMENT NO. 2020-106317, AS AMENDED BY "FIRST AMENDMENT TO

FLORENCE LANE ENABLING DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP" RECORDED IN THE OFFICIAL RECORDS OF SAN MATEO COUNTY, STATE OF CALIFORNIA, ON THE 10TH DAY OF AUGUST 2023, SERIES NO. 2023-038500 ("DECLARATION").

PARCEL II:

AN UNDIVIDED 1/8TH INTEREST IN THE COMMON AREA AS DESCRIBED IN THE

PLAN AND THE DECLARATION, WHICH CONDOMINIUM IS LOCATED ON THE REAL PROPERTY DESCRIBED ON THE MAP ENTITLED "975 FLORENCE LANE" (THE "MAP") RECORDED ON JULY 17, 2020, IN BOOK 142 OF MAPS, PAGES 83084 IN SAN MATEO COUNTY RECORDS.

PARCEL III:

THE EXCLUSIVE RIGHT TO USE THE FOLLOWING APPURTENANT "EXCLUSIVE USE COMMON AREAS" SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE

OF THE OWNER OF THE CONDOMINIUM DESCRIBED AS PARCEL I ABOVE, AS DESCRIBED IN THE DECLARATION AND AS SHOWN ON THE PLAN AS FOLLOWS:

PARKING SPACE P-8 AND DECK D-8.

EXCEPTING THEREFROM AND RESERVING EASEMENTS AS DEFINED IN THE DECLARATION.

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FURTHER EXCEPTING THEREFROM ALL NUMBERED CONDOMINIUM UNITS

SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION OTHER THAN

THE UNIT CONVEYED AS PARCEL I ABOVE, AND THOSE PORTIONS OF THE "EXCLUSIVE USE COMMON AREA" AS DEFINED IN THE DECLARATION AND/OR

SHOWN ON THE PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE

EXCLUSIVE USE OF THE OWNERS OF CONDOMINIUMS OTHER THAN THE CONDOMINIUM DESCRIBED HEREIN AS PARCEL I.

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EXHIBIT C
This document is recorded for the benefit of the City of Menlo Park and is entitled to be recorded free of charge in accordance with Sections 6103 and 27383 of the Government Code.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Menlo Park
Attn: City Clerk
701 Laurel Street
Menlo Park, CA 94025
Below Market Rate Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property
(975 Florence Lane Project)

THIS BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Agreement”) is entered into as of , 202[_], by and between the City of Menlo Park, a California municipal corporation (“City”), and Florence Lane Ventures, LLC, a California limited liability company (“Owner”). City and Owner may be referred to individually as a “Party” or collectively as the “Parties” in this Agreement.

RECITALS
A. WHEREAS, the City adopted a Below Market Rate Housing Program, codified in the Menlo Park Municipal Code at Chapters 16.96 and 15.36 (the “Ordinance”) and governed by the Below Market Rate Housing Program Guidelines (the “Guidelines”), to provide housing opportunities to persons with low or moderate incomes to purchase homes at prices which are below market rates prevailing in the community; and B. WHEREAS, the intent of the City is to preserve the number and availability of affordable homes in the program for persons with low or moderate incomes for as long as possible; C. WHEREAS, Owner is the owner of that certain property located at 975 Florence Lane, Menlo Park, CA 94025.

D. WHEREAS, on July 16, 2019, the City approved the construction of an eight (8) unit condominium development at 975 Florence Lane, Menlo Park, CA 94025 (the “Project”).

The applicant and owner of said development was Paul Goswamy.

E. WHEREAS, pursuant to the Ordinance and the Guidelines, as a condition of entitlement of the Project, applicant was required to deed restrict one unit, Unit No. 8, of the Project bearing an APN of 118-090-080 (the “Property”) for moderate income households (i.e. households earning no more than 120% of the County of San Mateo Annual Medium Income) for a period of 55 years.
1 Page J-7.47

F. WHEREAS, the applicant recorded such deed restriction which did not contain any operation standards and this agreement is therefore required to memorialize the details of the moderate income deed restriction.

NOW, THEREFORE, the Parties hereto agree as follows. The recitals are incorporated into this Agreement by this reference.

1. OPERATION OF THE BMR UNITS.

1.1 Effective Date. The effective date of this Agreement shall be the date that the Property closes escrow and is transferred to a Qualified Buyer, as that term is used and defined in the Guidelines (the “Effective Date.”)

1.2 Affordability Period. The Property, shall be subject to the requirements of this Agreement from the Effective Date until the 55th anniversary of such date. The duration of this requirement shall be known as the “Affordability Period.”

1.3 Maintenance. Owner shall comply with every condition of the Project Approvals applicable to the Project and shall, at all times, maintain the Project and the Property in good repair and working order, reasonable wear and tear excepted, and in a safe and sanitary condition, and from time to time shall make all necessary and proper repairs, renewals, and replacements to keep the Project and the Property in a good, clean, safe, and sanitary condition.

1.4 Monitoring and Recordkeeping. Throughout the Affordability Period, Owner shall comply with all applicable recordkeeping and monitoring requirements set forth in the Guidelines, or, at the Owner’s election, applicable recordkeeping and monitoring requirements in updated Guidelines. City shall have the right to inspect the books and records of Owner and its rental agent or bookkeeper upon reasonable notice during normal business hours. Representatives of the City shall be entitled to enter the Property, upon at least 48-hour prior written notice, which can be provided via email, to monitor compliance with this Agreement, to inspect the records of the Project with respect to the the Property, and to conduct, or cause to be conducted, an independent audit or inspection of such records. Owner agrees to cooperate with the City in making the Property available for such inspection or audit. Owner agrees to maintain records in businesslike manner, and to maintain such records for Affordability Period.

1.5 Non-Discrimination Covenants. Owner covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall any occupant of the Property or any person claiming under or through such occupant, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in 2 Page J-7.48

the Property. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith.

1.5.1. In deeds, the following language shall appear:
(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

1.5.2. In leases, the following language shall appear:
(1) The lessee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, 3 Page J-7.49

as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

1.5.3. In contracts pertaining to management of the Project, the following language, or substantially similar language prohibiting discrimination and segregation shall appear:
(1) There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

1.6 Subordination. This Agreement shall be recorded in the Official Records of the County of San Mateo and shall run with the land. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement for the benefit of lenders providing financing for the Project, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

2. OPERATION OF THE PROPERTY UNITS.

2.1 Sale to Moderate Income Households. The Property shall be sold in accordance with the BMR Ordinance and the Guidelines. The Property shall be affordable to eligible households which are moderate income as defined in Section 50093 of the California Health and Safety Code, as described in the Guidelines, which households meet all of the requirements set forth in the Guidelines, and are of the smallest household size eligible for the Property on the BMR waiting list 4 Page J-7.50

maintained by the City on the date that the Sales Prices are set, as more particularly described below and in the Guidelines. The eligibility requirements for buyers of the Property, the selection process for buyers for the Property, the purchase process and sale procedures, the occupancy requirements for the Property and the process for resale of Property are all set forth in the Guidelines.

The Property shall be subject to deed restrictions and conditions which include a right of first refusal in favor of the City for the duration of the Affordability Period, pursuant to the terms and conditions set forth in the Guidelines.

The Property shall be located in the Project as set forth in Exhibit B.

Any sale of the Property shall be subject to the setting of a sales price which shall be calculated according to the formula for calculating the sales price set forth in the Guidelines in effect at the time Owner notifies City that they wish to sell the Property (the “Sales Price.”) The Sales Price shall be set before the commencement of the sale process for the Property.

2.2 Term. Any and all obligations or responsibilities of Owner under this Agreement with regard to the Property shall terminate upon the recording of the grant deed conveying the Property to a qualified third party purchaser or the City in accordance with the terms and provisions of Section 3 of this Agreement and this Agreement as a whole and the recording of the deed restrictions in compliance with the Guidelines against the Property.

2.3 Third Party Purchasers. The execution and delivery of this Agreement shall not be deemed to be for the benefit of the third party purchasers of the Property or any other third party and any and all obligations and responsibilities of Owner under this Agreement are to the City for whose benefit this Agreement has been entered into. No third party purchaser of the Property or market rate unit, homeowners’ association or any other third party shall obtain any rights or standing to complain that the Property was not constructed, designed, sold or conveyed in accordance with this Agreement, or the Ordinance and the Guidelines as a result of this Agreement. Furthermore, the acceptance of this Agreement by the City, the acceptance of the interior specifications for the Property and the conveyance of the Property to qualified third parties shall conclusively indicate that Owner has complied with this Agreement and the Ordinance and the Guidelines.

2.4 Right of First Refusal. Except as provided herein, Owner hereby grants and gives to the City of Menlo Park, or another governmental entity or tax-exempt nonprofit organization to whom City may assign the rights set forth in this Paragraph 10 (“Assignee”), a right to purchase the Premises solely for resale as a BMR unit pursuant to the terms of the City’s Below Market Rate Housing Program, under conditions set forth below. City, at its sole discretion, may also assign this right to an individual buyer who meets the City’s eligibility qualifications to participate in the City’s Below Market Rate Housing Program (“Eligible Buyer”). City shall select an Eligible Buyer from the BMR Purchase and Rental Interest List or the BMR Purchase Legacy List or, if neither list exist, City shall market the Premises 5 Page J-7.51

and shall have the right to retain a realtor to locate Eligible Buyers. City reserves the right to reassign the right to another Eligible Buyer in the event the initial Eligible Buyer fails or is unable to complete the transaction. Notwithstanding the foregoing, no assignment or reassignment of this right shall extend any time limits for performance under this Agreement without the mutual, express and written agreement signed by both the Owner and any assignee.

3. CONDITIONS OF TRANSFER.

For purposes of this Agreement, “transfer” shall mean any voluntary or involuntary sale, assignment or transfer of ownership or any interest in the Premises, including, but not limited to, a fee simple interest, joint tenancy interest, or life estate. A “transfer” shall also include the recording of one or more deeds of trust against the Premises to secure one or more loans or to refinance an existing loan. Until such time as the City’s right of first refusal is exercised, waived, or expired, there shall be no transfer of the Premises to any person or entity except with the express written consent of City or its designee, which consent shall be consistent with the City’s goal of creating, preserving, maintaining, and protecting housing in Menlo Park for persons of low and moderate income. Any transfer of the Premises shall be subject to the conditions set forth in this Agreement, and any and all conditions contained in the Ordinance and the Guidelines, including any amendments thereto which may be adopted from time to time, as long as these amendments do not have a materially adverse affect on the interests of Owner.

3.1 Prohibited Transfer/Default. Any transfer which is not in substantial compliance with the above conditions shall be deemed a “Prohibited Transfer”. Upon receipt of any evidence of a Prohibited Transfer or any other violation of the terms of this Agreement, City shall give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within ten (10) days after the date of the notice, or within such further time as City determines is necessary to correct the violation, City may declare a default under this Agreement. Upon the declaration of a default, City may apply to a court of competent jurisdiction for specific performance of the Agreement, for an injunction prohibiting a proposed sale or transfer in violation of this Agreement, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate under the circumstances.

3.2 Permitted Transfer. Notwithstanding the foregoing, the following transfers are exempt from City’s right of first refusal and do not re-start the fifty-five (55) year deed restriction clock (each, a “Permitted Transfer”):

3.2.1. Transfer by devise or inheritance to Owner’s spouse;

3.2.2. Transfer of title by an Owner’s death to a surviving joint tenant, tenant in common, or a surviving spouse of community property (that is, another owner already on title);
6 Page J-7.52

3.2.3. Transfer of title to the Owner’s spouse as part of divorce or dissolution proceedings;

3.2.4. Transfer of title or an interest in the property to the Owner’s spouse in conjunction with marriage;

3.2.5. Transfer to Fannie Mae through foreclosure or its acceptance of a deed in lieu of foreclosure.

In the event of a Permitted Transfer, an instrument shall be executed, acknowledged and recorded by the transferee containing the following covenant:
“This property is subject to the terms and provisions of that certain ‘Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property’. Transferee, on behalf of transferee, and transferee’s successors and assigns, covenants and agrees to be bound by, and to perform in accordance with, such Agreement, and to include this covenant in any further transfer of the property.”

3.3 Conditional Permitted Transfers. Owner may transfer the Premises to a child or other relative by devise or inheritance provided that: a) Owner provides written notice to the City with the transferee’s name, contact information, and household income information and the City consents; b) the transferee household is an eligible, qualifying household under the BMR Guidelines at the time of the transfer; c) the transferee signs a new Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and Performance Deed of Trust and Security Agreement in a form acceptable to City and occupies the Premises. In the event that the transferee is not an eligible, qualifying household, the transferee may inherit the Premises but must offer the Premises for sale in accordance with Paragraph 11 below within ninety (90) days of the recording of the deed or probate order conveying title to the Premises to transferee. Failure to comply with the provisions of this Paragraph 5.C shall constitute a Prohibited Transfer.

4. OWNER OCCUPANCY.

Prospective purchasers of the Property must sign a written statement acknowledging their agreement that the Property must be occupied as the purchaser’s principal residence, that the Property may not be rented or leased, except as allowed under the Resale Restriction Agreement.

5. SENIOR LIEN HOLDER.

Any attempt to transfer title or any interest therein in violation of these covenants shall be void, provided, however, that any deed restrictions herein shall be subordinate to any mortgage (“First Deed of Trust”) held by a Senior Lien Holder and/or a federally or state chartered bank or savings and loan association qualified to do business in the State of California which mortgage was obtained at the time owner purchased the Property (“Senior Lien Holder”). City and Owner acknowledge and agree that this Agreement is subject and subordinate in all respects to the liens, terms, covenants and conditions of the 7 Page J-7.53

First Deed of Trust and to all advances heretofore made or which may hereafter be made pursuant to the First Deed of Trust held by a Senior Lien Holder including all sums advanced for the purpose of (a) protecting or further securing the lien of the First Deed of Trust, curing defaults by the Owner under the First Deed of Trust or for any other purpose expressly permitted by the First Deed of Trust, or (b) constructing, renovating, repairing, furnishing, fixturing or equipping the Premises. The terms and provisions of the First Deed of Trust are paramount and controlling, and they supersede any other terms and provisions hereof in conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of the First Deed of Trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the Premises to low or moderate income households or otherwise restricting the Owner’s ability to sell the Premises shall have no further force or effect on subsequent owners or purchasers of the Premises. Any person, including his or her successors or assigns (other than the Owner or a related entity of the Owner), receiving title to the Premises through a foreclosure or deed in lieu of foreclosure of the First Deed of Trust shall receive title to the Premises free and clear from such restrictions. Further, if the Senior Lien Holder acquires title to the Premises pursuant to a deed in lieu of foreclosure, the lien of this Agreement shall automatically terminate upon the Senior Lien Holder’s acquisition of title, provided that (i) the City has been given written notice of a default under the First Deed of Trust, and (ii) the City shall not have cured the default under the First Deed of Trust, or diligently pursued curing the default as determined by the Senior Lien Holder, within the 60-day period provided in such notice sent to the City. Any and all deeds of trust recorded against the Premises, other than the First Deed of Trust held by the Senior Lien Holder and/or such Senior Lien Holder’s successor or assignee of its interest, shall be subordinate and subject to the terms and provisions of this Agreement.

6. RESALE PROCEDURES

6.1 Notice of Offer to Sell. Whenever the Owner no longer desires to own the Premises, Owner shall notify City of their intent to offer the property for sale in accordance with the terms of this Agreement. Such notice shall be in writing, and must be sent by certified mail through the United States Postal Service, addressed to the Community Development Director, City of Menlo Park, 701 Laurel Street, Menlo Park, CA 94025. Owner’s offer to sell may be withdrawn by Owner, provided that notice of withdrawal has been received by City or its designee, in writing, prior to acceptance by City or its designee.

6.2 Acceptance. City, its designee or Assignee shall have sixty (60) days from the date of receipt of Owner’s notice to exercise the right of first refusal to accept Owner’s offer to sell the Premises. This acceptance shall be in writing, shall indicate that City believes the Premises are in salable condition in accordance with Paragraph 18, state the purchase price for the Premises as determined in Paragraph 14, and whether City is exercising the right of first refusal on its own behalf or has located an Eligible Buyer, and shall be sent by certified mail through the United States Postal Service, addressed to the Owner of record at the official address of the Premises. For purposes of fulfillment of the terms of this procedure, the notice of intent to sell the Premises shall be deemed to be an offer to sell, and the exercise of the right to purchase by the City or its designee or Assignee shall be deemed to be 8 Page J-7.54

an acceptance of that offer. Acceptance by City or its designee or Assignee shall constitute a legally binding contract for the transfer of title, and once accepted, the offer to sell may not be withdrawn without the express, written consent of the party who accepted the offer. The Owner is responsible for all fees and expenses related to the sale of the unit, including but not limited to real estate commissions and inspections.

6.3 Escrow. Within sixty (60) days of the date of acceptance, an escrow account shall be opened by the City or its designee or Assignee. At the closing, a title insurance company approved by City shall issue to the City, its designee, or Assignee, or the Eligible Buyer a CLTA owner’s title insurance policy, in a form reasonably approved by City and subject only to such title exceptions as reasonably approved by City. Taxes and assessments shall be prorated as of the date of closing. Taxes must be paid current as of the closing date and all liens must be satisfied and removed from title unless City expressly agrees otherwise in writing. The City, its designee, or Assignee or the Eligible Buyer shall pay the cost of the title insurance.

Closing shall utilize the form of escrow agreement customarily used by such title company for residential transactions with the City, modified to the extent necessary to conform to this transaction. If the Premises are sold to an Eligible Buyer, prior to the Closing, City and the Eligible Buyer shall deliver an executed Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and a Performance Deed of Trust and Security Agreement in a form acceptable to City. The Eligible Buyer must also certify at Closing that he or she will occupy the Premises as his or her primary residence. At the Closing, the Owner shall convey title to the City, the Assignee, or the Eligible Buyer by grant deed.

6.4 Resale Restriction Agreement. The initial buyer and each subsequent buyer of the Property shall execute and record a covenant, substantially in the form of Exhibit D, that restricts the future sale of moderate income households at the Sales Price for a period of fifty-five (55) years (the "Resale Restriction Agreement").

6.5 Owner’s Obligation to Cooperate. At all times commencing on the date that the Owner provides the notice set forth in Paragraph 11.A, Owner shall ensure that the Premises are clean and in good repair, and available to be shown to prospective Eligible Buyers. Owner shall cooperate with the City of Menlo Park and their respective officers, employees and representatives. Failure to comply with these conditions shall be deemed a material breach of Owner’s obligations pursuant to the terms of this Agreement, and upon determination by the City that Owner has failed to comply with any of the above conditions, City shall notify Owner that the time periods stated herein shall be tolled, and the applicable time periods extended accordingly, until Owner has complied with all of the conditions of this Agreement.

Acts by Owner which shall be deemed to be a breach of this obligation include, but are not limited to, failure to make the Premises available for showing to prospective Eligible Buyers upon reasonable notice, willful or deliberate actions to dissuade prospective buyers from purchasing the Premises, and failure or refusal to return telephone calls, complete forms, provide required reports, or perform other actions ordinarily required by a party to a real estate transaction in a timely manner. In 9 Page J-7.55

addition to tolling the applicable time periods, the City may pursue any other remedies for breach based upon this paragraph.

6.6 Assignment. City reserves the right, at any time during this process, to subsequently assign its right to purchase to an Eligible Buyer. In no case shall the time between Owner’s receipt of City’s acceptance of an offer to sell and the date of close of escrow exceed one hundred eighty (180) days, unless both parties mutually agree, in writing, to extend that date, or if for any reason the time periods herein are tolled.

7. DEFAULT AND REMEDIES

7.1 Events of Default. The following shall constitute an “Event of Default” by Owner under this Agreement: there shall be a material breach of any condition, covenant, warranty, promise or representation contained in this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof to the Owner without the Owner curing such breach, or if such breach cannot reasonably be cured within such 30 day period, commencing the cure of such breach within such 30 day period and thereafter diligently proceeding to cure such breach; provided, however, that if a different period or notice requirement is specified for any particular breach under any other paragraph of Section 4 of this Agreement, the specific provision shall control.

7.2 Remedies. The occurrence of any Event of Default under Section 4.1 shall give the City the right to proceed with an action in equity to require the Owner to specifically perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and the right to terminate this Agreement.

7.3 Obligations Personal to Owner. The liability of Owner under this Agreement to any person or entity is limited to Owner’s interest in the Project, and the City and any other such persons and entities shall look exclusively thereto for the satisfaction of obligations arising out of this Agreement or any other agreement securing the obligations of Owner under this Agreement. From and after the date of this Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Agreement, any agreement pertaining to any Project or any other agreement securing Owner’s obligations under this Agreement), shall be rendered against Owner, the assets of Owner (other than Owner’s interest in the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Agreement or any agreement securing the obligations of Owner under this Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding. No subsequent Owner of the Project shall be liable or obligated for the breach or default of any obligations of Owner under this Agreement on the part of any prior Owner. Such obligations are personal to the person who was the Owner at the time the default or breach was alleged to 10 Page J-7.56

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have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Owner. Each Owner shall comply with and be fully liable for all obligations the Owner hereunder during its period of ownership of the Project.

7.4 Remedies Cumulative. No right, power, or remedy given by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise.

7.5 Waiver of Terms and Conditions. The City may, in its sole discretion, waive in writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.

7.6 Non-Liability of City Officials and Employees. No member, official, employee or agent of the City shall be personally liable to Owner or any occupant of the Property, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement.

7.7 Cure Rights. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by Owner’s mortgage lender, shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner.

8. GENERAL PROVISIONS

8.1 Below Market Rate Guidelines (“Guidelines”). This Agreement incorporates by reference the Guidelines as of the date the Owner submitted a complete Preliminary Application pursuant to Government Code section 65941.1 and, at the election of the Owner, any successor sections as the Guidelines may be amended from time to time. In the event of any conflict or ambiguity between this Agreement, the requirements of state and federal fair housing laws and the Guidelines, the terms and conditions of this Agreement and the requirements of state and federal fair housing laws shall control.

8.2 Time. Time is of the essence in this Agreement.

8.3 Notices. Unless otherwise indicated in this Agreement, any notice requirement set forth herein shall be deemed to be satisfied three days after mailing of the notice first-class United States certified mail, postage prepaid, or by personal delivery, addressed to the appropriate party as follows:

Owner: Florence Lane Ventures, LLC
Paul Goswamy
XXXXX
11 Page J-7.57

City: City of Menlo Park
701 Laurel Street
Menlo Park, California 94025-3483
Attention: City Manager
Such addresses may be changed by notice to the other party given in the same manner as provided above.

8.4 Successors and Assigns. This Agreement constitutes a covenant and legal restriction on the Property and shall run with the land, provided the Project remains on the Property, and all of the terms, covenants and conditions of this Agreement shall be binding upon Owner and the permitted successors and assigns of Owner.

8.5 Intended Beneficiaries. The City is the intended beneficiary of this Agreement and shall have the sole and exclusive power to enforce this Agreement. It is intended that the City may enforce this Agreement in order to, satisfy its obligations to improve, increase and preserve affordable housing within the City, as required by the Guidelines, and to provide that a certain percentage of new housing is made available at affordable housing cost to persons and families of very low, low and moderate incomes as required by the Guidelines. No other person or persons, other than the City and Owner and their assigns and successors, shall have any right of action hereon.

8.6 Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

8.7 Governing Law. This Agreement and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. The venue for any action shall be the County of San Mateo.

8.8 Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Owner and the City.

8.9 Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. Where this Agreement requires an approval or consent of the City, such approval shall not be unreasonably withheld may be given on behalf of the City by the City Manager or his or her designee. The City Manager or his or her designee is hereby authorized to take such actions as may be necessary or appropriate to implement this Agreement, including without limitation the execution of such documents or agreements as may be contemplated by this Agreement, and amendments which do not substantially change the uses or restrictions hereunder, or substantially add to the costs of the City hereunder. 12 Page J-7.58

8.10 Indemnification. To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel reasonably approved by City) and hold the City, its heirs, successors and assigns (the “Indemnitees”) harmless from and against any and all demands. losses, claims, costs and expenses, and any other liability whatsoever, including without limitation, reasonable accountants’ and attorneys’ fees, charges and expense (collectively, “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 5.10 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 6.10 shall survive the expiration or earlier termination of this Agreement, but only as to claims arising from events occurring during the Affordability Period.

8.11 Insurance Coverage. Throughout the Affordability Period, Owner shall comply with the insurance requirements set forth in Exhibit C, attached hereto and incorporated herein by this reference, and shall, at Owner’s expense, maintain in full force and effect insurance coverage as specified in Exhibit C.

8.12 Transfer and Encumbrance.

8.12.1. Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of any Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

8.12.2. Permitted Transfers. The prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; or (ii) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (iii) transfers between entities owned or controlled by the Florence Lane Ventures, LLC.

8.12.3. Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement and/or a 13 Page J-7.59

Property if all of the following requirements are met (provided however, the requirements of this Section 8.12.3 shall not apply to Transfers described in clauses (i) or (ii) of Section 8.12.2.
(1) The proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement.
(2) The Owner and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Property or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(3) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner’s obligations pursuant to conditions, and restrictions set forth in this Agreement.
(4) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

Consent to any proposed Transfer may be given by the Director unless the Director, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Owner, the proposed Transfer shall be deemed approved.

8.13 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of any Property shall be deemed to relieve the Owner or any other party from any obligation under this Agreement. This Section

8.13 shall not apply to Transfers described in clauses (i) and (ii) of Section 8.12.2.

8.14 Recovery of City Costs. Owner shall reimburse City for all reasonable City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Owner of an invoice detailing such costs.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year set forth above.
14 Page J-7.60
SIGNATURES ON FOLLOWING PAGE(S).
15 Page J-7.61

OWNER:
[INSERT]
By:

Its:

CITY:

CITY OF MENLO PARK, a California municipal
corporation
By:

City Manager
ATTEST:

By:

City Clerk
List of Exhibits:

Exhibit A: 975 Florence Lane Property Description
Exhibit B: Property (Unit 8) Location
Exhibit C: Insurance Requirements
Exhibit D: Resale Restriction Agreement
4887-9247-0404 v1 16
Page J-7.62

EXHIBIT A
975 Florence Lane Property Description
4887-9247-0404 v1
Page J-7.63

EXHIBIT B
Property Location
4887-9247-0404 v1
Page J-7.64
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EXHIBIT B
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PROJECT
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DATE: 25 JUNE 2018
SHEET#: SD-1.2
Page J-7.65

EXHIBIT C
Insurance Requirements
Prior to initiating work on the Project and continuing throughout the Affordability Period, Owner shall obtain and maintain the following policies of insurance and shall comply with all provisions set forth in this Exhibit.

1. General Requirements. Owner shall procure and maintain the following insurance providing coverage against claims for injuries to persons or damages to property that may arise from or in connection with the Project, construction, management, or operation of the Property by the Owner or the Owner’s agents, representatives, employees and contractors, or subcontractors, including the following:
(a) Commercial General Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain a commercial general liability policy in an occurrence policy for protection against all claims arising from injury to person or persons not in the employ of the Owner and against all claims resulting from damage to any property due to any act or omission of the Owner, its agents, or employees in the conduct or operation of the work or the execution of this Agreement. Such insurance shall include products and completed operations liability, blanket contractual liability, personal injury liability, and broad form property damage coverage. Coverage shall be at least as broad as Insurance Services Office Commercial General Liability coverage.
(b) Commercial Automobile Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain insurance for protection against all claims arising from the use of vehicles, owned, hired, non-owned, or any other vehicle in connection with the Project, construction, operation or management of the Property. Such insurance shall cover the use of automobiles and trucks on and off the site of the Property. Coverage shall be at least as broad as Insurance Services Office covering Commercial Automobile Liability, any auto, owned, non-owned and hired auto.
(c) Workers' Compensation Insurance: The Owner (and the general partners thereof) shall furnish or cause to be furnished to City evidence satisfactory to City that Owner (and the general partners thereof), and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement, shall maintain Workers' Compensation Insurance as required by the State of California and Employer’s Liability Insurance. (d) Builder’s Risk: Upon commencement of any construction work on the Property, Owner and all contractors working on behalf of Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee as its interests may appear.Professional Liability/Errors and Omissions: Owner shall require any architects, engineers, and general contractors working on the Property to maintain Professional Liability/Errors and Omissions insurance with limits not less than Two 4887-9247-0404 v1
Page J-7.66

Million Dollars ($2,000,000) each claim. Certificates evidencing this coverage must reference both the Owner and the Indemnitees. If the professional liability/errors and omissions insurance is written on a claims made form: (i) the retroactive date must be shown and must be before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of Project construction, and (iii) if coverage is cancelled or non-renewed and not replaced with another claims made policy form with a retroactive date prior to the Effective Date, Owner must purchase, or require the provision of, extended period coverage for a minimum of three (3) years after completion of construction.
(f) Property: Owner shall maintain property insurance covering all risks of loss, including earthquake and flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, and as commercially available.

2. Minimum Limits; Adjustments. Insurance shall be maintained with limits no less than the following:
(a) Commercial General Liability and Property Damage: $2,000,000 per occurrence and $5,000,000 annual aggregate for bodily injury, personal injury and property damage; provided however, with City’s advance written approval, subcontractors may maintain liability coverage with limits not less than $1,000,000 per occurrence, $2,000,000 annual aggregate.
(b) Products and Completed Operations: $3,000,000 per occurrence/aggregate.

Subcontractors may maintain Products and Completed Operations with limits not less than $1,000,000 per occurrence and $1,000,000 aggregate. (c) Commercial Automobile Liability: $2,000,000 combined single limit. (d) Employer’s Liability:

Bodily Injury by Accident - $1,000,000 each accident.

Bodily Injury by Disease - $1,000,000 policy limit.

Bodily Injury by Disease - $1,000,000 each employee.
(e) Professional Liability/Errors and Omissions : $2,000,000 per occurrence or claim.

If the policy provides coverage on a claims-made basis, the retroactive date must be shown and must be before the date of the Agreement or the beginning of the contract work. Subcontractors are required to carry coverage if their scope of work includes design services to the Project.

Coverage limits, and if necessary, the terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than every five (5) years after the Effective Date nor more than once in every three (3) year period) to address changes 4887-9247-0404 v1 54
Page J-7.67

in circumstance, including, but not limited to, changes in inflation and the litigation climate in California. City shall give written notice to Owner of any such adjustments, and Owner shall provide City with amended or new insurance certificates or endorsements evidencing compliance with such adjustments within thirty (30) days following receipt of such notice.

3. Deductibles and Self-Insured Retention. Any deductibles or self-insured retention must be declared to, and approved by, the City. Payment of all deductibles and self-insured retentions will be the responsibility of Owner. If the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense.Additional Requirements. The required general liability and automobile policies shall contain, or be endorsed to contain, the following provisions:The Indemnitees are to be covered as Additional Insureds as respects: liability arising out of activities performed by or on behalf of the Owner; products and completed operations of the Owner; premises owned, occupied or used by the Owner; or automobiles owned, leased, hired or borrowed by the Owner. The coverage shall contain no special limitations on the scope of protection afforded to the Indemnitees. Additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94.All insurance shall be primary insurance as respects the Indemnitees. Any insurance or self-insurance maintained by the Indemnitees shall be excess of the Owner’s/contractor’s insurance and shall not contribute with it.
(c) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Indemnitees. (d) The Owner’s insurance shall apply separately to each insured against whom claim is made or suit is brought except, with respect to the limits of the insurer’s liability. (e) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City. (f) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within five (5) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies.

Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Owner’s expense, and Owner shall promptly reimburse City for such expense upon receipt of billing from City. 4887-9247-0404 v1 55
Page J-7.68

(g) Owner agrees to waive subrogation rights for commercial general liability, automobile liability and worker’s compensation against Indemnitees regardless of the applicability of any insurance proceeds, and to require all contractors, subcontractors or others involved in any way with any construction on the Property to do likewise. Each insurance policy shall contain a waiver of subrogation for the benefit of City. If any required insurance is provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs are included in such annual aggregate limit, such annual aggregate limit shall be three times the applicable occurrence limits specified above. (h) It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirement and/or limits shall be available to the additional insured. Furthermore, the requirement for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater. For all liability insurance required by this Agreement, Owner (and Owner’s contractors, as applicable) shall obtain endorsements that name the Indemnitees as additional insured in the full amount of all applicable policies, notwithstanding any lesser minimum limits specified in this Agreement. This Agreement requires Owner (and Owner’s contractors, as applicable) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Owner (or Owner’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Owner (or Owner’s contractors as applicable) obtains insurance policies that provide liability coverage in excess of the amounts specified in this Agreement, the actual limits provided by such policies shall be deemed to be the amounts required under this Agreement. Without limiting the foregoing, the limits of liability coverage specified in this Agreement are not intended, nor shall they operate, to limit City’s ability to recover amounts in excess of the minimum amounts specified in this Agreement.
(i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. Acceptability of Insurers. Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII.

6. Verification of Coverage. Prior to the Effective Date of this Agreement, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (a), (b), (c), and (e) of Section 1 above, duly executed endorsements evidencing the Indemnitees’ status as additional insured, and all 4887-9247-0404 v1 56
Page J-7.69

other endorsements and coverage required hereunder pertaining to such coverage. Prior to commencement of any construction work on the Property, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (d) and (g) of Section 1 above. Prior to City’s issuance of a final certificate of occupancy or equivalent for the Project, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraph (f) of Section 1 above. Owner shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf.

7. Insurance Certificates and Endorsements. Owner shall submit to the City all of the necessary insurance documents, including the applicable amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of required Owner policies listing all required policy endorsements to the City. Insurance Certificates and Endorsements are to be received and approved by the City within the time periods specified in Section 6 above.

Should Owner cease to have insurance as required at any time, all work by Owner pursuant to this Agreement shall cease until insurance acceptable to the City is provided. Upon City’s request, Owner shall, within thirty (30) days of the request, provide or arrange for the insurer to provide to City, complete certified copies of all insurance policies required under this Agreement. City’s failure to make such request shall not constitute a waiver of the right to require delivery of the policies in the future. 4887-9247-0404 v1 57
Page J-7.70

Exhibit D

RESALE RESTRICTION AGREEMENT
4887-9247-0404 v1 58
Page J-7.71

EXHIBIT D
This document is recorded for the benefit of the City of Menlo Park and is entitled to be recorded free of charge in accordance with Sections 6103 and 27383 of the Government Code.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Menlo Park
Attn: City Clerk
701 Laurel Street
Menlo Park, CA 94025

BUYER'S OCCUPANCY AND RESALE RESTRICTION AGREEMENT

WITH RIGHT OF FIRST REFUSAL
(975 Florence Lane Unit 8)

THIS BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Agreement”) is entered into as of , 202[_], by and between the City of Menlo Park a California municipal corporation (“City”), and ___________________________, a California limited liability company (“Owner”). City and Owner may be referred to individually as a “Party” or collectively as the “Parties” in this Agreement.

RECITALS
A. Pursuant to the terms of that certain BMR Agreement (“Regulatory Agreement”) between the City and Florence Lane Ventures , LLC, recorded on ______________, 20__, as Document No. ________________ in the Official Records of San Mateo County (“Official Records”), that certain property described in Exhibit A to this Agreement (the "Property") was designated as a moderate income unit, to be made available for sale only to moderate income households at a price not to exceed a moderate income housing costs for a period of fifty-five (55) years.

B. Owner is a Moderate Income Household, and is purchasing the Property. As a condition of purchasing the Property, and in exchange for having the opportunity to acquire the Property at a sales price below market value for the property, Owner is required to enter into this Agreement to ensure the continued affordability of the Property, consistent with the Regulatory Agreement.

C. This Agreement also provides the City a right of first refusal to purchase the Property given in consideration of the economic benefits to the Owner resulting from the purchase of the Property at a price below market value for the Property.

NOW, THEREFORE, the Parties hereto agree as follows. The recitals are incorporated into this Agreement by this reference.
1 Page J-7.72

1. OPERATION OF THE BMR UNIT.

2.1 Effective Date. The effective date of this Agreement shall be the date that the Grant Deed conveying the Property to Owner is recorded in the Official Records. (the “Effective Date.”)

2.2 Affordability Period. The Property, shall be subject to the requirements of this Agreement from the Effective Date until the 55th anniversary of such date. The duration of this requirement shall be known as the “Affordability Period.”

2.3 Maintenance. Owner shall comply with every condition of the Project Approvals applicable to the Project and shall, at all times, maintain the Project and the Property in good repair and working order, reasonable wear and tear excepted, and in a safe and sanitary condition, and from time to time shall make all necessary and proper repairs, renewals, and replacements to keep the Project and the Property in a good, clean, safe, and sanitary condition.

2.4 Monitoring and Recordkeeping. Throughout the Affordability Period, Owner shall comply with all applicable recordkeeping and monitoring requirements set forth in the Guidelines, or, at the Owner’s election, applicable recordkeeping and monitoring requirements in updated Guidelines. City shall have the right to inspect the books and records of Owner and its rental agent or bookkeeper upon reasonable notice during normal business hours. Representatives of the City shall be entitled to enter the Property, upon at least 48-hour prior written notice, which can be provided via email, to monitor compliance with this Agreement, to inspect the records of the Project with respect to the Property, and to conduct, or cause to be conducted, an independent audit or inspection of such records. Owner agrees to cooperate with the City in making the Property available for such inspection or audit. Owner agrees to maintain records in businesslike manner, and to maintain such records for Affordability Period.

2.5 Non-Discrimination Covenants. Owner covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall any occupant of the Property or any person claiming under or through such occupant, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith.

2.5.1. In deeds, the following language shall appear:
2 Page J-7.73

(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

2.5.2. In leases, the following language shall appear:
(1) The lessee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).
3 Page J-7.74

2.5.3. In contracts pertaining to management of the Project, the following language, or substantially similar language prohibiting discrimination and segregation shall appear:
(1) There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

2.6 Subordination. This Agreement shall be recorded in the Official Records of the County of San Mateo and shall run with the land. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement for the benefit of lenders providing financing for the Project, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

3. OPERATION OF THE PROPERTY UNITS.

3.1 Sale to Moderate Income Households. The Property shall be sold in accordance with the BMR Ordinance and the Guidelines. The Property shall be affordable to eligible households which are moderate income as defined in Section 50093 of the California Health and Safety Code, as described in the Guidelines, which households meet all of the requirements set forth in the Guidelines, and are of the smallest household size eligible for the Property on the BMR waiting list maintained by the City on the date that the Sales Prices are set, as more particularly described below and in the Guidelines. The eligibility requirements for buyers of the Property, the selection process for buyers for the Property, the purchase process and sale procedures, the occupancy requirements for the Property and the process for resale of Property are all set forth in the Guidelines. 4 Page J-7.75

The Property shall be subject to deed restrictions and conditions which include a right of first refusal in favor of the City for the duration of the Affordability Period, pursuant to the terms and conditions set forth in the Guidelines.

The Property shall be located in the Project as set forth in Exhibit B.

Any sale of the Property shall be subject to the setting of a sales price which shall be calculated according to the formula for calculating the sales price set forth in the Guidelines in effect at the time Owner notifies City that they wish to sell the Property (the “Sales Price.”) The Sales Price shall be set before the commencement of the sale process for the Property.

3.2 Term. Any and all obligations or responsibilities of Owner under this Agreement with regard to the Property shall terminate upon the recording of the grant deed conveying the Property to a qualified third party purchaser or the City in accordance with the terms and provisions of Section 3 of this Agreement and this Agreement as a whole and the recording of the deed restrictions in compliance with the Guidelines against the Property.

3.3 Third Party Purchasers. The execution and delivery of this Agreement shall not be deemed to be for the benefit of the third party purchasers of the Property or any other third party and any and all obligations and responsibilities of Owner under this Agreement are to the City for whose benefit this Agreement has been entered into. No third party purchaser of the Property or market rate unit, homeowners’ association or any other third party shall obtain any rights or standing to complain that the Property was not constructed, designed, sold or conveyed in accordance with this Agreement, or the Ordinance and the Guidelines as a result of this Agreement. Furthermore, the acceptance of this Agreement by the City, the acceptance of the interior specifications for the Property and the conveyance of the Property to qualified third parties shall conclusively indicate that Owner has complied with this Agreement and the Ordinance and the Guidelines.

3.4 Right of First Refusal. Except as provided herein, Owner hereby grants and gives to the City of Menlo Park, or another governmental entity or tax-exempt nonprofit organization to whom City may assign the rights set forth in this Paragraph 10 (“Assignee”), a right to purchase the Premises solely for resale as a BMR unit pursuant to the terms of the City’s Below Market Rate Housing Program, under conditions set forth below. City, at its sole discretion, may also assign this right to an individual buyer who meets the City’s eligibility qualifications to participate in the City’s Below Market Rate Housing Program (“Eligible Buyer”). City shall select an Eligible Buyer from the BMR Purchase and Rental Interest List or the BMR Purchase Legacy List or, if neither list exist, City shall market the Premises and shall have the right to retain a realtor to locate Eligible Buyers. City reserves the right to reassign the right to another Eligible Buyer in the event the initial Eligible Buyer fails or is unable to complete the transaction. Notwithstanding the foregoing, no assignment or reassignment of this right shall extend any time limits for performance under this Agreement without the mutual, express and written agreement signed by both the Owner and any assignee.
5 Page J-7.76

4. CONDITIONS OF TRANSFER.

For purposes of this Agreement, “transfer” shall mean any voluntary or involuntary sale, assignment or transfer of ownership or any interest in the Premises, including, but not limited to, a fee simple interest, joint tenancy interest, or life estate. A “transfer” shall also include the recording of one or more deeds of trust against the Premises to secure one or more loans or to refinance an existing loan. Until such time as the City’s right of first refusal is exercised, waived, or expired, there shall be no transfer of the Premises to any person or entity except with the express written consent of City or its designee, which consent shall be consistent with the City’s goal of creating, preserving, maintaining, and protecting housing in Menlo Park for persons of low and moderate income. Any transfer of the Premises shall be subject to the conditions set forth in this Agreement, and any and all conditions contained in the Ordinance and the Guidelines, including any amendments thereto which may be adopted from time to time, as long as these amendments do not have a materially adverse affect on the interests of Owner.

4.1 Prohibited Transfer/Default. Any transfer which is not in substantial compliance with the above conditions shall be deemed a “Prohibited Transfer”. Upon receipt of any evidence of a Prohibited Transfer or any other violation of the terms of this Agreement, City shall give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within ten (10) days after the date of the notice, or within such further time as City determines is necessary to correct the violation, City may declare a default under this Agreement. Upon the declaration of a default, City may apply to a court of competent jurisdiction for specific performance of the Agreement, for an injunction prohibiting a proposed sale or transfer in violation of this Agreement, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate under the circumstances.

4.2 Permitted Transfer. Notwithstanding the foregoing, the following transfers are exempt from City’s right of first refusal and do not re-start the fifty-five (55) year deed restriction clock (each, a “Permitted Transfer”):

4.2.1. Transfer by devise or inheritance to Owner’s spouse;

4.2.2. Transfer of title by an Owner’s death to a surviving joint tenant, tenant in common, or a surviving spouse of community property (that is, another owner already on title);

4.2.3. Transfer of title to the Owner’s spouse as part of divorce or dissolution proceedings;

4.2.4. Transfer of title or an interest in the property to the Owner’s spouse in conjunction with marriage;

4.2.5. Transfer to Fannie Mae through foreclosure or its acceptance of a deed in lieu of foreclosure.
6 Page J-7.77

In the event of a Permitted Transfer, an instrument shall be executed, acknowledged and recorded by the transferee containing the following covenant:
“This property is subject to the terms and provisions of that certain ‘Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property’. Transferee, on behalf of transferee, and transferee’s successors and assigns, covenants and agrees to be bound by, and to perform in accordance with, such Agreement, and to include this covenant in any further transfer of the property.”

4.3 Conditional Permitted Transfers. Owner may transfer the Premises to a child or other relative by devise or inheritance provided that: a) Owner provides written notice to the City with the transferee’s name, contact information, and household income information and the City consents; b) the transferee household is an eligible, qualifying household under the BMR Guidelines at the time of the transfer; c) the transferee signs a new Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and Performance Deed of Trust and Security Agreement in a form acceptable to City and occupies the Premises. In the event that the transferee is not an eligible, qualifying household, the transferee may inherit the Premises but must offer the Premises for sale in accordance with Paragraph 11 below within ninety (90) days of the recording of the deed or probate order conveying title to the Premises to transferee. Failure to comply with the provisions of this Paragraph 5.C shall constitute a Prohibited Transfer.

5. OWNER OCCUPANCY.

Prospective purchasers of the Property must sign a written statement acknowledging their agreement that the Property must be occupied as the purchaser’s principal residence, that the Property may not be rented or leased, except as allowed under the Resale Restriction Agreement.

6. SENIOR LIEN HOLDER.

Any attempt to transfer title or any interest therein in violation of these covenants shall be void, provided, however, that any deed restrictions herein shall be subordinate to any mortgage (“First Deed of Trust”) held by a Senior Lien Holder and/or a federally or state chartered bank or savings and loan association qualified to do business in the State of California which mortgage was obtained at the time owner purchased the Property (“Senior Lien Holder”). City and Owner acknowledge and agree that this Agreement is subject and subordinate in all respects to the liens, terms, covenants and conditions of the First Deed of Trust and to all advances heretofore made or which may hereafter be made pursuant to the First Deed of Trust held by a Senior Lien Holder including all sums advanced for the purpose of (a) protecting or further securing the lien of the First Deed of Trust, curing defaults by the Owner under the First Deed of Trust or for any other purpose expressly permitted by the First Deed of Trust, or (b) constructing, renovating, repairing, furnishing, fixturing or equipping the Premises. The terms and provisions of the First Deed of Trust are paramount and controlling, and they supersede any other terms and provisions hereof in conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of 7 Page J-7.78

the First Deed of Trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the Premises to low or moderate income households or otherwise restricting the Owner’s ability to sell the Premises shall have no further force or effect on subsequent owners or purchasers of the Premises. Any person, including his or her successors or assigns (other than the Owner or a related entity of the Owner), receiving title to the Premises through a foreclosure or deed in lieu of foreclosure of the First Deed of Trust shall receive title to the Premises free and clear from such restrictions. Further, if the Senior Lien Holder acquires title to the Premises pursuant to a deed in lieu of foreclosure, the lien of this Agreement shall automatically terminate upon the Senior Lien Holder’s acquisition of title, provided that (i) the City has been given written notice of a default under the First Deed of Trust, and (ii) the City shall not have cured the default under the First Deed of Trust, or diligently pursued curing the default as determined by the Senior Lien Holder, within the 60-day period provided in such notice sent to the City. Any and all deeds of trust recorded against the Premises, other than the First Deed of Trust held by the Senior Lien Holder and/or such Senior Lien Holder’s successor or assignee of its interest, shall be subordinate and subject to the terms and provisions of this Agreement.

7. RESALE PROCEDURES

7.1 Notice of Offer to Sell. Whenever the Owner no longer desires to own the Premises, Owner shall notify City of their intent to offer the property for sale in accordance with the terms of this Agreement. Such notice shall be in writing, and must be sent by certified mail through the United States Postal Service, addressed to the Community Development Director, City of Menlo Park, 701 Laurel Street, Menlo Park, CA 94025. Owner’s offer to sell may be withdrawn by Owner, provided that notice of withdrawal has been received by City or its designee, in writing, prior to acceptance by City or its designee.

7.2 Acceptance. City, its designee or Assignee shall have sixty (60) days from the date of receipt of Owner’s notice to exercise the right of first refusal to accept Owner’s offer to sell the Premises. This acceptance shall be in writing, shall indicate that City believes the Premises are in salable condition in accordance with Paragraph 18, state the purchase price for the Premises as determined in Paragraph 14, and whether City is exercising the right of first refusal on its own behalf or has located an Eligible Buyer, and shall be sent by certified mail through the United States Postal Service, addressed to the Owner of record at the official address of the Premises. For purposes of fulfillment of the terms of this procedure, the notice of intent to sell the Premises shall be deemed to be an offer to sell, and the exercise of the right to purchase by the City or its designee or Assignee shall be deemed to be an acceptance of that offer. Acceptance by City or its designee or Assignee shall constitute a legally binding contract for the transfer of title, and once accepted, the offer to sell may not be withdrawn without the express, written consent of the party who accepted the offer. The Owner is responsible for all fees and expenses related to the sale of the unit, including but not limited to real estate commissions and inspections.
8 Page J-7.79

7.3 Escrow. Within sixty (60) days of the date of acceptance, an escrow account shall be opened by the City or its designee or Assignee. At the closing, a title insurance company approved by City shall issue to the City, its designee, or Assignee, or the Eligible Buyer a CLTA owner’s title insurance policy, in a form reasonably approved by City and subject only to such title exceptions as reasonably approved by City. Taxes and assessments shall be prorated as of the date of closing. Taxes must be paid current as of the closing date and all liens must be satisfied and removed from title unless City expressly agrees otherwise in writing. The City, its designee, or Assignee or the Eligible Buyer shall pay the cost of the title insurance.

Closing shall utilize the form of escrow agreement customarily used by such title company for residential transactions with the City, modified to the extent necessary to conform to this transaction. If the Premises are sold to an Eligible Buyer, prior to the Closing, City and the Eligible Buyer shall deliver an executed Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and a Performance Deed of Trust and Security Agreement in a form acceptable to City. The Eligible Buyer must also certify at Closing that he or she will occupy the Premises as his or her primary residence. At the Closing, the Owner shall convey title to the City, the Assignee, or the Eligible Buyer by grant deed.

7.4 Resale Restriction Agreement. The initial buyer and each subsequent buyer of the Property shall execute and record a covenant, substantially in the form of Exhibit D, that restricts the future sale of moderate income households at the Sales Price for a period of fifty-five (55) years (the "Resale Restriction Agreement").

7.5 Owner’s Obligation to Cooperate. At all times commencing on the date that the Owner provides the notice set forth in Paragraph 11.A, Owner shall ensure that the Premises are clean and in good repair, and available to be shown to prospective Eligible Buyers. Owner shall cooperate with the City of Menlo Park and their respective officers, employees and representatives. Failure to comply with these conditions shall be deemed a material breach of Owner’s obligations pursuant to the terms of this Agreement, and upon determination by the City that Owner has failed to comply with any of the above conditions, City shall notify Owner that the time periods stated herein shall be tolled, and the applicable time periods extended accordingly, until Owner has complied with all of the conditions of this Agreement.

Acts by Owner which shall be deemed to be a breach of this obligation include, but are not limited to, failure to make the Premises available for showing to prospective Eligible Buyers upon reasonable notice, willful or deliberate actions to dissuade prospective buyers from purchasing the Premises, and failure or refusal to return telephone calls, complete forms, provide required reports, or perform other actions ordinarily required by a party to a real estate transaction in a timely manner. In addition to tolling the applicable time periods, the City may pursue any other remedies for breach based upon this paragraph.

7.6 Assignment. City reserves the right, at any time during this process, to subsequently assign its right to purchase to an Eligible Buyer. In no case shall the time between Owner’s receipt of City’s acceptance of an offer to sell and the date of close of escrow exceed one hundred eighty (180) days, unless both parties 9 Page J-7.80

mutually agree, in writing, to extend that date, or if for any reason the time periods herein are tolled.

8. DEFAULT AND REMEDIES

8.1 Events of Default. The following shall constitute an “Event of Default” by Owner under this Agreement: there shall be a material breach of any condition, covenant, warranty, promise or representation contained in this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof to the Owner without the Owner curing such breach, or if such breach cannot reasonably be cured within such 30 day period, commencing the cure of such breach within such 30 day period and thereafter diligently proceeding to cure such breach; provided, however, that if a different period or notice requirement is specified for any particular breach under any other paragraph of Section 4 of this Agreement, the specific provision shall control.

8.2 Remedies. The occurrence of any Event of Default under Section 4.1 shall give the City the right to proceed with an action in equity to require the Owner to specifically perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and the right to terminate this Agreement.

8.3 Obligations Personal to Owner. The liability of Owner under this Agreement to any person or entity is limited to Owner’s interest in the Project, and the City and any other such persons and entities shall look exclusively thereto for the satisfaction of obligations arising out of this Agreement or any other agreement securing the obligations of Owner under this Agreement. From and after the date of this Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Agreement, any agreement pertaining to any Project or any other agreement securing Owner’s obligations under this Agreement), shall be rendered against Owner, the assets of Owner (other than Owner’s interest in the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Agreement or any agreement securing the obligations of Owner under this Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding. No subsequent Owner of the Project shall be liable or obligated for the breach or default of any obligations of Owner under this Agreement on the part of any prior Owner. Such obligations are personal to the person who was the Owner at the time the default or breach was alleged to have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Owner. Each Owner shall comply with and be fully liable for all obligations the Owner hereunder during its period of ownership of the Project.

8.4 Remedies Cumulative. No right, power, or remedy given by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and 10 Page J-7.81

-
____________
each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise.

8.5 Waiver of Terms and Conditions. The City may, in its sole discretion, waive in writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.

8.6 Non-Liability of City Officials and Employees. No member, official, employee or agent of the City shall be personally liable to Owner or any occupant of the Property, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement.

8.7 Cure Rights. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by Owner’s mortgage lender, shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner.

9. GENERAL PROVISIONS

9.1 Below Market Rate Guidelines (“Guidelines”). This Agreement incorporates by reference the Guidelines as of the date the Owner submitted a complete Preliminary Application pursuant to Government Code section 65941.1 and, at the election of the Owner, any successor sections as the Guidelines may be amended from time to time. In the event of any conflict or ambiguity between this Agreement, the requirements of state and federal fair housing laws and the Guidelines, the terms and conditions of this Agreement and the requirements of state and federal fair housing laws shall control.

9.2 Time. Time is of the essence in this Agreement.

9.3 Notices. Unless otherwise indicated in this Agreement, any notice requirement set forth herein shall be deemed to be satisfied three days after mailing of the notice first-class United States certified mail, postage prepaid, or by personal delivery, addressed to the appropriate party as follows:

Owner: ____________
XXXXX
City: City of Menlo Park
701 Laurel Street
Menlo Park, California 94025-3483
Attention: City Manager
11 Page J-7.82

Such addresses may be changed by notice to the other party given in the same manner as provided above.

9.4 Successors and Assigns. This Agreement constitutes a covenant and legal restriction on the Property and shall run with the land, provided the Project remains on the Property, and all of the terms, covenants and conditions of this Agreement shall be binding upon Owner and the permitted successors and assigns of Owner.

9.5 Intended Beneficiaries. The City is the intended beneficiary of this Agreement and shall have the sole and exclusive power to enforce this Agreement. It is intended that the City may enforce this Agreement in order to, satisfy its obligations to improve, increase and preserve affordable housing within the City, as required by the Guidelines, and to provide that a certain percentage of new housing is made available at affordable housing cost to persons and families of very low, low and moderate incomes as required by the Guidelines. No other person or persons, other than the City and Owner and their assigns and successors, shall have any right of action hereon.

9.6 Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

9.7 Governing Law. This Agreement and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. The venue for any action shall be the County of San Mateo.

9.8 Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Owner and the City.

9.9 Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. Where this Agreement requires an approval or consent of the City, such approval shall not be unreasonably withheld may be given on behalf of the City by the City Manager or his or her designee. The City Manager or his or her designee is hereby authorized to take such actions as may be necessary or appropriate to implement this Agreement, including without limitation the execution of such documents or agreements as may be contemplated by this Agreement, and amendments which do not substantially change the uses or restrictions hereunder, or substantially add to the costs of the City hereunder.

9.10 Indemnification. To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel reasonably approved by City) and hold the City, its heirs, successors and assigns (the “Indemnitees”) harmless from and against any and all demands. losses, claims, costs and expenses, and any other liability whatsoever, including without limitation, reasonable accountants’ and attorneys’ fees, charges 12 Page J-7.83

and expense (collectively, “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 9.10 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 9.10 shall survive the expiration or earlier termination of this Agreement, but only as to claims arising from events occurring during the Affordability Period.

9.11 Insurance Coverage. Throughout the Affordability Period, Owner shall comply with the insurance requirements set forth in Exhibit C, attached hereto and incorporated herein by this reference, and shall, at Owner’s expense, maintain in full force and effect insurance coverage as specified in Exhibit C.

9.12 Transfer and Encumbrance.

9.12.1. Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of any Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

9.12.2. Permitted Transfers. The prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; or (ii) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (iii) transfers between entities owned or controlled by the Florence Lane Ventures, LLC.

9.12.3. Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement and/or a Property if all of the following requirements are met (provided however, the requirements of this Section 9.12.3 shall not apply to Transfers described in clauses (i) or (ii) of Section 9.12.2.
13 Page J-7.84

(1) Proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement.
(2) The Owner and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Property or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(3) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner’s obligations pursuant to conditions, and restrictions set forth in this Agreement.
(4) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

Consent to any proposed Transfer may be given by the deputy Director unless the Deputy Director, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Owner, the proposed Transfer shall be deemed approved.

9.13 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of any Property shall be deemed to relieve the Owner or any other party from any obligation under this Agreement. This Section

9.13 shall not apply to Transfers described in clauses (i) and (ii) of Section 9.12.2.

9.14 Recovery of City Costs. Owner shall reimburse City for all reasonable City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Owner of an invoice detailing such costs.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year set forth above.

SIGNATURES ON FOLLOWING PAGE(S).
14 Page J-7.85

OWNER:
[INSERT]
By:

Its:

CITY:

CITY OF MENLO PARK, a California municipal
corporation
By:

City Manager
ATTEST:

By:

City Clerk
List of Exhibits:

Exhibit A: 975 Florence Lane Property Description
Exhibit B: Property (Unit 8) Location
Exhibit C: Insurance Requirements
Exhibit D: Buyer’s Occupancy and Resale Restriction Agreement with First Right of Refusal 4858-8193-6771 v2 15
Page J-7.86

EXHIBIT A
975 Florence Lane Property Description
4858-8193-6771 v2
Page J-7.87

EXHIBIT B – Property Location
4858-8193-6771 v2
Page J-7.88
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PROJECT
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Page J-7.89

EXHIBIT C
Insurance Requirements
Prior to initiating work on the Project and continuing throughout the Affordability Period, Owner shall obtain and maintain the following policies of insurance and shall comply with all provisions set forth in this Exhibit.

1. General Requirements. Owner shall procure and maintain the following insurance providing coverage against claims for injuries to persons or damages to property that may arise from or in connection with the Project, construction, management, or operation of the Property by the Owner or the Owner’s agents, representatives, employees and contractors, or subcontractors, including the following:
(a) Commercial General Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain a commercial general liability policy in an occurrence policy for protection against all claims arising from injury to person or persons not in the employ of the Owner and against all claims resulting from damage to any property due to any act or omission of the Owner, its agents, or employees in the conduct or operation of the work or the execution of this Agreement. Such insurance shall include products and completed operations liability, blanket contractual liability, personal injury liability, and broad form property damage coverage. Coverage shall be at least as broad as Insurance Services Office Commercial General Liability coverage.
(b) Commercial Automobile Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain insurance for protection against all claims arising from the use of vehicles, owned, hired, non-owned, or any other vehicle in connection with the Project, construction, operation or management of the Property. Such insurance shall cover the use of automobiles and trucks on and off the site of the Property. Coverage shall be at least as broad as Insurance Services Office covering Commercial Automobile Liability, any auto, owned, non-owned and hired auto.
(c) Workers' Compensation Insurance: The Owner (and the general partners thereof) shall furnish or cause to be furnished to City evidence satisfactory to City that Owner (and the general partners thereof), and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement, shall maintain Workers' Compensation Insurance as required by the State of California and Employer’s Liability Insurance. (d) Builder’s Risk: Upon commencement of any construction work on the Property, Owner and all contractors working on behalf of Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee as its interests may appear.
4858-8193-6771 v2
Page J-7.90

(e) Professional Liability/Errors and Omissions: Owner shall require any architects, engineers, and general contractors working on the Property to maintain Professional Liability/Errors and Omissions insurance with limits not less than Two Million Dollars ($2,000,000) each claim. Certificates evidencing this coverage must reference both the Owner and the Indemnitees. If the professional liability/errors and omissions insurance is written on a claims made form: (i) the retroactive date must be shown and must be before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of Project construction, and (iii) if coverage is cancelled or non-renewed and not replaced with another claims made policy form with a retroactive date prior to the Effective Date, Owner must purchase, or require the provision of, extended period coverage for a minimum of three (3) years after completion of construction.
(f) Property: Owner shall maintain property insurance covering all risks of loss, including earthquake and flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, and as commercially available.

2. Minimum Limits; Adjustments. Insurance shall be maintained with limits no less than the following:
(a) Commercial General Liability and Property Damage: $2,000,000 per occurrence and $5,000,000 annual aggregate for bodily injury, personal injury and property damage; provided however, with City’s advance written approval, subcontractors may maintain liability coverage with limits not less than $1,000,000 per occurrence, $2,000,000 annual aggregate.
(b) Products and Completed Operations: $3,000,000 per occurrence/aggregate.

Subcontractors may maintain Products and Completed Operations with limits not less than $1,000,000 per occurrence and $1,000,000 aggregate. (c) Commercial Automobile Liability: $2,000,000 combined single limit. (d) Employer’s Liability:

Bodily Injury by Accident - $1,000,000 each accident.

Bodily Injury by Disease - $1,000,000 policy limit.

Bodily Injury by Disease - $1,000,000 each employee.
(e) Professional Liability/Errors and Omissions: $2,000,000 per occurrence or claim.

If the policy provides coverage on a claims-made basis, the retroactive date must be shown and must be before the date of the Agreement or the beginning of the contract work. Subcontractors are required to carry coverage if their scope of work includes design services to the Project.
4858-8193-6771 v2 54
Page J-7.91

Coverage limits, and if necessary, the terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than every five (5) years after the Effective Date nor more than once in every three (3) year period) to address changes in circumstance, including, but not limited to, changes in inflation and the litigation climate in California. City shall give written notice to Owner of any such adjustments, and Owner shall provide City with amended or new insurance certificates or endorsements evidencing compliance with such adjustments within thirty (30) days following receipt of such notice.

3. Deductibles and Self-Insured Retention. Any deductibles or self-insured retention must be declared to, and approved by, the City. Payment of all deductibles and self-insured retentions will be the responsibility of Owner. If the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense.Additional Requirements. The required general liability and automobile policies shall contain, or be endorsed to contain, the following provisions:The Indemnitees are to be covered as Additional Insureds as respects: liability arising out of activities performed by or on behalf of the Owner; products and completed operations of the Owner; premises owned, occupied or used by the Owner; or automobiles owned, leased, hired or borrowed by the Owner. The coverage shall contain no special limitations on the scope of protection afforded to the Indemnitees. Additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94.All insurance shall be primary insurance as respects the Indemnitees. Any insurance or self-insurance maintained by the Indemnitees shall be excess of the Owner’s/contractor’s insurance and shall not contribute with it.
(c) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Indemnitees. (d) The Owner’s insurance shall apply separately to each insured against whom claim is made or suit is brought except, with respect to the limits of the insurer’s liability. (e) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City. (f) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within five (5) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies.

Upon failure to so file such certificate, City may, without further notice and at its 4858-8193-6771 v2 55
Page J-7.92

option, procure such insurance coverage at Owner’s expense, and Owner shall promptly reimburse City for such expense upon receipt of billing from City. (g) Owner agrees to waive subrogation rights for commercial general liability, automobile liability and worker’s compensation against Indemnitees regardless of the applicability of any insurance proceeds, and to require all contractors, subcontractors or others involved in any way with any construction on the Property to do likewise. Each insurance policy shall contain a waiver of subrogation for the benefit of City. If any required insurance is provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs are included in such annual aggregate limit, such annual aggregate limit shall be three times the applicable occurrence limits specified above. (h) It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirement and/or limits shall be available to the additional insured. Furthermore, the requirement for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater. For all liability insurance required by this Agreement, Owner (and Owner’s contractors, as applicable) shall obtain endorsements that name the Indemnitees as additional insured in the full amount of all applicable policies, notwithstanding any lesser minimum limits specified in this Agreement. This Agreement requires Owner (and Owner’s contractors, as applicable) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Owner (or Owner’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Owner (or Owner’s contractors as applicable) obtains insurance policies that provide liability coverage in excess of the amounts specified in this Agreement, the actual limits provided by such policies shall be deemed to be the amounts required under this Agreement. Without limiting the foregoing, the limits of liability coverage specified in this Agreement are not intended, nor shall they operate, to limit City’s ability to recover amounts in excess of the minimum amounts specified in this Agreement.
(i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. Acceptability of Insurers. Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII. 4858-8193-6771 v2 56
Page J-7.93

6. Verification of Coverage. Prior to the Effective Date of this Agreement, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (a), (b), (c), and (e) of Section 1 above, duly executed endorsements evidencing the Indemnitees’ status as additional insured, and all other endorsements and coverage required hereunder pertaining to such coverage. Prior to commencement of any construction work on the Property, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (d) and (g) of Section 1 above. Prior to City’s issuance of a final certificate of occupancy or equivalent for the Project, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraph (f) of Section 1 above. Owner shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf.

7. Insurance Certificates and Endorsements. Owner shall submit to the City all of the necessary insurance documents, including the applicable amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of required Owner policies listing all required policy endorsements to the City. Insurance Certificates and Endorsements are to be received and approved by the City within the time periods specified in Section 6 above.

Should Owner cease to have insurance as required at any time, all work by Owner pursuant to this Agreement shall cease until insurance acceptable to the City is provided. Upon City’s request, Owner shall, within thirty (30) days of the request, provide or arrange for the insurer to provide to City, complete certified copies of all insurance policies required under this Agreement. City’s failure to make such request shall not constitute a waiver of the right to require delivery of the policies in the future. 4858-8193-6771 v2 57
Page J-7.94

Exhibit D

BUYER'S OCCUPANCY AND RESALE RESTRICTION AGREEMENT

WITH RIGHT OF FIRST REFUSAL
(same as subject agreement)
4858-8193-6771 v2 58
Page J-7.95

EXHIBIT D
This document is recorded for the benefit of the City of Menlo Park and is entitled to be recorded free of charge in accordance with Sections 6103 and 27383 of the Government Code.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Menlo Park
Attn: City Clerk
701 Laurel Street
Menlo Park, CA 94025

BUYER'S OCCUPANCY AND RESALE RESTRICTION AGREEMENT

WITH RIGHT OF FIRST REFUSAL
(975 Florence Lane Unit 8)

THIS BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Agreement”) is entered into as of , 202[_], by and between the City of Menlo Park a California municipal corporation (“City”), and ___________________________, a California limited liability company (“Owner”). City and Owner may be referred to individually as a “Party” or collectively as the “Parties” in this Agreement.

RECITALS
A. Pursuant to the terms of that certain BMR Agreement (“Regulatory Agreement”) between the City and Florence Lane Ventures , LLC, recorded on ______________, 20__, as Document No. ________________ in the Official Records of San Mateo County (“Official Records”), that certain property described in Exhibit A to this Agreement (the "Property") was designated as a moderate income unit, to be made available for sale only to moderate income households at a price not to exceed a moderate income housing costs for a period of fifty-five (55) years.

B. Owner is a Moderate Income Household, and is purchasing the Property. As a condition of purchasing the Property, and in exchange for having the opportunity to acquire the Property at a sales price below market value for the property, Owner is required to enter into this Agreement to ensure the continued affordability of the Property, consistent with the Regulatory Agreement.

C. This Agreement also provides the City a right of first refusal to purchase the Property given in consideration of the economic benefits to the Owner resulting from the purchase of the Property at a price below market value for the Property.

NOW, THEREFORE, the Parties hereto agree as follows. The recitals are incorporated into this Agreement by this reference.
1 Page J-7.96

1. OPERATION OF THE BMR UNIT.

2.1 Effective Date. The effective date of this Agreement shall be the date that the Grant Deed conveying the Property to Owner is recorded in the Official Records. (the “Effective Date.”)

2.2 Affordability Period. The Property, shall be subject to the requirements of this Agreement from the Effective Date until the 55th anniversary of such date. The duration of this requirement shall be known as the “Affordability Period.”

2.3 Maintenance. Owner shall comply with every condition of the Project Approvals applicable to the Project and shall, at all times, maintain the Project and the Property in good repair and working order, reasonable wear and tear excepted, and in a safe and sanitary condition, and from time to time shall make all necessary and proper repairs, renewals, and replacements to keep the Project and the Property in a good, clean, safe, and sanitary condition.

2.4 Monitoring and Recordkeeping. Throughout the Affordability Period, Owner shall comply with all applicable recordkeeping and monitoring requirements set forth in the Guidelines, or, at the Owner’s election, applicable recordkeeping and monitoring requirements in updated Guidelines. City shall have the right to inspect the books and records of Owner and its rental agent or bookkeeper upon reasonable notice during normal business hours. Representatives of the City shall be entitled to enter the Property, upon at least 48-hour prior written notice, which can be provided via email, to monitor compliance with this Agreement, to inspect the records of the Project with respect to the Property, and to conduct, or cause to be conducted, an independent audit or inspection of such records. Owner agrees to cooperate with the City in making the Property available for such inspection or audit. Owner agrees to maintain records in businesslike manner, and to maintain such records for Affordability Period.

2.5 Non-Discrimination Covenants. Owner covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall any occupant of the Property or any person claiming under or through such occupant, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith.

2.5.1. In deeds, the following language shall appear:
2 Page J-7.97

(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

2.5.2. In leases, the following language shall appear:
(1) The lessee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).
3 Page J-7.98

2.5.3. In contracts pertaining to management of the Project, the following language, or substantially similar language prohibiting discrimination and segregation shall appear:
(1) There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

2.6 Subordination. This Agreement shall be recorded in the Official Records of the County of San Mateo and shall run with the land. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement for the benefit of lenders providing financing for the Project, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

3. OPERATION OF THE PROPERTY UNITS.

3.1 Sale to Moderate Income Households. The Property shall be sold in accordance with the BMR Ordinance and the Guidelines. The Property shall be affordable to eligible households which are moderate income as defined in Section 50093 of the California Health and Safety Code, as described in the Guidelines, which households meet all of the requirements set forth in the Guidelines, and are of the smallest household size eligible for the Property on the BMR waiting list maintained by the City on the date that the Sales Prices are set, as more particularly described below and in the Guidelines. The eligibility requirements for buyers of the Property, the selection process for buyers for the Property, the purchase process and sale procedures, the occupancy requirements for the Property and the process for resale of Property are all set forth in the Guidelines. 4 Page J-7.99

The Property shall be subject to deed restrictions and conditions which include a right of first refusal in favor of the City for the duration of the Affordability Period, pursuant to the terms and conditions set forth in the Guidelines.

The Property shall be located in the Project as set forth in Exhibit B.

Any sale of the Property shall be subject to the setting of a sales price which shall be calculated according to the formula for calculating the sales price set forth in the Guidelines in effect at the time Owner notifies City that they wish to sell the Property (the “Sales Price.”) The Sales Price shall be set before the commencement of the sale process for the Property.

3.2 Term. Any and all obligations or responsibilities of Owner under this Agreement with regard to the Property shall terminate upon the recording of the grant deed conveying the Property to a qualified third party purchaser or the City in accordance with the terms and provisions of Section 3 of this Agreement and this Agreement as a whole and the recording of the deed restrictions in compliance with the Guidelines against the Property.

3.3 Third Party Purchasers. The execution and delivery of this Agreement shall not be deemed to be for the benefit of the third party purchasers of the Property or any other third party and any and all obligations and responsibilities of Owner under this Agreement are to the City for whose benefit this Agreement has been entered into. No third party purchaser of the Property or market rate unit, homeowners’ association or any other third party shall obtain any rights or standing to complain that the Property was not constructed, designed, sold or conveyed in accordance with this Agreement, or the Ordinance and the Guidelines as a result of this Agreement. Furthermore, the acceptance of this Agreement by the City, the acceptance of the interior specifications for the Property and the conveyance of the Property to qualified third parties shall conclusively indicate that Owner has complied with this Agreement and the Ordinance and the Guidelines.

3.4 Right of First Refusal. Except as provided herein, Owner hereby grants and gives to the City of Menlo Park, or another governmental entity or tax-exempt nonprofit organization to whom City may assign the rights set forth in this Paragraph 10 (“Assignee”), a right to purchase the Premises solely for resale as a BMR unit pursuant to the terms of the City’s Below Market Rate Housing Program, under conditions set forth below. City, at its sole discretion, may also assign this right to an individual buyer who meets the City’s eligibility qualifications to participate in the City’s Below Market Rate Housing Program (“Eligible Buyer”). City shall select an Eligible Buyer from the BMR Purchase and Rental Interest List or the BMR Purchase Legacy List or, if neither list exist, City shall market the Premises and shall have the right to retain a realtor to locate Eligible Buyers. City reserves the right to reassign the right to another Eligible Buyer in the event the initial Eligible Buyer fails or is unable to complete the transaction. Notwithstanding the foregoing, no assignment or reassignment of this right shall extend any time limits for performance under this Agreement without the mutual, express and written agreement signed by both the Owner and any assignee.
5 Page J-7.100

4. CONDITIONS OF TRANSFER.

For purposes of this Agreement, “transfer” shall mean any voluntary or involuntary sale, assignment or transfer of ownership or any interest in the Premises, including, but not limited to, a fee simple interest, joint tenancy interest, or life estate. A “transfer” shall also include the recording of one or more deeds of trust against the Premises to secure one or more loans or to refinance an existing loan. Until such time as the City’s right of first refusal is exercised, waived, or expired, there shall be no transfer of the Premises to any person or entity except with the express written consent of City or its designee, which consent shall be consistent with the City’s goal of creating, preserving, maintaining, and protecting housing in Menlo Park for persons of low and moderate income. Any transfer of the Premises shall be subject to the conditions set forth in this Agreement, and any and all conditions contained in the Ordinance and the Guidelines, including any amendments thereto which may be adopted from time to time, as long as these amendments do not have a materially adverse affect on the interests of Owner.

4.1 Prohibited Transfer/Default. Any transfer which is not in substantial compliance with the above conditions shall be deemed a “Prohibited Transfer”. Upon receipt of any evidence of a Prohibited Transfer or any other violation of the terms of this Agreement, City shall give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within ten (10) days after the date of the notice, or within such further time as City determines is necessary to correct the violation, City may declare a default under this Agreement. Upon the declaration of a default, City may apply to a court of competent jurisdiction for specific performance of the Agreement, for an injunction prohibiting a proposed sale or transfer in violation of this Agreement, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate under the circumstances.

4.2 Permitted Transfer. Notwithstanding the foregoing, the following transfers are exempt from City’s right of first refusal and do not re-start the fifty-five (55) year deed restriction clock (each, a “Permitted Transfer”):

4.2.1. Transfer by devise or inheritance to Owner’s spouse;

4.2.2. Transfer of title by an Owner’s death to a surviving joint tenant, tenant in common, or a surviving spouse of community property (that is, another owner already on title);

4.2.3. Transfer of title to the Owner’s spouse as part of divorce or dissolution proceedings;

4.2.4. Transfer of title or an interest in the property to the Owner’s spouse in conjunction with marriage;

4.2.5. Transfer to Fannie Mae through foreclosure or its acceptance of a deed in lieu of foreclosure.
6 Page J-7.101

In the event of a Permitted Transfer, an instrument shall be executed, acknowledged and recorded by the transferee containing the following covenant:
“This property is subject to the terms and provisions of that certain ‘Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property’. Transferee, on behalf of transferee, and transferee’s successors and assigns, covenants and agrees to be bound by, and to perform in accordance with, such Agreement, and to include this covenant in any further transfer of the property.”

4.3 Conditional Permitted Transfers. Owner may transfer the Premises to a child or other relative by devise or inheritance provided that: a) Owner provides written notice to the City with the transferee’s name, contact information, and household income information and the City consents; b) the transferee household is an eligible, qualifying household under the BMR Guidelines at the time of the transfer; c) the transferee signs a new Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and Performance Deed of Trust and Security Agreement in a form acceptable to City and occupies the Premises. In the event that the transferee is not an eligible, qualifying household, the transferee may inherit the Premises but must offer the Premises for sale in accordance with Paragraph 11 below within ninety (90) days of the recording of the deed or probate order conveying title to the Premises to transferee. Failure to comply with the provisions of this Paragraph 5.C shall constitute a Prohibited Transfer.

5. OWNER OCCUPANCY.

Prospective purchasers of the Property must sign a written statement acknowledging their agreement that the Property must be occupied as the purchaser’s principal residence, that the Property may not be rented or leased, except as allowed under the Resale Restriction Agreement.

6. SENIOR LIEN HOLDER.

Any attempt to transfer title or any interest therein in violation of these covenants shall be void, provided, however, that any deed restrictions herein shall be subordinate to any mortgage (“First Deed of Trust”) held by a Senior Lien Holder and/or a federally or state chartered bank or savings and loan association qualified to do business in the State of California which mortgage was obtained at the time owner purchased the Property (“Senior Lien Holder”). City and Owner acknowledge and agree that this Agreement is subject and subordinate in all respects to the liens, terms, covenants and conditions of the First Deed of Trust and to all advances heretofore made or which may hereafter be made pursuant to the First Deed of Trust held by a Senior Lien Holder including all sums advanced for the purpose of (a) protecting or further securing the lien of the First Deed of Trust, curing defaults by the Owner under the First Deed of Trust or for any other purpose expressly permitted by the First Deed of Trust, or (b) constructing, renovating, repairing, furnishing, fixturing or equipping the Premises. The terms and provisions of the First Deed of Trust are paramount and controlling, and they supersede any other terms and provisions hereof in conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of 7 Page J-7.102

the First Deed of Trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the Premises to low or moderate income households or otherwise restricting the Owner’s ability to sell the Premises shall have no further force or effect on subsequent owners or purchasers of the Premises. Any person, including his or her successors or assigns (other than the Owner or a related entity of the Owner), receiving title to the Premises through a foreclosure or deed in lieu of foreclosure of the First Deed of Trust shall receive title to the Premises free and clear from such restrictions. Further, if the Senior Lien Holder acquires title to the Premises pursuant to a deed in lieu of foreclosure, the lien of this Agreement shall automatically terminate upon the Senior Lien Holder’s acquisition of title, provided that (i) the City has been given written notice of a default under the First Deed of Trust, and (ii) the City shall not have cured the default under the First Deed of Trust, or diligently pursued curing the default as determined by the Senior Lien Holder, within the 60-day period provided in such notice sent to the City. Any and all deeds of trust recorded against the Premises, other than the First Deed of Trust held by the Senior Lien Holder and/or such Senior Lien Holder’s successor or assignee of its interest, shall be subordinate and subject to the terms and provisions of this Agreement.

7. RESALE PROCEDURES

7.1 Notice of Offer to Sell. Whenever the Owner no longer desires to own the Premises, Owner shall notify City of their intent to offer the property for sale in accordance with the terms of this Agreement. Such notice shall be in writing, and must be sent by certified mail through the United States Postal Service, addressed to the Community Development Director, City of Menlo Park, 701 Laurel Street, Menlo Park, CA 94025. Owner’s offer to sell may be withdrawn by Owner, provided that notice of withdrawal has been received by City or its designee, in writing, prior to acceptance by City or its designee.

7.2 Acceptance. City, its designee or Assignee shall have sixty (60) days from the date of receipt of Owner’s notice to exercise the right of first refusal to accept Owner’s offer to sell the Premises. This acceptance shall be in writing, shall indicate that City believes the Premises are in salable condition in accordance with Paragraph 18, state the purchase price for the Premises as determined in Paragraph 14, and whether City is exercising the right of first refusal on its own behalf or has located an Eligible Buyer, and shall be sent by certified mail through the United States Postal Service, addressed to the Owner of record at the official address of the Premises. For purposes of fulfillment of the terms of this procedure, the notice of intent to sell the Premises shall be deemed to be an offer to sell, and the exercise of the right to purchase by the City or its designee or Assignee shall be deemed to be an acceptance of that offer. Acceptance by City or its designee or Assignee shall constitute a legally binding contract for the transfer of title, and once accepted, the offer to sell may not be withdrawn without the express, written consent of the party who accepted the offer. The Owner is responsible for all fees and expenses related to the sale of the unit, including but not limited to real estate commissions and inspections.
8 Page J-7.103

7.3 Escrow. Within sixty (60) days of the date of acceptance, an escrow account shall be opened by the City or its designee or Assignee. At the closing, a title insurance company approved by City shall issue to the City, its designee, or Assignee, or the Eligible Buyer a CLTA owner’s title insurance policy, in a form reasonably approved by City and subject only to such title exceptions as reasonably approved by City. Taxes and assessments shall be prorated as of the date of closing. Taxes must be paid current as of the closing date and all liens must be satisfied and removed from title unless City expressly agrees otherwise in writing. The City, its designee, or Assignee or the Eligible Buyer shall pay the cost of the title insurance.

Closing shall utilize the form of escrow agreement customarily used by such title company for residential transactions with the City, modified to the extent necessary to conform to this transaction. If the Premises are sold to an Eligible Buyer, prior to the Closing, City and the Eligible Buyer shall deliver an executed Agreement and Deed Restrictions Regarding Resale Controls for Below Market Rate Property and a Performance Deed of Trust and Security Agreement in a form acceptable to City. The Eligible Buyer must also certify at Closing that he or she will occupy the Premises as his or her primary residence. At the Closing, the Owner shall convey title to the City, the Assignee, or the Eligible Buyer by grant deed.

7.4 Resale Restriction Agreement. The initial buyer and each subsequent buyer of the Property shall execute and record a covenant, substantially in the form of Exhibit D, that restricts the future sale of moderate income households at the Sales Price for a period of fifty-five (55) years (the "Resale Restriction Agreement").

7.5 Owner’s Obligation to Cooperate. At all times commencing on the date that the Owner provides the notice set forth in Paragraph 11.A, Owner shall ensure that the Premises are clean and in good repair, and available to be shown to prospective Eligible Buyers. Owner shall cooperate with the City of Menlo Park and their respective officers, employees and representatives. Failure to comply with these conditions shall be deemed a material breach of Owner’s obligations pursuant to the terms of this Agreement, and upon determination by the City that Owner has failed to comply with any of the above conditions, City shall notify Owner that the time periods stated herein shall be tolled, and the applicable time periods extended accordingly, until Owner has complied with all of the conditions of this Agreement.

Acts by Owner which shall be deemed to be a breach of this obligation include, but are not limited to, failure to make the Premises available for showing to prospective Eligible Buyers upon reasonable notice, willful or deliberate actions to dissuade prospective buyers from purchasing the Premises, and failure or refusal to return telephone calls, complete forms, provide required reports, or perform other actions ordinarily required by a party to a real estate transaction in a timely manner. In addition to tolling the applicable time periods, the City may pursue any other remedies for breach based upon this paragraph.

7.6 Assignment. City reserves the right, at any time during this process, to subsequently assign its right to purchase to an Eligible Buyer. In no case shall the time between Owner’s receipt of City’s acceptance of an offer to sell and the date of close of escrow exceed one hundred eighty (180) days, unless both parties 9 Page J-7.104

mutually agree, in writing, to extend that date, or if for any reason the time periods herein are tolled.

8. DEFAULT AND REMEDIES

8.1 Events of Default. The following shall constitute an “Event of Default” by Owner under this Agreement: there shall be a material breach of any condition, covenant, warranty, promise or representation contained in this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof to the Owner without the Owner curing such breach, or if such breach cannot reasonably be cured within such 30 day period, commencing the cure of such breach within such 30 day period and thereafter diligently proceeding to cure such breach; provided, however, that if a different period or notice requirement is specified for any particular breach under any other paragraph of Section 4 of this Agreement, the specific provision shall control.

8.2 Remedies. The occurrence of any Event of Default under Section 4.1 shall give the City the right to proceed with an action in equity to require the Owner to specifically perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and the right to terminate this Agreement.

8.3 Obligations Personal to Owner. The liability of Owner under this Agreement to any person or entity is limited to Owner’s interest in the Project, and the City and any other such persons and entities shall look exclusively thereto for the satisfaction of obligations arising out of this Agreement or any other agreement securing the obligations of Owner under this Agreement. From and after the date of this Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Agreement, any agreement pertaining to any Project or any other agreement securing Owner’s obligations under this Agreement), shall be rendered against Owner, the assets of Owner (other than Owner’s interest in the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Agreement or any agreement securing the obligations of Owner under this Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding. No subsequent Owner of the Project shall be liable or obligated for the breach or default of any obligations of Owner under this Agreement on the part of any prior Owner. Such obligations are personal to the person who was the Owner at the time the default or breach was alleged to have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Owner. Each Owner shall comply with and be fully liable for all obligations the Owner hereunder during its period of ownership of the Project.

8.4 Remedies Cumulative. No right, power, or remedy given by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and 10 Page J-7.105

-
____________
each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise.

8.5 Waiver of Terms and Conditions. The City may, in its sole discretion, waive in writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.

8.6 Non-Liability of City Officials and Employees. No member, official, employee or agent of the City shall be personally liable to Owner or any occupant of the Property, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement.

8.7 Cure Rights. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by Owner’s mortgage lender, shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner.

9. GENERAL PROVISIONS

9.1 Below Market Rate Guidelines (“Guidelines”). This Agreement incorporates by reference the Guidelines as of the date the Owner submitted a complete Preliminary Application pursuant to Government Code section 65941.1 and, at the election of the Owner, any successor sections as the Guidelines may be amended from time to time. In the event of any conflict or ambiguity between this Agreement, the requirements of state and federal fair housing laws and the Guidelines, the terms and conditions of this Agreement and the requirements of state and federal fair housing laws shall control.

9.2 Time. Time is of the essence in this Agreement.

9.3 Notices. Unless otherwise indicated in this Agreement, any notice requirement set forth herein shall be deemed to be satisfied three days after mailing of the notice first-class United States certified mail, postage prepaid, or by personal delivery, addressed to the appropriate party as follows:

Owner: ____________
XXXXX
City: City of Menlo Park
701 Laurel Street
Menlo Park, California 94025-3483
Attention: City Manager
11 Page J-7.106

Such addresses may be changed by notice to the other party given in the same manner as provided above.

9.4 Successors and Assigns. This Agreement constitutes a covenant and legal restriction on the Property and shall run with the land, provided the Project remains on the Property, and all of the terms, covenants and conditions of this Agreement shall be binding upon Owner and the permitted successors and assigns of Owner.

9.5 Intended Beneficiaries. The City is the intended beneficiary of this Agreement and shall have the sole and exclusive power to enforce this Agreement. It is intended that the City may enforce this Agreement in order to, satisfy its obligations to improve, increase and preserve affordable housing within the City, as required by the Guidelines, and to provide that a certain percentage of new housing is made available at affordable housing cost to persons and families of very low, low and moderate incomes as required by the Guidelines. No other person or persons, other than the City and Owner and their assigns and successors, shall have any right of action hereon.

9.6 Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

9.7 Governing Law. This Agreement and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. The venue for any action shall be the County of San Mateo.

9.8 Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Owner and the City.

9.9 Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. Where this Agreement requires an approval or consent of the City, such approval shall not be unreasonably withheld may be given on behalf of the City by the City Manager or his or her designee. The City Manager or his or her designee is hereby authorized to take such actions as may be necessary or appropriate to implement this Agreement, including without limitation the execution of such documents or agreements as may be contemplated by this Agreement, and amendments which do not substantially change the uses or restrictions hereunder, or substantially add to the costs of the City hereunder.

9.10 Indemnification. To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel reasonably approved by City) and hold the City, its heirs, successors and assigns (the “Indemnitees”) harmless from and against any and all demands. losses, claims, costs and expenses, and any other liability whatsoever, including without limitation, reasonable accountants’ and attorneys’ fees, charges 12 Page J-7.107

and expense (collectively, “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 9.10 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 9.10 shall survive the expiration or earlier termination of this Agreement, but only as to claims arising from events occurring during the Affordability Period.

9.11 Insurance Coverage. Throughout the Affordability Period, Owner shall comply with the insurance requirements set forth in Exhibit C, attached hereto and incorporated herein by this reference, and shall, at Owner’s expense, maintain in full force and effect insurance coverage as specified in Exhibit C.

9.12 Transfer and Encumbrance.

9.12.1. Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of any Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

9.12.2. Permitted Transfers. The prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; or (ii) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (iii) transfers between entities owned or controlled by the Florence Lane Ventures, LLC.

9.12.3. Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement and/or a Property if all of the following requirements are met (provided however, the requirements of this Section 9.12.3 shall not apply to Transfers described in clauses (i) or (ii) of Section 9.12.2.
13 Page J-7.108

(1) Proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement.
(2) The Owner and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Property or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(3) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner’s obligations pursuant to conditions, and restrictions set forth in this Agreement.
(4) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

Consent to any proposed Transfer may be given by the deputy Director unless the Deputy Director, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Owner, the proposed Transfer shall be deemed approved.

9.13 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of any Property shall be deemed to relieve the Owner or any other party from any obligation under this Agreement. This Section

9.13 shall not apply to Transfers described in clauses (i) and (ii) of Section 9.12.2.

9.14 Recovery of City Costs. Owner shall reimburse City for all reasonable City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Owner of an invoice detailing such costs.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year set forth above.

SIGNATURES ON FOLLOWING PAGE(S).
14 Page J-7.109

OWNER:
[INSERT]
By:

Its:

CITY:

CITY OF MENLO PARK, a California municipal
corporation
By:

City Manager
ATTEST:

By:

City Clerk
List of Exhibits:

Exhibit A: 975 Florence Lane Property Description
Exhibit B: Property (Unit 8) Location
Exhibit C: Insurance Requirements
Exhibit D: Buyer’s Occupancy and Resale Restriction Agreement with First Right of Refusal 4858-8193-6771 v2 15
Page J-7.110

EXHIBIT A
975 Florence Lane Property Description
4858-8193-6771 v2
Page J-7.111

EXHIBIT B – Property Location
4858-8193-6771 v2
Page J-7.112

EXHIBIT C
Insurance Requirements
Prior to initiating work on the Project and continuing throughout the Affordability Period, Owner shall obtain and maintain the following policies of insurance and shall comply with all provisions set forth in this Exhibit.

1. General Requirements. Owner shall procure and maintain the following insurance providing coverage against claims for injuries to persons or damages to property that may arise from or in connection with the Project, construction, management, or operation of the Property by the Owner or the Owner’s agents, representatives, employees and contractors, or subcontractors, including the following:
(a) Commercial General Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain a commercial general liability policy in an occurrence policy for protection against all claims arising from injury to person or persons not in the employ of the Owner and against all claims resulting from damage to any property due to any act or omission of the Owner, its agents, or employees in the conduct or operation of the work or the execution of this Agreement. Such insurance shall include products and completed operations liability, blanket contractual liability, personal injury liability, and broad form property damage coverage. Coverage shall be at least as broad as Insurance Services Office Commercial General Liability coverage.
(b) Commercial Automobile Liability: The Owner and all contractors working on behalf of Owner on the Property shall maintain insurance for protection against all claims arising from the use of vehicles, owned, hired, non-owned, or any other vehicle in connection with the Project, construction, operation or management of the Property. Such insurance shall cover the use of automobiles and trucks on and off the site of the Property. Coverage shall be at least as broad as Insurance Services Office covering Commercial Automobile Liability, any auto, owned, non-owned and hired auto.
(c) Workers' Compensation Insurance: The Owner (and the general partners thereof) shall furnish or cause to be furnished to City evidence satisfactory to City that Owner (and the general partners thereof), and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement, shall maintain Workers' Compensation Insurance as required by the State of California and Employer’s Liability Insurance. (d) Builder’s Risk: Upon commencement of any construction work on the Property, Owner and all contractors working on behalf of Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee as its interests may appear.
4858-8193-6771 v2
Page J-7.113

(e) Professional Liability/Errors and Omissions: Owner shall require any architects, engineers, and general contractors working on the Property to maintain Professional Liability/Errors and Omissions insurance with limits not less than Two Million Dollars ($2,000,000) each claim. Certificates evidencing this coverage must reference both the Owner and the Indemnitees. If the professional liability/errors and omissions insurance is written on a claims made form: (i) the retroactive date must be shown and must be before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of Project construction, and (iii) if coverage is cancelled or non-renewed and not replaced with another claims made policy form with a retroactive date prior to the Effective Date, Owner must purchase, or require the provision of, extended period coverage for a minimum of three (3) years after completion of construction.
(f) Property: Owner shall maintain property insurance covering all risks of loss, including earthquake and flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, and as commercially available.

2. Minimum Limits; Adjustments. Insurance shall be maintained with limits no less than the following:
(a) Commercial General Liability and Property Damage: $2,000,000 per occurrence and $5,000,000 annual aggregate for bodily injury, personal injury and property damage; provided however, with City’s advance written approval, subcontractors may maintain liability coverage with limits not less than $1,000,000 per occurrence, $2,000,000 annual aggregate.
(b) Products and Completed Operations: $3,000,000 per occurrence/aggregate.

Subcontractors may maintain Products and Completed Operations with limits not less than $1,000,000 per occurrence and $1,000,000 aggregate. (c) Commercial Automobile Liability: $2,000,000 combined single limit. (d) Employer’s Liability:

Bodily Injury by Accident - $1,000,000 each accident.

Bodily Injury by Disease - $1,000,000 policy limit.

Bodily Injury by Disease - $1,000,000 each employee.
(e) Professional Liability/Errors and Omissions: $2,000,000 per occurrence or claim.

If the policy provides coverage on a claims-made basis, the retroactive date must be shown and must be before the date of the Agreement or the beginning of the contract work. Subcontractors are required to carry coverage if their scope of work includes design services to the Project.
4858-8193-6771 v2 54
Page J-7.114

Coverage limits, and if necessary, the terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than every five (5) years after the Effective Date nor more than once in every three (3) year period) to address changes in circumstance, including, but not limited to, changes in inflation and the litigation climate in California. City shall give written notice to Owner of any such adjustments, and Owner shall provide City with amended or new insurance certificates or endorsements evidencing compliance with such adjustments within thirty (30) days following receipt of such notice.

3. Deductibles and Self-Insured Retention. Any deductibles or self-insured retention must be declared to, and approved by, the City. Payment of all deductibles and self-insured retentions will be the responsibility of Owner. If the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense.Additional Requirements. The required general liability and automobile policies shall contain, or be endorsed to contain, the following provisions:The Indemnitees are to be covered as Additional Insureds as respects: liability arising out of activities performed by or on behalf of the Owner; products and completed operations of the Owner; premises owned, occupied or used by the Owner; or automobiles owned, leased, hired or borrowed by the Owner. The coverage shall contain no special limitations on the scope of protection afforded to the Indemnitees. Additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94.All insurance shall be primary insurance as respects the Indemnitees. Any insurance or self-insurance maintained by the Indemnitees shall be excess of the Owner’s/contractor’s insurance and shall not contribute with it.
(c) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Indemnitees. (d) The Owner’s insurance shall apply separately to each insured against whom claim is made or suit is brought except, with respect to the limits of the insurer’s liability. (e) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City. (f) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within five (5) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies.

Upon failure to so file such certificate, City may, without further notice and at its 4858-8193-6771 v2 55
Page J-7.115

option, procure such insurance coverage at Owner’s expense, and Owner shall promptly reimburse City for such expense upon receipt of billing from City. (g) Owner agrees to waive subrogation rights for commercial general liability, automobile liability and worker’s compensation against Indemnitees regardless of the applicability of any insurance proceeds, and to require all contractors, subcontractors or others involved in any way with any construction on the Property to do likewise. Each insurance policy shall contain a waiver of subrogation for the benefit of City. If any required insurance is provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs are included in such annual aggregate limit, such annual aggregate limit shall be three times the applicable occurrence limits specified above. (h) It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirement and/or limits shall be available to the additional insured. Furthermore, the requirement for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater. For all liability insurance required by this Agreement, Owner (and Owner’s contractors, as applicable) shall obtain endorsements that name the Indemnitees as additional insured in the full amount of all applicable policies, notwithstanding any lesser minimum limits specified in this Agreement. This Agreement requires Owner (and Owner’s contractors, as applicable) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Owner (or Owner’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Owner (or Owner’s contractors as applicable) obtains insurance policies that provide liability coverage in excess of the amounts specified in this Agreement, the actual limits provided by such policies shall be deemed to be the amounts required under this Agreement. Without limiting the foregoing, the limits of liability coverage specified in this Agreement are not intended, nor shall they operate, to limit City’s ability to recover amounts in excess of the minimum amounts specified in this Agreement.
(i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. Acceptability of Insurers. Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII. 4858-8193-6771 v2 56
Page J-7.116

6. Verification of Coverage. Prior to the Effective Date of this Agreement, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (a), (b), (c), and (e) of Section 1 above, duly executed endorsements evidencing the Indemnitees’ status as additional insured, and all other endorsements and coverage required hereunder pertaining to such coverage. Prior to commencement of any construction work on the Property, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraphs (d) and (g) of Section 1 above. Prior to City’s issuance of a final certificate of occupancy or equivalent for the Project, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the insurance coverage required under paragraph (f) of Section 1 above. Owner shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf.

7. Insurance Certificates and Endorsements. Owner shall submit to the City all of the necessary insurance documents, including the applicable amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of required Owner policies listing all required policy endorsements to the City. Insurance Certificates and Endorsements are to be received and approved by the City within the time periods specified in Section 6 above.

Should Owner cease to have insurance as required at any time, all work by Owner pursuant to this Agreement shall cease until insurance acceptable to the City is provided. Upon City’s request, Owner shall, within thirty (30) days of the request, provide or arrange for the insurer to provide to City, complete certified copies of all insurance policies required under this Agreement. City’s failure to make such request shall not constitute a waiver of the right to require delivery of the policies in the future. 4858-8193-6771 v2 57
Page J-7.117

Exhibit D

BUYER'S OCCUPANCY AND RESALE RESTRICTION AGREEMENT

WITH RIGHT OF FIRST REFUSAL
(same as subject agreement)
4858-8193-6771 v2 58
Page J-7.118

,.

MENLO PARK
AGENDA ITEM K-1
Community Development

STAFF REPORT
City Council
Meeting Date: 10/10/2023
Staff Report Number: 23-228-CC
Regular Business: Review and authorize staff to submit the revised Housing Element for the 2023 to 2031 planning
period to the California Department of Housing and
Community Development
Recommendation
Staff recommends the City Council review and authorize staff to submit the revised 2023 to 2031 (6th Cycle) Housing Element to the California Department of Housing and Community Development (HCD). The Housing Element, which was adopted by the City Council Jan. 31, has been revised (Attachment A) in response to an Aug. 29 letter from HCD.

Policy Issues
State housing law requires that jurisdictions throughout California adequately plan to meet the housing needs of the community and future residents by regularly updating the jurisdiction’s general plan housing element. The Regional Housing Needs Allocation (RHNA) identifies the specific number of housing units at each income level category that a jurisdiction must plan for from 2023 to 2031 to comply with State mandates. Additionally, the Affirmatively Furthering Fair Housing (AFFH) Act requires that all local public agencies facilitate deliberate action to explicitly address, combat, and relieve disparities resulting from past patterns of segregation to foster more inclusive communities.

Background
The city began its efforts to update the Housing Element and Safety Element, and prepare a new Environmental Justice Element in early 2021. The project has been a City Council priority, and the city has undertaken an extensive process of planning, public engagement and coordination with community members, stakeholders, city decision makers, and other governmental agencies to develop the 2023 to 2031 Housing Element. The Housing Element was developed to meet the city’s assigned RHNA of 2,946 net new housing units across all income levels over an eight-year period and to create a foundation for the city’s policies related to housing. In an effort to exceed the State’s minimum requirements, the Housing Element included a wide range of housing-related programs and incorporated more net new units than required to provide ample opportunities for new housing development throughout the community, primarily in City Council Districts 2 through 5.

The City Council adopted the Housing Element Jan. 31 (Attachment B) and submitted it to HCD for review Feb. 8. On April 7, the City received a letter from HCD requesting additional changes to the document.

Among the topics in the letter were requests for additional analysis of housing needs, resources and constraints; additional information to support the inclusion of sites in the inventory; and further evaluation of governmental constraints on housing development in the city. Following a June 27 City Council meeting to review and authorize staff to submit the revised Housing Element to HCD, staff finalized the document and submitted it to HCD for review June 30. On Aug. 29, the City received a letter from HCD (Attachment C) City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 menlopark.gov Page K-1.1

Staff Report #: 23-228-CC
requesting additional changes to the document, but on a narrower range of topics than the April 7 letter.

Analysis
During the process of revising the adopted Housing Element, the project team met with HCD staff on Sept. 12 to discuss potential responses to HCD’s Aug. 29 comment letter. HCD staff shared examples of how to address comments from other jurisdictions’ housing elements, and agreed to informally review select proposed revisions, which staff prepared and sent to HCD on Sept. 21. As of the date of this report, HCD is still conducting the informal review. Upon receiving feedback from HCD, staff intends to address any comments and make applicable revisions, and post the updated draft for a period of seven days on the City’s website. Unless directed otherwise by the City Council, staff would then submit the document to HCD for formal review following the public review period.

Responses to HCD comments
The complete revised draft Housing Element with tracked change text edits since the June 30 document is included as Attachment A. The three major themes from the comments were focused on:

1. The analysis and actions to promote AFFH.

2. The inventory of land suitable and available for residential development.

3. The analysis of potential and actual government constraints.

A table of the 10 HCD comments and a summary response with references to applicable page numbers in the revised draft Housing Element is provided as Attachment D. The changes described in Attachment D do not include minor revisions in Attachment A, such as corrections to spelling and grammatical errors and new references to Housing Element chapters and programs for clarity and consistency.

Most of the changes in the revised document provide additional data, give more context about existing zoning and application processing procedures, and further enhance proposed programs with numeric metrics and specific actions to be conducted by the City during Housing Element implementation, where applicable.

The project team would like to highlight one proposed change to the site inventory capacity calculations used to demonstrate the ability of sites to meet the city’s RHNA. Currently, the site inventory generally utilizes a density of 55 dwelling units per acre (du/ac) for each of the 68 opportunity sites, reflecting the potential for all sites to take advantage of the affordable housing overlay (AHO) to achieve the density of up to 55 du/ac, or in combination with state density bonus law up to 100 du/ac. (As per HCD guidance, the site inventory did not include the potential application of the state density bonus, and only considered the potential zoning densities and AHO bonuses offered by the city.) Upon further review of comment 9 in HCD’s letter, staff is proposing a more conservative analysis. The Housing Element site inventory capacity calculations would be modified to use a density of 30 du/ac for sites outside the El Camino Real/Downtown Specific Plan (Specific Plan) area, except for those sites that have existing development proposals or known interest (such as the Veterans Affairs and Ravenswood City School District properties).

The density of 30 du/ac reflects the maximum base density anticipated for the R-3 around downtown, commercial and mixed-use sites outside the Specific Plan area following Housing Element zoning modifications. An example modified site sheet is included as Attachment E. Within the Specific Plan area, 55 du/ac would continue to be used for the capacity calculations to reflect a base density of 40 units/acre to which the AHO would be applied for increased density. Despite maintaining a density of 55 du/ac to calculate Specific Plan parcels’ capacity in the Housing Element, projects on those sites would realistically be able to achieve densities of up to 100 du/ac or more, depending on the Specific Plan subdistrict and the density bonuses applied.

Table 1 provides a comparison of the prior and proposed site capacity calculations. The table includes the City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 menlopark.gov Page K-1.2

Staff Report #: 23-228-CC
forecast number of units at each income level, the total number of units projected in combination with pipeline projects and future accessory dwelling unit (ADU) production, and the total number of units in comparison to the city’s RHNA requirements. With these changes, the site capacity calculations would continue to demonstrate the ability to meet the city’s RHNA and maintain a buffer of additional unit capacity beyond HCD’s requirements.

Table 1: Proposed change in Housing Element capacity by income level (in dwelling units) Very low Low Moderate Above moderate Total
Original inventory 967 986 881 0 2,834 methodology
Proposed inventory 880 634 571 0 2,085 methodology
Pipeline projects 133 277 197 3,038 3,645 (unchanged)
ADUs (unchanged) 26 25 26 8 85
Total with proposed 1,039 936 794 3,046 5,815 methodology Required RHNA 740 426 496 1,284 2,946
Difference between
proposed methodology 299 510 298 1,762 2,869
and RHNA
At this time, staff has not updated the capacity calculations in Attachment A. Unless the City Council directs otherwise, staff will revise the capacity calculations for the opportunity sites as described above, consistent with the example in Attachment E, and make associated changes to numbers throughout the document before submittal of the revised Housing Element to HCD.

Next steps
Following a required seven-day public review period and an assumed full 60-day HCD review period, it is anticipated that HCD would provide a response to the revisions in early December 2023. If tentative certification of the Housing Element is granted following HCD’s review, the Planning and Housing Commissions would make recommendations and the City Council would tentatively meet in January 2024 to consider re-adoption of the Housing Element.

Concurrent with the submittal of the revised draft Housing Element to HCD, the project team is finalizing actions related to the following zoning changes proposed as part of Housing Element implementation programs:
• H4.D (Modify the Affordable Housing Overlay (AHO)),
• H4.I (Create New Opportunities for Mixed-Use Development), • H4.J (Increase Residential Density and Maximize Development Proposals), • H4.L (Modify El Camino Real/Downtown Specific Plan), and • H4.T (Residential Overlay).

The Planning Commission is tentatively scheduled to review and provide a recommendation to the City Council on the proposed zoning changes at their Oct. 23 meeting, with a tentative City Council date in November/early December.

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 menlopark.gov Page K-1.3

Staff Report #: 23-228-CC
Correspondence
Since the June 30 Housing Element submittal to HCD, staff has received 18 items of correspondence. In general, the emails and letters cover three main topics:

1. Requests in support or opposition of specific sites in the site inventory.

2. Feedback regarding the proposed zoning changes related to Housing Element implementation and support for increased residential densities.

3. Anticipation of needs and opportunities related to housing growth in the Menlo Park City School District.

The correspondence has been added to Appendix 1-1 of the Housing Element.

Impact on City Resources
As part of the fiscal year 2020-21 budget, the City Council appropriated nearly $1.5 million from the general fund to support the Housing Element Update (including preparation of the subsequent environmental impact (SEIR)). On March 14, the City Council approved an amendment to the professional services agreement with M-Group, the City’s Housing Element Update project consultant, in the amount of $75,414, for an overall contract total of $1,547,466. Staff is working with the consultant team to understand anticipated budget augmentations and contract modifications for continued support on the Housing Element and related components, such as the Environmental Justice Element, and anticipates bringing the information to the City Council for review at an upcoming meeting.

Environmental Review
The City Council adopted Resolution No. 6808 and certified the SEIR for the Housing Element Update project (i.e., Housing Element and Safety Element updates, a new Environmental Justice Element, and associated changes) Jan. 31. On Feb. 1, a Notice of Determination (NOD) was filed. The proposed changes to the Housing Element are primarily to clarify, specify, and enhance the content in the document adopted by the City Council Jan. 31 in response to comments from HCD, and are covered by the certified SEIR.

Public Notice
Public notification was achieved by posting the agenda, with the agenda items being listed, at least 72 hours prior to the meeting. A Weekly Digest article was also electronically distributed Oct. 2 to highlight the Oct. 10 City Council meeting to review draft revisions to the Housing Element. The Housing Element Update project webpage was updated to advertise the meeting and the City has posted about the meeting via the City’s Facebook, Instagram and X (formally Twitter) platforms.

Attachments
A. Hyperlink – Revised 2023 to 2031 General Plan Housing Element in response to Aug. 29 comments from HCD: menlopark.gov/files/sharedassets/public/v/2/community-development/documents/housingelement-annual-progress-reports/city-of-menlo-park-2023-2031-housing-element-updated-october-5- 2023-track-change-version-3.pdf
B. Hyperlink – Jan. 31 Adopted 2023 to 2031 General Plan Housing Element:
menlopark.gov/files/sharedassets/public/community-development/documents/projects/housing-elementupdate/city-of-menlo-park-2023-2031-housing-element.pdf C. Hyperlink – Aug. 29 letter from HCD: menlopark.gov/files/sharedassets/public/v/1/communitydevelopment/documents/projects/housing-element-update/20230829-hcd-review-letter-for-revisedhe.pdf City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 menlopark.gov Page K-1.4

Staff Report #: 23-228-CC
D. Summary of responses to Aug. 29 HCD letter
E. Example site sheet using proposed capacity calculations Report prepared by:

Tom Smith, Principal Planner
Report reviewed by:

Mary Wagner, Assistant City Attorney
Deanna Chow, Assistant Community Development Director
City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 menlopark.gov Page K-1.5

Summary of Responses to August 29, 2023 HCD Letter

ATTACHMENT D
Comment
Number HCD Comment Recommended Modification(s) to the Housing Element Housing Element
Tracked Changes
Version Page Number
Reference(s)

1. Promote AFFH
Actions, Programs, Metrics, and Milestones: The Table 4-26 (Fair Housing Issue, Contributing Pages 4-87 through 4- element was revised to include geographic targeting
and some additional actions. However, given the
disparities in access to opportunity between the east
and west side of the City, the element still must
include a significant and robust suite of actions to 1) promote housing mobility 2) increase new housing
choices and affordability in higher opportunity or
relatively higher-income areas 3) place-based
strategies for community preservation and
revitalization and 4) displacement protection.

Additionally, given the stark contrast between
different parts of the City in terms of income and
Factors, and City Actions) has been modified to
add specificity for geographic targeting (e.g., Belle
Haven) and city actions linked with Housing
Element programs and/or quantified metrics to
support AFFH.

A description of the community amenities program
and funds, including benefits for the Belle Haven
and Bayfront neighborhoods—areas that are
identified as Underserved Communities in the
city’s ongoing preparation of its first
Environmental Justice Element—has been added.
95; 8-1; and 8-38
1 access to opportunity, the element must be revised
to include significant numeric metrics (beyond the
Regional Housing Needs Allocation (RHNA))
focused on all four program areas noted above. For
your information, quantified metrics should target
beneficial impacts for people, households, and
neighborhoods (e.g., number of people or
households assisted, number of housing units built,
number of parks or infrastructure projects
completed). HCD will follow-up under a separate
cover with additional guidance.

In Chapter 8, Program H5.J has been added to
identify and support the preparation of Menlo
Park’s first Environmental Justice Element. As
stated in Program H5.J (Environmental Justice
Element), the City will annually evaluate potential
funding of environmental justice programs through
utilization of community amenities funds and will
implement at least one Environmental Justice
Element program each year with emphasis on the
highest priority programs. Examples may include
sidewalks, lighting, and landscaping
improvements; affordable ownership housing;
anti-displacement programs; and open space and
recreation enhancements.

Page K-1.6

Comment
Number HCD Comment Recommended Modification(s) to the Housing Element Housing Element
Tracked Changes
Version Page Number
Reference(s)
Table 4-26 identifies the factors that contribute to
fair housing issues and sets forth specific city
actions with metrics and milestones to address
the issues; these actions, along with the programs
in Chapter 8, constitute Menlo Park’s housing
program strategy for implementation of the
Housing Element. The city will report its progress
in implementing its fair housing actions and all its
Housing Element programs as part of Annual
Progress Reports (APR).

2. Inventory of land suitable and available for
residential development
2 Zoning for a Variety of Housing Types – Emergency
Shelters: The element explains parking
requirements for emergency shelters complies with
AB 139 (Statutes of 2020). However, AB 139
provides that parking requirements shouldn’t be
more than what is necessary for staff working in the
shelter. The City’s requirements exceed the number
of spaces necessary for staff and as a result, the
element should add or modify programs to address
the constraint.

The Emergency Shelters section of Chapter 5 has
been revised to discuss an inconsistency between
the city’s existing off-street parking requirements
and what state law allows for shelters. In Chapter
8, Program H3.G has been modified to note that
parking requirements for emergency shelters will
be set at the number of spaces needed only to
accommodate shelter staff.

Pages 5-12 through 5-
14; 8-18
In addition, Chapter 654, Statutes of 2022 (AB
2339), adds specificity on how cities and counties
plan for emergency shelters and ensure sufficient
and suitable capacity. Future submittals of the
housing element may need to address these
statutory requirements. For additional information
and timing requirements, please see HCD’s memo
at
Page K-1.7
Comment
Number HCD Comment Recommended Modification(s) to the Housing Element Housing Element
Tracked Changes
Version Page Number
Reference(s)
https://www.hcd.ca.gov/sites/default/files/docs/plann
ing-and- community/ab2339-notice.pdf.
3 Electronic Sites Inventory: Although the City has
submitted electronic sites inventory as described in
the prior review, if any changes occur, the City
should submit revisions as part of any future readoption or submittal. Please see HCD’s housing element webpage at
https://www.hcd.ca.gov/planning-and-communitydevelopment/housing-elements for additional information.

Unless City Council directs otherwise, staff will
submit a revised electronic sites inventory using
the methodology described in the “Responses to
HCD comments” subsection of the staff report,
and change numbers throughout the Housing
Element for consistency.

Various
4 Programs: As noted above, the element does not
include a complete site analysis; therefore, the
adequacy of sites and zoning were not established.

Based on the results of a complete sites inventory
and analysis, the City may need to add or revise
programs to address a shortfall of sites or zoning
available to encourage a variety of housing types. In
addition, the element must be revised, as follows:

The element includes many complex and
challenging strategies that are essential to the City’s approach in addressing its housing needs including
identifying publicly-owned sites, large pipeline
projects and complex nonvacant typologies. As a
result, the element should include a program to
evaluate the effectiveness of these approaches and
commit to adjustments, as appropriate, to continue
working toward the housing element’s goals and
objectives. Specifically, the element could include a
program to conduct an in-depth mid-term evaluation
of identified sites and programs, including their
effectiveness in addressing the RHNA, and commit
Program H1.H has been expanded to clarify that
the mid-cycle review will evaluate progress on
pipeline projects, nonvacant sites, zoning
modifications, the AHO, and governmental
constraints, and propose modifications to address
any significant shortfalls and/or remaining
governmental constraints.

Pages 8-7 through 8-8
Page K-1.8

Comment
Number HCD Comment Recommended Modification(s) to the Housing Element Housing Element
Tracked Changes
Version Page Number
Reference(s)
to adjustments within a specified time period. Topics
should include pipeline projects, nonvacant sites,
rezoning, Affordable Housing Overlay zone and
governmental constraints (e.g., parking, lot
coverage, Floor Area Ratio (FAR), etc.,)
5 Shortfall of Adequate Sites (Program H4.K –
Rezone for Lower-Income Shortfall): HCD’s prior
review found that this program must include several
revisions related to appropriate statutory references,
timelines and other provisions. While this Program
was revised to address some of HCD’s prior review,
it still must identify the shortfall by income group,
acreage, allowable densities and commitment to
appropriate development standards. Additionally,
HCD’s prior review found that the element must
clarify whether other programs are needed to meet
the City’s RHNA and if so, it also needs to comply
with the applicable rezone requirements under
Government Code section 65583(c)). While the
element clarified that Programs H4.I (Create New
Opportunities for Mixed-Use Development) and
H4.T (Residential Overlay) are needed to address a
shortfall of sites and implement rezones, it did not
revise these programs to comply with all applicable
requirements.

In Chapter 7, the analysis of sites in the site
inventory that are the appropriate size and density
to meet HCD requirements for lower-income units
has been expanded, and a shortfall of 193 lowerincome units with the current zoning in place has been described in terms of income group,
acreage, and allowable densities. The zoning
programs that will be implemented to address the
shortfall are described and the resulting surplus of
units and adequacy of the sites has been
quantified. In making the revisions, staff closely
followed an example of how to address the
comment provided by HCD staff.

In Chapter 8, Program H4.K has been updated to
numerically describe the lower-income unit
shortfall under current zoning and reference the
zoning programs that will be implemented to
address the shortfall.

Pages 7-2 through 7-4;
8-28 through 8-29
Federally-Owned Sites and School Sites: HCD’s Chapter 7 has been updated with the most recent Pages 7-20 through 7- prior review found that the element must include status of potential and known projects on 21; 7-27; 8-32 through sufficient analysis demonstrating the feasibility and federally-owned and school sites, namely the 8-33 6 likelihood of these sites redeveloping during the
planning period. While the element now includes an
analysis, it should also include a program
committing to facilitating development on these sites
USGS site, the VA site, and the former Flood
School site, indicating continued progress, any
known timing, and anticipated likelihood of
Page K-1.9

Comment
Number HCD Comment Recommended Modification(s) to the Housing Element Housing Element
Tracked Changes
Version Page Number
Reference(s)
during the planning period. Specifically, the element
should include a program with numerical objectives
that ensures, if applicable, compliance with the
Surplus Land Act, provides incentives and actions
along with a schedule to facilitate development on
these sites and alternatives (e.g., identifying
additional sites) if production does not actualize as
identified in the inventory. Actions could include but
are not limited to outreach with owners, facilitating
communications developers, issuing requests for
proposals, incentives, fee waivers, priority
processing and financial assistance.
development occurring during the Housing
Element planning period (through 2031).

A new program, H4.U, has been added to Chapter
8 clarifying and quantifying potential incentives
and city actions that will lead to housing on the
federally-owned and school sites in the site
inventory, and a commitment to review progress
on the sites as part of the mid-cycle evaluation
from Program H1.H.

3. Analysis of potential and actual governmental
constraints
7 Land Use Controls: HCD’s prior review found that
the element must analyze development standards in
the R-3 zones and whether standards facilitate
achieving maximum densities. The element briefly
discussed that landscaping, parking, and FAR
requirements could act as a constraint to
development and included a program to evaluate
and modify these requirements. However, the
element must also include actions addressing lot
coverage in R-3 zones as a constraint. Specifically,
the element acknowledged that the City’s current lot
coverage requirements in these zones are generally
lower than what’s permissible in neighboring
jurisdictions (p. 5-26). In addition, HCD finds that lot coverage for multifamily housing less than 50
percent is generally considered a constraint. The
element must include or modify programs(s)
In Chapter 5, new text has been added
acknowledging that HCD views lot coverage of
less than 50 percent to be a constraint on
multifamily development and references Program
H4.J to address the constraint.

Program H4.J in Chapter 8 has been revised to
include actions to increase lot coverage to more
than 50 percent in the city’s R-3 and R-4 zoning
districts.